Indra Sistemas, S.A.

Indra reported first-half revenue of EUR 3.2 billion, up 30% year on year, with order intake up 58% to EUR 5 billion and backlog at a record EUR 20.5 billion, up 117%. EBIT margin reached 9.9% in the first half, up 1.3 percentage points, while EBITDA and EBIT increased 22% and 51%, respectively; net income was EUR 219 million, up 2%. Free cash flow was EUR 1.5 billion versus EUR 65 million a year ago, driven by PEM prepayments, and the company ended with net cash of EUR 1 billion and net debt-to-EBITDA of minus 1.3x. Management reaffirmed 2026 guidance for more than EUR 375 million of free cash flow excluding PEM prepayments and more than EUR 700 million of EBIT; Miguel Forteza also said full-year CapEx is expected to be around EUR 300 million, and Minsait guidance remains low-single- to mid-single-digit growth with EBIT margin between 6.6% and 7%.

Josep Recasens framed the call as the start of a new execution-focused phase, repeatedly stressing delivery speed, quality, sovereignty, and competitiveness. He said Indra has strong technology, backlog, and momentum, and argued that the current geopolitical and industrial environment is creating structural demand for the company’s capabilities. He also said the strategic plan will combine organic and inorganic options, but the immediate priority is to execute on current programs and turn backlog into results.

Miguel Forteza emphasized that the EUR 1.5 billion free cash flow was not a recurring operating run-rate, but instead was entirely explained by January PEM prepayments; after adjusting for PEMs and factoring, comparable free cash flow was EUR 15 million in the first half. He highlighted a net cash position of EUR 1 billion, operating cash flow of EUR 444 million, CapEx of EUR 183 million in the first half, and gross debt cost declining to 3% with average maturity extending to 3.8 years. He also noted EUR 949 million of available committed credit facilities, including a EUR 385 million EIB facility, and said full-year net CapEx is expected to be around EUR 300 million.

Analysts pressed management on capital allocation, possible M&A or disposals, the timing of the capital markets day, the impact and timing of PEMs, defense revenue phasing, and whether any forensic investigation into prior decisions was underway. Recasens said all options remain open on capital allocation, but alliances, industrial partnerships, and selective organic/inorganic moves will be considered within the strategic plan; he also declined to comment on the forensic-investigation rumor and asked for patience on CMD timing because he has only been in the role about 15 days. Forteza said defense revenue visibility remains strong, with EUR 973 million in defense revenue in H1, and reiterated that margin performance was boosted by Eurofighter mix while still expecting defense margins to moderate somewhat into year-end.