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HENSOLDT AG
Quarterly Report • Aug 4, 2021
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Quarterly Report
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Semi-annual financial report for the First Half Year 2021
This report is also available in German. In case of discrepancies, the German language document is the sole authoritative and universally valid version.
Interim Report for the First Half Year of 2020 – HENSOLDT
Interim Group Management Report
In recent months we continued to monitor the situation around the Coronavirus SARS-CoV-2 ('COVID-19') pandemic at all our sites to protect the health and well-being of all our employees, customers and partners as well as our business. The COVID-19 pandemic has still not significantly influenced the business of HENSOLDT Group ('HENSOLDT' or 'the Group') as a provider of defence and security electronic solutions. The utilization of the revolving credit facility, which was fully drawn as part of our COVID-19 mitigation plan in 2020, was reduced by €150.0 million in the first half year of 2021.
In April 2021 LEONARDO S.p.A., Italy, announced that it has entered into a definitive agreement with Square Lux Holding II S.à r.l. ('Square Lux'), a portfolio company controlled by funds advised by Kohlberg Kravis & Roberts & Co. L.P., to purchase a 25.1 % stake in HENSOLDT AG. In May 2021 Kreditanstalt für Wiederaufbau ('KfW'), executing the acquisition rights of the Federal Republic of Germany ('Federal Government'), acquired 25.1 % of HENSOLDT AG's shares from Square Lux.
In May 2021 HENSOLDT AG had its first annual general meeting. Due to the pandemic the meeting was held virtually. Following the decisions of the annual general meeting a total amount of €13.65 million was distributed as dividend to the shareholders of HENSOLDT AG.
With effect as of June 2021 HENSOLDT switched the consolidation method of HENSOLDT Cyber GmbH, Taufkirchen, ('HENSOLDT Cyber') from at-equity to full consolidation due to potential voting rights in connection with conversion rights attached to loans granted to HENSOLDT Cyber. In addition HENSOLDT closed two minor but strategic acquisitions in the first half year of 2021, namely two business units (Air Traffic Management ('ATM') and Defence Division) of Tellumat (Pty) Ltd in South Africa as well as HENSOLDT Analytics GmbH (formerly: SAIL LABS Technology GmbH) in Vienna.
With the appointment of Celia Pelaz as of July 1, 2021 the Management Board of HENSOLDT AG was expanded to four members. Ms. Pelaz serves as Chief Strategy Officer and continues to lead the Spectrum Dominance & Airborne Solutions division as well as HENSOLDT Ventures.
A significant volume of our annual revenue for both reporting segments Sensors and Optronics is typically recorded in the last months of the year due to the timing of many budgetary decisions by our governmental customers. The first half of our financial year, particularly the first quarter, is characterized by a reduction of trade receivables and corresponding cash inflows due to customer payments, a reduction of trade payables and corresponding cash outflows as well as an increase in work in progress accounted for under inventories.
Overall, HENSOLDT's operating business in the first half year 2021 was marked by continued positive development. HENSOLDT has been able to secure a number of orders, most notably for the development and delivery of the airborne electronic signals intelligence system 'PEGASUS' for a contract value of €1.25 billion and large orders relating to procurement of additional Eurofighters by the German Air Force ('Eurofighter Quadriga') in the Sensors segment as well as for observation and reconnaissance platforms in the Optronics segment. Revenue increased by 10.4 % (€486.2 million; PY: €440.3 million). Ramp-up of key programs develops as expected. Adjusted EBITDA increased (€44.1 million; PY: €41.3 million) as lower project margins for higher pass-through revenue and increased functional costs were overcompensated by the increased volume and higher other operating income.
The COVID-19 pandemic magnified existing security trends and tensions and made the security environment more unpredictable. The security threats and challenges that led to the adoption of the NATO Defence Investment Pledge have not subsided with the pandemic. The year 2020 marked the sixth consecutive year of growth in defence spending by European NATO-Allies and Canada.
In Germany the national defence budget for the year 2022 was increased by approximately €3.5 billion in the latest Federal Government's budget draft in June 2021 and will for the first time exceed the mark of €50 billion. The increase includes €1.2 billion out of the economic stimulus package 2020. One driver of the budget increase is the financing of essential procurement programs like the French-German-Spanish Future Combat Air System ('FCAS') and Norwegian-German cooperation programs (submarines and Naval Strike Missile). For the FCAS project the German Budget Committee approved a further government agreement and supplementary contracts worth around €4.4 billion by 2027, which paves the way for the continuation of the armaments cooperation with France and Spain in autumn 2021. HENSOLDT as consortium leader, together with Diehl Defence, ESG and Rohde & Schwarz, is part of the Future Combat Mission System ('FCMS') consortium, which has assumed joint responsibility for the networked use of sensors and effectors in the FCAS project. The budget committee of the German Bundestag cleared a budget of roughly €19 billion for 27 new defence procurement programs each valued over €25 million in June 2021, including PEGASUS. However, the COVID-19 pandemic might have negative effects on defence budgets in the upcoming years. The latest government budget drafts see a slight decrease of the German defence budget after 2022.
The European Defence Fund ('EDF') was officially launched in June 2021. The size of the EDF is approximately €8 billion and was determined during negotiations for the EU's Multi-annual Financial Framework ('MFF') from 2021 to 2027. The decision to fund defence research and capability development programs from the EU budget is an important step that contributes to the growing role of the EU in the field of defence and to boost innovative and disruptive technologies. In the EDF program, consortia consisting of at least three entities from at least three EU member states and Norway can apply for and receive funding from the EDF.
Because of the changing security environment and growing instability, worldwide defence investments increased in the last years. EU and NATO countries are seeking further cooperation in defence matters with a broad range of partner nations, especially regarding the Indo-Pacific region due to the competition with China. The transatlantic relationship between EU and the USA is also being re-established. Although the COVID-19 pandemic might affect national budgets, the focus and priority on defence remains high. Many countries see defence investment as an additional stimulus for economic recovery post COVID-19. Overall, multifaceted business opportunities for HENSOLDT worldwide and especially in its EU home countries result from the conditions in the defence and security sector.
| Order intake | Revenue | Order backlog | |||||||
|---|---|---|---|---|---|---|---|---|---|
| First half year | First half year | Jun. 30, | Dec. 31, | ||||||
| in € million | 2021 | 2020 | % Change | 2021 | 2020 | % Change | 2021 | 2020 | % Change |
| Sensors | 1,904.7 | 1,654.6 | 15.1% | 375.7 | 343.5 | 9.4% | 4,324.2 | 2,825.5 | 53.0% |
| Optronics | 209.6 | 122.0 | 71.8% | 111.3 | 97.7 | 13.9% | 703.0 | 600.0 | 17.2% |
| Elimination/Transversal/ Others |
-2.7 | -1.1 | -0.8 | -0.9 | -3.3 | -1.5 | |||
| HENSOLDT | 2,111.6 | 1,775.6 | 18.9% | 486.2 | 440.3 | 10.4% | 5,023.9 | 3,424.0 | 46.7% |
- Sensors: Further growth compared to the very successful previous year mainly related to the orders for the PEGASUS airborne electronic signals intelligence system and Eurofighter Quadriga in the division Spectrum Dominance & Airborne Solutions. Division Radar & Naval Solutions benefits from further contracts with regard to the Eurofighter Quadriga program as well. Previous year included the orders for the Eurofighter Common Radar System Mk1.
-
Optronics: Higher order intake particularly driven by the product line Ground Based Systems. Increases also for the product lines Naval and High Performance Optics as well as for the South African entity.
-
Sensors: Overall growth mainly related to Eurofighter radars in the division Radar & Naval Solutions. The divisions Spectrum Dominance & Airborne Solutions and Customer Services & Space Solutions trade on a comparable level as previous year.
-
Optronics: Significant increase mainly driven by Ground Based Systems partly offset by decrease in High Performance Optics due to a product transition.
-
Sensors: Further growth compared to the year-end 2020 mainly driven by the order intake in the divisions Spectrum Dominance & Airborne Solutions and Radar & Naval Solutions.
- Optronics: Further increase resulted primarily from the order intake in the product lines Ground Based Systems and Naval as well as in the South African entity.
| Profit margin First half year |
|||||
|---|---|---|---|---|---|
| First half year | |||||
| in € million | 2021 | 2020 | % Change | 2021 | 2020 |
| Sensors | 35.7 | 32.8 | 8.8% | 9.5% | 9.5% |
| Optronics | 10.7 | 10.3 | 3.9% | 9.6% | 10.5% |
| Elimination/Transversal/Others | -2.3 | -1.8 | |||
| Adjusted EBITDA | 44.1 | 41.3 | 6.8% | 9.1% | 10.0% |
| Depreciation and amortization | -60.1 | -57.7 | -4.2% | ||
| Non-recurring effects | -5.9 | -12.9 | 54.3% | ||
| Earnings before finance result and income taxes (EBIT) | -21.9 | -29.3 | 25.3% | -4.5% | -6.7% |
| Finance result | -16.3 | -87.9 | 81.5% | ||
| Income taxes | 9.7 | 28.3 | -65.7% | ||
| Group result | -28.5 | -88.9 | 67.9% | -5.9% | -20.2% |
| Earnings per share (in €; basic/diluted) | -0.26 | -1.11 | 76.6% |
- Sensors: Lower project margins for higher pass-through revenue as well as higher research and development and functional costs were overcompensated by volume effects and higher other operating income.
-
Optronics: Increase in volume and reduced research and development costs were partly offset by project mix effects and higher functional costs.
-
Depreciation and amortization: Increase due to higher depreciation of property, plant & equipment and right-of-use assets. Amortization of intangible assets stable as lower amortization of acquired intangible assets was offset by higher amortization of capitalized development costs.
-
Non-recurring effects1: Decrease mainly due to lower other non-recurring effects in general administrative expenses in connection with the preparation of the initial public offering (IPO) of HENSOLDT AG in the previous year.
-
Finance result: Decreased expenses largely driven by the revaluation of an embedded derivative in the former Term Loan agreement in accordance with IFRS 9 which characterized the finance result in the previous year. In the reporting period no such effects were recognized due to restructured financial liabilities in connection with the IPO.
- Income taxes: Decrease mainly due to lower deferred tax income primarily related to the revaluation of the embedded derivative in the former Term Loan agreement in the first half year of 2020.
Earnings per share ('EPS') improved from €-1.112 to €-0.26 compared to prior half year, mainly caused by the improvement of the finance result.
1 Defined as transaction costs, separation costs and other non-recurring effects.
2 Calculated based on the amount of shares at the time of transformation of the legal form of HENSOLDT AG.
| Jun. 30, | Dec. 31, | ||
|---|---|---|---|
| in € million | 2021 | 2020 | % Change |
| Non-current assets | 1,339.5 | 1,313.4 | 2.0% |
| therein: Goodwill | 651.9 | 637.2 | 2.3% |
| Current assets | 1,361.7 | 1,634.2 | -16.7% |
| therein: Inventories | 501.3 | 403.7 | 24.2% |
| therein: Trade receivables | 242.1 | 282.0 | -14.1% |
| therein: Other current assets | 131.7 | 78.7 | 67.3% |
| therein: Cash and cash equivalents | 281.8 | 645.5 | -56.3% |
| Total assets | 2,701.2 | 2,947.6 | -8.4% |
| Equity | 345.0 | 346.8 | -0.5% |
| therein: Capital reserve | 583.2 | 596.8 | -2.3% |
| therein: Other reserves | -45.7 | -86.3 | 47.0% |
| therein: Retained earnings | -308.7 | -281.6 | -9.6% |
| Non-current liabilities | 1,235.2 | 1,257.1 | -1.7% |
| therein: Non-current provisions | 454.4 | 482.6 | -5.8% |
| Current liabilities | 1,121.0 | 1,343.7 | -16.6% |
| therein: Current provisions | 161.9 | 193.6 | -16.4% |
| therein: Current financing liabilities | 213.9 | 363.3 | -41.1% |
| therein: Current contract liabilities | 449.4 | 416.8 | 7.8% |
| therein: Trade payables | 188.1 | 164.0 | 14.7% |
| therein: Other current financial liabilities | 6.0 | 97.8 | -93.9% |
| Total equity and liabilities | 2,947.6 | -8.4% | |
- Non-current assets: Increase largely related to goodwill recognized for the full consolidation of HENSOLDT Cyber and net increase in intangible assets.
-
Current assets: Decrease resulted primarily from the reduction of cash and cash equivalents driven by the partial repayment of the revolving credit facility. This effect was partly compensated by higher current other assets mainly due to higher advance payments made. Following the usual seasonality pattern inventories increased while trade receivables decreased in the first half year of 2021.
-
Equity: Slight decrease due to the net loss of the reporting period and the decrease in capital reserve as a result of the dividend payment nearly offset by higher other reserves primarily resulting from the valuation of pension obligations.
- Non-current liabilities: Decrease driven by the reduction of non-current provisions mainly related to the decrease in pension provisions due to higher interest rates.
- Current liabilities: Decrease primarily related to the partial repayment of the revolving credit facility as well as the reduction of other current financial liabilities. The latter position is determined by scheduled forwarding of payments to a factoring company. This relates to payments received for factoring contracts as of December 31, 2020, that were not yet due for forwarding them to the factor. Current provisions mainly decreased as a result of decreased personnel related provisions due to seasonal patterns and several other movements of project related provisions
within the usual project lifecycles. These decreases were partly offset by higher current contract liabilities largely driven by higher advance payments received as well as an increase in trade payables.
| First half year | |||
|---|---|---|---|
| in € million | 2021 | 2020 | Change |
| Cash flows from operating activities | -38.7 | 41.9 | -80.6 |
| Cash flows from investing activities | -61.1 | -48.8 | -12.3 |
| Free cash flow | -99.8 | -6.9 | -92.9 |
| Non-recurring effects | 8.4 | 12.2 | -3.8 |
| Interest, income taxes and M&A activities | 34.1 | 20.9 | 13.2 |
| Adjusted pre-tax unlevered free cash flow | -57.3 | 26.2 | -83.5 |
| Cash flows from financing activities | -263.9 | 196.8 | -460.7 |
- Cash flows from operating activities: Decrease mainly driven by higher buildup of inventories, increasing other assets primarily related to higher advance payments made and lower reduction of trade receivables compared to the previous period. These effects were partly offset by higher contract liabilities as well as an increase in trade payables compared to a decrease in the prior year.
-
Cash flows from investing activities: Increase of cash outflows primarily as a result from higher payments in connection with M&A activities.
-
Non-recurring effects3: Decrease mainly due to lower other non-recurring effects in connection with the preparation of the IPO in the previous year as well as the reduction of transaction expenses.
- Interest4, income taxes5 and M&A activities6: Increase mainly related to higher outflows from M&A activities and income taxes partly offset by lower interest payments in the reporting period.
Decrease largely due to the partial repayment of the revolving credit facility, while the net cash inflow in the prior period was determined by its drawing as part of HENSOLDT's COVID-19 mitigation plan. Further cash outflows resulted from scheduled forwarding of payments to the factoring company. This relates to payments received for factoring contracts that were not yet due for forwarding them to the factor as of December 31, 2020. In addition dividend payments are included in this reporting period with no distribution in the prior year.
3 Defined as transaction costs, separation costs and other non-recurring effects.
4 Defined as 'Interest paid' (including interest on lease liabilities) as reported in the consolidated statement of cash flows.
5 Defined as 'Income tax payments / refunds' as reported in the consolidated statement of cash flows. 6
Defined as sum of 'Share of profit in entities recognized for using the equity method', 'Acquisition of associates, other investments and other non-current investments', 'Proceeds from sale of intangible assets and property, plant and equipment', 'Acquisition of businesses net of acquired cash' and 'Other cash flows from investing activities' as reported in the consolidated statement of cash flows.
The Management Board expects a significant increase in revenue for 2021 and a moderate increase in order intake. The adjusted EBITDA is anticipated to increase significantly in 2021. The outlook is unchanged compared to year-end 2020.
This expectation does not account for possible implications from additional waves of infection or further lockdowns in connection with the global COVID-19 pandemic.
In HENSOLDT's combined management report for the year ended December 31, 2020, we described the principles of the HENSOLDT risk management system, certain risks which could have an adverse impact on HENSOLDT as well as our most significant opportunities. HENSOLDT's Management Board assesses the overall opportunity and risk situation of the Group as unchanged compared to year-end 2020.
Condensed Consolidated Interim Financial Statements
| First half year | |||
|---|---|---|---|
| in € million | 2021 | 2020 | |
| Revenue | 486.2 | 440.3 | |
| Cost of sales | -414.4 | -374.8 | |
| Gross profit | 71.8 | 65.5 | |
| Selling and distribution expenses | -48.9 | -42.2 | |
| General administrative expenses | -39.0 | -37.7 | |
| Research and development costs | -15.1 | -13.9 | |
| Other operating income | 18.9 | 9.7 | |
| Other operating expenses | -7.6 | -8.9 | |
| Share of profit/loss from investments accounted for using the equity method | -2.0 | -1.8 | |
| Earnings before finance result and income taxes (EBIT) | -21.9 | -29.3 | |
| Interest income | 4.3 | 2.0 | |
| Interest expense | -24.0 | -85.4 | |
| Other finance income/costs | 3.4 | -4.5 | |
| Finance result | -16.3 | -87.9 | |
| Earnings before income taxes | -38.2 | -117.2 | |
| Income taxes | 9.7 | 28.3 | |
| Group result | -28.5 | -88.9 | |
| thereof attributable to the owners of HENSOLDT AG | -27.1 | -88.4 | |
| thereof attributable to non-controlling interests | -1.4 | -0.5 | |
| Earnings per share | |||
| Basic and diluted earnings per share (in €) | -0.26 | -1.11 |
| First half year | ||||
|---|---|---|---|---|
| in € million | 2021 | 2020 | ||
| Group result | -28.5 | -88.9 | ||
| Other comprehensive income | ||||
| Items that will not be reclassified to profit or loss | ||||
| Measurement of defined benefit plans | 50.7 | 22.1 | ||
| Tax on items that w ill not be reclassified to profit or loss | -14.4 | -5.1 | ||
| Subtotal | 36.3 | 17.0 | ||
| Items that will be reclassified to profit or loss | ||||
| Difference from currency translation of financial statements | 4.5 | -14.7 | ||
| Cash flow hedge - unrealized gains/losses | 0.3 | -1.5 | ||
| Cash flow hedge - reclassification to profit or loss | - | 0.1 | ||
| Tax effect on unrealized gains/losses | 0.3 | 0.4 | ||
| Subtotal | 5.1 | -15.7 | ||
| Other comprehensive income net of tax | 41.4 | 1.3 | ||
| Total comprehensive income/loss | 12.9 | -87.6 | ||
| thereof attributable to the owners of HENSOLDT AG | 13.5 | -84.5 | ||
| thereof attributable to non-controlling interests | -0.6 | -3.1 |
| ASSETS | Jun. 30, | Dec. 31, |
|---|---|---|
| in € million | 2021 | 2020 |
| Non-current assets | 1,339.5 | 1,313.4 |
| Goodw ill | 651.9 | 637.2 |
| Intangible assets | 393.5 | 386.2 |
| Property, plant and equipment | 103.8 | 103.1 |
| Right-of-use assets | 145.3 | 143.5 |
| Investments accounted for using the equity method | - | - |
| Other investments and other non-current financial assets | 16.8 | 11.3 |
| Non-current other financial assets | 0.7 | 1.0 |
| Other non-current assets | 3.4 | 4.8 |
| Deferred tax assets | 24.1 | 26.3 |
| Current assets | 1,361.7 | 1,634.2 |
| Other non-current financial assets, due on short-notice | 3.6 | 11.2 |
| Inventories | 501.3 | 403.7 |
| Contract assets | 193.5 | 204.4 |
| Trade receivables | 242.1 | 282.0 |
| Other current financial assets | 7.2 | 7.1 |
| Other current assets | 131.7 | 78.7 |
| Income tax receivables | 0.5 | 1.6 |
| Cash and cash equivalents | 281.8 | 645.5 |
| Total assets | 2,701.2 | 2,947.6 |
| EQUITY AND LIABILITIES | Jun. 30, | Dec. 31, |
|---|---|---|
| in € million | 2021 | 2020 |
| Share capital | 105.0 | 105.0 |
| Capital reserve | 583.2 | 596.8 |
| Other reserves | -45.7 | -86.3 |
| Retained earnings | -308.7 | -281.6 |
| Equity held by shareholders of HENSOLDT AG | 333.8 | 333.9 |
| Non-controlling interests | 11.2 | 12.9 |
| Equity, total | 345.0 | 346.8 |
| Non-current liabilities | 1,235.2 | 1,257.1 |
| Non-current provisions | 454.4 | 482.6 |
| Non-current financing liabilities | 602.8 | 601.3 |
| Non-current contract liabilities | 22.5 | 16.0 |
| Non-current lease liabilities | 142.7 | 140.3 |
| Other non-current financial liabilities | - | 0.2 |
| Other non-current liabilities | 6.9 | 8.9 |
| Deferred tax liabilities | 5.9 | 7.7 |
| Current liabilities | 1,121.0 | 1,343.7 |
| Current provisions | 161.9 | 193.6 |
| Current financing liabilities | 213.9 | 363.3 |
| Current contract liabilities | 449.4 | 416.8 |
| Current lease liabilities | 15.4 | 13.7 |
| Trade payables | 188.1 | 164.0 |
| Other current financial liabilities | 6.0 | 97.8 |
| Other current liabilities | 84.4 | 86.9 |
| Tax liabilities | 1.9 | 7.6 |
| Total equity and liabilities | 2,701.2 | 2,947.6 |
| First half year | ||||
|---|---|---|---|---|
| in € million | 2021 | 2020 | ||
| Group result | -28.5 | -88.9 | ||
| Depreciation and amortization | 60.1 | 57.7 | ||
| Allow ances on inventories, trade receivables and contract assets | -3.4 | -2.4 | ||
| Share of profit in entities accounted for using the equity method | 2.0 | 1.8 | ||
| Financial expenses (net) | 17.1 | 83.4 | ||
| Other non-cash expenses/income | -9.4 | -0.2 | ||
| Change in | ||||
| Provisions | -10.7 | -8.8 | ||
| Inventories | -93.2 | -33.2 | ||
| Contract balances | 49.2 | 28.2 | ||
| Trade receivables | 47.5 | 75.4 | ||
| Trade payables | 25.5 | -16.6 | ||
| Other assets and liabilities | -62.0 | -1.7 | ||
| Interest paid | -18.7 | -22.4 | ||
| Income tax expense (+) / income (-) | -9.7 | -28.3 | ||
| Income tax payments (-) / refunds (+) | -4.5 | -2.0 | ||
| Cash flows from operating activities | -38.7 | 41.9 | ||
| Acquisition/addition of intangible assets and property, plant and equipment | -48.2 | -50.6 | ||
| Proceeds from sale of intangible assets and property, plant and equipment | 0.1 | - | ||
| Acquisition of associates, other investments and other non-current investments | -4.6 | 1.6 | ||
| Acquisition of businesses net of cash acquired | -8.4 | - | ||
| Other | - | 0.2 | ||
| Cash flows from investing activities | -61.1 | -48.8 | ||
| Proceeds (+) / repayment (-) from financial liabilities | -149.5 | 203.5 | ||
| Change in other financial liabilities | -89.7 | - | ||
| Payment of lease liabilities | -7.7 | -6.7 | ||
| Dividend payments to shareholders of HENSOLDT AG | -13.7 | - | ||
| Dividend payments to non controlling interests | - | 0.0 | ||
| Transaction costs on issue of equity | -3.3 | - | ||
| Cash flows from financing activities | -263.9 | 196.8 | ||
| Effects of movements in exchange rates on cash and cash equivalents | - | -3.6 | ||
| Other adjustments | - | -2.1 | ||
| Net changes in cash and cash equivalents | -363.7 | 184.2 | ||
| Cash and cash equivalents | ||||
| Cash and cash equivalents on January 1st | 645.5 | 137.4 | ||
| Cash and cash equivalents on June 30th | 281.8 | 321.6 |
| Other reserves | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| in € million | Share capital |
Capital reserve |
Retained earnings |
Remea surement of pensions |
Cash flow hedge |
Currency translation |
Sub total |
Non controlling interests |
Equity |
| Jan. 1, 2021 | 105.0 | 596.8 | -281.6 | -66.7 | -4.7 | -15.0 | 333.9 | 12.9 | 346.8 |
| Group result | - | - | -27.1 | - | - | - | -27.1 | -1.4 | -28.5 |
| Other comprehensive income | - | - | - | 36.3 | 0.5 | 3.8 | 40.6 | 0.8 | 41.4 |
| Total comprehensive income |
- | - | -27.1 | 36.3 | 0.5 | 3.8 | 13.5 | -0.6 | 12.9 |
| Transactions w ith non controlling interests/ Acquisition through business combinations |
- | - | - | - | - | - | - | -1.1 | -1.1 |
| Dividend payment | - | -13.7 | - | - | - | - | -13.7 | - | -13.7 |
| Other | - | 0.1 | - | - | - | - | 0.1 | - | 0.1 |
| Jun. 30, 2021 | 105.0 | 583.2 | -308.7 | -30.4 | -4.2 | -11.2 | 333.8 | 11.2 | 345.0 |
Attributable to the owners of the HENSOLDT AG
Attributable to the owners of the HENSOLDT AG
| Other reserves | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| in € million | Share capital |
Capital reserve |
Retained earnings |
Remea surement of pensions |
Cash flow hedge |
Currency translation |
Sub total |
Non controlling interests |
Equity |
| Jan. 1, 2020 | 10.0 | 396.7 | -215.8 | -39.3 | -4.1 | -6.3 | 141.2 | 13.6 | 154.8 |
| Group result | - | - | -88.4 | - | - | - | -88.4 | -0.5 | -88.9 |
| Other comprehensive income | - | - | - | 16.9 | -0.9 | -12.1 | 3.9 | -2.6 | 1.3 |
| Total comprehensive income |
- | - | -88.4 | 16.9 | -0.9 | -12.1 | -84.5 | -3.1 | -87.6 |
| Jun. 30, 2020 | 10.0 | 396.7 | -304.2 | -22.4 | -5.0 | -18.4 | 56.7 | 10.5 | 67.2 |
Notes to the Condensed Consolidated Interim Financial Statements
HENSOLDT is a platform-independent provider of defence and security sensor solutions based in Taufkirchen, Germany.
The Condensed Interim Consolidated Financial Statements of HENSOLDT AG and its subsidiaries include the sixmonth period ended June 30, 2021.
The Condensed Consolidated Interim Financial Statements for the first half year 2021 were prepared in accordance with IAS 34 and related interpretations issued by the International Accounting Standards Board ('IASB') as endorsed by the European Union ('EU') for interim financial reporting as at June 30, 2021.
The Condensed Consolidated Interim Financial Statements were authorized for issue by the HENSOLDT AG's Management Board on August 3, 2021.
These Condensed Consolidated Interim Financial Statements include all information and disclosures required by the International Financial Reporting Standards ('IFRS') to be presented in Condensed Consolidated Interim Financial Statements and should be read in conjunction with the IFRS Consolidated Financial Statements for the financial year ended December 31, 2020.
The accounting policies applied to the Condensed Consolidated Interim Financial Statements are generally based upon the same accounting policies and same methods of computation used in the consolidated financial statements for the financial year ended December 31, 2020. Exceptions are new or revised Standards required to be applied for the first time in financial year 2021 that, however, have not had a material influence on the Condensed Consolidated Interim Financial Statements.
The preparation of the Condensed Interim Consolidated Financial Statements in accordance with IAS 34 requires the management to exercise judgement and make estimates and assumptions that affect the application of accounting policies in the Group and the presentation of assets, liabilities, income and expenses. Actual amounts may differ from these estimates. The results obtained in first half year 2021 are not necessarily an indication of how business will develop in the future.
In the first half year of 2021 HENSOLDT´s business and, in particular, the economic environment is still affected by the COVID-19 pandemic, though certain mitigating effects may arise due to the various measures taken by governments or states globally including favorable financial support to the economies.
With effect as of June 2021 HENSOLDT switched the consolidation method of HENSOLDT Cyber from at-equity to full consolidation due to potential voting rights in connection with conversion rights attached to loans granted to HENSOLDT Cyber. Under consideration of the potential voting rights HENSOLDT consolidates 70 % of HENSOLDT Cyber. The
object of the company is the development, production, integration and distribution of solutions in the areas of hardware, software and services.
In the first half year of 2021 two business units (ATM and Defence Division) of Tellumat (Pty) Ltd, South Africa, as well as 100.0 % of the shares in HENSOLDT Analytics GmbH (formerly: SAIL LABS Technology GmbH), Vienna, were acquired. The total preliminary purchase price amounted to €8.4 million. HENSOLDT Analytics GmbH is not consolidated due to materiality.
The Company has entered into various transactions with related entities carried out in the normal course of business.
Revenue, other income and other expenses with related entities for the first half year ended June 30, 2021:
| First half year | |||
|---|---|---|---|
| in € million | 2021 | 2020 | |
| Revenue and other income | 46.9 | 33.7 | |
| thereof companies with significant influence | 10.4 | - | |
| Other expenses | 14.3 | 8.9 | |
| thereof companies with control | 2.7 | - | |
| thereof companies with significant influence | 1.2 | - |
Receivables and liabilities with related entities as per June 30, 2021:
| Jun. 30, | Dec. 31, | |
|---|---|---|
| in € million | 2021 | 2020 |
| Receivables | 109.8 | 99.3 |
| thereof from companies with significant influence | 14.6 | - |
| Liabilities | 83.7 | 8.4 |
| thereof to companies with control | - | 0.2 |
| thereof to companies with significant influence | 71.5 | - |
On May 26, 2021, the Federal Government indirectly acquired a total of 26,355,000 shares in HENSOLDT AG via the KfW, a public law institution controlled by the Federal Government, which corresponds to a shareholding of 25.1 %. The Federal Government is thus a related party of HENSOLDT AG with significant influence. HENSOLDT maintains diverse relationships with the Federal Government and with other companies controlled by the Federal Government. The Federal Government, related government agencies and offices as well as other companies controlled by the Federal Government are customers of HENSOLDT and as such purchase and use many of HENSOLDT's products and services.
On June 29, 2021, the Federal Government, represented by the Federal Ministry of Defence, which in turn is represented by the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support ('Bundesamt für Ausrüstung, Informationstechnik und Nutzung der Bundeswehr' or 'BAAINBw'), has awarded a contract for the development, delivery and integration of the airborne electronic signals intelligence system PEGASUS including the procurement of three aircrafts and the associated evaluation stations for a contract value of €1.25 billion to HENSOLDT. The agreement was concluded after budget approval by the German Bundestag.
The Management Board members participate starting with fiscal year 2021 in the respective applicable long-term incentive ('LTI') bonus plan.
Apart from this there were no material changes regarding transactions with key management personnel from the information disclosed in the 2020 Consolidated Year-End Financial Statements.
The Group operates in two operating segments, Sensors and Optronics.
| First half year | ||||
|---|---|---|---|---|
| in € million | 2021 | |||
| Sensors | Optronics | Elimination/ Transversal/ Others |
Group | |
| Order intake | 1,904.7 | 209.6 | -2.7 | 2,111.6 |
| Order backlog | 4,324.2 | 703.0 | -3.3 | 5,023.9 |
| Revenue from external customers | 375.0 | 111.2 | 0.0 | 486.2 |
| Intersegment revenue | 0.7 | 0.1 | -0.8 | - |
| Segment revenue | 375.7 | 111.3 | -0.8 | 486.2 |
| First half year | ||||
| in € million | 2021 | |||
| Sensors | Optronics | Elimination/ Transversal/ Others |
Group | |
| Material non-cash items other than depreciation and amortization: | ||||
| Additions to other provisions | -34,5 | -13,6 | 0,0 | -48,1 |
| Dissolution of other provisions | 5,3 | 6,7 | 0,0 | 12,0 |
| Remeasurement to fair value of pre-existing interest in an acquiree |
10,2 | - | - | 10,2 |
| Entity's interest in the profit or loss of associates and joint ventures accounted for using the equity method |
- | - | -2,0 | -2,0 |
| First half year | ||||
| in € million | 2021 | |||
| Sensors | Optronics | Elimination/ Transversal/ Others |
Group | |
| EBITDA | 35.6 | 10.7 | -8.1 | 38.2 |
| Transaction costs | - | - | 0.1 | 0.1 |
| IPO related costs | - | - | 0.8 | 0.8 |
| Other non-recurring effects | 0.1 | - | 4.9 | 5.0 |
| Adjusted EBITDA | 35.7 | 10.7 | -2.3 | 44.1 |
| Margin adjusted EBITDA | 9.5% | 9.6% | 9.1% | |
| Depreciation and amortization | -47.6 | -12.5 | 0.0 | -60.1 |
| EBIT | -12.0 | -1.8 | -8.1 | -21.9 |
| Effect on earnings from purchase price allocations | 26.7 | 5.1 | 0.0 | 31.8 |
| Transaction costs | - | - | 0.1 | 0.1 |
| IPO related costs | - | - | 0.8 | 0.8 |
| Other non-recurring effects | 0.1 | - | 4.8 | 4.9 |
| Adjusted EBIT | 14.8 | 3.3 | -2.4 | 15.7 |
| Margin adjusted EBIT | 3.9% | 3.0% | 3.2% |
| First half year | ||||
|---|---|---|---|---|
| in € million | 2021 | |||
| Sensors | Optronics | Elimination/ Transversal/ Others |
Group | |
| EBIT | -12.0 | -1.8 | -8.1 | -21.9 |
| Finance result | - | - | - | -16.3 |
| EBT | - | - | - | -38.2 |
| First half year | ||||
| in € million | 2020 | |||
| Sensors | Optronics | Elimination/ Transversal/ Others |
Group | |
| Order intake | 1,654.6 | 122.0 | -1.1 | 1,775.6 |
| Order backlog | 2,819.4 | 607.5 | 0.0 | 3,426.9 |
| Revenue from external customers | 343.3 | 97.0 | - | 440.3 |
| Intersegment revenue | 0.2 | 0.7 | -0.9 | - |
| Segment revenue | 343.5 | 97.7 | -0.9 | 440.3 |
| First half year | ||||
| in € million | 2020 | |||
| Elimination/ Transversal/ Others |
Group | |||
| Material non-cash items other than depreciation and amortization: | Sensors | Optronics | ||
| Additions to other provisions | -26.0 | -16.4 | - | -42.4 |
| Dissolution of other provisions | 2.1 | 1.4 | - | 3.5 |
| Entity's interest in the profit or loss of associates and joint ventures | ||||
| accounted for using the equity method | - | - | -1.8 | -1.8 |
| First half year | ||||
| in € million | 2020 | |||
| Sensors | Optronics | Elimination/ Transversal/ Others |
Group | |
| EBITDA | 32.3 | 9.8 | -13.7 | 28.4 |
| Transaction costs | 0.4 | - | - | 0.4 |
| Other non-recurring effects | 0.1 | 0.5 | 11.9 | 12.5 |
| Adjusted EBITDA | 32.8 | 10.3 | -1.8 | 41.3 |
| Margin adjusted EBITDA | 9.5% | 10.5% | 9.4% | |
| Depreciation and amortization | -43.7 | -13.9 | -0.1 | -57.7 |
| EBIT | -11.4 | -4.1 | -13.8 | -29.3 |
| Effect on earnings from purchase price allocations | 27.0 | 7.3 | 0.0 | 34.3 |
| Transaction costs | 0.4 | - | - | 0.4 |
| Other non-recurring effects | 0.1 | 0.5 | 12.1 | 12.7 |
| Adjusted EBIT | 16.1 | 3.7 | -1.7 | 18.1 |
| Margin adjusted EBIT | 4.7% | 3.8% | 4.1% |
| First half year | ||||
|---|---|---|---|---|
| in € million | 2020 | |||
| Sensors | Optronics | Elimination/ Transversal/ Others |
Group | |
| EBIT | -11.4 | -4.1 | -13.8 | -29.3 |
| Finance result | - | - | - | -87.9 |
| EBT | - | - | - | -117.2 |
The Group´s operations and main revenue streams are described in the 2020 Consolidated Year-End Financial Statements.
During the first half year 2021 revenues increased overall by €45.9 million to €486.2 million compared to €440.3 million in the first half year 2020.
| First half year | ||||
|---|---|---|---|---|
| in € million | Sensors | Optronics | Other | 2021 |
| Revenue from contracts with customers | ||||
| Sales | 262.1 | 100.6 | - | 362.7 |
| Aftersales | 114.2 | 11.5 | - | 125.7 |
| Exchange rate differences | -1.1 | -0.7 | -0.4 | -2.2 |
| Total | 375.2 | 111.4 | -0.4 | 486.2 |
| First half year | ||||
| in € million | Sensors | Optronics | Other | 2020 |
| Revenue from contracts with customers | ||||
| Sales | 227.3 | 79.0 | - | 306.3 |
| Aftersales | 115.7 | 14.9 | - | 130.6 |
| Exchange rate changes | 0.3 | 3.2 | -0.1 | 3.4 |
| First half year | ||
|---|---|---|
| in € million | 2021 | 2020 |
| Europe | 398.4 | 341.9 |
| (thereof Germany) | 272.0 | 209.8 |
| Middle East | 35.5 | 37.6 |
| APAC | 18.4 | 15.6 |
| North America | 16.1 | 24.1 |
| Africa | 20.2 | 19.6 |
| LATAM | 7.8 | 7.3 |
| Other regions/Consolidation | -10.2 | -5.8 |
| Total | 486.2 | 440.3 |
| First half year | ||||
|---|---|---|---|---|
| in € million | Sensors | Optronics | Other | 2021 |
| Point of time of revenue recognition | ||||
| Revenue recognition at a point in time | 168.9 | 112.8 | - | 281.7 |
| Revenue recognition over time | 207.4 | -0.7 | - | 206.7 |
| Exchange rate differences | -1.1 | -0.7 | -0.4 | -2.2 |
| Total | 375.2 | 111.4 | -0.4 | 486.2 |
| First half year | ||||
| in € million | Sensors | Optronics | Other | 2020 |
| Point of time of revenue recognition | ||||
| Revenue recognition at a point in time | 157.8 | 90.2 | - | 248.0 |
| Revenue recognition over time | 185.2 | 3.7 | - | 188.9 |
| Exchange rate changes | 0.3 | 3.2 | -0.1 | 3.4 |
A significant volume of the annual revenue for both reporting segments Sensors and Optronics is typically recorded in the last months of the year due to the timing of many budgetary decisions by the governmental customers. The first half of the financial year, particularly the first quarter, is characterized by a reduction of trade receivables and corresponding cash inflows due to customer payments, a reduction of trade payables and corresponding outflows, as well as an increase in work in progress accounted for under inventories.
The share of loss in HENSOLDT Cyber, an investment accounted for using the equity method till May 2021, was €-2.0 million compared to €-1.8 million in the first half year 2020.
Other operating income increased by €9.2 million to €18.9 million compared to €9.7 million in the first half year 2020. This is mainly due to the remeasurement to fair value of pre-existing interest in HENSOLDT Cyber in the segment Sensors in June 2021 which led to an income of €10.2 million.
Other operating expenses decreased by €1.3 million to €7.6 million compared to €8.9 million in the first half year 2020. Both are due to lower project costs recharged to other entities.
Total finance result improved by €71.6 million to €-16.3 million compared to €-87.9 million in the first half year 2020.
This is mainly due to the revaluation of an embedded derivative in the former Term Loan agreement in accordance with IFRS 9 in the first half year 2020 (€-53.9 million). In the reporting period no such effects were recognized due to restructured financial liabilities in connection with the IPO of HENSOLDT AG.
The group result has improved by €60.4 million to €-28.5 million compared to €-88.9 million in the first half year 2020. This is mainly driven by the revaluation result of an embedded derivative as part of the former financing structure in the first half year 2020.
Income tax expense was recognized at an amount determined by multiplying the profit or loss before tax for the interim reporting period by management's best estimate of the weighted-average annual income tax rate expected for the full financial year, adjusted for the tax effect of certain items recognized in full in the interim financial period. In the first half year 2021 the remeasurement to fair value of pre-existing interest in HENSOLDT Cyber in June 2021 were treated as discrete items. As such, the effective tax rate in the Interim Financial Statements may differ from management's estimate of the effective tax rate for the annual Financial Statements.
The decrease in income tax income of €18.6 million to €9.7 million compared to €28.3 million in the first half year 2020 resulted mainly from deferred taxes due to the revaluation of the embedded derivative in the first half year 2020.
Intangible assets remained nearly stable compared to prior year and were slightly effected by the first-time consolidation of HENSOLDT Cyber and the net increase in development cost.
The first time consolidation of HENSOLDT Cyber led to a goodwill of €14.0 million that was allocated to the segment Sensors. The purchase price allocation is preliminary.
| Jun. 30, | Dec. 31, | |
|---|---|---|
| in € million | 2021 | 2020 |
| Other investments | 16.7 | 11.2 |
| Other non-current financial assets | 0.1 | 0.1 |
| Other investments and other non-current financial assets | 16.8 | 11.3 |
| Other non-current financial assets, due on short-notice | 3.6 | 11.2 |
| Total | 20.4 | 22.5 |
The changes in other investments include other acquisitions of non-consolidated companies. The change in other non-current financial assets, due on short notice include effects from the change in the consolidation method of HENSOLDT Cyber in 2021.
Inventories increased by €97.6 million to €501.3 million compared to €403.7 million mainly due to increased work in progress following the usual seasonality pattern.
Contract assets decreased slightly by €10.9 million to €193.5 million mainly due to project closures of radar programs.
Trade receivables decreased by €39.9 million to €242.1 million following the usual seasonality pattern.
| Jun. 30, | Dec. 31, | |
|---|---|---|
| in € million | 2021 | 2020 |
| Provisions for pensions | 401.0 | 429.8 |
| Other provisions | 215.3 | 246.4 |
| Total | 616.3 | 676.2 |
| thereof non-current | 454.4 | 482.6 |
| thereof current | 161.9 | 193.6 |
Provisions for pensions decreased by €28.8 million to €401.0 million mainly due to higher interest rates.
Other provisions decreased by €31.1 million to €215.3 million mainly for personnel-related provisions due to seasonal patterns.
Other financial assets
| Jun. 30, | Dec. 31, | |
|---|---|---|
| in € million | 2021 | 2020 |
| Positive fair values of derivative financial instruments | - | 0.3 |
| Miscellaneous other non-current financial assets | 0.7 | 0.7 |
| Other non-current financial assets | 0.7 | 1.0 |
| Positive fair values of derivative financial instruments | 3.5 | 5.1 |
| Receivables from employees | 1.7 | 0.8 |
| Miscellaneous other current financial assets | 2.0 | 1.1 |
| Other current financial assets | 7.2 | 7.1 |
| Total | 7.9 | 8.0 |
Other financial liabilities
| Jun. 30, | Dec. 31, | |
|---|---|---|
| in € million | 2021 | 2020 |
| Miscellaneous other non-current financial liabilities | 0.0 | 0.2 |
| Other non-current financial liabilities | 0.0 | 0.2 |
| Negative fair values of derivative financial instruments | 4.3 | 6.4 |
| Liabilities from factoring contracts1 | 1.7 | 91.3 |
| Miscellaneous other current financial liabilities | - | 0.1 |
| Other current financial liabilities | 6.0 | 97.8 |
| Total | 6.0 | 98.0 |
1 Liabilities from factoring contracts result from the fact that the collection of payments by the
factoring party w as not yet due as of the balance sheet date.
Other assets
| Jun. 30, | Dec. 31, | |
|---|---|---|
| in € million | 2021 | 2020 |
| Other | 3.4 | 4.8 |
| Total other non-current assets | 3.4 | 4.8 |
| Advance payments made | 98.3 | 57.9 |
| VAT | 24.3 | 12.5 |
| Miscellaneous other current assets | 9.1 | 8.2 |
| Total other current assets | 131.7 | 78.7 |
| Total | 135.1 | 83.5 |
| Jun. 30, | Dec. 31, | |
|---|---|---|
| in € million | 2021 | 2020 |
| Liabilities to employees | 6.9 | 8.9 |
| Total other non-current liabilities | 6.9 | 8.9 |
| Tax liabilities (not incl. income tax) | 24.8 | 37.2 |
| Liabilities to employees | 42.5 | 30.2 |
| Liabilities to social security agencies | 5.3 | 5.8 |
| Other | 11.9 | 13.7 |
| Total other current liabilities | 84.4 | 86.9 |
| Total | 91.3 | 95.8 |
The following tables show the carrying amounts and fair values of financial assets and financial liabilities including their levels in the fair value hierarchy. For some short-term financial assets and liabilities the carrying amount is a reasonable approximation of the fair value.
| Jun. 30, 2021 | ||||
|---|---|---|---|---|
| in € million | Category | Carrying amount |
Fair value | Level |
| Assets | ||||
| Other investments and other non-current financial assets1 | FVtOCI | 16.8 | 16.8 | - |
| Other non-current financial assets, due on short-notice | AC | 3.6 | 3.6 | - |
| Trade receivables | AC | 176.0 | 176.0 | - |
| Trade receivables (intented for factoring)1 | FVtOCI | 66.1 | 66.1 | - |
| Other financial assets: | ||||
| Derivative instruments for cash flow hedges | FVtOCI | 0.1 | 0.1 | 2 |
| Other derivative instruments | FVtPL | 3.4 | 3.4 | 2 |
| Non-derivative instruments1 | AC | 4.3 | 4.3 | - |
| Cash and cash equivalents | AC | 281.8 | 281.8 | 1 |
| Total financial assets | 552.1 | 552.1 | ||
| Liabilities | ||||
| Financial liabilities: | ||||
| Liabilities to banks | FLAC | 816.7 | 827.2 | 2 |
| Trade payables | FLAC | 188.1 | 188.1 | - |
| Other financial liabilities: | ||||
| Other derivative instruments | FVtPL | 4.3 | 4.3 | 2 |
| Liability from put option | FVtPL | - | - | 3 |
| Other miscellanous financial liabilities | FLAC | 1.7 | 1.7 | - |
| Total financial liabilities | 1,010.8 | 1,021.3 |
1 Fair Value corresponds to cost due to materiality
| Dec. 31, 2020 | ||||
|---|---|---|---|---|
| in € million | Category | Carrying amount |
Fair value | Level |
| Assets | ||||
| Other investments and other non-current financial assets1 | FVtOCI | 11.3 | 11.3 | - |
| Other non-current financial assets, due on short-notice | AC | 11.2 | 11.2 | - |
| Trade receivables | AC | 240.1 | 240.1 | - |
| Trade receivables (intented for factoring)1 | FVtOCI | 41.9 | 41.9 | - |
| Other financial assets: | ||||
| Derivative instruments for cash flow hedges | FVtOCI | 0.4 | 0.4 | 2 |
| Other derivative instruments | FVtPL | 5.0 | 5.0 | 2 |
| Non-derivative instruments1 | AC | 2.7 | 2.7 | - |
| Cash and cash equivalents | AC | 645.5 | 645.5 | 1 |
| Total financial assets | 958.1 | 958.1 | ||
| Liabilities | ||||
| Financial liabilities: | ||||
| Liabilities to banks | FLAC | 964.7 | 971.1 | 2 |
| Trade payables | FLAC | 164.0 | 164.0 | - |
| Other financial liabilities: | ||||
| Other derivative instruments | FVtPL | 6.4 | 6.4 | 2 |
| Liability from put option | FVtPL | - | - | 3 |
| Other miscellanous financial liabilities | FLAC | 91.7 | 91.7 | - |
| Total financial liabilities | 1,226.8 | 1,233.1 | ||
1 Fair Value corresponds to cost due to materiality
The input factors used and the measurement methods applied are described in the year end Consolidated Financial Statements as at December 31, 2020.
The Group´s companies are from time to time involved in various legal and arbitration proceedings in the ordinary course of its business, the most significant of which are described below. Other than as described below, the Group is not aware of any material governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened), which may have or have had in the reporting period significant effects on the Group's financial position or profitability.
In January 2020 a major customer filed an arbitration claim with the contractually agreed arbitration board regarding a partially fulfilled contract and demanded refund of payments already made (approximately €31.0 million plus interest) plus further costs and expenses. HENSOLDT considers the asserted claims to be without merit and filed an arbitration counterclaim in May 2020 asserting a claim for performance of the contract, i.e. for payment in accordance with the underlying contract (approximately €11.0 million plus interest). A sufficiently certain statement about the outcome of the arbitration proceedings is still not possible.
| First half year | ||
|---|---|---|
| Number of employees (Average figures per end of quarter, FTEs)1 | 2021 | 2020 |
| Production, research and development, service | 4,934 | 4,626 |
| Sales and distribution | 218 | 223 |
| Administration and general services | 704 | 679 |
| Apprentices, trainees, etc. | 472 | 406 |
| Total | 6,327 | 5,934 |
1 Adjustment of the previous year's period due to changed calculation logic of the FTE in 2021
There are no significant events after the reporting date.
Review Report
To HENSOLDT AG, Taufkirchen, District of Munich
We have reviewed the condensed interim consolidated financial statements of HENSOLDT AG, Taufkirchen, District of Munich – comprising the consolidated balance sheet as per June 30, 2021, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of cash flows, the consolidated statement of changes in equity and selected notes to the condensed interim consolidated financial statements – together with the Interim Group Management Report of HENSOLDT AG, for the period from January 1 to June 30, 2021 that are part of the semi-annual financial report according to § 115 WpHG ['Wertpapierhandelsgesetz': 'German Securities Trading Act']. The preparation of the condensed interim consolidated financial statements in accordance with International Accounting Standard IAS 34 'Interim Financial Reporting' as adopted by the EU, and of the interim group management report in accordance with the requirements of the WpHG applicable to interim group management reports, is the responsibility of the company's management. Our responsibility is to issue a report on the condensed interim consolidated financial statements and on the interim group management report based on our review.
We performed our review of the condensed interim consolidated financial statements and the interim group management report in accordance with the German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW). Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with a certain level of assurance, that the condensed interim consolidated financial statements have not been prepared, in material respects, in accordance with IAS 34, "Interim Financial Reporting" as adopted by the EU, and that the interim group management report has not been prepared, in material respects, in accordance with the requirements of the WpHG applicable to interim group management reports. A review is limited primarily to inquiries of company employees and analytical assessments and therefore does not provide the assurance attainable in a financial statement audit. Since, in accordance with our engagement, we have not performed a financial statement audit, we cannot issue an auditor's report.
Based on our review, no matters have come to our attention that cause us to presume that the condensed interim consolidated financial statements have not been prepared, in material respects, in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the EU, or that the interim group management report has not been prepared, in material respects, in accordance with the requirements of the WpHG applicable to interim group management reports.
Munich, August 3, 2021
KPMG AG Wirtschaftsprüfungsgesellschaft
Leistner Peschel Wirtschaftsprüfer Wirtschaftsprüfer
[German Public Auditor] [German Public Auditor]
Responsibility Statement
The Management Board of HENSOLDT hereby declares that, to the best of their knowledge:
In accordance with the applicable reporting principles for semi-annual financial reporting, the Condensed Interim Consolidated Financial Statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the Interim Group Management Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the material opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.
Taufkirchen, August 3, 2021
HENSOLDT AG
The Management Board
Thomas Müller Axel Salzmann Peter Fieser Celia Pelaz Perez
Legal information and contact
HENSOLDT AG Investor Relations Willy-Messerschmitt-Strasse 3 82024 Taufkirchen Germany Phone: +49.89.51518-2499 E-Mail: [email protected]
Managing Directors: Thomas Müller (Chairman), Axel Salzmann, Peter Fieser and Celia Pelaz Perez Registration Court: District court of Munich, HRB 258711
Disclaimer
This semi-annual financial report contains forecasts based on assumptions and estimates by the management of HENSOLDT. These statements based on assumptions and estimates are in the form of forward-looking statements using terms such as 'believe', 'assume', 'expect' and the like. Even though the management believes that these assumptions and estimates are correct, it is possible that actual results in the future may deviate materially from such assumptions and estimates due to a variety of factors. The latter may include changes in the macroeconomic environment, in the statutory and regulatory framework in Germany and the EU, and changes within the industry. HENSOLDT does not provide any guarantee or accept any liability or responsibility for any divergence between future developments and actual results, on the one hand, and the assumptions and estimates expressed in this semi-annual financial report.
HENSOLDT has no intention and undertakes no obligation to update forward-looking statements in order to adjust them to actual events or developments occurring after the date of this report.
The semi-annual financial report is denominated in Euro. All amounts in the semi-annual financial report are rounded to thousand or million Euros. Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
The semi-annual financial report is also available in German. In case of discrepancies, the German language document is the sole authoritative and universally valid version.