Indra Sistemas Sa Ord

Good morning and welcome to Indira's first quarter 2024 results presentation. I now hand the conference over to Mr. Ezequiel Nieto, Head of Investor Relations. Please go ahead.

Good morning and welcome to our first quarter results 2024 presentation. I'm Ezequiel Nieto, Head of Investor Relations, and as usual, let me refer you to disclaimer on slide number three that shows the legal framework under which this presentation must be considered. First, let me introduce the participants of this call. José Vicente de los Mosos, CEO of Indra, Antonio Mora, Chief Control Officer, and Luis Abril, Managing Director of MINSIGHT. José Vicente, the floor is yours.

Thank you, Ezequiel. Ladies and gentlemen, good morning. And welcome to our conference, and thanks for being with us this morning. I think it's fair to say that our first quarter result has been very strong and positive. I try never go back and are a great starting point for our strategy plan leading the future and the right first step to achieve this target. Let's start with slide number five, where we display our main business achievement for the quarter. First of all, we have taken our first step to deliver on our strategy presented in the Capital Market Day by creating our space subsidiary with the aim of making it the cornerstone of our business activity in the coming years. As we said, we have the commitment of becoming a Tier 1 European player in space. We have also carried out the acquisition of the whole capital of global training, Aviation, to reinforce our position as one of the world's leading simulation companies. With this operation, Indra now covers the entire value chain of the business, from the manufacture of leading edge simulator to the provision of training services for pilots. Another very important milestone has been the joining of NAV Canada into the ITEC Alliance, where INDRA is a major player in the global air traffic ecosystem. With this important partnership, ITEC has reached beyond the European border for the first time. We have also signed several agreements with top players of the fence industry, such as the Next Generation Radar in Canada, Emirates with Edge Group, the new industrial collaboration agreement signed with Lockheed Martin, or the collaboration agreement signed with Thales to boost the joint development and commercialization of Vanguard's defense system. And finally, we have achieved two new relevant milestones in ESG, which are the best scores in the technology sector in the SNMP yearbook. the renewal of our top employer certification for the sixth consecutive year as one of the best companies to work for. In page 6, we can see the headline of our financial results for the first quarter of 2024. Just let me highlight the following. First, the double digital growth achieved in the order and take revenue, EBIT and EPS. Second, the size and quality of our backlog, which grew 6.3%, providing good visibility for our near future growth. Third, the commercial momentum that the company is going through, with revenues growing at 22% rate, strongly backed by all our divisions, among which it stands out the growth resistor by defense, plus 56%, and ATM plus 63%. Besides this, this growth combined with our cost measure and driving, are driving our improvement in profitability, as our EBITDA and EBIT margin show, and cash generation, allowing us to maintain financial leverage at a very low level of just 0.2 times. On the slide number 7, just let me remark the strength of our organic growth. 90%, one removes the forest impact and inorganic contribution. In terms of EBITDA distribution, defense, IT management and mobility represent 53% of the total for the first quarter of the year. On page number 8, we display the evolution of our headcount. Let me highlight here that we have improved our revenue per employee by 14%, while our workforce has only increased by 2% compared to March 23. The productivity becomes also a key element in our performance. Once the big picture has been presented, let's dive into the performance of each of our four divisions, starting in page 10 with Defence. In slide 10, this has been a very strong quarter for Defence, as you can see in the key figure on the slide. Ordering intake grew by 4%, mainly due to the Eurofighter project, and despite the worse FCAS project comparable. More important are the very strong figures of sales, which grew 56% in Q1 2024, mostly driven by the contribution of the FCAS project. Excluding this contribution, sales would have increased by 10%. On top of this, solid revenue growth, EBIT margin grew from 15.7% in first quarter 24 to 16.4% last year of same quarter. Improvement explained by the increasing contribution of the FCAS project. In high traffic management, also delivered very strong performance as you can see on slide number 11. The positive performance showed by order intake plus 83% growth was mainly due to the contrast sign in Canada and Colombia as well as some other in Europe and AMEA. It is worth noting, as we mentioned before, that NAF Canada joined the ITEC alliance. Sales in first quarter 24 grew by plus 63%, driving mainly by contracts carried out in Belgium and Spain, as well as the inorganic growth from the acquisition of Parker in the UK and the Celex business in the US. And finally, EBIT margin was in the double-digit range of 13.8%. If we move to the mobility division, backlog and order intake fell shortly before minus 3% and minus 1%, respectively, alfalo cells grow, plus 19%, driving by double-digit growth in all geographies except for Spain. The average margin in first quarter 24 was 3.2%, certainly higher than 10, 2.7% recorded in first quarter 23. But frankly, a big job done deeply in mobility session to prepare for the future. About Minsay. Now in past 13, Minsay also printed a very positive quarter. The good commercial momentum goes on with a plus 7% increase in organ intake in Q1 2024. For its part, revenue in Q1 2024 grew by plus 12%, driven by the strong performance shown in public administration and health care, which grew plus 35% thanks to the positive activity with the public administration in Spain while energy and industry posted plus 8% growth and financial services registered a plus 3% increase. Finally, EBIT margin in first quarter 2024 improved to 5.5% versus 5.1% in first quarter 2023 thanks to higher operating leverage from steady sales growth as well as improved revenue mix and therefore done with efficiency initiative. When we compare the concurrence of MinSci, you can see the good job done in first quarter for the team. On page 14, the breakdown of MinSci revenue by horizontal, where you can see that we have improved our mix with digital and solution growing by 15% compared to first quarter 23, and now representing 50% of our sales. And finally, on page 15, we saw our order intake and revenue breakdown of mid-size. First quarter 24, order intake was up 7%, with double-digit growth in three of the vertical, except for energy and industry, with decline by minus 8%. On the right-hand side, revenue in first quarter 24 grew by plus 3%, driven by public administration and health care for plus 35%, energy and industry plus 8%, and financial services plus 3%. On the contrary, revenue in telecom and media decreased by 4%. Now I leave the floor to Antonio Mora for the financial review.