Spain's Indra keeps 2026 targets on increased defence spending
Indra's Financial Performance and Strategic Outlook
By Gemma Guasch and Mireia Merino
Strong Defence Growth Amid Rising European Military Budgets
July 23 (Reuters) - Spanish firm Indra held on to its full-year targets on Thursday after strong growth in its defence business boosted first-half revenue and operating profit, with the continent hiking military spending in the wake of the Russia-Ukraine war and U.S. pressure on NATO.
Shares were up 5.3% at 10:33 GMT.
Impact of NATO and EU Defence Spending
Indra, partly state-run, has benefited from NATO member Spain pledging to lift defence spending to 2% of gross domestic product, with the European Union projected to spend €454 billion in 2026 after hitting €418 billion last year.
"This is not a temporary spending cycle," CEO Josep Maria Recasens said, as the defence and technology company reiterated a 2026 record revenue outlook of more than €7 billion.
Key Revenue Drivers and Programme Performance
The firm's first-half defence revenue more than doubled year-on-year to €973 million ($1.1 billion), driven by higher contributions from the Eurofighter fighter aircraft programme, military modernisation projects and armoured vehicle work.
It overrode a 15% decline in revenue from the FCAS future fighter jet programme, which was dropped after disagreements between Germany and France.
Profit and Cash Flow Highlights
Net profit rose 2% to €219 million, while free cash flow jumped to €1.49 billion from €65 million.
UBS had previously flagged defence revenue as a key test of the company's growth strategy.
Morgan Stanley said the defence division revenue could grow to €5.2 billion by 2030 to become its biggest business, as Spanish defence equipment spending nearly doubles.
Leadership Changes and Strategic Planning
Recent Management Shake-up
NEW STRATEGIC PLAN AWAITED
The company underwent a leadership shake-up with the exit of its chairman following a failed merger with remote weapon systems maker EM&E in March due to a conflict of interest, and Recasens' appointment in May.
Since the chairman's exit, the company's stock has been highly volatile, outpacing the European defence index.
Expectations for New Strategic Plan
Investors are expecting a new strategic plan to guide the company’s targets, which have been postponed a few times, now expected before the year-end, CFO Miguel Forteza said in June.
On Thursday, CEO Recasens asked for "patience" and said they will announce a date for the next capital markets day "as soon as possible".
Additional Information
($1 = 0.8752 euros)
(Reporting by Gemma Guasch and Mireia Merino; Editing by Mrigank Dhaniwala and Harikrishnan Nair)
