Indra Sistemas SA Q3 2024 Earnings Call Transcript

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

Question: Carlos Iranzo Peris - BofA Global Research - Analyst : Hey guys, good morning and thanks for taking my questions. I actually have two, if I may. The first one, it's on defense growth. So if you could give some color on what are the main programs that should drive growth in defense in 2025. And the reason I'm asking is because in theory, FCAS growth will slow down significantly in 2025. And then the second one is about the new space co, correct me if I'm wrong. But I thought you said previously that you did not want to be in the launcher business. And now I see in the slide that you are saying is not a priority in the short term. So how should we take that? Thank you.

Question: Carlos Iranzo Peris - BofA Global Research - Analyst : Thank you.

Question: Nicolas David - Oddo BHF - Analyst : Yes, good morning. Thank you for taking my question. I have two, actually. The first one is regarding test defense. Congratulations for closing this deal. Could you share some more details about the operational performance expected from this company? Maybe first on the first wave of orders that it's already a firm and now that you are going to integrate it fully the company in terms of revenue and operating profit. And then there's a second phase where operationally the way you are going to account the revenue of this company is going to be different. So could you elaborate a bit more and share the long term assumption you have taken regarding this business to justify the valuation? And my second question is regarding inside that after Q2, you were expecting a growth, kind of stronger growth that what we are delivering in Q3? What caught you by surprise in this area in terms of sectors and businesses? Thank you.

Question: Nicolas David - Oddo BHF - Analyst : Thank you. 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 30, 2024 / 8:00AM, IDR.MC - Q3 2024 Indra Sistemas SA Earnings Call

Question: Alvaro Lanza - Atlanta Equities - Analyst : Hi, thanks for taking my questions. The first one is on insight and if you could provide some detail on what is the contribution from the payment reasons now that you have announced that you're open to selling it? I don't know if you told it already, but just to make sure I have it correctly in my model. And secondly, if you could provide some indications on what has been the inflation on wages for minsait this year and what do you expect for next year? And then my second question would be on defense and if we could see more acquisitions in the tune of this defense in regards to size or maybe looking to join with other partners in the defense to make similar joint vendors or if you are looking more to make bigger acquisitions in 2025. Thank you.

Question: Alvaro Lanza - Atlanta Equities - Analyst : For Luis, I was asking on inflation from inside wages into 2025. I don't know if the bargaining agreements are already ongoing or not. And also, if we can assume that the margins for payments are substantially higher than the average from [minsait]. Thanks.

Question: Alvaro Lanza - Atlanta Equities - Analyst : Thanks.

Question: Michael Briest - UBS Limited - Analyst : Yes, Good morning. Just a quick clarification. I don't think I heard what the revenue run rate of test was? And there's an earnout of EUR30 million attached to it. Can you say what would trigger the earnout? Thanks.

Question: Michael Briest - UBS Limited - Analyst : And so --

Question: Michael Briest - UBS Limited - Analyst : Thank you.

Question: Carlos Trevino - Banco Santander - Analyst : Good morning. Thanks for taking my questions. I do have two questions. The first one follows up on the minsait. You have explained the reasons why perhaps resulting in Q3 has been a bit below than previous quarters. But I would like to follow up on if you have seen any changes in the business dynamics minsait over the last three months. My second question will be regarding flow expectations. For Q4, you have a guidance. I would like you to be a little specific on working capital and what kind of working capital dynamics in Q4? The typical ones are just taking prepayments. Thank you.

Question: Carlos Iranzo Peris - BofA Global Research - Analyst : Thank you.

Question: Laurent Daure - Kepler Cheuvreux - Analyst : Yes. Thank you. Good morning, gentlemen. I have three questions. The first is on the IT side on minsait. I want to make sure I understood well, the minsait is -- when you take back the election negative impact, you are still running on mid-single digit growth. Is it the kind of growth we should expect for the next two or three quarters or do you expect a specific headwind on all the units? So that's the first one. Second one is on traffic management and transport. You had this year several very, very strong quarters on the back of big deals. When shall we expect the (inaudible) on those two businesses to normalize a bit? And the final question is back on test. I'm sorry, but I still don't get the contribution for next year. I understand the number of units. But can you be very clear and tell us what you expect as average hypothesis in terms of revenue contribution? And did I get it right that you don't expect any EBIT contribution from this one? Thank you.

Question: Laurent Daure - Kepler Cheuvreux - Analyst : Thank you.