Hensoldt Shares Surge as Defense Orders Reach Record Highs

The defense technology group Hensoldt is demonstrating remarkable financial performance, posting record figures that underscore its position as a primary beneficiary of increased global military spending. With revenue climbing 21% to reach €2.24 billion, the company has comfortably surpassed its own projections.

Profitability and Shareholder Returns Exceed Forecasts

The company’s profitability metrics are equally compelling. Adjusted EBITDA surged to €405 million, yielding a robust margin of 19.4%, which clearly exceeded internal guidance. An even more powerful indicator of financial health is the 26% increase in free cash flow, which reached €249 million. This solid financial foundation has enabled management to reward shareholders with a significant 25% dividend hike, raising the payout to €0.50 per share.

A Flood of New Contracts Fuels Growth

The most explosive growth, however, is visible in Hensoldt’s order books. The company registered a record order intake of €2.9 billion, a substantial 40% increase compared to the previous year. This translates to a book-to-bill ratio of 1.3x, indicating that new orders are coming in faster than the company can fulfill them.

Should investors sell immediately? Or is it worth buying Hensoldt?

A series of major contracts secured between October and January, valued at over €1.4 billion, are driving this momentum. Key awards include:
* A €350 million contract for the ECRS Mk1 radar system for the Eurofighter jet.
* Significant air defense orders for its TRML-4D radar systems.
* Modernization programs for the German Bundeswehr’s vehicle fleet.

Assessing the Trajectory: Is This Growth Sustainable?

Looking ahead, the outlook remains positive. For 2025, Hensoldt anticipates further expansion, forecasting:
* Revenue in the range of €2.5 to €2.6 billion.
* A book-to-bill ratio of approximately 1.2x.
* An EBITDA margin around 18%.

CEO Oliver Dörre expressed confidence in the sustainability of this growth cycle, stating, “The world continues to be characterized by a multitude of crisis hotspots, and Europe in particular must sustainably expand its defense capabilities.” The company’s strategy appears to be working, with 40% of new orders now originating from European partner nations. The long-term ambition of achieving €5 billion in revenue by 2030 seems increasingly attainable, supported by the current tailwinds and a record-high order backlog of €6.6 billion. This optimistic picture is reflected in the company’s share price, which is trading near its 52-week high, validating early investors who recognized the potential in the defense sector.