Indra Sistemas Sa Ord

Good morning. Welcome to Indra's first quarter 2026 results presentation. I now hand the conference over to Mr. Ezequiel Nieto, head of investor relations. Please go ahead, sir.

Buenos dias y bienvenidos a la presentación.

Good morning and welcome to the presentation of results of the first quarter 2026. My name is Ezequiel Nieto. I'm in charge of relations with investors. First of all, allow me to make reference to this slide which offers the legal framework for this presentation. I'd like to start by introducing the speakers in this session, José Vicente de los Mozos, CEO, and Miguel Cortés, Financial Director. Thank you, Ezequiel. Welcome, everybody, and welcome to the presentation of the results of the first quarter 2026. Since my arrival in May 2003 and the presentation of the Lead in the Future strategic plan and its phase focus starting March 6, 2024, InnoTeams are committed to the transformation of this company with solid work. We have been able to achieve the objectives we set to ourselves. During the presidency of Ángel Esquivano we have accelerated the industrialization of the group and now with the arrival of Ángel Simón I would like to welcome today. I am sure we will keep on accelerating our transformation. At a group level we keep on executing the rotation of our portfolio we have closed with the investment of BPO and we keep an active pipeline of over 20 operations. Besides that, we closed the quarter with a growth in our headcount of 3% compared to the first quarter of 2025, with an increase that's especially relevant in our headcount in defence, and has increased by 35% in terms of the milestones of our businesses. We have also achieved important investment in defence. We keep on expanding our industrial base in Spain with new plants in León and Córdoba that are already working in to open in the third quarter of 2026. Besides, we have close relevant international agreements with Rain Metal, DL, ELT and Andua. The last one provides us with capacities to develop artillery or self-propelled artillery systems adapted to the needs of the armed forces and will provide Spain with autonomous capacity and design and manufacturing sovereignty on track and land platforms. In Spain, we completed the integration of ISPA-SAT and ISPA-SAT in the group, which turns us into a player with end-to-end capabilities and position us to take the opportunities that are about to come that we will elaborate on next. In ATM, we just opened a new plant in Kansas. We'll be fully operational in there. fourth quarter this year in 2026, and we will keep on advancing in international contracts, key international contracts, including the modernization of radars of the FAA in the United States. In mobility, we ensure contracts, important contracts, TFL in the UK, the rail Mecca Medina in Saudi Arabia, the modernization of railways in Chile, And so, contributing to our international presence, I would like to inform you that the Washington, D.C. Transport Authority has proposed Indra as the winner of its ticketing tender. In Indramine, we started the deployment of a platform of sovereign AI, and we accelerated vertical use cases. In Meanside, we are advancing the investment of non-core units, and the optimization of the international footprint focuses in in Latin America. Besides, we have advanced in cross-cutting capabilities in the rest of the units of the group, but we already have 1,300 developers working on digitalization in defense, air traffic, space, and mobility. We keep on focusing on advancing and delivering, and that's why today, once again, I'd like to I mentioned the 2026 guidance over 7 billion of euros in revenue, over 700 million in EBIT and over 375 million euros of free cash flow. No changes and with conviction. And besides, I'd like to ensure you that we will check how revenues are going to keep on growing quarter after quarter aligned with our delivery agenda planned for 2026. These results as you will see, are above our initial budget in the Living the Future strategic plan that we presented back in March 2026. I'd like to zoom on our transformation in IndraSpace, with the integration of EastBasad and EastDesad. In the group, IndraSpace operates as an integrated layer with end-to-end capabilities, which positions us As what sets us apart in an excellent moment, if official investment in the space sector is growing strong at the European level, the budgets of the European Space Agency for 2026-2028 plan have grown by 32% compared to the previous cycle. At the national level, this increase of investment is translated into binding commitments. You know that Spain is the fourth contributor to the European Space Agency, and it has the commitment to keep on advancing within the space strategy. For example, the Spanish Airspace Agency has approved over €625 million distributed in key programs such as the ESEA+, LEOPNT, IRIS II and launches. In terms of specific programs, I'd like to share two important messages with you this morning. First, IRIS II. is a reality, and the European commitment and interest are already developing its roadmap in its participation, about its participation, and according to its evolution, we'll provide you with further detail on its scope. At the same time, we have also launched our industrialization plan on satellite components with construction that's planned to be ready for the last quarter of this year. As you know, we are a defense and technology company And in this sense, we are, of course, we are aware of the disruption of artificial intelligence in our businesses, and that's why we are analyzing, according to our experience in the sector and our technology capabilities, how the transformation of the business should happen and how MINSight should be transformed. We are focused on accelerating our capabilities and improve the profitability of the technology business And after carrying out a 360-degree analysis of our daily operations, we have made a series of decisions, first divesting non-core units, which has allowed us to free resources and increase average revenue per employee. Second, creating cross-cutting capabilities beyond meanside in the rest of the group, we already have 1,300 developers that provide direct impact in the profitability of Mindsight and an acceleration in technology elements such as, for example, the integration of artificial intelligence in the development of new radars for civil as well as for military use. Also, the optimization of international footprint with the One Latin Plan, whose objective is to reduce over 2,000 technicians this year and we have already been able to reduce 1,000 already. And besides that, we're walking along strategic lines that position us as a technology group that's referenced in artificial intelligence. Today, our sovereign AI and introvert necessary reality has already been deployed in over five clients and with a solid pipeline for 2026 to 2028. We are already catalyzing the transformation of AI all throughout the group in solutions for clients in business processes and in corporate processes. We are and will be partners in the transformation of the business and the operation of our clients and in the application of AI with a purpose, which means that applied AI will have real impact in the business model of our clients. Of course, we will accompany them in the application of AI in a differential manner. And besides, we are accelerating products and vertical use cases with the support of our very wide knowledge in the sector. All of this is already ongoing, and so the first quarter is a good reference on which we should keep on building. We are making decisions with main size, advancing the disruption of AI, and we have a roadmap that we will present in the phase leading the future scale up, that goes from a sovereign platform all the way to applied AI in the processes we are transforming. Before, we start talking about the financial results. I would like to share with you a short clip, sometimes an image worth more than a thousand words, to show you the speed of the industrial transformation that's actually taking place in the group to increase our industrial capabilities and improve their delivery in the next quarters and years.