Indra Sistemas SA Q3 2021 Earnings Call Transcript

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

Question: Nicolas David - ODDO BHF Corporate & Markets, Research Division - Analyst : I have 3 questions from my side. And also congrats for this very strong quarter. First question, first, coming back on the T&D profitability in Q3. You reached obviously an impressive profitability at 17%. Did you benefit from any specific positive item like positive business mix or exceptionally profitable contracts here? And do you think that this profitability is sustainable for Q4 and going forward? My second question is, again, on T&D, but more on the transport division here, I mean, we can see that the transport division is still down year-on-year in Q3 despite relatively easy comps. I remember that you were quite positive on ATM recovery for H2. So is this something you are seeing? Or do you see some delays regarding this recovery? So any color would be helpful there? And my last question is regarding your EBIT guidance. Does it include the capital gain on the disposal of your facility, that is in the facilities or not? And in any case, I mean, even if it's done to that, it seems a bit implying a relatively weak Q4 EBIT margin compared to what you were able to deliver in the last years, maybe not last year, but before, '19 and before year, what should we take into account? And why should we be cautious regarding this Q4 EBIT?

Question: Manuel Lorente - Mirabaud Securities Limited, Research Division - Analyst : My first question probably is on T&D profitability improvement. I think that Ignacio was mentioning that a significant part of that improvement comes from some cashing up of projects, right? However, when I see the top line evolution of the T&D, on the third quarter standalone, I don't see any catching up, right? Revenues in the third quarter was roughly EUR 242 million versus a run rate on the first half of roughly EUR 270 million something. I mean, my point probably here is that I don't see any correlation between the catching up in revenues and the profitability increase. So any help here will be more than welcome.

Question: Manuel Lorente - Mirabaud Securities Limited, Research Division - Analyst : That's my first question, yes.

Question: Manuel Lorente - Mirabaud Securities Limited, Research Division - Analyst : And this catching up, it's in a relatively large number of small projects? Or is -- they're coming mainly for, I don't know, 2, 3, 4, 5 big projects? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 27, 2021 / 4:30PM, IDR.MC - Q3 2021 Indra Sistemas SA Earnings Call

Question: Manuel Lorente - Mirabaud Securities Limited, Research Division - Analyst : Then my second question is in the -- on the dividend policy. Can you share with us any idea about timing, how you are going to approach this issue, et cetera, et cetera?

Question: Ben Castillo-Bernaus - Exane BNP Paribas, Research Division - Analyst : A couple from me. Firstly, in transport, senior order intake improving specifically in Q3. We've seen deals announced in Poland, Hungary, Korea, Dubai, all sorts. Can you just talk about what's changed there in the quarter in terms of pipeline conversion and deals being agreed versus prior quarters? And perhaps how you look at your pipeline opportunity towards the end of the year into '22? Second question, again, in Transport & Traffic, you mentioned before, I believe, around EUR 100 million of projects or revenues that you weren't able to kind of execute or deliver on or finalize. Can you just remind us where you are on those as a rough estimate, that would help? And then my final question was, are you seeing, have you seen any impact so far from the supply chain disruptions to any of your contracts in terms of hardware components? I'm just curious if you're seeing any of that yet.

Question: Ben Castillo-Bernaus - Exane BNP Paribas, Research Division - Analyst : I was mainly asking about Q3, we've seen a number of deals come through that you've announced. I just wondered in transport specifically, what's changed there in the environment? What's changed? I mean, those deals are now being closed? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 27, 2021 / 4:30PM, IDR.MC - Q3 2021 Indra Sistemas SA Earnings Call

Question: Ben Castillo-Bernaus - Exane BNP Paribas, Research Division - Analyst : Yes. Perfect. That's helpful. And then so my last question was on, have you seen any headwind impacts from just general supply chain disruption to any of your contracts you're working?