Hensoldt Ag · XETR:HAG
Hensoldt — Investor Day (December 2022)
49 slides from Hensoldt's investor day presentation, Dec 14, 2022
Slide 1: The new defence environment – Capital Markets Day 2022
HENSOLDT The new defence environment Capital Markets Day 2022 London, 14th of December 2022 This document and its content is the property of HENSOLDT AG. It shall not be communicated to any third party without the owner’s written consent. © Copyright HENSOLDT AG 2022. All rights reserved.
Slide 2: Disclaimer Forward Looking Statement
HENSOLDT CMD 2022 Disclaimer Forward Looking Statement This presentation and the information contained herein are for information purposes only and should not be treated as This presentation may contain forward-looking statements about HENSOLDT and its businesses, including statements investment adv
Slide 3: Agenda
HENSOLDT CMD 2022 Agenda 1. Introduction Thomas Müller Chief Executive Officer 2. The new defence environment Celia Pelaz 3. The HENSOLDT growth strategy Chief Strategy Officer Dr. Lars Immisch 4. A sustainable workplace to attract the right people Chief HR Officer Christian Ladurner 5. Updating our
Slide 4: 1. Introduction
1. Introduction Thomas Müller, Chief Executive Officer This document and its content is the property of HENSOLDT AG. It shall not be communicated to any third party without the owner’s written consent. © Copyright HENSOLDT AG 2022. All rights reserved.
Slide 5: HENSOLDT has fully delivered on its commitments at IPO
HENSOLDT CMD 2022 HENSOLDT has fully delivered on its commitments at IPO IPO targets(1) 2019A – 2022E(2) Revenue growth ~15% ~15% ü Adjusted EBITDA margin(3) before pass-through revenue ~18% ~19% ü Dividends % adjusted net income Up to 20% Up to 20% ü Net leverage(4) 2.25x ~1.25x ü (1) 2020A - 2022E
Slide 6: Unique high growth defence and security investment
HENSOLDT CMD 2022 Unique high growth defence and security investment “We strive to become Europe’s leading, platform-independent provider of defence and security sensor solutions with global reach.” Focused Customer leader in Platform- centric Platform for attractive agnostic business high growth ma
Slide 7: HENSOLDT has outgrown its core markets
HENSOLDT CMD 2022 HENSOLDT has outgrown its core markets Accessible defence electronics market(1) HENSOLDT revenue HENSOLDT order intake 22% 15% +€7.6bn(2) ~6% Cumulative order intake CAGR 2019A - 2022E CAGR 2019A - 2022E CAGR 2019A - 2022E Source: Renaissance Strategic Advisors, HENSOLDT AG. (1) Re
Slide 8: HENSOLDT successfully converted a large order backlog into high and profitable growth
HENSOLDT CMD 2022 HENSOLDT successfully converted a large order backlog into high and profitable growth €2.1bn €2.2bn ~€5.3bn(1) ~€1.7bn Revenue (€bn) €1.1bn Adj. EBITDA margin(3) €1.0bn % excl. pass-through revenue ~19% Order backlog (€bn) 15.2%(2) 19.3% 2017A 2019A 2022 guidance Source: HENSOLDT A
Slide 9: 2. The new defence environment
2. The new defence environment Thomas Müller, Chief Executive Officer This document and its content is the property of HENSOLDT AG. It shall not be communicated to any third party without the owner’s written consent. © Copyright HENSOLDT AG 2022. All rights reserved.
Slide 10: We find ourselves in a new defence environment
HENSOLDT CMD 2022 We find ourselves in a new defence environment Threat Environment Implications • Significant uptick of threat • Clear shift in global security environment in Europe perception through Russian war War In Ukraine against Ukraine • Higher commitment to defence budgets and NATO • Milit
Slide 11: Our products are proving critical to the defence and security of Germany and its allied partners
HENSOLDT CMD 2022 Our products are proving critical to the defence and security of Germany and its allied partners Examples TRML – 4D PEGASUS GESTRA Equipment supply Achieving information Space, a key defence and to Ukraine superiority security capability enabler Source: HENSOLDT AG 11 This document
Slide 12: Strong global growth in defence budgets, especially in our core markets
HENSOLDT CMD 2022 Strong global growth in defence budgets, especially in our core markets Germany Rest of Europe Rest of World(1) 9,2% 8,9% 6,5% 5,9% 5,1% 4,9% Defence Spending CAGR 2022E – 2027E Accessible Defence Electronics CAGR 2022E – 2027E Source: Renaissance Strategic Advisors. Global figures
Slide 13: Strong German defence electronics market growth translating into concrete opportunities
HENSOLDT CMD 2022 Strong German defence electronics market growth translating into concrete opportunities for HENSOLDT German accessible defence electronics market Example opportunities for HENSOLDT 9.2% 10,1% 9,4% FCAS Eurofighter EW capabilities 9,0% 8,0% 7,2% EuroDrone GESTRA Ground-based Air Def
Slide 14: Record order backlog and pipeline
HENSOLDT CMD 2022 HENSOLDT is capitalizing on the new defence environment with a record order backlog and pipeline(1) >30 Order backlog (€bn) Pipeline(1) (€bn) 17,3 10,0 2.4x 5,3 2,2 2019A 2022E At IPO Today Identified pipeline 2021E - 2023E 2023E - 2025E 2023E - 2027E Source: HENSOLDT AG. (1) Pipel
Slide 15: Multi-Domain is the future of warfare
Multi-Domain is the future of warfare: Sensors at the core of the connected battlefield 15 This document and its content is the property of HENSOLDT AG. It shall not be communicated to any third party without the owner’s written consent. © Copyright HENSOLDT AG 2022. All rights reserved.
Slide 16: 3. The HENSOLDT growth strategy
3. The HENSOLDT growth strategy Celia Pelaz, Chief Strategy Officer This document and its content is the property of HENSOLDT AG. It shall not be communicated to any third party without the owner’s written consent. © Copyright HENSOLDT AG 2022. All rights reserved.
Slide 17: HENSOLDT strongly positioned for the future of warfare
HENSOLDT CMD 2022 HENSOLDT strongly positioned for the future of warfare Focused capability Leadership Strong technology European pure-play sensor solutions 100% Champion status €98m leader with state-of- pure-play with >150 years R&D cash spend(1) the-art technology defence electronics player of he
Slide 18: HENSOLDT to capture key pockets of growth for decades to come
HENSOLDT CMD 2022 HENSOLDT to capture key pockets of growth for decades to come Germany Rest of Europe Rest of World(1) The future of warfare is Multi-Domain Increase & upgrade 9.2%(2) 5.9%(2) 8.9%(2) Focus on conventional capabilities: 1 capturing global 2 the ‘new Electronics battlefields’ at the
Slide 19: HENSOLDT has the right strategy to capture these growth pockets
HENSOLDT CMD 2022 HENSOLDT has the right strategy to capture these growth pockets Growth drivers Customer priorities HENSOLDT’s strategic vectors • Speed of delivery Increase & upgrade 1 conventional capabilities • State-of-the art capabilities Sensor solutions house • Interoperability Innovation ch
Slide 20: Strong immediate global demand to increase and upgrade conventional capabilities
HENSOLDT CMD 2022 There is a strong & immediate global demand to increase and upgrade conventional capabilities HENSOLDT core regions Germany & Rest of Europe APAC Middle East & Northern Africa Key priorities for increase and upgrade Land & Air Defence Maritime Surveillance Border Protection TRML-4D
Slide 21: Electronics content and network connectivity on platforms continues to increase
HENSOLDT CMD 2022 At the same time, electronics content & network connectivity on platforms continues to increase Previous generation Current generation Future generation Leopard 2A4 ca. 25% Leopard 2A7+ ca. 45% ca. 55% Tornado ca. 25% Eurofighter ca. 40% ca. 45% F122 class ca. 20% F125 class ca. 35
Slide 22: Positioned to capture rising demand for interconnected solutions in electronics
HENSOLDT CMD 2022 HENSOLDT is strongly positioned to capture this rising demand for interconnected solutions in electronics 2017 2022 2025+ • Driver Vision System SPECTUS • Driver Vision System SPECTUS • Driver vision system • Gunner Sight (EMES) • Digital Gunner Sight, infra red, Laser ATTICA GL &
Slide 23: Selectively moving up the value chain
HENSOLDT CMD 2022 HENSOLDT is selectively moving up the value chain to capture more platform content Before 2017 2022 2025+ EuroHawk Pegasus FCAS • Payload • Integration • Cross-platform sensor network • Payload • Payload pre-integration on the platform • Payload Electronics content constantly incre
Slide 24: Continues to invest to remain at the forefront of leading capabilities
HENSOLDT CMD 2022 …and continues to invest to remain at the forefront of leading capabilities Key capabilities strengthened L5Y Strong focus on R&D since the IPO Future areas of focus Self-funded R&D (€m) ü Air Defence radar Future Combat Aircraft System ü +13% 98 Airborne and Naval C2(1) Air Defenc
Slide 25: Global order pipeline of ~€30bn over the next 5 years
HENSOLDT CMD 2022 Today we already have a global order pipeline(1) of ~ €30bn over the next 5 years and it will continue to grow Order pipeline(1) by region (€bn) Germany 31% North & Latin America 7% ~€30bn Asia Pacific Europe excluding 17% Germany 29% Middle East & Africa 16% Global Source: HENSOLD
Slide 26: HENSOLDT set to benefit from upcoming German programs
HENSOLDT CMD 2022 HENSOLDT set to benefit from upcoming German programs Service Programme 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 EF Mk1 + Rebaselining Rebaselining To 2035 -> GESTRA 2027+ -> STH(1) 2030+ -> Air Force F-35 (TOR Replacement) ISS To 2030 -> Eurofighter EK To 2030 -> PEG
Slide 27: Global footprint with presence in all major accessible defence markets
HENSOLDT CMD 2022 Our go-to-market: HENSOLDT has a global footprint with presence in all major accessible defence markets Comprehensive global footprint Embedded with prime partners • Present in 19 key accessible Geographic presence defence markets Sales office / representatives(1) • Established ind
Slide 28: Leveraging our presence to capture international opportunities
HENSOLDT CMD 2022 Leveraging our presence to capture international opportunities & budget growth German platform presence Selected international opportunities Type 212 Leopard 2 AMPV Leopard 2 Walrus Class TRML-4D (Baltics) SERPENS Eurofighter SkyShield Europe Eurofighter F126 Orca Class Knife Fish
Slide 29: Targeted M&A remains a core part of HENSOLDT's growth path
HENSOLDT CMD 2022 Targeted M&A remains a core part of HENSOLDT’s growth path • Artificial Intelligence • Europe, e.g. UK and France Pipeline • Data Fusion and Analytics Strengthen Access to • APAC, e.g. Australia • Autonomy capabilities key regions disruptive • US and enter technologies • Intelligen
Slide 30: Potential to double revenue every five years
HENSOLDT CMD 2022 HENSOLDT has the potential to double revenue every five years Current backlog Revenue (€bn) Pipeline (N5Y) Potential to double every 5 years ~€30bn €5.4bn 1,7 2022E 2022 2027E 2027 2032E 2032 33 This document and its content is the property of HENSOLDT AG. It shall not be communica
Slide 31: 4. A sustainable workplace to attract the right people
4. A sustainable workplace to attract the right people Dr. Lars Immisch, Chief HR Officer This document and its content is the property of HENSOLDT AG. It shall not be communicated to any third party without the owner’s written consent. © Copyright HENSOLDT AG 2022. All rights reserved.
Slide 32: HENSOLDT is a top 2 employer in Germany
HENSOLDT CMD 2022 HENSOLDT is a top 2 employer in Germany Company A 1 2 HENSOLDT Company C 3 4 Company D Company E 5 6 Company F Company G 7 8 Company H Company I 9 10 Company J Source: Kununu, ZEIT Verlagsgruppe, HENSOLDT AG. Note: Ranking reflects sector benchmark 36 This document and its content
Slide 33: We have highly qualified and motivated employees
HENSOLDT CMD 2022 We have highly qualified and motivated employees… Highly motivated employees(1) 4.3/5.0 92% Overall score Recommend HENSOLDT as employer Gender Diversity Apprenticeships Percentage of women in our leadership team from currently 19% to 25% by 2024. +25% 25% 19% 64 65 63 2022E 2024E
Slide 34: A proven track record in hiring
HENSOLDT CMD 2022 …and a proven track record in hiring Number of employees(1) ~6,000 + ~1,700 4,302 2018A 2019A 2020A 2021A 2022E Source: HENSOLDT AG. (1) Headcount active workforce consolidated companies & temporary workers and excluding trainees & interns 38 This document and its content is the pr
Slide 35: HENSOLDT is an ESG leader in the sector and beyond
HENSOLDT CMD 2022 HENSOLDT is an ESG leader in the sector and beyond… Sustainalytics: HENSOLDT is an ESG leader in the A&D sector… …and also performs very well beyond the sector peers Key rating agencies see HENSOLDT as sector outperformer HENSOLDT 15,5 “Low Risk” 1 Best 11% Only “low risk” in A&D C
Slide 36: HENSOLDT keeps focus on ESG to maintain leadership role
HENSOLDT CMD 2022 …and HENSOLDT keeps focus on ESG to maintain leadership role Key achievements and focus going forward Reporting and reputation Strategy and initiatives Focus going forward ü Publication of ESG report ü Successful launch of ESG Strategy 2026 ü Further integrate ESG criteria among su
Slide 37: 5. Updating our medium term guidance
5. Updating our medium term guidance Christian Ladurner, Chief Financial Officer This document and its content is the property of HENSOLDT AG. It shall not be communicated to any third party without the owner’s written consent. © Copyright HENSOLDT AG 2022. All rights reserved.
Slide 38: 9 month results on track to deliver on 2022E guidance
HENSOLDT CMD 2022 9 month results on track to deliver on our 2022E guidance Order intake in line with expectations Excellent revenue performance Robust order backlog €1,377m €1,100m €5,372m Strong adjusted EBITDA(1) result Improved adjusted EBITDA(1) margin (before pass-through) Successfully decreas
Slide 39: Record order backlog and pipeline
HENSOLDT CMD 2022 HENSOLDT is capitalizing on the new defence environment with a record order backlog and pipeline(1) >30 Order backlog (€bn) Pipeline(1) (€bn) 17,3 10,0 2.4x 5,3 2,2 2019A 2022E At IPO Today Identified pipeline 2021E - 2023E 2023E - 2025E 2023E - 2027E Source: HENSOLDT AG. (1) Pipel
Slide 40: From budgets to orders to reliable long term growth
HENSOLDT CMD 2022 It takes time from budgets to orders, but once locked in, they provide reliable long term growth Political and environmental influences until order received Project structures influence timing Government statements Revenue Budget Profit Orders Cash Average lead time 1 – 2 years Ave
Slide 41: Updated guidance 2023
HENSOLDT CMD 2022 Updated guidance 2023 Old 2023 target(5) New 2023 target Book-to-bill ratio >1x 1.1 - 1.2x Revenue growth(1) Mid to high single digit 7 - 10%(6) with stronger growth in core revenue excl. pass-through Adjusted EBITDA margin(2) ~19% ~19% before pass-through revenue before pass-throu
Slide 42: Updated increased medium term guidance
HENSOLDT CMD 2022 Updated increased medium term guidance Old medium term target(4) New medium term target Orders to grow faster than revenue Orders to grow significantly faster than Order intake Book-to-bill ratio >1x revenue Revenue growth(1) Mid single digit 10%(5) average annual growth Adjusted E
Slide 43: Benchmark visibility continues also for 2023
HENSOLDT CMD 2022 Based on order backlog 9M2022, benchmark visibility continues also for 2023 Revenue coverage 2023E – 2025E 2023E 2024E 2025E (1) (2) Firm order backlog Recurring short cycle and aftermarket business New orders to be executed in the respective year ~85% revenue for 2023E covered(3)
Slide 44: HENSOLDT Go! Wave 3 to be rolled out between 2023 and 2025
HENSOLDT CMD 2022 HENSOLDT Go! Wave 3 to be rolled out between 2023 and 2025 HENSOLDT Go! Wave 1 HENSOLDT Go! Wave 2 HENSOLDT Go! Wave 3 • Drive internationalization • Finalize carve-out from Airbus • Keep momentum to transform • Improve supply chain robustness HENSOLDT and increase inflation resili
Slide 45: OneERPnow – the efficient way to handle growth
HENSOLDT CMD 2022 OneERPnow – the efficient way to handle growth Digital products & services Digital enterprise Digital work and culture Digital foundation ü ü ü ü Better data at the right time Increased efficiency Managing upcoming growth Enhanced business insights to best serve our customers and a
Slide 46: OneERPnow rollout in waves to de-risk process
HENSOLDT CMD 2022 OneERPnow rollout in waves to de-risk process 2022 2023 2024 2025 2026 2027 Project Post go- Partner and software Global process Pilot Rollout Rollout and team live selection template design Rollout Wave 1 Wave 2 ramp-up support Mid of 2023 Mid of 2024 End of 2024 Mid of 2027 Proje
Slide 47: Capital allocation
HENSOLDT CMD 2022 Capital allocation Fund our growth Dividends M&A By preserving a conservative financial debt profile 51 This document and its content is the property of HENSOLDT AG. It shall not be communicated to any third party without the owner’s written consent. © Copyright HENSOLDT AG 2022. A
Slide 48: Key messages
HENSOLDT CMD 2022 Key messages Excellent visibility Sustainable, consistent Highly profitable & long term growth cash generating growth 52 This document and its content is the property of HENSOLDT AG. It shall not be communicated to any third party without the owner’s written consent. © Copyright HE
Slide 49: Potential to double revenue every five years
HENSOLDT CMD 2022 HENSOLDT has the potential to double revenue every five years Current backlog Revenue (€bn) Pipeline (N5Y) Potential to double every 5 years ~€30bn €5.4bn 1,7 2022E 2022 2027E 2027 2032E 2032 54 This document and its content is the property of HENSOLDT AG. It shall not be communica