Indra sets out on the road to becoming the national champion of the Spanish defence industry
Sponsored by the Ministry of Defence and having received all the blessings of the Moncloa Palace, the Spanish technology company Indra has just given the go-ahead to become the long-awaited national champion of the Spanish defence sector.
Indra's non-executive chairman for exactly two years, Marc Murtra, made this clear at the start of his opening speech at the General Shareholders' Meeting held on Friday 30 June at the company's headquarters in Alcobendas, near Madrid.
His exact words were that Indra "has faced challenges, has made the necessary changes and has taken important decisions that have put it on the path to stability and growth". Murtra described the times ahead for the company as "a new era", with "new leadership, new shareholders and new board members" who, in his opinion, "more accurately reflect the new vision for the future".
In case there was any doubt about the meaning of his words, in a brief meeting with the media after the end of the Shareholders' Meeting, when asked by Atalayar whether Indra aspires to be the national champion, the chairman of the multinational was terse but clear.
In his answer, Murtra specified that "the term national champion is not technically defined or approved". But he confirmed that Indra "has the vocation and the decision to be the great technological operator in the field of defence, to be the great Spanish defence company and, therefore, yes, to be the national champion".
It aspires to be the number one in air traffic management systems
What Murtra has defined as a "new era" began with the ratification by the company's shareholders' meeting of the new CEO, José Vicente de los Mozos, 61, appointed on 18 May. He is an aeronautical engineer who until recently was the Renault group's General Manager for Manufacturing and Logistics worldwide, Chairman of the Board of Directors of Renault España and President of the National Association of Automobile Manufacturers, ANFAC.
The President of the company controlled by Moncloa and the Ministry of Finance, through SEPI, presented the new head as a man "with experience, independence, industrial background and great personality". He went on to stress that "together" we are going to work "to promote a company that is more focused on future business and new technological opportunities".
Marc Murtra has launched a challenge to its most direct competitors in the air traffic management business, a growing market in which communication, navigation and surveillance technologies merge to ensure the safety and fluidity of civil and military air traffic on a global scale. He stated that Indra is already "number two internationally" and anticipated that "we aspire to be number one... soon".
He emphasised that "important growth actions" are being carried out and highlighted the recent purchase of a company in the United States -Selex ES, a subsidiary of the Italian company Leonardo- which, from his perspective, "will mean breaking entry barriers in the world's largest air traffic market". This will be accompanied by "strong commercial actions in the areas of greatest growth, such as Asia-Pacific and others with higher margins, such as Europe".
Along these lines, the new CEO also stressed that Indra "needs to grow to compete in Europe with aerospace and defence companies such as Leonardo or Thales, which are much larger and whose control over the value chain is higher than ours". Thales is the large French electronics group for information systems and technologies for the aerospace, defence and security sectors, while Leonardo is the large Italian industrial corporation in the aeronautics, space and defence industry.
José Vicente de los Mozos says he comes to Indra with a "high degree of motivation, determination and commitment to lead this great company". He informed shareholders that his last six weeks have allowed him to "fully immerse himself and assess" the state of the company, which has "transversal and driving digital capabilities (...) that have not been properly exploited to date". Nevertheless, Marc Murtra notified shareholders that 2022 has been "an extraordinary year for Indra" in which "we have met the objectives committed to with investors".
Becoming a full systemist
He also described 2022 as "outstanding", noting that in the past year "we have managed to reach record highs in the order book", which he valued at 6,309 million euros, a 27% growth, with Ignacio Mataix as CEO. The transport and defence business area took the lion's share, with 4,557 million euros, representing 72.2% of the overall portfolio.
The company has been focused on what it calls "financial prudence", thanks to which it has managed to reduce its net debt to 43 million euros and obtain profits of 172 million. All of the above brings "solidity to our financial position", Murtra stresses, which, charged to 2022 profits, allows us to pay dividends of 0.25 euros per share payable this July.
As for Indra's acquisition of a significant stake in Spanish engine manufacturer ITP Aero, both Marc Murtra and José Vicente de los Mozos have avoided referring to it in their speeches and in their answers to questions from the media.
The majority shareholder of ITP Aero is Bain Capital, a US private equity firm with a clear advantage. The two companies agreed that 30 June was the deadline to sign off on the transaction, although there may be an agreement to extend the deadline. Indra wants to buy a significant shareholding in ITP Aero at all costs, which clearly increases the sale price.
Indra's recent allies are the industries that in May became shareholders of the multinational: Escribano Mechanical and Engineering of Alcalá de Henares (Madrid), which acquired 3% of the capital with the intention of reaching 10% before the end of the year; and SAPA Placencia, specialised in transmission and mobility technologies for military vehicles, which bought 5%.
Marc Murtra and José Vicente de los Mozos reiterate that to be a national champion and compete successfully in the global aerospace and defence market, Indra must "increase its size and maintain its focus on systems as a major growth area". "Our ambition is to be a complete systems player," Murtra reiterated.
