ISSN 2330-717X

Indra Earnings Grow Thanks To International Markets


Despite an increasingly sluggish macroeconomic context in 2011, Indra said Thursday it met all of its targets in 2011 and bolstered competitiveness, mainly through intensification of its international business, a better positioning on markets with high growth potential, and a clear focus on technology investment to maintain competitive edge. The company succeeded in boosting its international business to offset a weak domestic market.

Revenues in 2011 stood at €2,688 M, up by 5% on the previous year and slightly above forecasts. This includes the effect of acquisition of the Brazilian firm Politec and the Italian firm Galyleo. Growth disregarding these purchases stood at 3%. International revenue increased by 17%, and fell back by 3% on the Spanish market. This means that international business now accounts for almost half of pro-forma revenue.

Order intake in 2011 was €2,976 M – 11% above revenues – representing an increase of 3% on the previous year. International commercial business, one of the company’s main growth levers, reaped considerable success – for instance, the high speed railway project between Mecca and Medina in Saudi Arabia, modernisation of air traffic management systems in Oman, modernisation of the Bahrain health system, and other relevant contracts in Latin American’s energy market.

The 2011 order book grew by 11% to €3,231 M, the equivalent of 1,20x revenue during the period.

Recurring EBIT margin stood at 10%, in line with forecasts.

Attributable profit for the year was €181 M, 4% less than 2010. Excluding the effect of the Galyleo and Politec acquisitions, net profit would have stood at €191 M.

International growth moves into double figures

International markets continue being the company’s growth driver beyond the expectations announced at the beginning of the year, showing a 17% increase. The strategic focus on Asia-Pacific led to 18% growth in this market in 2011, and growth of 30% in Latin America.

An excellent performance was also posted on all vertical markets, with the exception of Security & Defence: Telecom & Media grew by 24%; Energy & Industry, by 12%; Public Administrations & Healthcare, 9%; Transport & Traffic, 8%; and Financial Services, 5%. Security & Defence fell by 14%.

2012 targets and medium-term forecasts

Indra said it expects to maintain its profile of growth and high profitability in 2012 despite general economic difficulties and uncertainties, and a technology market still bringing considerable pressure on prices amid increasing levels of competition. International markets – chiefly the emerging markets – will again act as a growth lever, accounting for more than half the firm’s revenue at year-end.

The superior position reached in recent years in certain supply segments and high-potential geographic areas will enable Indra to remain on the path to growth and profitability in both the short and medium term.

With the aim of deploying the necessary changes to retrieve operating profitability and boost competitive edge, the firm intends to account for non-recurring expenses in 2012 and 2013 of less than 1% and 0.5% of the expected revenue during these years, respectively.

Specifically, Indra expects to meet the following targets between 2012 and 2014:

  • Revenue growth of between 6.5% and 7.5% in 2012, falling at only single-digit pace on the Spanish market while rising sharply on international markets. “We are expecting a gradual recovery on the domestic market over the next two years, with significant growth abroad remaining steady. This means total growth will be positive each year during the 2012-2014 period,” says the company
  • An order intake/revenue ratio in excess of 1x in each year, boosting our order book year on year.
  • A recurring EBIT margin between 8% and 9% in 2012, gaining ground to around 10% by 2014.
  • Maintenance of net working capital within a range of 110 – 100 days of equivalent revenue, moving into the lower section of the range at the end of the period.
  • Lower volume of net tangible and intangible investment, reaching €65-75 M annually.

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