Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: With the changes in European defense budgets, including Germany's EUR200 billion special fund, when can we expect an update on your organic growth guidance? Also, how quickly can you scale up to meet increased demand? A: Oliver Dorre, CEO: We remain conservative, sticking to the 2% GDP investment currently committed. However, promising discussions in Germany and Europe could lead to increased budgets. We expect to revisit our guidance in the second half of the year once the new German government is in place. We are prepared to scale up, having invested in our production capabilities to meet increased demand sustainably.
Q: Assuming Germany increases its defense budget by 50%, would your sales increase proportionally? And what is your capacity to ramp up production by 2026? A: Oliver Dorre, CEO: We expect to benefit fully from any budget increases, as the capability gaps align with our offerings. We are prepared to scale up production, having invested in operational excellence. By 2026, we anticipate being able to ramp up production significantly, potentially achieving 20% sales growth.
Q: Regarding optronics, how sustainable is the 30% growth seen in the German entity, and what are your expectations for 2025? A: Christian Ladurner, CFO: The 30% growth is impressive, but with the move to a new site, we expect growth to be around 20%-25% in 2025. The order backlog provides visibility for future growth. We anticipate margins to improve to 10% in 2025 and further increase by 2027 as digitalization efforts conclude.
Q: How do you view the potential impact of the transatlantic alliance's changes on Hensoldt's business opportunities and risks? A: Oliver Dorre, CEO: We hope for continued strong transatlantic relations. However, if weakened, we are positioned to support Germany's defense capabilities, particularly in lifecycle management of US-acquired systems. We maintain a balanced risk and opportunity profile, with ongoing negotiations with US partners like Lockheed Martin and Boeing.
Q: What are your M&A plans, and when can we expect your next acquisition? A: Oliver Dorre, CEO: M&A will focus on technology, innovation, and supporting internationalization. We are considering smaller acquisitions to strengthen regional focus areas. We are prepared for larger opportunities, but acquisitions will always follow a strong strategic rationale, not just for growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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