‘Leading the Future’ plan accelerates Indra's results achievement
Indra's revenues in the first half of 2024 increased by 15%, with all divisions showing solid growth (ATM up 33%; Defence 31%; Mobility 13% and Minsait 9%).
In the second quarter of the year, revenue growth was also strong across all business divisions: Defence 17%; Mobility 9%; ATM 8% and Minsait 6%. Foreign exchange subtracted €16m from revenues in the first half (-0.8pp), mainly due to currency depreciation in Argentina and Chile. In the quarter, the subtraction was €9m (-0.8pp).
Organic revenues for the first six months of the year (excluding the inorganic contribution from acquisitions and the exchange rate effect) grew by 12%. By division, Defence increased revenues by 29%; ATM by 19%; Mobility by 13% and Minsait by 7%. For the second quarter alone, organic revenues increased by 6% (up - Defence 15%; Mobility 9%; Minsait 4% - with the exception of ATM, which declined 2%).
By geographic area, all the areas where Indra operates registered growth in the first six months of 2024. Specifically, Spain, which increased its revenues by 15%, continues to account for the largest percentage of the company's revenues (50%). It is followed by Europe, which accounts for 21% of sales and grew by 23% during the period. Behind them are the Americas, with an 8% increase and a 20% share of global revenues; and Asia, Middle East and Africa (AMEA), with 6% growth in the first half, equivalent to 9% of total sales.
Steady portfolio growth
The backlog in H1 2024 reached €7,148m, up 5% year-on-year, driven by Minsait and the ATM division. The backlog to revenues ratio for the last twelve months was 1.54x versus 1.68x for the same months of the previous year.
Net order intake in the first half increased 7%, with growth in all divisions except Mobility. Of note was the strong growth in MTA, mainly due to contracts in Canada and Colombia. The book-to-bill ratio of order intake to revenues was 1.16x versus 1.25x in the same period of 2023.
Other variables
During the first six months of the current year, the EBITDA margin stood at 10.0% compared to 9.4% in the same period last year, up 22% in absolute terms.
This improvement is mainly due to growth in the most profitable operating divisions, Defence and ATM, as well as improved profitability in Mobility. In the second quarter, the margin improved to 9.6% vs. 8.9% in the second quarter of 2023 and grew 17% in absolute terms despite higher structural costs due to the implementation of the strategic plan and one-off costs from potential acquisitions and divestments under analysis, mainly affecting the Defence division.
In the first half, the operating margin was 9.1% vs. 8.3% in the same period a year earlier, up 26% in absolute terms. For the quarter only, the operating margin was 8.9% vs. 8.3% in the same period of 2023.
The EBIT margin for the first six months was 7.8%, compared to 6.9% in the first half of the previous year, and grew 29% in absolute terms. In the second quarter, the margin improved to 7.5% vs. 6.7%, an increase of 21% in absolute terms.
Net income rose to €114m versus €90m in the first half of 2023, an increase of 27%. In the second quarter, net income grew by 15%.
Free Cash Flow in the period was € 69m compared to € 54m in the first six months of the previous year, an improvement mainly due to higher operating profitability. In the three months of the second quarter, cash generation was €1m (including the €41m IRPF payment corresponding to the delivery of shares of the 2021-2023 medium-term remuneration scheme) compared to €28m in those months of 2023.
Finally, Net Debt stood at €93m in June 2024 compared to €107m in December 2023 and €47m in June 2023. The Net Debt/EBITDA LTM ratio (excluding IFRS 16 impact) stood at 0.2x in June 2024 versus 0.3x in December 2023 and versus 0.1x in June 2023.
New 2024 Targets
The company updates its 2024 targets upwards:
- Revenues in local currency: higher than €4.8bn (from higher than €4.65bn, as forecast at the beginning of the year).
- Reported EBIT: higher than €415m (from higher than €400m).
- Reported Free Cash Flow: higher than €260m (from higher than €250m in the previous forecast).
Marc Murtra, Indra's CEO, explained in reference to the results that ‘we continue to work on optimising our operations and we have evidence of improvements that we can see in EBITDA and EBIT margins’.
He added that ‘we are in the process of implementing Indra's Technology Plan, which includes aligning our production capabilities and R&D efforts with the key technologies and products we have identified and announced at Capital Markets Day. We believe this is one of the most important efforts we must make for Indra's medium-term success.
José Vicente de los Mozos, CEO of Indra, said: ‘The speed with which Indra's teams have begun to implement the Leading the Future Strategic Plan has already had positive consequences for the company, resulting in higher-than-expected growth in revenues, EBITDA, EBIT and free cash flow. The consequence of all this is an upward revision of the targets we had set for the full year 2024.