February 28th , 2023
CONFERENCE CALL DETAILS
LIVE EVENT:
The Company will host a conference call for investors and analysts today at 18:30 (Spanish time).
Please find below conference call telephone details:
Pre-registration: https://aiti.capitalaudiohub.com/indra/reg.html
- Once you've registered, you will receive an email with your personal credentials: Dial-in numbers, Conference ID and User ID.
- Participants will need to enter the Conference ID and press the pound key.
- Each participant will need to enter a unique personal User ID and press the pound key.
Access to the webcast live event:
https://streamstudio.world-television.com/1015-2578-34648/en
This presentation has been produced by Indra for the sole purpose expressed therein. Therefore, neither this presentation nor any of the information contained herein constitutes an offer sale or exchange of securities, invitation to purchase or sale shares of the Company or any advice or recommendation with respect to such securities.
Its content is purely for information purposes and the statement it contains may reflect certain forward-looking statements, expectations and forecasts about the Company at the time of its elaboration. These expectations and forecasts are not in themselves guarantees of future performance as they are subject to risks, uncertainties and other important factors beyond the control of the Company that could result in final results materially differing from those contained in these statements. The Company does not assume any obligation or liability in connection with the accuracy of the mentioned estimations and is not obliged to update or revise them.
This document contains information that has not been audited. In this sense, this information is subject to, and must be read in conjunction with, all other publicly available information.
This disclaimer should be taken into consideration by all the individuals or entities to whom this document is targeted and by those who consider that they have to make decisions or issue opinions related to securities issued by Indra.
Chief Executive Officer
General Director Minsait
Chief Financial Officer
2022 Indra Highlights
2022 T&D Highlights T&D
2022 Minsait Highlights
2022 Financial Review
Chief Executive Officer
- Outstanding 2022 performance:
- All-time high levels of annual Backlog, Order Intake, Revenues and EBIT
- Double digit growth of Revenues, EBIT and EPS
- Solid delivery of recently upgraded 2022 guidance for all metrics
- Strong Group's cash flow generation, leading to almost zero net financial debt at year end
- Increase of 67% in the proposed dividend (0.25€/share)
- Outlook & Guidance: Group remains strongly positioned for 2023 and beyond. In 2023, we expect to continue to grow robustly, albeit at a rate below the outstanding 2022
Headlines For an Outstanding Year
| Backlog |
Order
Intake |
| € 6,309m |
€ 4,778m |
| +16% |
+29% |
| Revenues |
EBIT |
| € 3,851m |
€ 300m (7.8% margin) |
| +14% |
+18% |
| Basic EPS |
Free Cash Flow |
| € 0.97 |
€ 253m |
| +20% |
0
1x
Net
Debt/EBITDA |
|
|
2019 2022
2019 2022
8
- Supportive environment across spectrum of our Group activities – showing resilience even in more turbulent economic times
- Build up of a high quality backlog, which provides visibility for the medium term and sets the basis for operational improvements going forward
- Increased access to sizeable contracts: FCAs, DFS (ATM in Germany), ENAIRE (ATM in Spain), Telco main operators (Minsait), with incremental presence in the Digital business in T&D and Minsait
- Delivery of operational efficiencies, and improvements in execution
- Financial focus and control of capital allocation control
- Synergistic bolt-on acquisitions in place, having signed 5 bolt on transactions
|
Strong Medium-Term
An Outstanding Year
Performance Record |
|
|
|
2019-21 |
2022 vs 2021 |
|
Revenues
CAGR |
2.9% |
13.6% YoY |
|
| EBIT CAGR |
7.5% |
17.6% YoY |
|
| FCF |
€127m* |
€253m |
|
Well-positioned for medium-term outlook
* FCF average 2019-2021
Backlog (€m) Backlog/revs LTM
FY22 Revenues (€m)
FY22 Operating Margin2 (€m)
- Excluding the impact of the Inorganic contribution and FX impact for the year; 2. EBIT before Other Operating Income & Expenses, including: staff reorganization, impairments, capital gains, integration and acquisition costs, fines, amortization of intangible assets (PPA from acquisitions) and equity-based compensation.
4Q22 Revenues (€m)
4Q22 Operating Margin2 (€m)
-
Excluding the impact of the Inorganic contribution and FX impact for the year; 2. EBIT before Other Operating Income & Expenses, including: staff reorganization, impairments, capital gains, integration and acquisition costs, fines, amortization of intangible assets (PPA from acquisitions) and equity-based compensation.
-
Yearly Revenue growth (+14%) above workforce increase (+9%)
- Most of the workforce increased in Latam (+14%)
- Improved Revenue per Employee (+4%)
- Slowdown of workforce increase in Q4 vs the rest of the year
Employee
commitment |
79% |
| Employee attrition rate |
16% |
Training hours
per employee |
20 hours |
| Employee promotions |
28% |
| Diversity |
33% |
Relevant presence in the main ESG indexes Committed to talent
Chief Executive Officer
D
| Backlog |
Order
Intake |
| € 4,587m |
€ 2,198m |
| +19% |
+44% |
| Revenues |
Operating
Margin |
| € 1,335m |
€ 172m (12.9% margin
) |
| +6% |
+14% |
|
EBIT |
|
€ 163m (12.2% margin
) |
+10%
T&D Backlog, Order Intake and Revenues at all -time highs
- T&D EBIT Margins at double -digit levels. Defence & Security and ATM margins best in class in the Aerospace & Defence universe
- T&D Backlog over Revenues LTM over 3x ensuring sound prospects for the coming years
-
Bolt -on acquisitions in 2022 (Simumak and Temansa) and agreement to acquire Selex Inc's Air Traffic Management line of business from Leonardo
-
Defence global expenditure at all time highs in 2022
- 2023 Spain Defence budget up 26 % with 2% GDP commitment by 2029
- Further Cooperative Defence programs in Europe to come
- Backlog and Order Intake at historical highs:
- FCAS Phase 1B
- Eurofighter, with both new orders and mid -life upgrade contracts
- Multi -year Defence contracts in Spain:
- Lanza 3D, F110, 8x8 armoured vehicle, Helicopter NH90 & Chinook
- Current Blacklog/Revenues LTM >3.5x
-
FCAS Phase 1B signed in 4Q22 (>€600m). Further €700m expected Phase 2
-
Sound prospects for the coming years, with air traffic expected to achieve pre-pandemic levels by 2024¹
- Strong Backlog (LTM >2x revs) & Order Intake with sizeable contracts
- Eurocontrol, Air Surveillance in Germany, ATM systems in Norway, India, Kuwait, among others
- Strong Revenue growth achieved in 2022 (+9%), recovering pre-pandemic levels despite global air traffic is still c. 20%¹ below
- Agreement to acquire Selex Inc's Air Traffic Management line of business from Leonardo
- Complementing Indra's robust portfolio in Navigation/Aid Systems
- Allowing Indra entry into the US market
-
Canada as the next big opportunity for ITEC Indra ATM solution
-
Source: IATA. Figures compared to 2019 (% variation). 2022: -17%; 2023: -6%; 2024: +3%
-
Profitable after several years at break -even or loss -making
- Material future opportunities in the Smart Transport ecosystem
- Significant de -risking of several problematic projects:
- Meca -Medina
- Rhyad
- T-Mobilitat
- Focus on value added product and service quality while gaining penetration in top countries like US, Canada, UK and Nordics
- Current Backlog /Revenues LTM >2.5x
- Recent Order Intake with better margins entering into the Backlog:
- Railway & Collection projects in Spain
- Communication Systems in Peru
- Strong Revenue growth achieved in 2022 (+8%) driven by positive activity in Spain (Interurban and Railway projects)
FY22 Backlog/revs LTM
FY22 Order Intake (€m)
Local Currency / Reported
FY22 Revenues (€m)
Local Currency / Reported
FY22 Operating Margin¹(€m)
FY22 EBIT and Margin (€m)
1.EBIT before Other Operating Income & Expenses, including: staff reorganization, impairments, capital gains, integration and acquisition costs, fines, amortization of intangible assets (PPA from acquisitions) and equity-based compensation.
Local Currency / Reported
4Q22 Revenues (€m) 4Q22 Operating Margin¹(€m)
4Q22 EBIT and Margin (€m)
1.EBIT before Other Operating Income & Expenses, including: staff reorganization, impairments, capital gains, integration and acquisition costs, fines, amortization of intangible assets (PPA from acquisitions) and equity-based compensation.
General Director Minsait
| Backlog |
Order
Intake |
| € 1,722m |
€ 2,580m |
| +8% |
+18% |
| Revenues |
Operating
Margin |
| € 2,517m |
€ 183m (7.3% margin
) |
| +18% |
+37% |
|
EBIT |
|
€ 138m (5.5% margin
) |
+27%
- Minsait Order Intake and Revenues at all -time highs and grew at double digit rates in 2022
- Strong revenue growth (+13% organically) in 2022 supported by high levels of activity and no sights of slowing demand so far
- Highest historical level of EBIT Margin at 5.5% in 2022
- Improving the mix change: Digital + Proprietary Solutions + Third Party Solutions & Others grew +32% and now accounts for 57% of Minsait sales
-
Bolt -on acquisitions in 2022 (Nexus and Mobbeel) focused on high growth and profitable segments like Payment Systems, Cybersecurity and Digital
-
Consolidation of our core value proposition:
- E2E implementation and operation of business -applied technology solutions with a high level of specialization by industry
- Wide range of digital services and proprietary products, focused on four business acceleration vectors: phygital, cloud data, payments and cybersecurity
- Well -balanced and diversified revenue mix by industry domain and geography
- Increased our share of wallet in our top -10 clients, with relevant wins in large -contract service renewals/ additions
- Double digit growth of our acceleration vectors: phygital (15%), cloud data (20%), payments (53%) and cybersecurity (19%)
- Successful delivery of critical systems' implementations
- More than 15,000 new professionals hired in 2022 despite high competition in tech talent market
Future growth opportunities
- Next wave digital domains: digitization of physical operations (IoT, IT-OT convergence), data & AI, modernization & cloud migration of traditional systems
- Inroads into not-yet-fully-covered core markets in core geographies (Financial Services in Italy, Brazil; Manufacturing & Consumer in Mexico and Colombia)
- Buildout of accounts with top-tier potential
FY22 Backlog FY22 Order Intake (€m) (€m)
Local Currency / Reported
28
Local Currency / Reported
FY22 Operating Margin¹(€m) FY22 Revenues (€m)
1.EBIT before Other Operating Income & Expenses, including: staff reorganization, impairments, capital gains, integration and acquisition costs, fines, amortization of intangible assets (PPA from acquisitions) and equity-based compensation.
FY22 Revenues (€m)
Revenue Growth 2022 vs 2021
Local Currency / Reported 6.3%
4Q22 Revenues (€m) 4Q22 Operating Margin¹(€m)
4Q22 EBIT and Margin (€m) 2.6%
1.EBIT before Other Operating Income & Expenses, including: staff reorganization, impairments, capital gains, integration and acquisition costs, fines, amortization of intangible assets (PPA from acquisitions) and equity-based compensation.
Chief Financial Officer
Quarterly reported FCF (€m)
World-class Return on Capital Employed thanks to lean capital management strategy together with increasing profitability
Net Working Capital ST+LT (DoS)
Net Debt (€m)
- Non-recourse factoring; 2. EBITDA LTM excluding IFRS 16, extraordinary items related to employee restructuring plans and asset disposals
Gross and Net Debt Structure
|
FY22 |
total
% |
FY21 |
total
% |
L/T
Debt |
700 |
72% |
1
436
, |
97% |
S/T
Debt |
275 |
28% |
39 |
3% |
Gross
Debt |
976 |
100% |
1
475
, |
100% |
Cost
Gross
of
Debt |
2
0% |
|
1
9% |
|
|
|
|
|
|
Cash
Others
& |
933 |
n
m |
1
235
, |
n
m |
|
|
|
|
|
Net
Debt |
43 |
n.m. |
240 |
n.m. |
Gross Debt Maturity Profile
- Including €246m Convertible Bond with 2023 maturity; 2. €152m Corporate Bond with 2024 maturity
Chief Executive Officer
|
Guidance
2022 |
2022 results |
Guidance
2023 |
Revenues
(in
constant
currency) |
> €3,600m |
€3,851m |
> €4,000m |
| EBIT |
> €280m |
€300m |
> €315m |
| FCF |
> €175m |
€253m |
> €200m |
Context for 2023 Encouraging Outlook, On Top of 2022
* FCF average 2019-2021; ** FCF average 2021-2023 guidance
-
- With an all-time high backlog, incremental digital portfolio, improvement in operational delivery and solid financial position, the group remains strongly positioned for 2023 and beyond
-
- Robust cashflow generation and careful stewardship of our shareholders' capital leaves meaningful Group balance sheet strength, and capacity to support our strategic options
-
- We remain sharply focused on delivering 1st class customer satisfaction, and further improving our operational performance and efficiency
Chief Executive Officer General Director Minsait Chief Financial Officer
Avenida de Bruselas, 35 28108 Alcobendas Madrid Spain T +34 91 480 98 00 www.indracompany.com