Indra 1H25 slides: Order backlog surges 33%, defense business expected to double in 2025

Published 23/07/2025, 16:54
Indra 1H25 slides: Order backlog surges 33%, defense business expected to double in 2025

Introduction & Market Context

Spanish technology and defense company Indra (BME:IDR) presented its first-half 2025 results on July 23, revealing substantial growth across key metrics despite a challenging market environment. The company’s stock closed down 3.02% at €38.46 on the day of the presentation, suggesting investors may have expected even stronger results or guidance.

Indra is capitalizing on significant tailwinds in the aerospace and defense industry, particularly the increased defense spending across Europe. The company highlighted that the "ReArm Europe" initiative is expected to increase spending by €800 billion between 2025-2029, with a €10.4 billion budget allocated for 2025 alone.

As shown in the following chart detailing industry tailwinds, European strategic autonomy in defense is becoming a priority, with 70% of current spending going to non-EU suppliers - a dependency Indra aims to help reduce:

Executive Summary

Indra reported impressive first-half results, with backlog growing 32.5% to €9,474 million and order intake increasing 18.0% to €3,162 million. Revenue rose 6.3% to €2,450 million, while EBIT margin improved by 0.8 percentage points to 8.6% (€209 million, up 17.0% year-over-year). Net income surged 87.7% to €215 million, partially driven by the one-off impact of TESS consolidation.

The company maintained a strong financial position with free cash flow of €65 million and a neutral net debt position of €4 million (0.0x Net Debt/EBITDA). These results keep Indra on track to deliver its 2025 financial guidance and 2026 Strategic Plan targets.

The following slide summarizes the key financial headlines for 1H25:

Detailed Financial Analysis

Revenue growth of 6.3% was driven by strong performances in the Defense and Air Traffic Management (ATM) divisions, which grew 16.1% and 24.8% respectively. When excluding foreign exchange impacts, organic growth was 5% for the first half and accelerated to 8% in the second quarter.

The company’s geographical diversification continues to progress, with international business accounting for 49% of total revenues. By region, Spain represented 51% of revenues (+7%), Europe 21% (+10%), America 20% (+6%), and AMEA 8% (-6%).

The Defense division was the standout performer, with order intake growing 53.4% to €757 million, boosted by the Eurofighter project and radar contracts in Germany and Oman. Revenues increased 16.1% to €518 million, with EBIT margin improving by 1.2 percentage points to 16.7%. Management expects the division’s net order intake to more than double in 2025 compared to 2024.

The following chart details the Defense division’s performance:

The Air Traffic Management division also delivered strong results, with order intake up 38.5% to €400 million and revenues growing 24.8% to €258 million. The division maintained its EBIT margin at 11.9%.

The Mobility division showed mixed results with flat revenues at €172 million despite order intake growing 41.4% to €216 million. EBIT margin remained stable at 3.8%. Meanwhile, Minsait, the company’s IT services division and largest by workforce, posted modest growth with revenues up 1.5% to €1,502 million and EBIT margin improving by 0.4 percentage points to 5.7%.

Strategic Initiatives

Indra unveiled several strategic initiatives aimed at capitalizing on increased defense spending and technological advancement. The company is focusing on three key areas: land vehicles, weapons & ammunitions, and IndraMind, its new AI platform.

The following slide illustrates Indra’s strategic ambitions in these areas:

The most significant new initiative is IndraMind, a sovereign advanced AI platform for civil-military use cases. The platform aims to deliver advanced software and AI-driven solutions for sophisticated decision-making and mission-critical operations.

Indra has set ambitious revenue targets for IndraMind, aiming to reach over €1 billion by 2030, representing a 25-30% CAGR from 2025 to 2030. The platform will initially focus on civil applications (90%) before gradually increasing its military applications to reach a 50-50 split by 2030.

The company is also implementing a new operating model with transversal Tech Operations, the new IndraMind vertical, and a reinforced international model. This restructuring aims to improve efficiency and accelerate internationalization.

Additionally, Indra is expanding its industrial and technological footprint by over 100,000 m² across Spain, in line with defense industry strategy corridors. The company is also streamlining its supply chain, reducing its supplier base from over 2,000 to 700 Tier-1 suppliers by 2025, with 550 suppliers expected to concentrate over 90% of spending.

Forward-Looking Statements

Indra reaffirmed its 2025 guidance, targeting revenues of over €5,200 million (in local currency), EBIT of over €490 million, and free cash flow of over €300 million. The company plans to hire 2,400 new employees before the end of the year, on track to meet its goal of 5,000 hires by 2026.

The company’s workforce has already increased by 6% compared to 1H24, reaching 61,162 employees by June 2025. The Defense division saw the largest proportional increase in headcount, reflecting its strategic importance and growth trajectory.

Management emphasized that the company is well-positioned to capture opportunities in the European defense market, particularly with its designation as a core member of the MARTE program and its successful acquisition of a majority stake in TESS Defence.

With its neutral net debt position and strong order backlog, Indra appears well-positioned to execute its strategic initiatives while maintaining financial stability. However, the market reaction to the presentation suggests investors may be looking for even stronger performance or more aggressive guidance in future quarters.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.