Post on 16-Jun-2020
2
This presentation has been produced by Indra for the sole purpose expressed therein. Therefore, neither this presentation nor
any of the information contained herein constitutes an offer sale or exchange of securities, invitation to purchase or sale shares
of the Company or any advice or recommendation with respect to such securities.
Its content is purely for information purposes and the statement it contains may reflect certain forward-looking statements,
expectations and forecasts about the Company at the time of its elaboration. These expectations and forecasts are not in
themselves guarantees of future performance as they are subject to risks, uncertainties and other important factors beyond
the control of the Company that could result in final results materially differing from those contained in these statements. The
Company does not assume any obligation or liability in connection with the accuracy if the mentioned estimations and is not
obliged to update or revise them.
This document contains information that has not been audited. In this sense, this information is subject to, and must be read in
conjunction with, all other publicly available information.
This disclaimer should be taken into consideration by all the individuals or entities to whom this document is targeted and by
those who consider that they have to make decisions or issue opinions related to securities issued by Indra.
What is Indra?
Our Strategic Plan
Transport & Defence (T&D)
Minsait (IT)
Annex 1: Last quarterly results
1
2
3
4
5
51 What is Indra?
Indra at the core
Leading worldwide provider of proprietary solutions
in niche areasLeading Digital company in Spain and LatAm
€ 3.2Bn Revenues 2019
>140Countries
>49.000Employees
€ 225m In R&D
6
2,015
566
323
300
Transport
9%
€3,204m
Defence &Security
10%
ATM
2019
Transport
Defence & Security
ATM
Minsait
Minsait
18%
Digital 23%
1 What is Indra?
63%
Revenue Collection Control & Enforcement Safety & Signalling
Security & Border Surveillance
Air Defence & Electronic Warfare
SimulationSpace & Satellite Communications
ATM systems Communications Navigation Surveillance
Operational systems & Communications
Energy & Industry Financial Services Telecom & MediaPublic Administrations &
Healthcare
Business consulting, Digital solutions, Cybersecurity
%
7
€635
20%
€697
22%
€251
8%
€432
13%
€566
18%
€623
19%
Telecom &
Media
Financial Services
Public Admin &
Healthcare
Energy & Industry
Sales 2019
1 What is Indra?
EBIT 2019
Transport &
Traffic
Defence &
Security 145
66%
76
34%
T&D
€ m
mm
€ m
€ m
12.2% EBIT margin
3.8% EBIT margin
T&D
m
m m
Minsait
81 What is Indra?
28.023
17.252
2.240 2.092
0
5.000
10.000
15.000
20.000
25.000
30.000
50%
21%
17%
12%
Sales 2019 Employees 2019
Spain America Europe Asia, Middle East & Africa (AMEA)
9
(*) Board of Directors representation
CNMV data. Identified shareholders with
a position in excess of 3%
1 What is Indra?
18,7%
10,5%
9,8%
3,1%
3,0%
54,9%
Sociedad Estatal de Participaciones
Industriales S.E.P.I (*)
Corporación Financiera
Alba (*)
Others
T. Rowe Price
Fidelity
Management Research
Norges Bank
101 What is Indra?
(1) Before non-recurrent items of €687M
(2) Before non-recurrent items of €246M
(3) After non-recurrent items
FY16FY15
Order Intake (€M)
Revenues (€M)
EBITDA (€M)
EBIT margin
Net profit Reported (€M)
CAPEX (€M)
FCF (€M)
Net Debt (€M)
FY17 FY18
EBIT (€M)
FY19
2,651
2,850
131
45(1)
1.6%(1)
-641(1)
37
-50
700
2,744
2,709
229
162
6.0%
70
28
184
523
3,248
3,011
266
196
6.5%
127
40
186
588
3,437
3,104
293
199
6.4%
120
79
168
483
3,686
3,204
343
221
6.9%
121
76
8
552
11
AA
Indra´s presence in the main ESG indexes Supporting gender equality
Only 15 Spanish
companies listed
2nd best possible scoreOnly company in the Software
and Services sector listed for
14 consecutive years
Demonstrating strong
Environmental, Social and
Governance (ESG) practices
14 years
5 years
Prime
ESG performance above
the sector
Committed to talent
Acting on Climate Change
Score B
Relevant ESG figures*
75% 35%CO2 emissions
reduction per employee
since 2013 (scope 1 +
2)
Women within Indra
82% Local providers31% Women on the Board of Directors
Professionals trained on Code of
Ethics and Legal Compliance92%
*Figures not audited
13
Resulting in high financial stress
Cash flow draining
High debt generating difficulties on
external financing
-164€M1H15
accumulatedFCF
5.9x1H15
Net Debt / EBITDA
825€M1H15
Net Debt
Ongoing deep operational issues
Non reliable analytical accounting and lack of control of onerous projects
718€M write-offs in 2015
Difficulties to understand root causes and underlying issues
Profitability de-prioritisation
Growth driven by low value added services
Cost overruns in some contracts resulting from aggressive growth
Expensive delivery model
Lack of focus on cost efficiency
Heavy corporate structure
Non optimal production pyramid management
Cash management decoupled from business activities
Excessive working capital requirements
Excessive risk assumption in commercial bids
Some products at too early stage, generating onerous projects
Contractual and legal conditions without enough self-protection
2 Our Strategic Plan
14
Much more reliable balance sheet after write-offs
2.2x
Jun
16Dec
15
6.6x
Jun
15
Jun
17Dec
16
Sustainable cash generation
FCF accumulated LTM (€M)
Net debt on the lowest point since 2015 peak
Net Debt / EBITDA LTM (Times)
Healthy P&L and balance sheet
Recurring EBIT LTM (€M)
45 199
Dec 18Dec 15
1.6% 6.4%
163181184 184
-136
132
186
Jun
17
104
Jun
15
Jun
16
-50
Dec
16
76
-114
Dec
15
Includes 78€M cash cost from
personnel optimisation plan in
2015, and 51€M in 2016
Dec
17
Dec
17
2 Our Strategic Plan
150
168
Jun
18
Dec
18
1.6x
Jun
18
Dec
18
15
Greater focus, accountability,
agility and flexibility
Healthy
sales growth
Margin
enhancement
New Specialised Operating Model
Ongoing Productivity Upgrades
Product
Portfolio
Evolution
Segmented
Commercial
Processes
02 03
04
01
2 Our Strategic Plan
16
Operational synergies
Corporate services will continue to be shared to leverage the
scale effect and without losing synergies
Economies of scale within the T&D and the IT business (in
Offering Development, Cross-Selling and Production) will be
totally captured
Improved strategic flexibility
Easier potential alliances, joint-ventures and M&A
Increased management focus and accountability
Businesses split facilitates specialisation (e.g. more focused
international commercial activity)
Split allows for clearer accountabilities
Increased agility and time-to-market
Simplified management structure within the new division
Decision-making and execution processes will be faster and
better suited to each single business needs
~
Indra
T&D
Corporate functions +
shared services
Minsait
2 Our Strategic Plan
17
Deploy Lean manufacturing, Lean IT production and apply Automation
Extend scope of our Global Business Services and rationalise our indirect costs base
Intensify our Pyramid management and Delayering
Optimise procurement
Ongoing Productivity UpgradesProduct
Portfolio EvolutionSegmented Commercial
Processes
Invest to reinforce those productswhere we already have a leading position
Apply digital technologies to further position our offering in the smart ecosystem
Complement selectively ourproprietary products portfolio to sell complete end-to-end solutions
Increase commercial intensity with strong incentives and systematic tools
Apply a segmented commercial approach with new more specialised profiles
Establish alliances / JVs for commercial acceleration in selected geographies
2 Our Strategic Plan
18
Other uses (€M) (5)
2015-2017E
CAPEX (€M) (4)
1. Pro-forma values including full consolidation from Tecnocom
2. Organic growth. Constant exchange rates as of 2016 (average FX in 2016)
3. Includes the estimated CF generated in 2015-17E, excluding the estimated impact from the cash outflows from Tecnocom acquisition (191€M), headcount plans (129€M), onerous projects (~145€M)
and the accumulated CAPEX in the period
4. Accumulated CAPEX in the 2015-2017E and 2018-2020E period respectively
5. The uses of the cash flow generated in the 2018-2020E period are contingent upon fulfilment of the Strategic Plan
6. Includes the FCF generated in the period according to Indra’s definition, excluding CAPEX and the last part of the pending cash outflows associated with the headcount reduction plan in Spain (~40€M)
~610 (3)
100-110
550-650 (6)
150-200
Restructuring Plan 129
Tecnocom acquisition 191
Onerous projects ~145
Deleverage (consensus end FY17) ~40
2018-2020E
Continue deleveraging
Reinstate dividend policy
Selective bolt-on acquisitions
Revenues (€M)
EBIT (€M)
CAGR 2016-2020 (2)
3,121
180
Low single digit
>10% (p.a. growth)
2016 (1)
Total Cash Flow (€M) [~€775m since First Investors Day]
2 Our Strategic Plan
19
T&D
Transport Mid to high single digit
ATM Mid single digit
Defence & Security
Mid to high single digit
Minsait Low single digitIT
1. Organic growth. Constant exchange rates as of 2016 (average FX in 2016). 2. Proforma including full 2016 revenues from Tecnocom
Source: Indra
CAGR1 (16-20)Excluding
2018
Eurofighter
revenues fall
355€M
270€M
599€M
1,897€M2
Revenues 2016
2 Our Strategic Plan
21
All our clients are facing the digital transformation of their operations
Satellite
Communications>10%
Simulation 4%
Electronic Warfare 4%
Border Surveillance 6%
Air Defence 3%
Safety &
Signalling>10%
Operational Systems >10%
Control &
Enforcement6%
Revenue Collection 8%
Sources: Markets and markets, Indra Analysis
TransportAir Traffic ManagementDefence & Security
Communications,
Navigation,
Surveillance
5%
Air Traffic
Management 3%
The smart
segment
of all
these
solutions
is growing
over 20%
Expected CAGR 17-22 (%)Expected CAGR 17-22 (%) Expected CAGR 17-22 (%)
3 Transport & Defence (T&D)
22
Indra's accessible geographies will grow
Revitalised NATO push for 2% GDP defence expenditure
European Defence Fund investing up to 5.5€Bn/year
Geopolitical uncertainty is increasing amidst growing security threats
"Cyber threats are becoming more common, sophisticated and
damaging (…) In 2016 NATO experienced an average of 500
incidents per month – an increase of roughly 60% over 2015"
NATO Cyber Defence Factsheet, May 2017
"The events that shaped 2016 added a new sense of urgency
and determination to see Europe delivering on its potential in
defence"
European Defence Agency 2016 Annual Report
0
500
20202016 2018
Global Defence procurement
(ex North America), $Bn
+4%
Indra's home market in Spain is launching a new investment cycle
Strong R&D programs launched by 2015 now entering
into production phase
Additionally, new R&D programs starting
+3% CAGREurope
+13% CAGRLatAm
+9% CAGRMiddle East & Africa
+6% CAGRAsia Pacific
Note: NATO (North Atlantic Treaty Organisation). UN (United Nations). Source: IHS Jane's Defence Budgets 2017
"Effective border security is key to the effective implementation of
counter-terrorism measures"
UN, 2017
And Security market gaining relevance linked to an increase in border control and surveillance
3 Transport & Defence (T&D)
23
1. Defence Simulations
2. Simulation Solutions
for Training
PlatformsDefence
SystemsSecurity Cyberdefence Space
Training
Solutions &
Services
1. Airborne Systems
2. Naval Platforms
3. Eurofigther and
A400M participation
1. Electronic Defence
2. Countermeasures
3. Military Air Bases
4. Integrated
Command and
Control Systems
5. Airspace
surveillance and
control
1. Border surveillance
and protection
2. Safe Cities
3. Smart Borders
4. Safe Communication
1. Cyberdefence
Systems
2. Simulation and
Training
1. Communications
Solutions
2. Navigation and
positioning
3. European Space
Surveillance and
Tracking Service
1. Aeronautical MRO
Services
2. Technical support
3. Full Maintenance
Logistics &
Maintenance
3 Transport & Defence (T&D)
24
A400M
2003-2024
NH90
1992-2024
Tiger
1988-…
Eurofighter
1986-…
There have been significant developments linked with the new Spanish investment cycle
Existing long-term high volume programs are still in progress
SST
2003-2024
Note: DASS (Defensive Aids Sub-System). DIRCM (Directional Infrared Counter Measures). CAS (Close Air Support).
SST (Space Surveillance & Tracking)
Integrated frigate mast
90€M in R&D phase
~350€M in
production phase
Electronic warfare system
~350€M project,
not including
associated
platforms
Space surveillance radar
15€M R&D
~340€M
production
project, with EU
funding
Vehicle systems
28€M in R&D
phase
~300€M in
production
phase 1
Sustainment, sales and export opportunities
Future upgrades of main subsystems (e.g. radar, DASS)
Systems (e.g. DIRCM) and simulation
Systems (e.g. CAS)
and aftermarket
+8x8
2015-2027
F110
2014-2027
Santiago
2015-…
3 Transport & Defence (T&D)
25
Airborne
Platforms
•BPE
•BAC
•BAM
•FFG
•F122
•K130
•Eurofighter
•A400M
•C-295
•F/A-18
•F1
•NH90
•P3
•B707
Naval
Platforms
•Chinook
•CH53
•Tigre
•Cougar
•U212/214
•T-209
•OPV
•F100
•F105
•S70
Land based
Air Defence Electronic Warfare
Border Surveillance
Naval
Land
based
•BPE
•BAC
•BAM
•F100
•F105
•FFG
•S70
•S80
•F122
•K130
•U212
•U214
•T-204
•AWD
•ASW
•OPV
Satellite Communications
•Eurofighter
•A400M
•A330 MRTT
•F-18
•AV-8B
•Tiger
•Seahawk
•NH90
•Wildcat
•Chinook
•Cougar
•H135
•H225
•H175
•H145
•A320
•B737…
Military Simulation
3 Transport & Defence (T&D)
26
FCAS
Scope: Define NGWS capabilities and common architectures
Define and update technology development roadmaps
Establish program framework for all the phases
Indra’s Role: SP´s nominated Co-Contractor, together with Dassault in FR and Airbus D&S in GE.
Scope: Ensure timely results for various demonstration projects during NGWS Design Phase
Activities to be supported by SIMLAB to allow consistency amongst main stakeholders
Indra’s Role: SP’s nominated Co-Contractor, together with Dassault in FR and Airbus D&S in GE.
Scope: Development of technical breakthroughs in Sensors, Defensive Aids and EM effectors.
Next generation of smart distributed systems to be more sensitive, flexible and robust
Incorporating Big Data, Artificial Intelligence and advanced communications.
Indra’s Role: International Prime contractor and Program leader in this pillar in all three countries.
Scope: Information and Intelligence gathering, sharing and exploitation, operating in cloud
Rely on advanced architectures, cybersecurity, distributed computing and communications.
Indra´s Role Prominent role at international level and Pillar leader/Main contractor in Spain.
1) Joint Concept Study (JCS)
2) JCS Inter-Pillars Consistency / SIMLAB
Ne
xt
Ge
ne
rati
on
Fig
hte
r
En
gin
e
Re
mo
te C
arr
iers
4)S
oS
/Co
mb
at
Clo
ud
3)
Se
nso
rs
En
ha
nce
d L
ow
Ob
serv
ab
ilit
y T
ech
.National
Coordinator
NationalCoordinator
Pillar Leader
3-Nation(3*)
Pillar Leader Spain
NGWS
The NGWS is a System of Systems (SoS) that includes a New Generation Fighter (NGF)and a set of unmanned vehicles (Remote Carriers - RC) to expand the capabilities of the fighter, with all those assets interconnected and operated through a Combat Cloud
MAIN AREAS OF PARTICIPATION FOR INDRA
1) Joint Concept Study:
2) JCS Inter-Pillars Consistency / SIMLAB:
4) Systems of Systems/Combat Cloud:
3) Sensors:
(3*) Final role to be confirmed
27
IA1: ConceptStudy
IA2: Phase 1APrototype Concept
Phase 1BPrototypes and
Concepts
Phase 2Individual Flight Demonstrators
Phase 3NGWS capabilities Demonstrator and
initial phase of Development
NGWS PDRDevelopment initiation
IOC
Development and Industrialization
Program
1st flights
System Concept
Phase
(incl. launching of
R&T and
demonstrators)
Demonstration
Phase
(incl. R&T maturation
and ground / flying
demonstrators)
Development,
production…
Framework Agreement signed by the Ministries of Defence of France, Germany and Spain in Le Bourget’19
>€8bn total investment
IDR participation
IDR participation
IDR participation
IDR participation
IDR
participation
28
10
20
30
0
7
17
2016
Passenger traffic (RPKs Bn)
4.7%
2036
Note: RPKs (Revenue per kilometre). Source: Boeing Market Outlook 2017-2036; Markets and markets; Global airport construction review, CAPA
Maintenance and replacement
of legacy systems
Very long development cycles,
high client loyalty
Potential new ATM systems operators
Already ~400 airports under
construction or planned for
Innovative technology to solve
aerospace congestion (e.g. Europe)
Increase of air passenger traffic worldwide
Increase of flying aircrafts worldwide
3 drivers of sustained demand for ATM systems
80
0
20
60
40
23
Aircrafts in service worldwide (k)
2016
47
3.5%
2036
Expected stable ~4% growth in the ATM market
3 Transport & Defence (T&D)
293 Transport & Defence (T&D)
1. Aeronautical
Information
Management
2. Message Handling
Systems
3. System Wide
Information
Management
4. Air Traffic
Management
5. Operational
Meteorological
Information
Indra Air
Automation
Indra Air
Communication
Indra Air
Navigation
Indra Air
Surveillance
Indra Air
Drones
Indra Air
Information
1. Air Traffic Control
Automation Systems
2. Air Traffic
Management
Solutions
3. Advanced Controller
Working Position
1. Automated
Communications
Functionalities
2. Digital Voice
Communications
Control Systems
1. Navigational
Products (ILS, DME,
DVOR, GBAS)
1. Surveillance
Solutions1. Connect drones
safely
2. Manage unmanned
traffic
3. Neutralize drones
30
~200 Control Centres
~1,700 Instrument
Landing Systems (ILS)
~400 Secondary Radars
(MSSR)
Note: Most significant countries with Indra's presence highlighted
Indra ATM businessis present in
176 countries
3 Transport & Defence (T&D)
Developing long lasting relationships with international reference clients
Enaire in Spain 35 years
DFS in Germany 20 years
iNATS n the UK 10 years
31
Europe has a challenge in air traffic management due to air
traffic congestion and the fragmentation of aerospace
Note: SESAR (Single European Sky ATM Research)
iTEC by Indra
Coflight
Coopans
Other potential
iTEC partners
In 2004 Eurocontrol, the European Commission and a
selection of industrial partners took the lead to solve this
issue and increase interoperability
Indra is one of the key industrial partners of SESAR
7 European countries have already joined the iTEC Alliance along
with Indra to fulfil present and future SESAR requirements, and
+20 countries still pending to adopt a decision
3 Transport & Defence (T&D)
32
Further develop remote
towers to be a reference supplier, leveraging SESAR
Indra already has leading technology installed (e.g. Norway)
Grow on aftermarket
leveraging our significant asset base of ~200 control centres, ~1700 ILS and ~400 radars
installed
Develop leading
Cybersecurity technology, fulfilling latent demand
Successfully evolve iTEC
with the future requirements of the Single European Sky, leading the SESARinteroperability
Evolve CNS products
and service model (e.g. GBAS) to maintain the technological and commercial leading
position
Expanding into new segments to complement Indra's offering
Keep evolving leading products in current segments with technological updates
Note: ILS (Instrument Landing System). GBAS (Ground Based Augmentation Systems). ADS–B (Automatic dependent surveillance – broadcast). SESAR (Single European Sky ATM Research)
We will gradually grow our CapEx in our product portfolio in 3 years
3 Transport & Defence (T&D)
PRODUCT PORTFOLIO EVOLUTION
33
Change in infrastructure operating models are generating additional opportunities
Increased demand for intelligent systems adapting to
the coming trend of Smart Transport
Requiring mobility, interconnectivity and real time
steering
More flexible asset management demand is requiring
new systems
More efficient and scalable
New opportunities for private players, as public
administrations are externalising their operations and
sharing risks (PPPs)
Change of cycle in infrastructure investment and therefore increased technology demand
+5% growth in global
investment for Transportinfrastructure
expected until 2025
Changed trend in
Spanish infrastructureinvestment
• -4% growth 2010-2014
• +2% growth 2015-2025
Indra has the perfect mix: transport business
know-how, proprietary products and digital capabilities
+10% expected growth
(+20% for Smart Transport)
Transport infrastructure technology demand increased by
• New investment cycle
• Need for maintenance and upgrade of already existing
infrastructure
+
Source: Oxford Economics, Assessing the global transport infrastructure market
3 Transport & Defence (T&D)
34
0
50
100
20172015 2016
Lack of focus and high risk assumed
implementing excessively tailor-made solutions in international unfamiliar environments
Weak control and risk management during projects
execution. ~90M€ impact on EBIT 2015-2017 due to restructuring
needs and expected ~ 1/5 of sales
at 0% margin in 2017
Opportunity cost: commercial activity focused on solving existing issues with clients instead of expanding the business
2010 2015 2020 2025 2030
0
20
30
Real
US Energy Information
Administration 2015 forecast
Internally, management issues identifiedExternally, drop of the national market in Spain linked to public investment…Infrastructure investment in Spain (US$ Bn)
Brent price ($/barrel)
…and economic slowdown in countries highly dependent on oil prices
Sources: Oxford Economics. EIA Annual Energy Outlook 2015; real data from World Bank.
CAGR '10-'14-10%
CAGR '14-'174%
CAGR '17-'302%
~15$/barrel gap average
Our Transport business did not evolve as quickly as the market demanded
3 Transport & Defence (T&D)
35
Portfolio rationalisation and development of more standardised and packaged solutions
Evolve proprietary products, strengthening our position in the Smart Transport market by taking them to the next technological step by gradually growing CapEx
Product Portfolio Evolution
New organisation and team
New governance model (e.g. new organisation, new profiles, increased specialisation)
Improved commercial processes (e.g. competitors intelligence, KPIs and incentives)
New commercial plans on existing clients and prioritised geographies
Segmented Commercial Processes
Opportunity to become an international reference in rail Safety & Signalling (ERTMS) beyond the local market
Potential upsides
Restructured organisation and new team already in charge
New operational plan improving control and risk management
Ongoing Productivity Upgrades
New structure and external talent recruited for top management positions Reinforced clients and competitors view
Note: ERTMS (European Rail Traffic Management System)
3 Transport & Defence (T&D)
36
Mova
ConsultingMova
CollectMova
TrafficMova
ProtectMova
ExperienceMova
CommsMova
Care
1.Ticketing
2.Toll
3.Back Office
1.Safety
2.Enforcement
3.Video surveillance
4.Cybersecurity
5.On-board systems
1.Information and Publicity for passengers
2.Entertainment
3.Digital User Experience
1.Communications
2.IoT Platforms
3.IT Transport Infrastructure
1.Infrastructure O&M
2.Technology O&M
3.Transportation Services O&M
4.New operation models
1.Planning & Optimization Systems
2.Bus Control Systems
3.Rail Control Systems
4.ITS Control Systems
5.Tunnels Control Systems
6.Airports Control Systems
7.Ports Control Systems
8.Design and Building of Control Centers
9.Transport Control Terminals
1.Consulting and Planning for Transport and Infrastructures
2.Design Engineering for Transport Infrastructure.
3.Construction Engineering for Transport Infrastructure
4.Project Management Services
5.Operations Consulting
3 Transport & Defence (T&D)
37
Note: ASFA-Digital (Safety & Signalling System)
Mova
Consulting
Mova
Collect
Mova
Traffic
Mova
Protect
Mova
Experience
Mova
Comms
Mova
Care
Riyadhticketing
AFC system for
public transport in
Riyadh
T-Mobilitat
Greater
integration of
collection and
Contactless
Urban Tunnels Control Centre
Tunnel control
centre in London
ASFA-D
High-end solution
for rail safety in
Spain
High SpeedMecca-Medina
Most complex
project in the
Middle East
Panama Canal
Expansion of the
canal, a reference
in technology and
security systems
Electronic Toll Management in Texas
Integrated tolling
operation
Sidney Trains
Intelligent video
surveillance
technology
ITS ColombiaSystems for control
and radio-
communications for
the Bogotá-
Villavicencio highway
Port CommunitySystem
National Port
Network
High SpeedControl Centre
Rail Traffic Control
Systems
Renfe High Speed Systems
Equipos embarcados
y entretenimiento
Algiers Airport
Project and
supervision of the
construction of
the new terminal
of the Int. Airport
Kenia AirportOperations
Integration of all the
land operations
3 Transport & Defence (T&D)
39
Digitalisation is a direct driver
for value
In 2015 digital was an emerging
business, today it is on the CEO
main agenda
Market conditions are
expected to be favourable
NASDAQ 100 outperformed S&P500 by
17 p.p. since our first IDay in 2015
Top 5 most valued companies
2006 2016
Source: Market and markets, Gartner, International Data Corporation (IDC), BCG Perspectives 1. Cyber 17-22 CAGR, IoT 16-20 CAGR, Cloud 17-20 CAGR, AI 16-22 CAGR
16%
Cloud
55%
11%
20%
Cyber IoT AI
Expected average annual
growth1
Technology is the 2nd most cited priority for
CEOs after growth…
…42% of CEOs say "digital first" or "digital to
core" is their company digital business posture
"CIOs now have a unique opportunity, but they
must 'flip' their information, technology, value
and people leadership practices to deliver on
the digital promise"
4 Minsait (IT)
40
€ -67mEBIT
€43mEBIT
Pending write-offs
Brazil´s losses
Heavy cost structure
Limited standardisation of
proprietary products and disperse
portfolio
Lack of control and proliferation of
onerous projects
No additional significant write-offs
Brazil´s business turnaround achieved in 2018
Leaner cost structure
Rationalised portfolio and structured product offering
Increased control and tracking due to an improved analytical
accounting and reduction of onerous projects
2015 2018
4 Minsait (IT)
€76mEBIT
2019
41
Minsait commercial
brand for Indra
Launched in 2016, focused on digital transformation
Transformation trigger of our move to high value
Now becomes the brand for our whole IT division
Rationalisation and standardisation of our product portfolio easing implementation
Creation of a new set of value propositions tackling all challenges derived from required
business transformations of our clients
Migration of our products to Cloud
New product delivery model with specialised centres of excellence
Portfolio enhancement
Consolidated leadership in Spain and LaTam with high
complementarity
Payment Processing solution to enhance our product portfolio
Operating synergies delivered as expected. Restructuring process is
over
Reinforced control and
delivery model
Increased control in tender offering process
Closer monitoring of less profitable projects
Sharp reduction in the number of unprofitable projects
Selective Acquisitions
Reinforcement of Digital and Proprietary Products
Improves our time-to-market
Completes our end-to-end offering
4 Minsait (IT)
42
Value propositions
for all Industries
Products Services
Modular suite of products (under the brand Onesite), leveraging open ecosystems and a strong set of strategic alliances
Combination of on-premise and cloud offering, with increasing focus on As-A-Service models
Minsait end-to-end set of solutions to transform businesses: From strategy/ideation, implementation & transformation to operations
Concrete value propositions aiming to generate impact through business and technology (legacy & new) transformation
Set of capabilities and expertise that, combined, make up Minsait value propositions
From strategy & management consulting to IT & digital consulting, ERP consulting, cybersecurity & operations
4 Minsait (IT)
PRODUCT PORTFOLIO EVOLUTION
43
432
251
697
635
2019
32%
35%
12%
21%
(
(
(
)
)
)
)(
A set of value proposition in 4 main domains…
New products, services and business models
Advanced customer relationship delivery models
Advanced technologies, processes and operations
Business protection solutions
… to all the different industries
Oil & Gas Utilities Airlines Industry ...
Banking Insurance
Media Telecom
Energy & Industry
Financial Services
Telecom & Media
Public Administrations
& Health Elections Health Public Sector
€ 2,015 m
4 Minsait (IT)
PRODUCT PORTFOLIO EVOLUTION
44
Digital (23% of Minsait sales)
Digital Consulting and Technology
ERP Consulting Cybersecurity Operations
We optimize and evolve key processes through leading business management solutions
We preserve our clients’ assets and digital identity creating secure client experiences
We manage our clients’ operations through a differential approach
We open up new paths in the strategic definition and transformation of our clients’ businesses
We create differential experiences and state-of-the-art generation solutions that drive our clients’ businesses
Business Consulting
4 Minsait (IT)
PRODUCT PORTFOLIO EVOLUTION
45
Energy & Industry
Telecom & Media
PublicAdministrations & Health
Airlines
Revenue accounting
Multi-channel reservation
Payments
Banking
Digital bank
B2B relations
Opening accounts
Oil & Gas
Refining
Transportation
Safety & Environment
Elections
Electoral solutions
Digital Democrazy
Protection
Public Sector
Taxes
Justice
E-goverment
Health
Management system
B2B processes
Network
Financial Services
Utilities
Generation
Distribution
Commercialization
Insurance
Complete platform
Integral solution for the sales forces
Multi-channel tools
Telecom
Advanced analytics
Customer´s
experience
Media
Corporate Services
Customers & channels
Operations
Industry
Manufacturing
Assets
Workforce
4 Minsait (IT)
PRODUCT PORTFOLIO EVOLUTION
46
We are helping the
Regional Government of
Andalusia in its digital
transformation
We drive the
implementation of the
new home medical
assistance concept
We are experts in
technology solutions
used to manage electoral
processes
We help private banks
during their transition with
our platform
We create the first fully
digital bank in Argentina
Financial ServicesEnergy & Industry Telecom & Media Public Administrations & Health
Transforming the core
insurance industry from
customer’s perspective
We improve the
competitiveness of the
nº1 airline in Brazil
We reduce costs through a
new billing model for
Telefonica
We are leaders in energy
industry solutions for the
transmission and
distribution grid
We developed, together
with Repsol, a solution for
early detection of
hydrocarbon spill
We build the new online
sales channel for a leading
retailer in optical services
(eCommerce)
We are leaders in card
processing in Spain and
America
We help customers port their
number, with processes
adapted to the customer and
country
We improve the
customer’s experience
optimizing the back office
We guarantee optimized
communications for Vivo,
using more than 33,000
km of fiber optic
We make a difference in
the management of
more than 400 electoral
processes
4 Minsait (IT)
PRODUCT PORTFOLIO EVOLUTION
47
Business Analytics··Big Data··Robotics··Automation··Artificial Intelligence
4 Minsait (IT)
PRODUCT PORTFOLIO EVOLUTION
48
4Global Production
3Pyramid Optimisation
2 Delayering
1Lean & Automation
Apply full end-to-end Lean approach, fostering a culture of continuous
improvement and placing automation at the core of our operations
Reduce management layers to increase agility and accountability while maximising efficiency
Reshape our production and delivery pyramid
Increase off-shoring by leveraging our existing capabilities in Latin America
~1.5-2ppinduced direct
margin increase
by 2020
ONGOING PRODUCTIVITY
UPGRADES
4 Minsait (IT)
50
• 2019 Order Intake (+7%) grew again above revenue growth (+4% in local currency)1
4
2 • Backlog up +11%, surpassing the €4.5bn mark at 1.4x revenues, new record for Indra
• FCF reached €8m driving Net Debt / EBITDA LTM ratio down to 1.8x (1.6x excluding SIA acquisition)
7
5
• EBIT grew +11% in 2019, pushed by Minsait profitability (3.8% EBIT margin), despite the lower
contribution of the Election Business
6
• Net profit stood at €121m and improved +1.3% due to higher tax rate (29% in 2019 vs 25% in 2018)
3 • Revenues up +4% in local currency in 2019. Minsait revenues grew +6%. By geographies, America
stood out (+12% in local currency). 4Q19 Transport & Defence revenues temporary down due to
delays in milestone certification of specific projects
• Indra 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)
51
Reported +3.2%
FY19 Sales Growth
Local Currency +3.6%
Organic1 +3.3% Organic1 -1.0%
Reported -1.5%
4Q19 Sales Growth
Local Currency -1.0%
1. Excluding the ACS acquisition which started to consolidate on October 1st, 2018 and the FX impact
€m€m
Delays in
milestone
certification of
specific
Transport &
Traffic projects
52
434 399
504 549
609 665
1,5561,591
3,1043,204
FY18 FY19
50%
14%
16%
20%
50%
12%
17%
21%
+9% / +9%
-9% / -8%
+2%
+12% / +9%
+4% / +3%
430 453
586 623
739782
1,6821,828
3,437
3,686
FY18 FY19
49%
13%
17%
22%
50%
12%
17%
21%
+6% / +6%
+5% / +5%
+9%
+7% / +6%
+8% / +7%
Local Currency / Reported
Revenues (€m)
Local Currency / Reported
Order Intake (€m)
Spain
America
Europe
AMEA
53
4,065
4,511
FY18 FY19
+11%2,719 3,014
FY18 FY19
+11%1,345 1,498
FY18 FY19
+11%
1.31 1.41
FY18 FY19
+8% 2.292.54
FY18 FY19
11%0.70 0.74
FY18 FY19
+6%
Minsait backlog (€m)Indra backlog (€m) T&D backlog (€m)
Indra backlog/revs LTM T&D backlog/revs LTM Minsait backlog/revs LTM
54
T&D
Minsait
€145m
€76m
66%
34%
FY19 EBIT and Margin
4Q19 EBITDA and Margin
FY19 EBITDA and Margin
4Q19 EBIT and Margin
FY19 EBIT by divisions
9.4%
10.8%6.4%
6.9%
11.8%13.5%
9.1%10.3%
55
34,864
39,855 40,365
6,900
7,3277,379
1,943
1,9001,863
20,000
25,000
30,000
35,000
40,000
45,000
50,000
dic.-18 sep.-19 dic.-19
4,991
-37
-43
427
510
52
Minsait
T&D
Overheads & Others
Total workforce
49,607*
-o/w >3,000 BPO
-o/w >700 Digital Services
o/w >2,500 in
BPO Latam
49,082
5,375
43,707
525
FY18 9M19 FY19
*742 SIA employees not included
56
Revenue growth(in constant currency)
EBIT growth
FCF before NWC
FY19
+4%
+11%
€139m
Guidance 2019
Low single digit
>10%
>100 m€
Guidance 2020
Mid single digit
>15% (>€255m)
>150 m€Free Cash Flow €8m
57
T&D
FY19 Order Intake (€m)
Transport & Traffic
Defence & Security
Local Currency / Reported
FY19 Revenues (€m) 4Q19 Revenues (€m)
Local Currency / Reported Local Currency / Reported
617 623
570 566
FY18 FY19
48%-1% / -1% 48%
+0% / +0%1,188 1,189
52%52%
+1% / +1% 229 197
181177
4Q18 4Q19
44% -2% / -2% 47%
-9% / -9%410374
56% 53%-14% / -14%
733 644
590 832
FY18 FY19
45% +41% / +41%56%
+11% / +12%1,323
1,476
55%44%-12% / -12%
Delays in milestone
certification of specific Transport & Traffic projects
58
4Q19 EBITDA and MarginFY19 EBITDA and Margin
4Q19 EBIT and MarginFY19 EBIT and Margin
16.2% 15.5%
13.2%12.2%
16.2%18.8%
T&D
14.0%17.0%
59
Energy & Industry
Financial Services
Telecom & Media
PPAA & Healthcare
MINSAIT
FY19 Order Intake (€m)
Local Currency / Reported Local Currency / Reported
FY19 Revenues (€m)
Local Currency / Reported
4Q19 Revenues (€m)
62 65
115 119
180 187
163 171
4Q18 4Q19
12%
22%
35%
31%
12%
22%
35%
32%
+6% / +4%
+5% / +4%
+4% / +4%
+6% / +5%
+5% / +4%520 542
240 251
436 432
661 697
580635
FY18 FY19
13%
23%
34%
30%
12%
21%
35%
32%
+6% / +4%
+0% / -1%
+5% / +6%
+10% / +10%
+6% / +5%1,9162,015
239 262
418522
785791
672635
FY18 FY19
11%
20%
37%
32%
12%
24%
36%
29%
+12% / +10%
+25% / +25%
+1% / +1%
-5% / -6%
+5% / +5%2,114
2,210
60
FY19 Operating Margin1
MINSAIT
4Q19 Operating Margin1
1. EBIT before Other Operating Income & Expenses, including: staff reorganization, integration and acquisition costs, fines, amortization of intangible assets (PPA from acquisitions) and equity based compensation.
4Q19 EBIT and MarginFY19 EBIT and Margin
43
76
FY18 EBIT (€m) FY19 EBIT (€m)
3.8%
1.5pp2.2%
Significantly lower contribution from
the Election Business
27 31
4Q18 Op. Margin (€m) 4Q19 Op. Margin (€m)
5.8%0.5pp5.2%
27 30
4Q18 EBIT (€m) 4Q19 EBIT (€m)
5.6%0.4pp5.2%
9197
FY18 Op. Margin (€m) FY19 Op. Margin (€m)
4.8%0.1pp4.8%
61
FY18 FY19
-1%
140 139
Accumulated FCF LTM (€m)
-79 -85
-23
137
47
2
-5
140
-5-26
75
142
-6
-55
15
213
-108-129
-1
246
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
FCF before WC (€m)
Quarterly FCF (€m)
FY16 €184m FY17 €186m FY18 €168mFY15 €-50m FY19 €8m
-114-136
-50
76
163181 184
132104
184 186 185157
96
168
66
-9-25
8
62
*
(IFRS 16 impact)
Net Debt Bridge – Cash Flow (€m)
o/w +26 M€ IFRS 16
Includes SIA
acquisition (€67m)
FCF = €8m
* €281m excluding IFRS 16 impact
63
3646
35
-82-70 -75
37
47
46
6-10
+11
+10
+13
24
-6
-11
-1
Net Working Capital (DoS)
2018 2019
Inventory
Accounts
Reveivable
Accounts
payable
9M19
64
837
700
523588
483552
3Q15 4Q15 4Q16 4Q17 4Q18 4Q19
Net Debt (€m)
Net Debt
Net Debt / EBITDA LTM Ex IFRS 16
(Factoring)1
(173)
(187)
(187)
(187)
(187)
1. Non-recourse factoring
(187)
1.6x excluding SIA acquisition
485 excluding SIA acquisition
6.6x
5.4x
2.3x 2.2x1.6x 1.8x
65
80
637
86
246
187
552
356
668
Gross Debt Cash & Cash
Equivalents
Net Debt
€1,406 €855m
€552m
17
134
318
937
2020 2021 2022 2023 and
beyond
Gross Debt Maturity Profile
Bank Loans
Convertible Bonds
R+D Loans
Factoring
Other available credit facilities: €132m
Corporate Bonds
EIB1 Loans
2
1. European Investment Bank . 2. Including €246m Convertible Bond with 2023 maturity and €296m Corporate Bond with 2024 maturity
Average life (years) 3,7 4,0
FY19 FY18
Gross and Net Debt StructureFY19 % total FY18 % total
L/T Debt 1,380 98% 1,359 97%
S/T Debt 27 2% 42 3%
Gross Debt 1,406 100% 1,401 100%
Cost of Gross Debt 1.8% 2.0%
Cash & Others 855 n.m. 918 n.m.
Net Debt 552 n.m. 483 n.m.
Cost of Net Debt 2.7% 3.2%