Hensoldt AG (FRA:HAG)

Half Year 2026 Hensoldt AG Earnings Call Transcript

Jul 31, 2026 / 01:00 PM GMT

Release Date Price: €79.84 (-4.84%)

Transcript

Key Points

Positve

Hensoldt AG (HAGHY) delivered a record first half with orders doubling year-over-year to over EUR2.8 billion, lifting the book-to-bill ratio to 2.4 times.
Revenue increased by 24% in the first half to over EUR1.1 billion, with core revenue (excluding pass-through) growing by 18%.
The order backlog reached a new record high of over EUR10 billion, providing excellent long-term visibility into the next decade.
Adjusted EBITDA increased by 29% to EUR137 million, with the margin expanding by 0.5 percentage points to 11.8%, driven by higher volumes and operational leverage.
The Optronics segment saw exceptional momentum, with order intake surging almost six-fold to over EUR900 million, driven by major armored vehicle programs like Puma and Sharkai.
Strategic positioning was reinforced by the NATO Summit in Ankara, which confirmed multi-year investment cycles and aligned alliance priorities (Counter-UAS, sensors, EW) with Hensoldt's core portfolio.
The company is expanding into new growth areas, including space-based sensing (with partners OHB, Helsing, Kongsberg) and the LUVUS program, which represents a potential multi-billion euro opportunity.
The F-126 termination was confirmed to have no material financial impact, with the remaining EUR130 million coming out of backlog and no change to guidance.
Production capacity is scaling effectively, with printed circuit board output almost tripling since January, demonstrating the conversion of investments into tangible industrial output.
The partnership with FirePoint for the Freya missile defense program is gaining strong political momentum, potentially opening a new, high-value revenue stream.

Negative

The full-year revenue guidance of approximately EUR2.7 billion implies a significant deceleration in top-line growth in the second half, which appears conservative given the strong H1 performance.
The Sensors segment margin was temporarily diluted by a high share of pass-through revenues and increased R&D spending, leading to a slight year-on-year decline in the adjusted EBITDA margin.
Adjusted free cash flow remained negative at minus EUR136 million, reflecting continued heavy investment in working capital and infrastructure to support future growth.
The F-126 termination, while not financially material, removes approximately EUR130 million from the order backlog and creates uncertainty in the naval business, despite management's reassurances.
The future of the FCAS program remains uncertain, and the company's position in next-generation air combat is dependent on the evolving political landscape, including potential German participation in GCAP.
The Pegasus export campaign is progressing slower than initially hoped, with the first export orders now expected in late 2027 or 2028, later than previously anticipated.
The company faces intense competition in the naval market, particularly for the Meko A200 frigates, where TKMS has already signed a contract with Saab for radar and combat systems for the first batch.
The Freya missile defense program is still in its early stages, and management stated it is 'premature' to build any concrete revenue from it into planning, with first contributions not expected until 2027.
The company's cash conversion is expected to be only approximately 50% for the year, reflecting the significant cash outflows for capacity expansion and working capital.
The Sensors segment's profitability was also impacted by costs for hiring and training new personnel for the new radar production facility, which are not yet covered by project revenues.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

HAGG.DE - Hensoldt AG
Half Year 2026 Hensoldt AG Earnings Call
Jul 31, 2026 / 01:00PM GMT

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Presentation
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Unidentified_1 [1]
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Ladies and gentlemen, welcome to the Hansolt Age H1 Results 2026 Analyst Conference Call.

I'm Sergen, the chorus call operator.

I would like to remind you that all participants will be in listen-only mode and the conference being recorded.

The presentation will be followed by Q&A session.

You can register for questions at any time by pressing star and one on your telephone.

For operating 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 Nicole Schillinger, Head of Investor Relations. Please go ahead.

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