In the first quarter, the armaments group HENSOLDT recorded an order intake almost twice as strong as in the same period of the previous year.
Operating profit increased by more than 10 percent despite lower sales. The MDAX and TecDAX-listed group from Taufkirchen near Munich confirmed its forecast for the year as a whole, which was specified at the beginning of April following the completion of the takeover of ESG Elektroniksystem- und Logistik GmbH.
"With a record order backlog, we are in an excellent position and have very good visibility on business development," said CFO Christian Ladurner according to the press release. We were able to further increase our profitability in the first three months of 2024. We are benefiting from improved operational processes and efficient cost management. We also expect the consolidation of the successful acquisition of ESG, which is an important driver of our sales and order development, to have a positive impact for the first time from the second quarter onwards."
$HAG (+0.79%) The acquisition of the manufacturer-independent system integrator and technology and innovation partner for defense and public safety is expected to generate annual cost synergies of EUR 19 million in addition to higher sales.
In the three months to the end of March, the Group's incoming orders rose by 91.8% to EUR 665 million, according to the press release. The Group benefited in particular from major orders in the Sensors segment, such as the order for a German air defense system received in January as a partner of Rheinmetall, as well as further orders for the TRML-4D medium-range radar. The order backlog rose by 6.3% compared to the end of 2023 to a new record high of around EUR 5.88 billion.
While revenue fell from EUR 338 million in the same quarter of the previous year to EUR 329 million, HENSOLDT further improved its profitability and increased adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from EUR 30 million to EUR 33 million. Thanks to a positive project mix and more efficient cost management, the adjusted EBITDA margin rose from 9.0 to 10.2 percent.
The adjusted free cash flow improved from minus 137 million to minus 81 million euros compared to the same period last year. This was mainly driven by higher cash inflows from customer contracts, the Group announced. In addition, the cash flow reflects investments in working capital.
For the 2024 financial year, HENSOLDT, including ESG, expects consolidated revenue of EUR 2.3 billion, compared to EUR 1.85 billion in the previous year, and significantly faster growth in order intake compared to consolidated revenue. HENSOLDT had previously forecast an organic increase in revenue to EUR 2 billion. The adjusted EBITDA margin before low value-added business volume is expected to be 18 to 19 percent including ESG. In 2023, the corresponding margin reached 19.9%, while the forecast for organic growth was 19 to 20%.
