Indra Reports Growth In 2019, Backlog Up 11% Reaching Historic High Increasing EBIT 11%

Indra, a Spanish information technology and defense systems company, reported Thursday that 2019 Order Intake (+7%) grew again above revenue growth (+3%), with Backlog up +11%, surpassing the €4.5 billion mark at 1.4x revenues, a new record for the company.

Indra reported that revenues were up +4% in local currency in 2019. Minsait revenues grew +6%. By geographies, America stood out (+12% in local currency). That said, fourth quarter Transport & Defence revenues temporary down due to delays in milestone certification of specific projects

EBIT grew +11% in 2019, pushed by Minsait profitability (3.8% EBIT margin), despite the lower contribution of the Election Business, Indra said, with a net profit of at €121 million and improved +1.3% due to higher tax rate (29% in 2019 vs 25% in 2018)

Fourth quarter FCF reached €246m (€7.5m in 2019), driving Net Debt / EBITDA LTM ratio down to 1.8x (1.6x excluding SIA acquisition).

Indra said it renewed its presence in the major sustainability indexes and generated more than 1,400 jobs in Spain (more than 3,000 in the last two years).

Indra acquired SIA, a firm specialized in cybersecurity services, for €67 million December 31, 2019. SIA balance sheet and cash flow statement are consolidated in 2019 numbers while the income statement will start to consolidate from January 1, 2020.

Fernando Abril-Martorell, Chairman and Chief Executive Officer of Indra: “2019 results highlight the positive performance of our commercial activity, reflected by the strong backlog, order intake and revenue growth, as well as by a clear improvement in underlying profitability (EBIT). We met all the metrics of our guidance to the financial community.”

According to Abril-Martorell, Backlog (+11%) and order intake (+7%) continued to progress confidently. Absolute backlog levels and the backlog/revenues ratio reached new historic highs, providing better visibility for future growth in the coming years, and ensuring the development of new technological capabilities associated to new programs, especially in Defence & Security.

For the combined Group revenues are up +4% in local currency, with a significant contribution of Minsait, helped by a strong performance in America (+12%), with Brazil as the main driver of growth.  

Indra continues to improve its profitability in the quarter and in the accumulated period, with double-digit EBIT growth and improving stronger EBIT margins.

During 2019, Minsait recorded a very positive performance, achieving strong revenue growth and significant profitability improvements. Minsait sales increased by 6%, with EBIT jumping by almost 80%, reaching an EBIT margin of 3.8% (1.6pp improvement vs. 2018). This improvement is even more remarkable if we consider the lower contribution of the election business in 2019 vs the previous year.

“In Transport & Defence it is worth highlighting the strong rebound of the order intake in Defence (+41%), in a positive background of a growing pipeline of Spanish and European programs. We would also like to bring your attention to the solid growth in Air Traffic Management, as well as to the recovery of the profitability of the division during the fourth quarter,” Abril-Martorell said.

Abril-Martorell added: “With respect to cash flow generation, the last quarter of the year proved to be a very strong period, with the Group netting a €246m positive cash inflow, driving down our net debt/ EBITDA ratio to 1.8x (or 1.6x excluding the acquisition of SIA closed the last few days of 2019).”

“Summarizing, 2019 results show our commitment to profitable growth and constitute a solid basis to keep this path, as reflected in our demanding guidance for 2020,” Abril-Martorell said.

Abril-Martorell also wanted to “highlight our commitment and constant effort to improve our position in social, environmental and governance issues. During 2019 Indra renewed once again our presence in the Dow Jones Sustainability Index (DJSI) World, as well as in FTSE4Good. During last year, our efforts on these matters were further recognized by our inclusion in the Bloomberg Gender-Equality Index (GEI) 2020 where only 15 Spanish companies are represented. Our commitment is further reinforced by the decision of the Board of Directors to create a Sustainability Commission with responsibility in the oversight of our initiative on these fronts [as well as the preparation of our non-financial information].”