Indra Sistemas SA Q1 2021 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Manuel Lorente - Mirabaud Securities Limited, Research Division - Analyst : My first question is regarding the phasing of the EUR 90 million savings that you announced for this year. Which one were already incorporated on the first quarter and what is your expectations for the remaining of the -- for the rest of the year? My second question is on some granularity of the more than EUR 200 million guidance. On the light of the first quarter results, we have seen Minsait with an EBIT of -- roughly 4% of EBIT margin, and T&D roughly an EBIT margin of 7%. Historically, Minsait has been below this level and on contrary, T&D has been well above this level. So a little bit of a breakdown of your of the margin progression of both lines throughout the year will be great. And probably my final question is on, well, do you have any comments regarding the recent news flow on Hensoldt. Obviously, looks like the deal has not been made. But what are your thoughts for -- in terms of M&A going forward?

Question: Manuel Lorente - Mirabaud Securities Limited, Research Division - Analyst : Okay. So just maybe a quick follow-up on the margin progressions on T&D. If the first quarter has been 7%, and do you expect a full year going back to this double-digit threshold? This margin improvement should be a combination of top line recovery, more consolidation of savings, especially as Fernando was saying on the workforce planned and a little bit more of Eurofighter? Or am I missing something?

Question: Nicolas David - ODDO BHF Corporate & Markets, Research Division - Analyst : And first, congrats for the strong results. My first question is in regards to Minsait. Should we be aware of some exceptional items explaining the strength of Minsait in Q1, I mean, both in terms of growth? There, I'm thinking about the Public Sector and Healthcare, which is growing 20%. Is it sustainable? Or is it kind of a one-off? In terms of profitability, you should enjoy just the impact of the efficiency plan or did you also enjoy some specific one-off item? And still regarding Minsait, given the strong Q1 and given that the comps are getting easier, it seems like for Q2 and Q3, with this embedded growth you could be able to post like high single-digit growth in Q2 and Q3, so is this assumption right? Or am I missing something in terms of seasonality? And my second question is regarding ATM. ATM declined 13% in Q1, which seems fair given the context, but given the fact that you signed some relevant contracts, I'm thinking about China and Poland notably and given that the cost might make it easier going forward, can we expect a significant improvement? Can we even expect that this business could go flattish somewhere during the year?

Question: Nicolas David - ODDO BHF Corporate & Markets, Research Division - Analyst : Okay. So it's not foolish to believe that you could post high single-digit growth in Minsait in Q2? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 27, 2021 / 4:30PM, IDR.MC - Q1 2021 Indra Sistemas SA Earnings Call

Question: Gregory K. Ramirez - Bryan Garnier & Co Ltd, Research Division - Analyst : A couple of questions on my side. First of all, going back to the Defence & Security business obviously, you mentioned Eurofighter as a catalyst, that's -- probably there is no big difference with what you said in February regarding the growth you expect. But could you imagine that the rest of the year will stay at growth levels, which are probably not as strong as Q1 in Defence & Security, but still up double digits? My second question is regarding the surprise finally that we had in Q1 in terms of revenue because I remember you mentioned that you were expecting a low single-digit revenue decline. And finally, it's longer digit growth. It looks to be that...

Question: Gregory K. Ramirez - Bryan Garnier & Co Ltd, Research Division - Analyst : Yes. So my second question was regarding the Q1 revenues, which were finally well above consensus. And remember that in February, you mentioned that you were expecting Q1 revenue declining, slightly declining at low single digit decline. But now, you delivered low single-digit growth. And the surprise mainly to stem from the Minsait division. But also on T&D, but it looks to be more on Minsait. So what are the specific elements which have created -- generated the surprise, I would say, in Q1, just to clarify? And my third and last question was regarding Q2 and Q3 because you were down like-for-like, I think, it was 6% to 7% last year. Given the strong Q1, solid Q1, can you imagine that Indra, or the group as a whole, could generate revenue growth around 10% or even more in Q2 and Q3?

Question: Gregory K. Ramirez - Bryan Garnier & Co Ltd, Research Division - Analyst : Yes. When I was referring to 10%, it was for Q2 and Q3, obviously.