Revenues (€4,343m) increased by 13% in 2023 compared to 2022, with growth accelerating in the last quarter of the year (up 15% vs. Q4 2022)

Indra's revenues, EBIT, net profit and FCF grow at double-digit rates in 2023

Presentación de resultados de Indra
Indra results presentation

Indra's revenues in 2023 grew by 14% in local currency (up 13% in reported), relative to the previous year 2022, following the company's own disclosures. 

  1. Key highlights
  2. Record portfolio
  3. Other highlights
  4. Very good results

Key highlights

  • Transport & Defence revenues increased 19% in local currency, driven by strong growth in Defence & Security (up 24%, due to higher contributions from FCAS and Eurofighter projects); and Air Traffic (up 25% due to strong performances in India, Belgium and Senegal, as well as inorganic contributions from ATM's Selex division in the US and Park Air). In addition, Transport revenues increased by 7% thanks to the certification of milestones in several contracts during the fourth quarter of 2023 (infrastructure project at Lima airport, I-66 highway in the US, toll collection systems on the Tren Maya in Mexico, the railway project in Romania and the tunnel management systems in Ireland and the UK).
  • The Minsait division's revenues in 2023 increased by 11% in local currency. All verticals posted double digit growth (Financial Services 14%; Energy & Industry 13% and Public Administrations & Healthcare 12%), except Telecom & Media (down 1% due to the completion of a relevant BPO contract in Colombia). Of note was the growth in Public Administrations & Healthcare excluding the Elections business (21%, due to the increased activity in strategic projects derived from the European funds with the central and regional government), as well as in the areas of Means of Payment, Cybersecurity and Digital businesses, led by Artificial Intelligence (AI) and Cloud. Likewise, in FY2023, the traditional Outsourcing offering has been modernised, evolving it to Cloud formats and beginning to incorporate generative AI in the different services.

For the fourth quarter of 2023, revenues increased by 16% in local currency (15% reported) compared to the same period last year:

  • Transport & Defence division revenues increased by 22% in local currency, with double-digit growth in all verticals: Transport by 36%; Air Traffic by 24% and Defence & Security by 14%.
  • Minsait's revenues in the fourth quarter increased by 13% in local currency, with all verticals showing double digit growth (Public Administrations & Healthcare 26%; Financial Services 12% and Energy & Industry 10%); with the exception of Telecom & Media, which declined by 3%.

Foreign exchange reduced revenues by €55m in 2023, mainly due to currency depreciation in the Americas (Argentina and Colombia) and in the AMEA region (mainly the Philippines, Australia and China). For the quarter, exchange rates subtracted €19m, mainly due to the depreciation of the Argentinean peso.

Organic revenues in 2023 (excluding the inorganic contribution from acquisitions and the exchange rate effect) grew by 12%. By division, Transport & Defence grew 17% and Minsait 9%. Organic revenues in the fourth quarter grew 14%, with Transport & Defence up 18% and Minsait up 12%.

Digital, Proprietary Solutions and Third-Party Solutions & Other (56% of Minsait's revenues) collectively grew 8% in reported terms in 2023. Of particular note was the growth in the Proprietary Solutions division (28%; 11% of Minsait's sales), driven by the Means of Payment business (organic growth together with the inorganic contribution of the Chilean company Nexus) and the Digital division (17%; 29% of Minsait's sales), which continues to see strong customer demand in Cybersecurity, Artificial Intelligence and migration to the Cloud.

Record portfolio

The backlog in 2023 stood at €6,776 M, showing a 7% growth in reported terms versus 2022. The Transport & Defence division's backlog amounted to €4,627m and increased by 1% year-on-year, with Defence & Security having a cumulative backlog of €2,953m. Minsait's backlog amounted to €2,149m and grew by 25% compared to 2022. The backlog to sales ratio for the last twelve months stood at 1.56x in 2023 compared to 1.64x in 2022.

Net order intake in 2023 decreased by 3% in local currency (4% reported), mainly due to the signing of phase 1B of the FCAS project, which took place at the end of the previous year (€ 39m in 2023 vs. € 575m in 2022). Excluding this effect, order intake would have increased by 8% on a reported basis:

  • Transport & Defence order intake in 2023 decreased by 28% in local currency, as a consequence of the declines recorded in Defence & Security (down 39%, due to the FCAS project comparative) and in Air Traffic (down 23%, also due to the strong order intake - of 62% - that took place in 2022 vs 2021, related to the contracts of Enaire in Spain, DFS in Germany, Avinor in Norway, and projects in India and Australia). On a positive note, order intake in Transport increased by 7% (notably the Tren Maya in Mexico and toll systems in the US).
  • Minsait's order intake in 2023 grew 19% in local currency, continuing the strong demand from clients and with all verticals showing double-digit growth (Financial Services 26%; Public Administrations & Healthcare 20%; Telecom & Media 19% and Energy & Industry 11%). Of note was the growth in Public Administrations & Healthcare, as it offset the strong order intake in 2022 due to the Elections project in Angola (excluding the Elections business, order intake in the vertical would have increased by 32% in reported terms, mainly driven by the award of large strategic projects derived from European funds).

Other highlights

Reported EBITDA in 2023 amounted to €446m compared to €400m in 2022, showing a growth of 11%, equivalent to an EBITDA margin of 10.3% in 2023 and 10.4% in the previous year. On a quarterly basis, EBITDA amounted to €141m vs €118m in Q4 2022 (equivalent to a margin of 10.6% in 4Q23 vs 10.2% in 4Q22).

Marc Murtra, Indra
Marc Murtra, Indra

Operating margin for the year stood at €403m vs. €354m in 2022, equivalent to a margin of 9.3% vs. 9.2%. Operating margin in the last quarter of the year was €134m versus €112m in the same period last year (equivalent to a margin of 10.1% vs. 9.7%).

  • The Operating Margin of the Transport & Defence division in 2023 stood at 13.4% compared to 12.9% in 2022, driven by increased profitability in Defence & Security and Air Traffic. Operating margin in the fourth quarter was 14.2%, the same profitability as in the same period of 2022.
  • The operating margin of the Minsait division in 2023 was 6.9% compared to 7.3% in 2022; lower profitability mainly due to the contribution of the Angola Elections project that took place in the previous year. In the fourth quarter, the operating margin was 7.0% compared to 6.6% in Q4 2022; an improvement due to operating leverage, mix improvement, as well as lower wage inflation pressure. 

Reported EBIT in 2023 stood at €347m versus €300m in 2022, increasing by 15% on a reported basis, which equates to a margin of 8.0% versus 7.8%. Reported EBIT in the fourth quarter was €119m compared to €96m in the same months last year, equivalent to an EBIT margin of 9.0% versus 8.3%:

  • Transport & Defence EBIT Margin stood at 12.7% versus 12.2% in 2022. EBIT Margin in Q4 2023 was 13.7% compared to 13.8% in Q4 2022.
  • Minsait's EBIT margin in 2023 was 5.3% versus 5.5% in 2022. In the last three months of the year, the EBIT Margin stood at 5.4% compared to 4.6% in those months in the previous year.

Net Profit amounted to €206m in 2023 compared to €172m in 2022, an increase of 20%.

Free Cash Flow stood at € 312m, up from € 253m in 2022. The growth is mainly explained by higher operating profitability, improved working capital variation and higher subsidy receipts. Cash generation in the last quarter of 2023 was € 195m versus € 199m in the fourth quarter of 2022.

Net Debt stood at € 107m in December 2023 versus € 43m in December 2022. The Net Debt/EBITDA LTM ratio (excluding IFRS 16 impact) stood at 0.3x in December 2023 versus 0.1x in December 2022. This increase in Net Debt is explained by the financial investments item (€284m relating to payments for acquisitions); the dividend payment in July 2023 (€44m) charged against 2022 profits; and by the acquisition of treasury shares (€33m) to cover mainly the future delivery of shares under the 2021-2023 medium-term remuneration scheme.

José Vicente de los Mozos, Indra
José Vicente de los Mozos, Indra

Very good results

According to Marc Murtra, Indra's chairman, "these results are the fruit of the hard work and efforts made at Indra. During 2023 the Defence and Technology areas have continued to grow and we have made a significant effort to continuously improve the work we do for our customers. We believe we have a great starting point for our new Strategic Plan".

Commenting on the financial results, José Vicente de los Mozos, CEO of Indra, said, "The actions we have implemented in the second half of 2023 have enabled us to improve on the revised revenue, EBIT and FCF targets we had given at the close of last year's first six months results. These results demonstrate the company's strong position, which will allow us to establish a solid base for our Leading The Future strategic plan, which we will present on 6 March and which will be the starting point for Indra's future of constant growth".

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