Hensoldt optimistic for 2024 after growth $HAG (-3,1%)

Rising military spending following the Russian invasion of Ukraine is keeping defense supplier Hensoldt on course for growth.

After significant growth in the first nine months, CFO Christian Ladurner is also optimistic for the fourth quarter. CEO Oliver Dörre believes that the radar and sensor specialist, in which the Italian armaments group Leonardo also holds a stake, is now in a position of strength with regard to the consolidation of the industry: "I say quite clearly: we want to shape this process and not be shaped." In the first nine months of 2024, incoming orders rose to around 1.86 billion euros, partly due to orders from the German Armed Forces, Hensoldt announced on Wednesday. The order backlog thus totaled 6.5 billion euros.

Turnover climbed by 21.3 percent to around 1.4 billion euros. Hensoldt worked more profitably

The adjusted operating profit (EBITDA) improved by 24.1 percent to 187 million euros.

The Management Board confirmed the outlook, and the ratio of incoming orders to sales (book-to-bill ratio) for the financial year was specified at the upper end at around 1.2.

Overall, Hensoldt expects "continued positive business development" for 2024. For the year as a whole, the management continues to expect sales of around EUR 2.3 billion and an adjusted EBITDA margin of 18 to 19 percent. "We will also see the momentum we saw in the first nine months in the final quarter," Ladurner told Reuters.

The Russian invasion of Ukraine had brought about a turnaround for Western arms companies such as Hensoldt and Rheinmetall. The industry is needed to strengthen the Bundeswehr and the armed forces of the NATO states and Ukraine.

At the same time, there are calls for alliances among European arms companies - also in order to keep up with the US arms giants. Rheinmetall and Hensoldt shareholder Leonardo recently forged an alliance to build tanks.

"We make sensors for tanks and key optronic components for the Leopard are made by Hensoldt," said Dörre: "These are topics that we are also discussing with our shareholder Leonardo." "Wherever we can add value with regard to the products, we will never turn down cooperation talks," he added. However, these would have to bring "real added value". Hensoldt will not do anything "for the sake of pure consolidation". Instead, Hensoldt is looking around for takeovers itself. "Technology and internationalization - these are the drivers for possible acquisitions," emphasized Dörre.