Hensoldt Ag Unsp/Adr

Ladies and gentlemen, welcome to the Henselt AG H1 results 2025 analyst conference call. I am Helise, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Veronica Endres, Head of Investor Relations. Please go ahead.

Good afternoon, everybody, and a warm welcome to Hensel's H1 2025 results call. Thank you all for joining us today. I'm Veronika Endres, Head of Investor Relations at Hensholt, and with me are our CEO, Oliver Dörre, and our CFO, Christian Ladona. Oliver and Christian will guide you through this presentation today, which will be followed by a Q&A session. And with that, over to you, Oliver.

Well, thank you very much, Veronika, and a very warm welcome to all our investors and the analysts following Hensholt. It's really great to have you with us today. I'd like to start with a quick snapshot of where we stand on the four axes of our North Star strategy. Overall, we are progressing strongly. The eight major transformation programs steered by our group transformation office are advancing as planned and already making an impact. Let's begin with Grow with Focus. We have essentially completed the sales transformation. Resources and priorities are now fully aligned with our strategic goals. Germany is and will remain our anchor customer, forming the foundation of our business, supported by Europe and selected international markets. We are appointing our first key account leads, embedding customer centricity even deeper into our organization. Going forward, it's not just about selling, it's about serving our customers, better than anyone else. On deliver at scale, this has become a clear imperative, underscored by the recent statements from Chancellor Merz and Defense Minister Pistorius. I will elaborate on this shortly, but one thing is clear. The chimneys at our factories are smoking. We have stabilized the operation of our new logistics center and are systematically clearing production backlogs. running electronics production in two shifts and logistics in three. The move to our Oberkochen site is well underway and on schedule. On pioneering software-defined defense, I'm pleased to announce that Sven Hoyersch joins Hensoldt tomorrow as our new head of SDD and digitalization. As a former German Air Force officer, Sven brings deep operational expertise that will significantly accelerate our progress here. Finally, on culture, which is crucial as we grow, I left our recent leadership team meeting inspired and proud. Among our top 80 leaders, there is no strong shared determination to take Hansolt to the next level together. Turning to the geopolitical landscape, the NATO summit in June reaffirmed what we expected. Despite doubts earlier this year, the alliance is united and determined. There is a broad consensus that defense spending must reach 3.5% of GDP, and NATO is clearly preparing for the possibility of conflict with a peer adversary. From where I stand, it's evident that Germany is stepping into its role as the frontrunner of NATO's European pillar, with far-reaching implications. The sharp increase in Germany defense budget will set procurement benchmarks for Europe and drive a de facto consolidation in our industry. With our deep roots in Germany and unmatched customer intimacy, Hensoldt is ideally positioned to play a central role in this development. You may recall this timeline from our Q1 call, and since then, our confidence has only grown that Germany's 2025 defense budget will be approved right after the summer break, the government's Eckwertepapier, the cornerstones of the budget, are already outlined, and they set clear priorities. We expect OEM-level orders to start arriving by the end of this year, and with the usual downflow, these will start appearing in our order book no later than mid-2026. Here you see the trajectory of Germany's defense budget over the next five years. It will more than double, reaching 3.5% of GDP, about $160 billion, including support for Ukraine, by 2029. To put it plainly, while others are still reading the timetable, Germany's train has already left the station and it's picking up speed. Importantly, it's not just about more money. It's about focus and purpose. Chancellor Maersk has promised to build the strongest conventional army in Europe, and procurement reflects that ambition. We see a dual approach. On one side, a massive ramp-up of conventional capabilities, with, for example, armored vehicles orders reaching five-digit numbers through high-volume frame contracts. On the other, increasing investment in technological sovereignty with significant R&D spent on advanced capabilities. As a high-tech solution provider, Hensoldt is perfectly positioned to benefit from both trends. Looking at our order intake in H1 2025, Eurofighter and TML4D once again drove sales to a strong 1.5 billion. lifting our order backlog to a record of €7 billion. We are particularly proud that Ukraine will soon receive an enhanced TMA-L4D capable of detecting enemy artillery and mortar sites, proof of how our software-driven products can deliver new functionality rapidly. The outlook for the second half of the year remains bright, and we see the strong momentum continuing for the rest of 2025 with a series of key orders on the horizon. We expect major contracts across air defense radars, Eurofighter programs, ground-based systems, and sustainment projects like the German P-8 Poseidon. Notably, we anticipate orders exceeding 500 million euro for optronics, and self-protection systems for platforms such as the new reconnaissance vehicle Corsac, Leopard 2 tank, and Boxer RCT-30. Our radars continue to sell exceptionally well with additional orders for TML-4D and SPEXA coming up. New projects for the Eurofighter and Algeria's border surveillance will further contribute significantly. Finally, a quick outlook at how we are ramping up capacity. Since 2022, we have been expanding production capacity through continuous improvement, automation, and outsourcing, integrated into our annual capex. This, of course, will continue. Our new logistics center and the Oberkochen move are transformative, laying the foundation for scale, efficiency, and profitability. Thanks to these initiatives, we have sufficient capacity for the next two to three years. But with the German defense budget rising and visibility on future orders improving, we are preparing a step change in our operations, fundamentally transforming our industrial system to ensure scalability, resilience, and customer service excellence. And with this view, what lies ahead? I'll now hand over to Christian for a closer look at the numbers, and thank you very much.