Renta 4 : Results have met our revenue guidance (+2% vs R4e) and have largely outperformed at operating and net level: Ordinary revenues €1. 096m (in line vs R4e, +2% vs consensus and +9% vs Q3 23), EBIT, main magnitude, €111m (+12% vs R4e, +10% vs consensus, +25% vs Q3 23), EBITDA €140m (vs €114m R4e and +20% vs Q3 23) and net profit €70m (+9% vs R4e, +8% vs consensus and +24% vs Q3 23) with financial result: -€9.6m (vs. -€8m R4e) and tax rate: -29% (vs. R4e -29% and 3Q 23).
By divisions, in Defence, revenues +16% vs Q3 23 to €226m (vs €232m R4e), EBIT €51m (vs €46m R4e and EBIT margin 22.6% (R4e 22%), in Air Traffic revenues +39% vs Q3 23 to €106m (vs €90m R4e), EBIT €14m (vs €12m R4e) and EBIT margin 9.4% (R4e 10.8%), Mobility revenues +24% vs Q3 23 to €84m, EBIT €5m and EBIT margin 5.7% and Minsait (IT), revenues +2.4% vs Q3 23 (-4% vs R4e), EBIT €42m (R4e €41m) and EBIT margin 6.1% (R4e 5.2%).
Indra generated +€32m in cash (vs. R4e +€42m) supported by the better operating performance, higher than expected working capital investment -€81m (R4e -€30m), capex -€26m (R4e -€30m) and net debt reduced by -€23m vs 2Q24 to €70m (vs. €50m R4e). Indebtedness remains at a conservative level, enabling it to finance possible corporate operations. We highlight favourably its liquidity position: €282m (excluding factoring) and additional credit lines of €778m, with a maturity schedule for the next 2 years (€35m in 2024e, €145m in 2025e and €306m in 2026e) more than covered by liquidity.
On the other hand, Indra announced yesterday that it has agreed to increase its stake in TESS Defence from 24.67% to 51.01% for €106.7 million. In addition, it has an earn-out of up to €30 million subject to the evolution of revenues and EBITDA. Indra will consolidate TESS Defence by global integration and the Board will be controlled by Indra, which will contribute four of the seven members.
Management reiterates 2024e guidance targets: Revenues > €4,800m, implying > +9.1% vs 2023 (R4e €4,821m), EBIT > €415m implying > +19.6% vs 2023 (R4e €422m) and FCF > €260m (€94m in 9M 24 and which will have to exceed €166m in 4Q 24e).
Order intake (precursor of future revenues) increased in 9M 24: +7.4% vs. 9M 23 (+9.0% excluding currency), accelerating in Q3 (+9.2% and +12.7%, respectively). Strong order intake in Q3 in all divisions except Minsait: -5.5% -0.7% excluding currency. Defence +20.5% in both, +42% and +45%, respectively, and Mobility: +77% and +78%, respectively, after the decline in 1H24. The order backlog grew +1.1% vs. 9M23 (+2.1% excluding currency) and remained close to record highs, offering good visibility for revenue generation.
We expect a positive impact on the share price after having largely surpassed the operational forecasts and having reiterated the 2024e guidance. Conference call 9:00h. P.O. €24.2 Recommendation OVERWEIGHT.
