1Q23 Backlog reached a new all-time high, €6,772m (+13.1% vs 1Q22), while Order Intake up +4.2% vs 1Q22, bolstered again by Transport & Defence

Indra increases its net result by 11.1%, with a backlog of 6.772 billion euros and growth in all income statement ítems

photo_camera PHOTO/FILE - Indra

Indra increases its net result by 11.1%, with a backlog of 6.772 billion euros and growth in all income statement ítems.

Backlog reached new all-time high and stood at €6,772m in 1Q23, implying +13% growth in reported terms vs 1Q22. Transport & Defence backlog amounted to €4,802m and increased by +21% in 1Q23 vs 1Q22, standing out Defence & Security, which amounted to €3,113m. For its part, Minsait backlog went down -2% in 1Q23 vs 1Q22 and totaled €1,970m. Backlog/Revenues LTM ratio stood at 1.73x in 1Q23 vs 1.72x in 1Q22.

Order intake in 1Q23 registered +4% increase in local currency (+4% in reported terms):

  • Order intake in the Transport & Defence division in 1Q23 was up +31% in local currency, with strong growth reported in Transport & Traffic (+60% in local currency), both in the Air Traffic segment (higher activity with Enaire in Spain and ATM projects in Honduras and Belgium) and in Transport (rail projects and Ticketing in Spain). For its part, order intake in Defence & Security grew at double-digit rates (+16% in local currency), bolstered by Spain (remaining amount of phase 1B of the FCAS project, and Identification and Self-protection Systems for F-18) and AMEA (Air Defence Systems in Rwanda).  
  • Order intake in the Minsait division in 1Q23 decreased -7% in local currency, mainly affected by the decline posted in Public Administration & Healthcare (-33% in local currency), due to the order intake of the Elections project in Angola that took place in 1Q22. Excluding the Election business, order intake in Minsait would have grown +9% in reported terms. On the other side, it stood out the double-digit growth registered in Energy & Industry (+16% in local currency), due to the positive performance showed in Spain, Philippines, Brazil and Peru.

1Q23 revenues grew +7% in local currency (+8% in reported terms) vs 1Q22:

  • 1Q23 revenues in the T&D division declined by -4% in local currency, with declines both in Defence & Security (-4% in local currency), due to the lower one-off contribution from Eurofighter and the FCAS project in the first quarter, which will start to contribute strongly to revenues in the second quarter of the year, as well as in Transport & Traffic (-3% in local currency), due to the decline registered in the Transport segment (-21%, due to the relevant contribution that took place in 1Q22 of the Interurban Systems project in Riyadh and the Control Systems and Ticketing projects in Egypt). On the contrary, the Air Traffic segment grew by +20%, driven by increased business activity in all geographies, particularly in Spain, India, UK, Norway, Belgium and Uruguay.
  • 1Q23 revenues in the Minsait division increased by +13% in local currency, with all the verticals registering very positive performance, standing out the double-digit growth posted in Financial Services (+15% in local currency, mainly due to the inorganic contribution of the Chilean company Nexus, specialized in Payment Systems, as well as increased activity with large banks in Spain and Mexico), Energy & Industry (+14% in local currency, highlighting Brazil in Energy and Spain in the Energy, Retail and Food sectors) and Public Administrations & Healthcare (+11% in local currency, because of the positive activity in Spain and Italy). In addition, Telecom & Media revenues also showed solid growth (+4% in local currency), due to the higher activity with the main Telecom operators in Spain and America.

FX impact contributed positively with €3m in 1Q23, mainly due to the appreciation of Latin American currencies (mainly Mexican peso and Brazilian real).

Organic revenues in 1Q23 increased +5% (excluding the inorganic contribution of the acquisitions and the FX impact). By divisions, Minsait showed +10% organic growth while Transport & Defence recorded -4% in 1Q23.
Minsait Digital revenues reached €189m (29% of Minsait sales) in 1Q23, which implied +20% increase vs 1Q22, backed by strong customer demand in digital transformation, cybersecurity, advanced analytics, process robotization and cloud migration. Digital, Proprietary solutions and Implementation of third party solutions & Others joint sales showed +20% growth in 1Q23 and accounted for 56% of Minsait sales.

1Q23 reported EBITDA stood at €92m vs €87m in 1Q22, showing +5.6% growth in reported terms, equivalent to 10.0% EBITDA margin in 1Q23 vs 10.2% in 1Q22.

Operating Margin was €76m in 1Q23 vs €72m in 1Q22, equivalent to 8.3% margin in 1Q23 vs 8.5% in 1Q22, due to the slight decrease in profitability in the Minsait division: 

  • 1Q23 Operating Margin in the T&D division reached €33m vs €30m in 1Q22, equivalent to 12.2% margin vs 10.7% last year same period, mainly thanks to the higher profitability posted in Transport & Traffic.
  • 1Q23 Operating Margin in Minsait stood at €43m vs €42m in 1Q22, equivalent to 6.7% operating margin in 1Q23 vs 7.4% in 1Q22, slightly lower profitability due to the lower contribution of the Elections project, as well as the impact of wage inflation.

Total workforce restructuring costs amounted to €-4m in 1Q23 vs €-6m in 1Q22.

1Q23 reported EBIT was €65m vs €60m in 1Q22, growing +8.4% in reported terms, equivalent to 7.1% EBIT margin in 1Q23 vs 7.0% in 1Q22:

  • EBIT margin in the T&D division stood at 11.7% in 1Q23 vs 9.8% in 1Q22.
  • EBIT margin in Minsait stood at 5.2% in 1Q23 vs 5.7% in 1Q22.

1Q23 Net profit of the group reached €44m vs €39m in 1Q22, implying an increase of +11.1%.

1Q23 Free Cash Flow was €27m vs €13m last year same period.

Net Debt declined to €27m in March 2023 vs €43m in December 2022 and vs €215m in March 2022. Net Debt/EBITDA LTM ratio (excluding the impact of IFRS 16, the capital gain from the sale of the facilities and the provision of the Real Estate Plan) stood at 0.1x in March 2023 vs 0.1x in December 2022 and vs 0.7x in March 2022.

Outlook 2023 

The Company reiterates its 2023 targets:

  • Revenues in constant currency: > €4,000m.
  • EBIT reported: > €315m.
  • Free Cash Flow reported: > €200m.

Ignacio Mataix, Chief Executive Officer of Indra, said: “The results for the first quarter of 2023 are characterized by growth in all items of the income statement, standing out net income, which grew at a double-digit rate. During this first quarter, both the strong market demand and the solid commercial performance of our business continued, as evidenced by the growth showed in order intake and backlog, which reached a new all-time high and improve growth expectations for the coming years. Both Indra's revenues and EBIT experienced strong growth that almost reached double-digit rates, showing the fast conversion of these commercial achievements in the execution of the projects, managing to maintain EBIT margin at similar levels than in the first quarter of 2022, despite the context of strong wage inflation pressure in the main markets where we operate. For yet another quarter, cash generation once again showed a very positive performance, more than doubling the favorable execution posted in the first quarter of 2022, and reducing financial leverage over again. These first quarter results represent a positive start to fiscal 2023, fully aligned with our annual targets and our 2021-2023 Strategic Plan.”

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