Indra Sistemas (IDR) Q2 2024 earnings summary

Executive summary

• Achieved double-digit growth in revenue (+15%), EBITDA (+22%), net income (+27%), and free cash flow (+27%) year-over-year in 1H24, reflecting strong execution of the 2024-2026 strategic plan.

• Strategic focus on Defense, Aerospace, and Advanced Digital Technologies, with significant progress in new geographies and digital transformation.

• Major organizational changes, including new CFO, regional directors, and streamlined international footprint from 45 to 19 countries.

• Key M&A and joint venture progress, including advanced talks with Lockheed Martin and EDGE group, and acquisitions (GTA, Totalnet) contributing €70m to 1H24 sales.

• Backlog exceeded €7bn at June 2024, with order intake up 7% year-over-year.

Financial highlights

• 1H24 revenues: €2,304m (+14.5% YoY); EBITDA: €230m (+22% YoY, margin 10.0%); EBIT: €179m (+29% YoY, margin 7.8%).

• Net profit: €114m (+27% YoY); free cash flow: €69m (+27% YoY), despite a €41m one-off tax payment.

• Net debt at €93m (0.2x EBITDA); gross debt €582m, average maturity below 2 years, cost of debt at 4.3%.

• Backlog: €7,148m (+4.8% YoY); order intake: €2,681m (+6.7% YoY); backlog at three times annual revenue.

• Book-to-bill ratio: 1.16x; operating margin: 9.1% (+0.8pp YoY); tax rate: 27%.

Outlook and guidance

• 2024 guidance raised: revenue above €4,800m, EBIT above €415m, and free cash flow over €260m.

• Management confident in at least mid-single-digit growth for the full year, with no significant slowdown in demand anticipated.

• Guidance includes all expected one-off and structural costs.

• All guidance metrics increased after strong 1H24 performance.