Indra Sistemas Stock

Good morning. Welcome to Indra's First Half 2026 Results Presentation. I now hand the conference over to Mr. Ezequiel Nieto, Head of Investor Relations. Please go ahead.

Good morning, everyone. Welcome to our first half 2026 results presentation. My name is Ezequiel Nieto, Head of Investor Relations. Before we begin, let me briefly draw your attention to the disclaimer on the current Slide, which sets out the legal framework applicable to today's presentation. Joining me today are Josep Maria Recasens, Chief Executive Officer of Indra; and Miguel Forteza, Chief Financial Officer of Indra.

With that, let me hand over to Reca to walk you through the key highlights of the quarter. Reca, the floor is yours.

Thank you very much, Ezequiel. Good morning to everybody, right? And thank you for joining the current presentation of the first group -- first half results of Indra in 2026. Actually, it's a privilege to address you today in my first results presentation as a Chief Executive Officer, and I fully recognize the responsibility that comes with this role. The results that we are presenting today are a result of the work carried out by our teams during the first half of the year. I want to acknowledge and recognize that work and thank everyone at Indra for the welcome I have received.

As you may know, I'm coming from the automotive industry, more than 25 years in the automotive sector, 20 years in the Volkswagen Group and the last 5 based in Paris in the Renault Group, right? So I have had different responsibilities in strategy, product programs, partnerships and business development. But despites the role were different, the equation was always the same, turning a strategy into execution by making the right product choices, managing programs efficiently and diligently and delivering on our commitments. That is the approach I bring to Indra. In my first weeks at Indra, I have focused on what I think matters the most, our teams, our customers and our programs. What I have found indeed is a company with exceptional outstanding technological capabilities, a strong backlog, talented people and a real momentum. My role, in fact, is to accelerate that execution.

Let me now turn to the environment in which we have to do that. Actually, every time I join a new venture, and this is a very particular one, I'd like to understand in which is the environment and context I have to operate. And in fact, I have identified a total of 8 challenges, right? Actually, our industry is at the same time, facing both more challenges and opportunities than ever before. First, geopolitical instability and polarization are reshaping the global security environment. Governments are reassessing the capabilities they need to protect their citizens, their infrastructure and their strategic interest.

Energy security and resilience have also become part of our national security. The question is no longer only how much energy costs, but whether is it available and secure when it is needed. As a consequence, we are experiencing a sustained increase in defense spending. The 27 EU member states spend more than EUR 400 billion on defense in 2025, 20% more than in 2024. In 2026, that figure is expected to reach EUR 450 billion according to the latest European Defense Agency report. This is not a temporary spending cycle. It is a structural change in priorities.

At the same time, shortages of critical raw materials and pressure on global supply chains are forcing Europe to reconsider its dependencies and strengthen its industrial capacity. That is why sovereignty has moved to the center of government agendas. Governments are asking not only what capabilities they need, but also where they are designed, where they are produced and who controls the technologies behind them. In this context, scale and innovation are decisive, decisive competitive advantages. Developing excellent technology is not enough. Companies, and this is what Indra aims to be, must be able to industrialize it, produce it reliably and deliver it on time at the required quality and a competitive cost.

Civil and military technologies are also converging and converging really, really fast. The traditional 5- to 10-year development cycle in defense no longer matches the speed at which threats evolve. Ukraine has shown how commercial drones and satellite communications can be adapted to battlefield needs in months, not years. Disruptive technologies such as artificial intelligence and quantum are accelerating this transformation even further, reshaping how systems are designed, how decisions are made and how capabilities evolve. Together, these forces are redefining our industry. For a company like Indra, this environment is not a threat. Actually, it's our moment. Every one of these forces points to greater demand for precisely what we do. But capturing that opportunity and turning it into results will depend on execution.

Given this context, we have defined 4 clear principles to guide how we operate. The first is delivery and speed. Our credibility is earned by delivering on our commitments on time and with full control of every program. That means managing milestones by milestones, anticipating bottlenecks and taking decisions faster. In programs such as land vehicles, drones and radars, the challenge is clear, increase our delivery capacity and convert demand into industrial output.

The second is quality and reliability. In our businesses, quality is not an option. We work on systems that must perform in critical environments over very long cycles. Eurofighter is a good example. It is not a program measured in months, but in decades, it requires the same level of excellence mission after mission and upgrade after upgrade. The speed is, again, essential, but speed cannot come at the expense of reliability. The third is sovereignty. Technologies like IndraMind keep critical capabilities in our hands, in our country's hands and in Europe's hands. The fourth is competitiveness. Being sovereign is not enough. We must also be competitive in cost, in lead time, in quality, in technology and in international ambition. Air traffic management proves that Indra can compete globally and win. That standard must guide us across the group.

Underpinning all 4 is our industrial footprint and ecosystem. Our plants, engineering centers, suppliers and partners must operate as one single system. These are our 4 management principles, deliver faster, deliver with quality, control critical technologies and compete globally. That is how we will turn a strategy into execution and backlog into results.

With that, let me turn to our first half performance. With that strategic context in mind, let me now turn to the key operational and financial highlights of the semester. The results for the first 6 months of the year demonstrate the consistent execution of our strategy and the continued progress we are making to deliver our annual targets. In particular, the second quarter marked a clear step-up in performance with a further acceleration in growth and continued margin expansion across the group, underscoring our ability to deliver profitable growth while maintaining a strong operational discipline.

Before taking a closer look at our financial performance, let me briefly highlight some of the key milestones achieved during the first half of the year. In the United States, we strengthened our industrial footprint with the opening of our Center of Excellence in manufacturing in Kansas, while also commissioning the first radar for the FAA, a significant milestone that reinforces our position in the Air Traffic Management market.

In defense, execution remained strong. With TESS, we have delivered in half a year more than the full year 2025, and this is a statement we want to keep going on. We also continued to expand our ecosystem of strategic partnerships through agreements with leading industry players such as BAE Systems, Rheinmetall, NATS, Iveco and Kongsberg. These collaborations further enhance our technological capabilities, broaden our market access and strengthen our long-term growth opportunities.

In terms of commercial activity, we secured important contracts awards, including Radar projects in Congo and the Transport for Washington contract in the United States, further supporting our future growth outlook. Finally, we continue to advance our portfolio optimization strategy through the divestment of non-core assets, completing the sale of Minsait Business Consulting division and reinforcing our focus on core businesses.

Let me now turn to our financial performance and walk you through the key results for the first half of 2026. Order backlog reached a record high EUR 20.5 billion, more than doubling year-on-year with 117% increase. At the same time, order intake grew by 58% to EUR 5 billion, driven primarily by the strong momentum in defense and the contribution of Hispasat and Hisdesat following their integration into the space business. Revenues increased by 30% year-on-year to EUR 3.2 billion, supported by an outstanding growth in defense, which more than doubled its revenues and by a continued expansion in Air Traffic Management. Importantly, this strong revenue performance was accompanied by improved profitability.

EBIT margin reached 9.9%, up 1.3 percentage points versus the first half of 2025 and 10.6%, excluding the impact of TESS consolidation. In absolute terms, EBITDA and EBIT increased by 22% and 51%, respectively.

Net income amounted to EUR 219 million, representing a 2% increase versus the first half of last year. Free cash flow reached EUR 1.5 billion compared to the EUR 65 million in the same period of 2025. Fully explained by the prepayments received in January 2026 from the special modernization programs. As a result, we closed the first half of 2026 with a strong balance sheet and a net cash position of EUR 1 billion, implying a net debt-to-EBITDA ratio of minus 1.3x, providing significant financial flexibility to support our future growth ambitions.

Looking to the second quarter on a stand-alone basis, we saw a clear acceleration in revenue growth, driven by the strong performance across all our divisions. Defense was particularly noteworthy, delivering exceptional triple-digit growth of 103%, this solid topline performance was also reflected in profitability. EBIT margin reached 10.7% in the quarter, an improvement of 1.8 percentage points compared with the second quarter of 2025.

Let me now turn to our first half sales performance. During the period, we achieved revenue growth of 30% in local currency and 16% on an organic basis. This performance was supported by both solid organic growth and the contribution from our recent acquisitions, while FX had a marginal impact on reported revenues.

Moving now to the divisional breakdown. I would like to highlight the continued transformation of our business portfolio. Aerospace and Defense now represent more than 71% of the group's EBIT, as illustrated on the chart on the right-hand side, underscoring the strategic importance of these activities and their growing role in driving value creation across the group.

Looking at our workforce metrics, headcount decreased by 5% to 58,383 employees, mainly driven by the 12% reduction in Minsait. More importantly, this evolution has accompanied by a substantial improvement in productivity. Revenue per employee increased by 30% year-on-year and by 21% compared with December 2025, highlighting the benefits of our portfolio transformation and the greater efficiency of our organization.

With that overview of the group's results, let us now take a closer look at the performance of each division and the key factors driving growth and profitability across the portfolio. Starting with the Defense business, the first half of 2026 confirms the strength of the business in all key performance indicators. Order intake increased by 120%, further reinforcing long-term visibility. Revenues more than doubled year-on-year, supported by a successful ramp-up of major programs already in execution.

Lastly, profitability remained at sector-leading levels with an EBITDA margin of 20.9% and EBIT margin of 17%, excluding the TESS impact. Looking specifically at the second quarter, Defense delivered a particularly strong quarter with program execution accelerating significantly. Order intake increased by 195%, driven by Eurofighter, air defense and PEMs. This was accompanied by a remarkable revenue growth of 156%, supported by the ramp-up of the TESS BCR 8x8 deliveries and the strong execution of major programs already underway. Profitability remained resilient with EBITDA and EBIT margins of 19% and 16.6%, respectively.

Following with Space, the first half of 2026 marks a transformational period following the integration of Hispasat and Hisdesat, significantly expanding the scale and strategic profile of that division. Order intake increased by 98%, while the backlog reached EUR 2.9 billion, providing a strong long-term visibility. Revenues grew by 398%, primarily reflecting the first full half consolidation of Hispasat and Hisdesat. Importantly, this integration has also reshaped the division's profitability profile with the EBITDA margin improving to 40.5% and the EBIT margin reaching 10.6%.

Looking at the second quarter, the Space division continued to showcase the new operation scale of the integration of Hispasat and Hisdesat with order intake growing by 110% and the revenues by 403%, driven by the strong contributions across Spain, America and Europe. This effect has -- was also reflected in profitability, EBITDA and EBIT margins improving to 42% and 14.2%, respectively.

Turning now to Air Traffic Management. The business delivered another strong set of results in the first half of 2026. Order intake increased by 57%, driven by strong momentum in America, AMEA and Spain, further strengthening the division's growth outlook. Revenues increased by 16%, while organic revenue growth reached 15%, highlighting the underlying strength of the business. At the same time, profitability continued to improve with EBITDA and EBIT margins increasing to 15.2% and 12.6%, respectively.

Focusing now on the second quarter, Air Traffic Management delivered another solid quarter with order intake up to 84%, driven by strong bookings across EMEA and Europe, while revenues advanced 15% in the quarter. The division also delivered a further improvement in profitability with EBITDA and EBIT margins reaching 13.9% and 11.9%, respectively.

Looking at Mobility, the key highlight of the first half was the outstanding commercial performance delivered by the division as order intake more than quadrupled year-on-year, increasing by 317% supported by several landmark awards like the Transport for London contract, the Saudi rail maintenance program and the Transport for Washington contract. These awards drove an increase in the book-to-bill ratio to 5.4x compared to the 1.25x in the first half of 2025, providing a strong revenue visibility for the coming years.

Moving on the second quarter, Mobility delivered another solid performance with order intake increasing by 92% and revenues growing by 2%, while profitability reflected EBITDA and EBIT margins of 2.7% and 2.6%, respectively.

Finally, let me conclude the divisional review with Minsait, which delivered a resilient performance in the first half of 2026, with revenues increasing by 3%, while organic growth accelerated to 5%, driven by the strong performance of Public Administrations and Healthcare. Order intake rose by 2%, maintaining a healthy book-to-bill ratio of 1.19x. Furthermore, profitability remained stable with an EBIT margin of 5.8% and operating margin standing at 6.9%.

Zooming in on the second quarter, Public Administrations & Healthcare remained the main growth driver, supporting a 4% increase in Minsait revenues and an acceleration in organic growth to 8%. Order intake was up to 2%, while EBIT margin was sustained at 5.8%, highlighting the business' ability to preserve profitability while continuing to grow.

I will now hand over to our Chief Financial Officer, Miguel Forteza.

Thank you, Reca, and good morning, everyone. Starting with the free cash flow. The first point to highlight is that in the first half of 2026, the company achieved an exceptionally strong free cash flow of EUR 1.5 billion compared with EUR 65 million recorded in the first half of 2025. As we explained during our first quarter results presentation, this increase is entirely driven by the prepayments received in January under the 2025 Special Modernization Programs or PEMs. After deducting the amounts already invested in these programs, the net impact of these prepayments at the end of June stands at EUR 1.7 billion.

As these funds are progressively deployed to execute the corresponding programs, reported free cash flow will naturally moderate over the coming quarters. That said, during the second quarter, we unlocked additional PEM-related prepayments, which partially offset this expected reduction. Additionally, as a reminder of a point we discussed also in the first quarter presentation, since the beginning of 2026, we have stopped using factoring at quarter end. Given our current cash position as this instrument no longer provides an efficient source of financing. For reference, factoring historically represented approximately EUR 187 million at the close of each quarter. For this reason and to facilitate a like-for-like comparison with previous periods and with our full year guidance, the chart on the right reconciles reported free cash flow of EUR 1.5 billion to a comparable free cash flow of EUR 15 million accumulated in the first half of 2026, adjusting for both the net effect of PEMs prepayments and the impact of factoring.

While this comparable free cash flow is below the EUR 65 million generated in the first half of 2025, the difference is fully explained by the higher levels of CapEx and working capital required to support the execution of our growing backlog. These investments reflects the strength of our business and the ramp-up of major contracts already awarded. Importantly, this temporary effect does not change our expectations for the full year, and we remain fully confident in delivering our guidance of more than EUR 375 million of free cash flow in 2026, excluding the impact of PEM-related prepayments.

Regarding the working capital, the evolution of days of sales shows an extraordinary year-on-year improvement, mainly explained by the prepayments received under the special modernization programs, minus 118 days of sales and to a lesser extent, by the positive net effect of days of sales resulting from the consolidation of Hispasat and Hisdesat, that is minus 26 days of sales. As a result, in the first half of 2026, we reached minus 110 days of sales compared with 6 days recorded in June 2025.

We will now analyze the evolution of net financial debt in the first half of 2026. The company closed the first half of the year with a net cash position of EUR 1 billion compared with a net debt of EUR 583 million recorded at the end of 2025. This change is primarily explained by the prepayments received from the PEMs, which amounted to EUR 1.7 billion in the first half of the year. In addition to this impact, it's worth highlighting the strong operating cash flow of EUR 444 million compared to EUR 219 million in the first half of last year, reflecting the solid operational performance of the business. At the same time, CapEx increased significantly to EUR 183 million in comparison with EUR 14 million first half of 2025, in line with the group's commitment to its industrial transformation strategy.

Lastly, the sale of the BPO business generated proceeds of EUR 70 million, which is also reflected in the financial investments, FX impact and other items bar shown in the chart. This transaction is fully aligned with our strategy of divesting non-core IT activities and further increasing our focus on Aerospace and Defense. As a result of the factors discussed, the net debt-to-EBITDA leverage ratio improved to minus 1.3x at the end of the first half of the year compared with 0x in the same period last year.

And finally, regarding our debt profile, we continue to make progress in reducing the cost of our gross debt, which declined to 3% in the first half of 2026 from 3.1% in the same period last year. At the same time, the average debt maturity extended to 3.8 years compared to 3.1 years in the first half of 2025.

Lastly, the consolidated cash position stood at EUR 2.5 billion, primarily reflecting the advanced payments received under the PEMs previously mentioned. In addition, the group has EUR 949 million of available committed credit facilities, including a EUR 385 million financial facility from the European Investment Bank for specific uses.

With that, we conclude the financial review, and I will hand it back to our CEO for his closing remarks.

Thank you very much, Miguel. And ladies and gentlemen, let me close where I began. We are building on a solid foundation, robust financial performance, a competitive product portfolio with proven demand across all markets, from radars to electronic warfare and above all, highly qualified people. That foundation gives us the capacity to be ambitious. Now the priorities are clear. We must turn the growing demand for technological and industrial sovereignty into sustainable growth. We must scale artificial intelligence through IndraMind as our sovereign platform and a business in its own to respond to our clients' needs and embedding AI in our products such as command and control, payments or intelligent traffic systems.

We must play a leading role in strengthening the Spanish defense ecosystem while deepening cooperation with our European partners. And we must capture more value alongside the several group's business units, corporate functions and geo sharing technologies, capabilities, best practices. We will set out the roadmap in our new strategic plan, ambitious in its objectives, realistic in its assumptions and disciplined in its execution. Until then, the priority is clear, deliver and deliver. Thank you very much.

Thank you. We are now ready for the Q&A session.

Ladies and gentlemen, the Q&A session starts now. [Operator Instructions] And our first question comes from the line of Juan Cánovas from Bestinver Securities.

Congratulations on your appointment. I wanted to know about your capital allocation strategy. There has been a lot of speculation in the press about changes [Technical Difficulty] for some of the international partners at the beginning of June. I would like to see to know what you have strengthen the prospects if that happened? And what are you doing to develop...

Sorry, Juan, sorry we are having some difficulties hearing the line. Could you please start since the beginning because we couldn't hear the question. Could you please start since the beginning, please, because we couldn't hear you here. Juan, please, could you please repeat since the beginning because we couldn't hear the questions.

Can you hear me now?

Yes. Now, it's fine.

I wanted to ask about your capital allocation strategy in terms of the partnerships and industrial investment plans since there has been a lot of speculation in the press recently about changes of previous management plans. And also whether you will continue looking for bolt-on acquisitions and divesting parts from Minsait. That was the first question.

And the second, I wanted to ask about your IndraMind strategy after the U.S. restricted access to our artificial intelligence models for international partners at the beginning of June. What are you doing to develop IndraMind and whether these restrictions have increased your business prospects you were targeting, I think, EUR 1 billion revenues in IndraMind by the end of the decade.

Look, thank you very much for the question regarding our capital allocation logic or strategy. What I would say is the following, right? So we have a massive challenge in front of us in terms of technological disruption and acceleration speed and scale in all fronts, right? And I'm sure that there is no company on earth, especially in Europe that will be capable to manage all that in a stand-alone basis. So it's going to be crucial to set up alliances with partners, suppliers and other peers in the European sector to make that happen, right? So I insist on the fact I don't believe that nobody alone will make it happen. So alliances will play a fundamental role. And this is where capital allocation plays a role in it, right? So it's going to be organic and inorganic. It's going to be using commercial agreements with suppliers, alliances with partners. This is what exactly we are investigating and exploring under the condition that in our strategic plan, we will define our core activities in terms of make and buy strategies. This is about the first question.

Regarding in the IndraMind, what I would like to highlight is the relevance role of a business unit like that, right? So to protect our critical infrastructure, it's key, right? And our value proposition with IndraMind is to cover an end-to-end platform, AI native in order to be a solid instrument to capture superior cognitive properties to be capable to automatize them and to be capable to be cyber resilient, right? So IndraMind is aiming to cover that end-to-end value proposition. And by doing that, we will be in the position to become a leading player, not only in Spain, but in Europe in order to offer AI-first solutions for all critical infrastructures in Europe.

If I may, Juan, just to give you some big numbers around IndraMind this year. Just to put that in context, last year, revenues to IndraMind were EUR 323 million, first half of the year, revenues attributed to IndraMind EUR 191 million, basically underpinned by cybersecurity, cyber defense, artificial intelligence and the IndraMind platform.

Next question please.

Our next question comes from the line of Michael Briest from UBS.

Welcome to the company. We've obviously had a CMD in our thoughts for some time now. Can you give any indication on the timing of that? And I sense that there's still a degree of strategic uncertainty. Are there any parts of the business that you would consider selling perhaps we've heard of Minsait being core, non-core at times over the last 2 to 3 years. Maybe just to frame if any disposals would be considered.

And then just in terms of the timing of the 2026 PEMs, have you any insights or expectations there? And in relation to cash flow, how can you firm up the 2026 CapEx guidance?

Regarding the first question about the strategic plan. Of course, there is a lot of attention about that strategic plan, right? I would like just to ask you for a little bit of patience. It's about 15 days that I'm on duties in the company. I'm trying to catch up very fast in all senses, meeting people, learning about everybody and understanding all the dynamics and strengths of the company. As mentioned during the presentation by Miguel and myself, I think that we have a very strong foundation -- solid, very solid foundation based on a high backlog and contracts. Our priority at short term right now is to make all that happen in terms of delivery and speed to fulfill our customer expectations in that respect. And this is what we are making that happen.

Secondly, of course, I'm spending with the team time to explore how do we kick the next strategic wave for the company. That, of course, is going to be based on what the company has been reaching so far, but probably we will need to strengthen our, I would say, technological differences because I do believe that companies that bet on technology that create difference and outstanding performance on them are the ones that are going to succeed. Here, and as mentioned before, IndraMind with artificial intelligence is going to play a crucial role in terms of kind of brain of system of systems and command and control, making all that based on our past experience, right? So let me remind you that Indra is a tech company, right, per se per definition. And with the high skilled qualified number of software engineers and developers in the company, we are ultra well prepared to face all those technological challenges because this is in the DNA of our workforce. Who can do that better than us? This is the question that we would like to demonstrate.

And regarding the PEMs of 2026, I think that it's more the Ministry of Defense that has the responsibility to announce what and when. We have, of course, our willingness to continue participating proactively and responsibly in the assignment of those PEMs and the consequent execution. But I would rather expect us wait to the announcement that the public administration in that case, the Ministry of Defense will do a due course.

Yes. And then Michael, regarding your question on some guidance on CapEx, let me give you some granularity on that. First half of the year, gross CapEx of EUR 205 million, which EUR 136 million tangible, EUR 69 million untangible. Grants, EUR 22 million, so net CapEx of EUR 183 million. So our guidance is around EUR 300 million for this year. That's important to mention not taking into account Hisdesat CapEx, which is included in this EUR 183 million I already provided, but including Hispasat CapEx, right? So -- and just to give you a sense of the Hisdesat CapEx, which, by the way, you know that is fully pre-financed and financed by the Ministry of Industries is EUR 69 million in the first half.

And we expect around investing CapEx around EUR 100 million in new factories on this industrial footprint that we have been commented. So that's important because we are in comparison with last year, where we invested around 2.5%. We expect to increase our CapEx on revenues at a level of around 4% to 4.3% this year.

Next question please.

Next question comes from the line of Deepshikha Agarwal from Goldman Sachs.

So just first one, I think like before in the first quarter, there was this expectation that the defense revenues could track at about EUR 1 billion by the first half. So just wanted to understand like if you can give any comments on what kind of visibility do you have in terms of the defense revenues and any -- especially on the phasing of the PEM-driven revenue?

And the second one is basically any color in terms of anything to be mindful of when we are thinking about the EBIT trajectory for the remainder of the year, given the second quarter, like margins are tracking better than what -- like tracking ahead of expectations?

Thanks a lot. And regarding visibility of revenues in Defense. As we were commenting the last quarter, we expected to double, right, revenues, which has been the case. We showed in defense EUR 973 million, which is 103% increase and basically driven and can give you some details on that by PEMs, which brings EUR 217 million by TESS, EUR 197 million. Air Defense around EUR 145 million; the Eurofighter, EUR 140 million; the FCAS, EUR 112 million, just to provide you -- and what we're talking around the FCAS, and it's important also to highlight that we are talking about the international FCAS. And bear in mind that within the PEMs revenues this quarter, there was also EUR 67 million coming from the national PEM, FCAS PEM, right? So regarding the guidance for the year...

So regarding the guidance, right? As with revenues, we are performing in line with our internal expectations. Remember, we delivered 9.9% margin and the implicit guidance is 10%. This quarter, so has been particularly strong, thanks to Defense with the Eurofighter project having a strong contribution to the Defense division's EBIT, although we expect this division's margin to close the financial year at the levels already announced. So therefore, we reaffirm our guidance of EBIT of more than EUR 700 million for the full year. So we reaffirm all our guidances for 2026.

And just one quick housekeeping question is basically the BPO sale is complete, then we will get an updated guidance like excluding that soon, right?

Could you please repeat the question?

So the BPO business, which was sitting in the Minsait, there was a sale that was announced, which is closed now. And as per what we have in the guidance, it says that it still includes BPO. So just does the guidance include the -- like will we have a guidance updated for that disposal?

I mean the guidance we provided for Minsait, which just taking into account BPO business for 4 months, which has been the case. And all the guidance that we have of growth and EBIT margins between 6.6% and 7% is our guidance for this year are taking into account the exclusion of the BPO business. Yes.

Next question please.

Next question from the line of Carlos Treviño from Santander.

My first question is, you have highlighted that you could continue to look for alliances with the European peers moving forward. My question is if you could reconsider to sign alliance with Hanwha, the South Korean company. There could be any change in the scope of that alliance moving forward?

And a couple of questions from an operational point of view. I'm sorry because with so good numbers, I'm going to ask you for Space where organic growth -- well, organic revenues are dropping 6% in the quarter. Could you elaborate a bit on the reasons for this decline in organic revenues in the Space? And on the other hand, a Minsait organic growth was very strong, plus 8%. Do you consider that those levels of organic growth in Minsait could continue through the second half of the year?

I'm going to answer the first question and Miguel will take over the second and third question. So about the first one, no news or good news. It means that we are full engaged and committed to deliver the project with our partner, in that case, Hanwha. So it's our major responsibility to keep the momentum that we have created in order to fulfill about 282 objects we have to deliver for the full program. And this is of paramount importance, and we will not put that in danger and this is our priority.

Okay. Regarding -- thank you, Carlos. And regarding Space, the 14% decline in organic revenue in Space simply due to timing differences in milestones between 1 year and the next. In fact, this decline was moderated in the second quarter with a fall of just 6%. But we clearly reiterate our ambition to reach more than EUR 400 million by the end of the year. And also, you've seen the EBIT and EBITDA numbers, which looks quite good. In terms of EBITDA, we expect to finish the year around 40%. And in terms of EBIT, that's quite volatile as a lack of scale in the business to date, around high single digit.

We expect, again, there are some topics that may help the business in the future, as you very well know, the European Space Agency new budget, programs at European level, clearly, [ IRIS² ], we should be having some news in the coming weeks, potentially new PEMs this year or next year and within the new European multi-annual financial framework of the next European budget where clearly space will be one of the main focus. And regarding the expectations for coming revenues, we think that Minsait will end up the year between low single and mid-single-digit growth. And we have quite confidence on the business keeping growing, especially we compare with other peers, we are doing clearly well. And remember, again, that Minsait guidance is considering the BPO divestment business, contributing only 4 months. And in terms of margins, I already commented our guidance.

Is that okay, Carlos?

That's very helpful.

Next question please.

Next question comes from the line of Nicolas David from ODDO.

The first one is regarding the guidance, can you explain what gives you such confidence to reach the top line guidance that given that you were slightly short of your EUR 1 billion defense revenue in H1 and the fact that you are apparently lowering slightly your guidance for Minsait for the year. What's compensating for those 2 elements in H2?

My second question is, could you explain a bit in more detail what were the drivers of the nice margin improvement in Defense in Q2, excluding TESS? Should we understand that the PEMs are very profitable? Or is it something else? And what do you see for H2?

And my last question would be, we have seen some press article reporting that the company is wishing to conduct the forensic investigation into certain patterns, decision made by the previous leadership. Could you comment on that to confirm or not? And if it's confirmed, what's prompting this -- to launch this investigation?

Thank you, Nicolas. And regarding our confidence on the top line guidance, EUR 7.7 billion. Clearly, I mean, we are fully confident on achieving that guidance even if Minsait goes from low- to mid-digit growth. In any case, we have room from Defense and ATM guidance to compensate. So we stress our commitment and reliable on achieving this guidance.

Regarding the higher margins on Defense, it's true that they were maybe slightly higher than expected, especially if you take the dilution effect of TESS, we reached 21.3% with a greater contribution from the Eurofighter project in terms that you know that we have different sources within this project and some of the sources of revenues are higher -- they have higher margin than others, which has been the case this quarter. And obviously, clearly, as we have been stating over the past weeks, PEMs margins are in line with our Defense margins, right? So -- but I mean, we don't rule out these margins, especially in Defense to moderate slightly over year-end and to end up around 18%, 19% end of the year, excluding, again, the effect on TESS.

And about the last question, we will not make any comment about that.

Next question please.

Our next question comes from the line of David López Sánchez from JB Capital.

So over the last few months, we have seen an increasing emphasis on industrial partnership rather than M&A. Have this changed your view on the need for acquisition to support the future growth? Or do you still see the consolidation as an important tool for strengthening your industrial capacity?

And my second question is a follow-up on the CMD. Could you provide a more precise indication on the timing? And should we expect it before the year-end?

Thank you very much for the question. About the first one, I would say that all doors are open, right? We will not constrain ourselves in exploring all kind of vehicles to generate sustainable growth in terms of revenue and profit, right? No matter what, right? So all instruments are available and none of them is closed.

About the industrial angle that you are mentioning, right, what do we believe is given the fact that we have to put in place an excellent operation management system in Indra because we want to invest, right? We are investing and we are building facilities from scratch in brownfields, especially, it's a huge opportunity, a unique opportunity, a once-in-a-lifetime opportunity to build a difference in terms of excellence in operations, in productivity, in lead time, in quality. So an example is what we are doing in the north of Spain in Gijón with our facility there to produce land vehicles. So we're going to invest in the facility. So we will renovate it. It's going to be much more than it's going to be ultramodern galactic, I would say, in order to ensure that productivity that will make the difference, I'm sure, right? So this is the first one.

And regarding the CMD, sorry to answer in a similar way than before. I would like to ask you for a little bit of patience. It is about 15 days that I'm in the company. I try to catch up as soon as I can, everything. I need to understand all the company in order to be certain and sure when that Capital Market Day will take place. We hope that it's going to be as soon as possible, let us work with the team, and we will come back to you with further announcements or specific dates for the event.

Okay. So finally, so I would like to thank you very much for your attendance and your questions. And I'm sure that we will have the chance in the coming days and weeks to meet together and further explore the major challenges and opportunities that Indra and the Defense sector as a whole are facing. And I'm going to be very happy to learn from you all since I'm a newcomer in the sector, right? And every input from you, it's going to be very rich for my catch-up and learning process. Thank you very much.

Good morning. Welcome to Indra's First Quarter 2026 Results Presentation. I now hand the conference over to Mr. Ezequiel Nieto, Head of Investor Relations. Please go ahead, sir.

Good morning, and welcome to the presentation of results of the first quarter '26. My name is Ezequiel Nieto. I'm in charge of relationship with investors. First of all, allow me to make reference to this slide, which offers the legal framework for this presentation.

I'd like to start by introducing the speakers in this session. Jose de Los Mozos Obispo, CEO; and Miguel Forteza, Financial Director.

Thank you, Ezequiel. Welcome, everybody, and welcome to the presentation of the results of the first quarter 2026. Since my arrival in May 2023 and the presentation of the Leading the Future strategic plan and it's phased focus, starting March 6, 2024. Indra teams are committed to the transformation of this company with solid work. We have been able to achieve the objectives we set to ourselves. During the presidency of Ángel Escribano, we have accelerated the industrialization of the group. And now with the arrival of Ángel Simón, I would like to welcome today. I am sure we will keep on accelerating our transformation.

At a group level, we keep on executing the rotation of our portfolio. We have closed the investment of BPO, and we keep an active pipeline of over 20 operations. Besides that, we closed the quarter with a growth in our headcount of 3% compared to the first quarter 2025 with an increase that's especially relevant in our headcount in defense, and that has increased by 35%. In terms of the milestone of our businesses, we have also achieved important investments in Defense. We keep on expanding our industrial base in Spain with new plants in León and Córdoba that are already working to open in the third quarter 2026. Besides that, we have close relevant international agreements with Rheinmetall, Diehl, ELT and Hanwha. And the last one provides us with capacities to develop artillery -- self-propelled artillery systems adapted to the needs of the armed forces and will provide Spain with autonomous capacity and design and manufacturing sovereignty on tracked land platforms.

In Spain, we completed the integration of Hispasat and Hisdesat in the group, which turns us into a player with end-to-end capabilities and position us to take the opportunities that are about to come that we will elaborate on next.

In ATM, we just opened a new plant in Kansas, will be fully operational in the fourth quarter this year in 2026. And we will keep on advancing in international contracts -- key international contracts, including the modernization of radars of the FAA in the United States.

In mobility, we ensure contracts -- important contracts, TFL in the U.K., the rail Mecca-Medina in Saudi Arabia, the modernization of railways in Chile. And so contributing to our international presence, I would like to inform you that the Washington D.C. Transport Authority has proposed Indra as the winner of its ticketing tender. In IndraMind, we started the deployment of our platform of sovereign AI, and we accelerate vertical use cases.

In Minsait, we advance in the disinvestment of noncore units and the optimization of the international footprint, focusing in Latin America. Besides, we have advanced in cross-cutting capabilities in the rest of the units of the group, but we already have 1,300 developers working on digitalization in defense, air traffic, space and mobility.

We keep on focusing on -- keep on advancing and delivering. And that's why today, once again, I'd like to mention the 2026 guidance of EUR 7 billion in revenue, over EUR 700 million in EBIT and over EUR 375 million of free cash flow. No changes and with conviction. And besides, I'd like to ensure you that we will check how revenues are going to keep on growing quarter after quarter, aligned with our delivery agenda plan for 2026.

These results, as you will see, are above our initial budget in the Leading the Future strategic plan that we presented back in March 2026. I'd like to zoom on our transformation in Indra Space. With the integration of Hispasat and Hisdesat in the group, Indra Space operates as an integrated player with end-to-end capabilities, which positions us as what sets us apart in an excellent moment. Institutional investment in the space sector is growing strongly at a European level. The budgets of the European Space Agency for 2026-2028 plan have grown by 32% compared to the previous cycle. And at a national level, this increase of investment is translated into binding commitment. You know that Spain is the fourth contributor to the European Space Agency, and it has the commitment to keep on advancing within the space strategy. For example, the Spanish Space Agency has approved over EUR 625 million distributed in key programs, such as the ESCA Plus, LEO PNT, IRIS2, and launches.

In terms of specific programs, I'd like to share 2 important messages with you this morning. First, IRIS2 is a reality and European commitment and Indra is already developing its road map in its participation -- about its participation. And according to its evolution, we'll provide you with further detail on its scope. At the same time, we have also launched our industrialization plan on satellite components with construction that's planned to be ready for the last quarter this year.

As you know, we are a defense and technology company. And in this sense, we are -- of course, we are aware of the disruption of artificial intelligence in our businesses. And that's why we are analyzing, according to our experience in the sector and our technology capabilities, how the transformation of the business should happen and how Minsait should be transformed.

We are focused on accelerating our capabilities and improve the profitability of the technology business. And after carrying out a 360-degree analysis of our daily operations, we have made a series of decisions first divesting noncore units, which has allowed us to free resources and increase average revenue per employee.

Second, creating cross-cutting capabilities beyond Minsait in the rest of the group, we already have 1,300 developers that provide direct impact in the profitability of Minsait and an acceleration in technology elements such as, for example, the integration of artificial intelligence in the development of new radars for civil as well as for military use. Also the optimization of international footprint with 1 LatAm plan, whose objective is to reduce of 2,000 technicians this year, and we have already been able to reduce 1,000 already. And besides that, we are working along strategic lines that position us as a technology group that's referenced in artificial intelligence.

Today, our sovereign AI and Indra is a reality. It's already been deployed in over 5 clients and with a solid pipeline for 2026 to 2028. We are already catalyzing the transformation of AI all throughout the group in solutions for clients, in business processes and in corporate processes.

We are and will be partners in the transformation of the business and the operation of our clients and in the application of AI with a purpose, which means that applied AI will have real impact in the business model of our clients. Of course, we will accompany them in the application of AI in a differential manner. And besides, we are accelerating products and vertical use cases with the support of our very wide knowledge in the sector.

All of this is already ongoing. And so the first quarter is a good reference on which we should keep on building. We are making decisions with Minsait, advancing the disruption of AI. And we have a road map that we will present in the phase Leading the Future Scale Up that goes from a sovereign platform all the way to applied AI in the process as we are transforming.

Before we start talking about the financial results, I would like to share with you a short clip, because sometimes an image is worth more than a thousand words. To show you the speed of the industrial transformation that's actually taking place in the group to increase our industrial capabilities and improve the delivery in the next quarters and years.

[Presentation]

And now let's start taking a look at the financial results of the group. The results of the first quarter show a clear picture. We are meeting what we committed to, and we are doing it in all our business lines. Backlog reached EUR 20.3 billion with growth of 154%, and also another intake of EUR 2.8 -- almost EUR 2 billion, 56% compared to last year, which shows the trust of the market in our proposal and how solid our position in defense and ATMS.

In terms of our revenue, have grown 14.6%, up to EUR 1.3 billion, with all our divisions showing positive figures this year. If we zoom into the results of the defense division, we can show that income linked to the PEMs Spanish modernization plans are not linear throughout the year due to the planification on the planning of milestones in projects having an impact in EBIT linked to those milestones. However, in the defense division, we'll keep on increasing our sales at an important pace. And I can already mention this morning that sales in the defense division in the first half of 2026 will be beyond EUR 1 billion, which is twice the sales of that division if compared to the first half of 2025.

What's actually most relevant is that the improvement of revenue in this first quarter of 14.6% turns into real profit already because the EBIT margin reached 8.9% with an improvement of 0.7 percentage points and EBIT and EBITDA growth 24% and 55%, respectively.

Net benefit is EUR 76 million, 28% more than the first quarter 2025. And free cash flow generation, especially high with EUR 1.4 billion in the first quarter compared to EUR 77 million last year, which is perfectly explainable due to the advancement received due to the modernization special programs. Net debt increased its position up to minus EUR 855 million with a ratio of minus 1.3x LTM EBITDA, which provides enough financial strength to keep on investing in growth.

As a summary, a first quarter that's aligned with annual objectives that gives us a solid foundation and trust to keep on building the rest of the year. If we now take a look at the results of sales in the first quarter, which we have achieved a growth of 15% in local currency and 6% in organic growth, the positive impact of our acquisitions with organic growth have balanced out the negative effect of ForEx.

I would also like to mention that over 63% of the EBIT of the group comes from Aerospace and Defense business, as we can see in the chart at the bottom of the screen. Our headcount has grown 3% up to 62,689 people, mainly in defense, which increased its head count up to 7,296 employees aligned with the acceleration of the business. Revenues for employee grew 11% compared to March last year and if we include the effect of the divestments that have already been announced, the improvement will be beyond 15%, which is a trend that will keep on improving as those divestments keep on happening.

If we take a look at the detail by divisions with its evolution and the main milestone of each business in the quarter, in Defense, it's a quarter that confirms how stronger businesses in all its dimensions, both backlog order intake and revenues as well. Backlog group -- or sorry, order intake grew 43%, pushed by simulation, special modernization programs, the international FCAS program, marine systems and Eurofighter programs that provide visibility in the long term and increase book-to-bill to 1.8x.

Revenues grew 33%, with land-based systems, TESS, VCR and naval systems especially, which show the programs already under execution. In that sense, I would like to mention that the TESS VCR 8x8, since we are in control of TESS, we are also monitoring and controlling the manufacturing and project, and we will see an important evolution in the delivery of vehicles to our clients.

As I already mentioned earlier, we are going to see a very clear acceleration of EBIT and revenues after this started in the second quarter as a result of the milestones of the special modernization plans. Margins are -- still have reference in the sector. EBITDA 25.7% and EBIT 18.1%.

In space, it's a quarter set by the integration of Hispasat and Hisdesat that transforms the size and the profile of the division. In fact, this is the first time we show results of space independently. The backlog reached EUR 2,868 million, and order intake grew 87%, pushed by America, the services of Hispasat in Peru and Hisdesat businesses that provide visibility and reoccurrence in long term. Revenue grew 393%, mainly due to the consolidation of Hispasat and Hisdesat that for first time fully integrated in the scope of the group.

The consolidation of both companies also transforms the profile of the margins. EBITDA goes from minus 8% to 38.8% and EBIT from minus 11% to 6.6%. So a division that's entering a new profitability phase.

In ATM, a quarter that reinforces our position as one of the now world reference brands in the management of airspace. And I'm humbly , I'd like to mention that I am sure that our digital solution in traffic is the most advanced solution in the sector as can be seen with the results. Our order intake grew by 47%, thanks to our radar contracts with the American FAA and in the UAE, 2 markets of high strategic value that increased our book-to-bill to 3.12x.

Revenues grew 17% with Brazil, Canada, UAE and Vietnam as our main contributors in traffic management systems and radars. Margins are still stable. EBITDA is 16.8% and EBIT 13.5%.

In Mobility, our other intake shows the advancement of our international bed. Order intake grew 422%, pushed by the contract of transport for London and the maintenance contract of railway system maintenance in Saudi Arabia, 2 very important references at the international level. Revenues grew 1%, thanks to the tolling in the United States and intelligent transport and ticketing systems in Spain that are partially balancing our lower revenues in Europe and EMEA. Margins are at 4.7% in terms of EBITDA and 0.9% for EBIT.

In Minsait, profitability increases and order intake is improving. Other intake increased by 8.8%, pushed by public administrations and health with a growth of 58% and financial services with a ratio, backlog to revenue, it's above 1% for the first time ever. And precisely, 1.02x, that's the backlog revenue to LTM ratio. We have grown our revenues with public administrations and health, the main engine margin -- EBIT margins already reached 5.8% with an improvement of 0.2 points.

And towards the rest of '26, my priorities are clear. Before October 31, we will present our strategic plan Leading the Future Scale Up, an ambitious plan that's aligned with what we have shown, we're capable of doing. And providing visibility up to 2030. Three years ago, we started a strategic plan -- a strategic change in Indra Group. That phase is reaching its end, and now we're starting the next phase.

We have a solid and robust road map, and it helps our equity story to be kept. At the same time, of course, we continue with implementation of industrial plan. We have programs to deliver factories that we have to get ongoing and engineers and professionals that we need to attract and train. We are focusing on delivering, delivering and delivering.

In terms of internationalization, we have advanced a lot in Spain, and we have consolidated our base. Now we have to make the most of this momentum to keep on growing out of Spain, both from an organic perspective as well as from an inorganic perspective, geopolitics providers with those tailwinds, and we have to capitalize it. Last, which is not the least important, we have to keep on advancing in the transformation of the culture and the integration of excellence in our group.

As I mentioned at the beginning of this presentation, I would like to once again affirm the guidance of 2026 for 3 years. We have been consistent in delivering objectives. As already mentioned in the previous presentation of results of fiscal year 2025, we increased our guidance for 2026, setting objectives are 17% above the original strategic plan in terms of revenue and EBIT and 19% above our planning free cash flow. Today, once again, I'd like to highlight that we are going to meet this new guidance for this year. And once again, I offer my full commitment to keep on leading this project.

Now I'd like to give the floor to our Financial Director, Miguel Forteza.

Thank you, Jose Vicente, and good morning, everybody. We'll start with free cash flow. First thing I'd like to highlight is that the company has achieved in the first quarter 2006 free cash flow that's extraordinarily positive EUR 1,444 million. That can be clearly explained due to the advancement received from the special modernization programs in which Indra Group is the main contractor or is in a joint venture with other companies.

These advancements were received in the second week of January and have already -- we have already started investing in CapEx and OpEx, getting them to the ecosystem of our suppliers and partners that are going to be contractors. In such way, out of those advancements received in January, the net impact at the end of the first quarter, after discounting what's already been invested is EUR 1,671 million.

In the next quarters, we will see how the free or the reported free cash flow, of course, will reduce as we use those advancements to execute the programs. And another relevant aspect that is a change compared to the practice of -- on the past few years is that for the first time, we have not used factoring and closing the quarter.

Of course, the availability of cash flow in our accounts makes it inefficient to use this resource that historically accounted for EUR 187 million in the closing of each and every quarter and have been so for many years. However, in order to be able to compare this year to the previous year and to be able to report the cash flow generation in a comparable way to our guidance, that's over EUR 375 million on the right-hand side. You can see we go from the reported cash flow of EUR 1,444 million to that year-on-year free cash flow of minus EUR 40 million in the first quarter, adjusting by year-on-year factoring and the net advancements of the plans.

These result comparable free cash flow from minus EUR 40 million in the first quarter compared to the EUR 77 million in the first quarter of 2025 is the logical result of greater CapEx and working capital, excluding advancements of PEMs that responds to investments and expenses needed to execute the programs and the contracts committed in our portfolio. And of course, that's not at risk to our guidance of over EUR 375 million in fiscal year 2026, excluding the advancement of those PEMs.

On working capital, the evolution of accounts receivable or can be explained to the advancement of PEMs, which is minus 119 days of sale and also due to the net positive effect on days of sale of the consolidation of Hispasat and Hisdesat that accounts for minus 34 days of sale, Contrary to that, stock increased to 124 days due to the start of contracts and industrial transformation of the group, and also due to the integration of TESS and that started in June 2025. As a result, at the end of the first quarter 2026, we are at minus 124 days of sale compared to the minus 9 days that we had in March 2025.

And now let's start talking about the evolution of net financial debt in the first quarter 2026. The company closed the first quarter with net cash flow position of EUR 855 million compared to a net debt of EUR 583 million at the end of fiscal year 2025. This change can be mainly explained due to the advancements received from the special modernization programs that at the end of the quarter, accounted to a net figure of EUR 1,671 million.

Besides that impact, we must highlight, the solid operational cash flow of EUR 158 million can be compared to the EUR 98 million that we had back in the first quarter 2025. Of course, that's the result of a good operational evolution of our businesses.

CapEx increased significantly up to EUR 59 million compared to EUR 5 million in the first quarter 2025 aligned with our bet of the industrial transformation of the group. As a consequence of what we've seen before, the leverage ratio of net debt-to-EBITDA improved to minus 1.3x at the end of the first quarter compared to minus 0.2x in the first quarter 2025.

And last, in terms of the structure of our debt, I'd like to mention that we keep on advancing in reducing the cost of our gross debt. That's now down to 2.9% at the end of the quarter, coming from 3.1% that we had in 2025. The average maturity of debt is now 3.9 years compared to 3.1 that we reported at the end of 2025.

And last, we have closed the quarter with a consolidated cash flow of EUR 2,350 million as a consequence mainly of the advancements received from the plans that we have already mentioned. Besides that, the company has EUR 1,015 million in additional credit lines, amongst which we can include funding from the investment European bank that accounts for EUR 385 million with the defined use of those funds.

And that is the end of our presentation, and we would now like to start the Q&A session.

[Operator Instructions] And our first question comes from the line of Michael Briest from UBS.

Obviously a very complex quarter in terms of the impact on defense from PEMs and cash flow. I know you don't guide quarterly, but you must have some sense on the milestones and the achievability. Can you talk a bit about Q2? I think you did say that there would be more milestones hit, but how much of progress do you think we'll see in the second quarter in TESS and PEM specifically?

Also, I heard you mention inorganic expansion, both inside and outside of Spain. Can you give some sort of weighting of the probabilities, the quality of the pipeline and anything on timing there? And then equally, are there any more of the 2025 PEMs that has not yet hit your order book for various contracting reasons to arrive? And any insights into the timetable for 2026 PEMs and the nature of the contracts?

Well, if we start with TESS. As I mentioned, since the end of the year, now Indra as most of TESS. And one of the things we have done has been, well, starting having control on its operation. And the best thing we can do is control the manufacturing process. That manufacturing process is a reality already. And we actually see that in their results in vehicles delivered to our Army or we can see that operational levels are improving every day.

And the budget we've got is to be able to deliver 80 to 90 vehicles and over EUR 400 million in revenue. I can already tell you that we are going to exceed 100 vehicles delivered at the end of the year. That's our aspiration, and that's what we're working for.

On PEMs 2026, we still have no information that the Ministry of Defense, of course, we're working. And quite clearly, the Indra Group is a company that's a reference and essential in the defense ecosystem in Spain. And -- well, that's why I'm sure we will keep on having the trust of the Ministry of Defense and our armed forces, and that's what we're working for.

But the best trust is to show that the modernization plans that we have been awarded are being executed, and that's what we are doing, not just in terms of delivery milestone, but also in how it permeate the Spanish system. We have experience in FCAS, for example, over 30% has been layered throughout all the companies.

And that's also our objective with our special modernization plans. We had our first event in Madrid with our suppliers in March, and in May, we're going to have another one in Catalonia, aligned with the corridors set by the Ministry of Defense.

On inorganic deals, well, as you very well know, until the operation has been closed, it's better not to say anything in the context, that's not easy because every country wants to keep its own companies. And inorganic operations cannot always be a purchase of a majority stake of a full company.

I believe they're going to help us establish alliances. And I believe the alliances such as the one we have with Rheinmetall for vehicles, with electronic of Rohde & Schwarz and Leonardo in defense. I believe they are aligned with the idea of having Indra as a European leader. And the best example, the EDF programs of the European Union, Indra has been amongst the companies that have won most of those contracts because we believe we are Spanish multinational company, but we focus in Europe, and we are very much committed with the NATO programs and projects.

And well, as I mentioned, sales will keep on growing quarter after quarter. And while last year, we received a grade portfolio, and we need some time to keep on organizing these projects and the guidances. There are EUR 700 million of EBIT, up 10%. And that's a commitment that we are sharing with you now. I'm sure we're going to be able to meet it.

Next question from the line of Carlos Trevino from Banco Santander.

[Audio Gap] in your business, have you perceived any impact that could impact the business over the next quarters and 3 more as specific ones.

Carlos. Please, can you start the question again because we couldn't hear you. I'm sorry.

Yes. My first question was on the conflict in the Middle East. So I was wondering if there is any impact in your business? Or do you think that the conflict is going to mean any impact over next quarters..

And few more specific ones. The first one is on the international FCAS project. You have highlighted in the past that you had received an order from this project. My question is if this changed your expectations for the year before you were expecting at around EUR 200 million from the FCAS project for this year. This new order could mean incremental business there.

And specifically on 2 business divisions, on Space, revenues has dropped by minus 24% year-on-year in Q1 organically, you are highlighting a tough year-on-year comparison. I would like to ask you for the expectation that you have in the Space for the rest of the year?

And also the last one on Minsait 2% organic growth in Q1. This is slightly below the growth that we have seen recently. So my question is if still you think that you can grow at around mid-single digit for the year as a whole in Minsait? And well, I assume that especially looking at the good evolution in the backlog, this could be possible. But I would like to ask specifically also on outsourcing where perhaps the drop of minus 5% has been a bit higher than in previous quarter. If you think that these trends could accelerate or not? Or this has been only one quarter and we can see a normalization moving forward?

Thank you, Carlos. If we start with the Middle East. The impact of the business, as you know, in the Middle East, we have a joint venture with Edge and we are fully in touch with them. The impact can only be positive. There's demand especially for advanced systems and what we're working on the delivery of some elements that we can deliver this year. And those are opportunities that were not -- had not be included but those opportunities until they actually materialize, well, I cannot actually provide it with more data on it.

On FCAS. We haven't got information on this year. You know the situation of this program, it's a European program, Spain is committed with 1/3. So the return should be 1/3. And you know the debate between Airbus and Dassalut on whether there's going to be 1 plane or 2 planes. Given that we focus on systems, we're just waiting for this decision to be made. And then we'll see.

In 2026, we expect around EUR 206 million of revenue from the international FCAS. In terms of Space, it's a matter of calendar. This year, we expect to have a revenue of over EUR 400 million and we expect to meet those figures. And while I wouldn't focus so much on the first quarter because this is going to be balanced in the next quarters.

On Minsait, when we see our competitors just firing people. And we -- not only we're not guaranteeing those jobs, but we are actually increasing our EBIT. And we are we're creating cross-cutting capabilities. That's something that surprised me within Indra. How -- and having our digital capabilities, we were not accelerating R&D -- technology R&D and the rest of the divisions such as radars and IndraMind where we have the first contract.

So we are sure that we will keep on improving the profitability of Minsait, but the issue here isn't just to improve profitability. We need to transform Minsait and make sure we have an IT company that's going to be referential by integrating, especially, the disruption of AI and integrating all the technology disruptions that we are facing and that we are being able to face.

And then we have Latin America. We believe that our business in Latin America was not efficient enough. We've got the 1 LATAM plan -- program that we designed at the end of last year. And the message was clear. If we want to survive in this world we must be best-in-class and improve our excellence and focus on added-value businesses. That's why in Latin America, while we've already got over 1,200 people focused on cybersecurity, we are integrating IndraMind in countries such as Brazil or Colombia.

So our idea is to transform and make the most of Minsait. We'll see this in the strategic plan, and turn Minsait into a modern IT company that's agile, that's best-in-class in terms of technology.

Our next question comes from the line of Deepshikha Agarwal from Goldman Sachs.

A lot of my questions are answered, but just following up on the question on defense. I think it was mentioned in the call that like first half in defense the expectation is more about EUR 1 billion plus of revenues. So that means roughly about like EUR 700 million for the second quarter.

Am I understanding it right? And if that's the case, what are the puts and takes there? And how should we be thinking -- so will the phasing be like, again, in the second half being, is it will be more 4Q weighted as how we should be thinking about it? Any color would be helpful. I think that's it from my end.

As I mentioned, within the special modernization plans, it's a matter of the milestones and the timing of the milestones, including the projects. So according to the different milestones and different programs, we will keep on executing those sales. That's work that's done jointly with the Ministry of Defense. First, we have to agree on the delivery milestones. And of course, that will provide us with that acceleration in sales.

Next question comes from the line of Marco Vitale from Mediobanca.

The first one is a follow-up still on the Defense business. I think you mentioned that you expect sales over the first part of the year to exceed EUR 1 billion. If you could just confirm this and also if you can provide some, say, qualitative indication of what projects -- which projects will underpin this acceleration besides PEMs?

Second question is about the large intake that you awarded within the Air Traffic Management business, also Mobility. If you could. I'm referring to the, say, transport for London and also the U.S. radar replacement. If you provide us any guidance in terms of timing that you expect in terms of P&L impact for those projects?

And last question, just a clarification on the prepayments for -- from PEMs. Should you award faster contract over the first part of the year? Should we expect additional prepayments to be associated with that? And potentially, what could be the timing for this?

Well, Miguel?

Well, I'll start a bit on the backlog, and then you can start talking about the results. Well, on our Air Traffic Management projects when we turn it into an individual division, that provide a lot of clarity because, as you know, in each country, there's only 1 client. And the fact that we have 1 division that's fully focused and with the digital acceleration that we are providing in Air Traffic Management, this shows the quality of our business, and that's why that portfolio is increasing.

So for example, one of them is the radars for the FAA. And the plan was to deliver 2 secondary radar, 1 in the first 3 months, and we have delivered them. So today, in Kansas, we're already delivering -- and the contracts actually were signed 4 months ago. We are going to have radars for the United States produced in the United States.

I believe that the response provide trust. And that's why our guidance in terms of revenue is 2 digits in 2026 because when the contracts are there, we have to start delivering. And I believe that being agile and having a contract in December like the one we had in December. And by the end of April, having delivered 3 radars already that shows that something is changing in the mindset of Indra.

And on Mobility, well, as you know that those are contracts that are very long-term contracts. And while will revenue -- the revenue stream is a bit different. And this year, we expect, well, 1-digit revenues. And just to mention about the future projects and revenues in Defense, well, besides what was clearly mentioned about what we expect in TESS, they are going to contribute to our revenues and also PEMs, I believe that acceleration is clear.

We also expect growth in Defense coming from Eurofighter. We have a revenue forecast at around EUR 280 million, EUR 285 million compared to EUR 260 million last year. We expect growth in radar, simulation, electronic warfare. So we still have a positive view, as it's been mentioned.

In terms of potential advancement or prepayments, well, as you know and as we have explained, we have some gross advancements of around EUR [ 1,850 ] million from what we have already discounted as mentioned, what's already been transferred to the suppliers and OpEx.

And we understand that as mentioned by our CEO, of course, that those transfers are going to accelerate because we have to make those funds available to our suppliers and contractors. It's true that part of the advancement received this year has not been deployed or still restricted such as [indiscernible] projects. And of course, those will materialize as soon as they are approved and as soon as that cash is available. That's now restricted as well as some other amounts, which are minor amounts.

In terms of whether or not we are going to see some advancements of prepayments this year or next year, that will probably depend on how future programs materialize, and we'll see further year.

And there's one additional element on revenue in Defense. So we have actually changed the way in which we work. We just started our projects in the automotive sector. And I would like to give you something. We decided to manufacture 12 LTM radars and 100 equipments of land warfare anticipating potential programs.

The culture used to be we won't invest as long as we are haven't got the program. But now I cannot tell a country in a conflict to give me the program that I'm going to be delivering in 3 years' time. On the LTR-25 radar, that's 1 of the main radars. At the end of the year, we'll be ready to have 12 to 15 radars ready to be delivered, which shows our agility. And that's the change of industrial mindset that we have carried out in the group. So that's this program, and there's a part that we manufacture with the client, but there's part of it that we manufacture for potential clients.

And why have we done that? Well, because we have worked on design to cost. When I was here, they were -- well, there was under attempts of the standardization rates. Now we have 14 radars. We have over 60% of standardization, which allows us to reduce delivery times. And before, it took Indra 3 years to deliver radars. And now we are saying that another 12 months, we're going to be delivering radars.

And that's going to bring about opportunities in the Middle East or other countries. So if we have product that can be delivered in, so to speak, short time, this will provide us with additional operations, and that's what needs to be done. We have to make the most of all the investments that we carry out in R&D and within those PEMs to accelerate our internationalization.

I believe that today, we are world leaders in radars as well as in ATM and defense, but there's yet another field in which we are working hard, which is electronic warfare. I believe we have something to say here. We are working on it, and we see this in naval and marine warfare and that's the way forward. It's just between -- we have development times and programs.

So we have to be patient. But we'll see how sales are going to increase. When we compare first quarter 2025 with first quarter 2026. In 2025, revenues in defense were EUR 470 million. And this year, I already mentioned that we -- it's going to be double that. That's thanks to the work of our teams, our commitment, development and getting factories working and just traveling around the world and positioning Indra as a reference company in Defense and Technology.

From the line of Lorenzo de Patrizi from Bank of America.

So my first question, what should we expect from the change of the group chairmanship, notably regarding the possible M&A transaction? Secondly, what traction are you getting on IndraMind? What revenue and EBIT contribution should we expect from it in full year '26? Down space, how should we expect margins to evolve medium term, given they were quite strong in Q1? And lastly, could you please remind me of the contribution you expect from FCAS and Eurofighter in full year '26?

Well, well, I believe we have to differentiate governance from operations. We have gone from an Executive President, that's Ángel Escribano, I believe, he really pushed that industrial advancement. He is an entrepreneur, and he knew the sector very well. And now we have a new President, a new Chairman, with great international experience and governance experience. And I believe his vision is also going to be important, both his view as well as the Board's view on the M&A operation. I mean this is -- I believe it's quite simple. The ones who stopped the operation were Ángel Escribano. They stopped this potential deal. So when there's a negotiation between 2 companies and 1 of them says that right now, the circumstances aren't right. Well, the only thing I can say is, well, nothing really. Just wait.

Today, they make a decision we'll check it. But today, if they believe it was not the right time, I have nothing to say. And of course, I respect their decision on IndraMind this year already. And integrating development revenues are going to be above EUR 100 million in the first quarterand EBIT is going to be above the average of the group. It's 10%. Miguel?

Well, yes, on margins that we expect coming from the different businesses in Defense, I'd say, we mentioned we expect a very clear increase of revenues with margins that are going to be close to the margins we have had in the past if we exclude the effect of the sales of TESS, we expect to be around 17%, 18%, where we've been in the past.

And in terms of Space, the guidance we can provide is that we expect to go beyond EUR 400 million of revenue this year. In Air Traffic Management, we expect the growth, well, of double-digit growth, mainly due to the great contribution -- or above the contribution we have got last year. And EBIT margin, that's going to be between 12% and 13%.

In terms of Mobility, we expect revenues around high single digits and an EBITDA is going to be close to the one we had last year. It's going to be around 6%. And in Minsait, as explained, we expect mid-single-digit growth in terms of revenues, and we expect to go from 6.6% of EBIT margin that we had last year, and we expect to be at around 6.6% to up to 7%. Between 6.6% and 7%. That's what we expect to be. In terms of FCAS and Eurofighter, FCAS first quarter contributed EUR 30 million compared to EUR 50 million last year. Last year, the revenues from FCAS were EUR 214 million and this year we expect EUR 200 million to EUR 205 million. In Eurofighter, the other way around. Revenues in the first quarter was EUR [ 68 ] million compared to EUR 64 million last year. We expect EUR 285 million in revenues this year compared to EUR 260 million last year.

Question comes from the line of Juan Cánovas from Alantra Equities.

I have a couple questions. First, on the size of M&A operations mentioned. If, and what is the average size that those operations could have? Second, I don't know if you can share with us the order book EBIT margin. Next one, for Miguel. If we exclude non-accessible cash of PEMs, what's the debt or accessible cash available to Indra?

On M&A, I mean, they've, they're, their sales are, their purchases are gonna be sales. Sizes, well, we'll see. This is just as when you go hunting. If you find a good animal, of course, we won't just let it go by. Until you see or can -- I mean, you don't really know if you're gonna go back home with, you know, 2 pigeons or it's gonna be a big game. We know our path. It's not a matter of just buying for the sake of it. It needs to provide me with capabilities that I haven't got or synergies that make my business more efficient or open markets I'm not in. If those things are present, well, that's what we're saying. It can't be just a matter of buying. I think we can find some alliances with some other companies in some sectors that can actually position myself as a reference in that sector. So everything's quite open, and it actually depends on the opportunities that we'll find.

And Miguel?

Yes. On the second question, I mean, we cannot mention those specific margins. And on the third question, if we don't take into account those advancements of -- coming from the PEMs and taken into account. And if we took into account the factor of EUR 180 million that I explained earlier, that are not part of our net financial debt would be -- will have a net debt of around EUR 630 million. And I believe that explains this free cash flow of minus EUR 40 million.

And in any case, it will be below 1x EBITDA in the conversion with our PEMs and factoring would be around, yes, EUR 630 million.

Thank you very much. And last, very simple and easy messages. Our objective is EUR 7 billion of revenue, EUR 700 million of EBIT and EUR 375 million in free cash flow. We are in a new governance phase, but the teams are committed, not just the teams, but also myself. And in that sense, there's a lot of speculation. My full commitment from my side and if the Board decides it, I will be happy to keep on working because I believe that the project of Indra Group right now is amongst the most appealing plans that we can have in our country. And in that sense, we keep on working to transform this company, which is a referential in our country.

Thank you very much and see you at the end of the first half of the year. Thank you.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good afternoon, and welcome, everyone, to the result presentation of 2025. My name is Ezequiel Nieto, and I'm the Head of Investor Relations. Let me first introduce the speakers for today's session. Angel Escribano, the Executive Chairman at Indra Group; Jose Vicente Los Mozos, CEO at Indra Group; and Miguel Forteza, our CFO.

Before I start, let me make mention of the current slide, the disclaimer for this presentation.

[Presentation]

Good afternoon, everyone, and welcome to the 2025 results presentation. Just over a year ago, I became the Chairman of Indra Group. And I was clearly convinced that in times of global uncertainty, it is essential to take decisive action to build our industrial capacity. This is not as easy as it seems. The path is full of obstacles, but I do believe we are moving in the right direction. I can say now that the results I am presenting validates the work done. And more importantly, we can talk about the future. We are building a stronger company with more investments, more partnerships, more effort and the best human capital.

Words are empty shells if they're not backed by facts. And you know that I am a man of fact. The results speak for themselves. Over this period, we have multiplied times 3 our market cap, and we've created more than EUR 3 billion of shareholder value. This value added for our shareholders is the result of the work and perseverance of all of our Indra Group employees, who have enabled to reach major milestones this year.

We have achieved EUR 12.78 billion of order intake in 2025, multiplying by more than 2.4x the 2024 figure. And we have more than EUR 16 billion in our backlog, which is more than doubled the number in 2024.

There are two clear pillars at Indo Group. The first pillar drives aerospace and defense, and the second pillar drives the technology component. This year, we've made sure both pillars have helped us become the national and European benchmark we aspire to be. In aerospace and defense, we've launched the new units, Indra Land Vehicles, Weapons and Ammunitions and Indra Space. We have also strengthened our tech division and, to that end, we have created and launched Indramind, our in and sovereign AI platform with a dual civil and military application.

We've made our digital capabilities cross-sectional and we've made them available to all business units within the company. We've also refocused our Minsait divestment with the objective of keeping critical talent and key technological capabilities within the group. We have only divested from Minsait areas where Indra cannot deliver the necessary value added to its clients. Additionally, we have invested more than EUR 950 million in the acquisition of more than 10 companies and assets while maintaining the net debt-to-EBITDA ratio at 1x.

We have launched Indra Ventures with more than EUR 200 million committed and the ambition to reach EUR 1 billion. Indra Ventures aims at investing in technology companies linked to aerospace, cyber securities, defense and emerging technologies as well as IT technologies. We've also increased our delivery capabilities by opening new industrial and technological centers across different regions of Spain and the U.S.

This year, we have multiplied our order intake and backlog by more than 2x. The order intake exceeds EUR 12.7 billion in 2025, which is 2.4x the 2024 figure. This is driven by a strong growth in defense, where we've multiplied by 8 the order intake and reaching an additional EUR 1 billion. And in addition, the order intake in the rest of the Indra Group departments has also grown by 7% specifically.

In 2025, the backlog exceeded EUR 16 billion, which is more than double the year prior. I would particularly highlight the growth of the defense market, where the backlog has multiplied times 4. The rest of the group's businesses have also evolved in a very solid and balanced way. The growth is very stable at 11%, way above the market average. I would like to highlight that.

This level of order intake and backlog shows the company's commercial mindset and the confidence of our clients in the Indra Group and its team. This commitment has made these figures possible.

In 2025, we have secured EUR 13.8 billion in Special Modernization Programs. This figure represents more than just business volume. It represents institutional trust, trust in our industrial capabilities and the boost to continue investing in more technology and more innovation. In fact, we lead 17 out of 31 programs launched, either directly from Indra Group, through our subsidiaries or through joint ventures. This positions us as the driving force in defense in Spain. So we are playing a key role in modernizing our country's defense and deterrence capabilities.

In addition, we participated in more than 10 programs as subcontractors, further expanding our presence in the industrial ecosystem and reinforcing our position as a strategic partner. Through these programs, we will develop and deliver critical capabilities for the Spanish Armed forces across all domains: land, sea, air, cyber and space. Among others, I would highlight the delivery of land vehicles, tactical radios, satellite, CUAS systems, drones, advanced cyber defense solutions and next-generation radars. This is quite a comprehensive portfolio that stands across key domains and demonstrates our ability to integrate advanced technology into real operational solutions.

The success in securing the 2025 PEM programs is not a coincidence and it has not been accomplished randomly. It's clearly the outcome of our anticipation of our bold decisions and the strategic choices made in the past. Over these months, viewed individually, you might think they are operational adjustments. But viewed together, they amount to strategic commitment to Indra's industrial and technological independence in order to develop all the capabilities required to deliver on the commitments set out in the 2025 PEM programs.

First, we decided to create 2 new defense divisions, Land Vehicles and Weapons and Ammunition. We did this in March 2025, ahead of the market. Thanks to that, we structured our industrial and specific capabilities to execute the PEMs. The Land Vehicles division today accounts for 34% of the 2025 defense backlog, and it's our ambition to become the land prime contractor to lead the growing national and international programs.

At the same time, we've launched Indramind, our sovereign artificial intelligence platform with dual, civil and military applications. It seeks to protect and reinforce technological sovereignty and it seeks to operate in increasingly complex hybrid environment. In addition, we have strengthened our industrial capabilities with a long-term vision. We've carried out strategic acquisitions within our industrial capabilities, such as [indiscernible] and then a new facility in Cordoba, where we will be manufacturing half of the satellites for exports and then our AERTEC's aerial systems subsidiary.

Since June, we've been mobilizing our group professionals, who've dedicated exclusively their time to prepare the bids for the award of the PEMs. We've worked to prepare the broader ecosystem involving companies, start-ups, universities, vocational training centers and institutions, thus strengthening the Spanish industrial ecosystem and ensuring that, together, we can meet this challenge in which we are all engaged. This mix of anticipating, preparing and executing has made a big difference, and it explains the results that we see today.

Alongside the industrial and organizational reinforcement, Indra Group has taken decisive steps in its international expansion, consolidating its international presence with contracts across 5 continents. We have increased international contracts compared with 2024 without taking these 2 contracts into account.

In mobility, we've landed to the Transport for London contract with EUR 1 billion, and we will be a key company in the transportation system of a great metropolitan city which is London. London has looked towards Spain, and they found Indra to reinforce its mobility system. And we're going to serve the more than 8.6 million passengers every day. I would like to highlight that this contract award is a result of everybody's work within Indra because beyond the mobility business unit, other departments have taken part.

And then in ATM, we have a contract with the U.S. Federal Aviation Administration worth more than EUR 300 million in the first phase, which involves the design, manufacturing and deployment of radars to modernize the United States' earth surveillance network. This strengthens our position as one of the main players in the sector worldwide. We will be deploying a fully operational production facility in Kansas in less than 6 months.

Additionally, we have secured more than 15 major international contracts across 5 continents to continue to drive Indra's international presence. Starting with the renewal of the Haramain contracts in Saudi Arabia, following with the installation of radars for observation and tracking in Germany and strengthening our presence in the strategic markets with high technological requirements.

Another milestone I am particularly proud of was the launch of our sovereign artificial intelligence platform, Indramind. To build it, we have used our most advanced digital profiles in artificial intelligence, cyber security and cyber defense to develop a proprietary sovereign platform, Indramind. Indramind is already having real impact in critical areas. In artificial intelligence, we have deployed real-time strategy solutions in the most demanding environment, and we have signed 4 additional confidential contracts to protect critical infrastructure also in the areas of intelligence and defense.

In cyber security, high-tech is evolving by integrating AI into our security operations centers. And in cyber defense, we are participating in key programs, such as the PEMs for the development of the cyberspace combat system and the cyber range PEM, which seeks to create advanced cyber simulation and maneuvering capabilities. Going forward, we see a pipeline of more than EUR 2 billion nationally and internationally. We don't only have the technology and the use cases. There is a market, there is demand, and we have an opportunity to grow.

Also, we are evolving on Minsait to maximize its value within Indra Group. Our goal is twofold. First, we want to move towards a portfolio of higher value-added solutions. This includes divesting from the BPO business and repositioning payment methods, which will remain a part of Indra Group. In addition, we are driving double-digit growth in high-value solutions, especially in cloud and data for strategic sectors such as public administrations and energy.

We are also making digital capabilities cross-sectional because we want to serve all group units. We are adding advanced technologies into the bidding process in operations of defense and space, and we are accelerating the digitalization of the supply chain and corporate functions. In short, Minsait and the technology sector are the players that underpin the Indra Group. And therefore, it is essential for the Minsait business to drive valuation and efficiency, and it must create a competitive advantage by having the technological DNA in-house.

The outlook for 2026 is also very positive. We see three main trends. First, we expect a significant increase in defense investment across European countries. Recently, the NATO Secretary General, Mr. Mark Rutte, highlighted astonishing shift in Europe's mindset towards higher spending and greater leadership in defense within Europe to lead in the field. I must highlight in his words that Europe is assuming more responsibilities and strengthening its military capabilities.

Second, we are facing a new reality in European and Spanish sovereignty. The European Union has set the goal that 50% of the defense systems should be produced within the EU. And in Spain, our commitment is for 78% of PEM outsourcing to remain domestic. This clearly shows how countries are prioritizing their strategic independence and critical industrial capabilities.

Third, we've seen an acceleration of the impact of technology, especially around cyber security. In a very short period of time, we've seen AI platforms to show a very similar approach to Indramind, and we've seen how their valuations have multiplied 2 or 3x in 2024 and '25. This is not a one-off event. This is a clear signal of where the market is moving and where the growth expectations are concentrated.

But beyond financial valuations, what truly matters is tangible impact. Studies published by comparable companies are showing productivity increases between 20% and 30%. In other words, AI is not just a technological promise. It is a real lever for a competitive advantage.

At Indra Group, we don't only have the capabilities. We also know how to deploy them and how to monetize them. We've integrated them into our internal processes, into our industrial plants and into our offering. And this confirms something we've defended at Indra for the longest time. Technology is not a support function. It is a strategic pillar on which Indra Group rests. And within that technology pillar, AI and cyber security are key.

None of these figures is cosmetic. They are the foundation of a strong industry competing for a place in a geopolitical landscape that demands more investment in technology and the ability to withstand adverse cycles without putting the industrial projects at risk because Indra's independence and our country's position as a European power is not a balance sheet issue. Above all, it is a matter of capabilities.

Indra has reinforced its role in next-generation EU programs. Indra has consolidated its global leadership in air traffic management system and it has expanded its digital solutions, which are critical for infrastructure such as energy, transportation and public administration. We're not selling more of the same. We are very well placed in areas where cumulative knowledge and technology makes us a hardly replaceable players. And we become the reference for Europe.

We have a very solid position in the national market. In Spain, in 2025, the spending defense was EUR 33 billion. Out of that EUR 33 billion, EUR 24.8 billion are the PEMs, the Special Modernization Programs. And out of that EUR 24 billion, Indra has landed EUR 13.8 billion, which shows our very strong position in the national ecosystem. At the same time, the NATO's commitment points towards a 5% GDP target for defense and security. And some countries such as Poland, Germany or the U.K. have already communicated their spending goals for the next few years.

Our goal is to be the driving company in Spain. That should be our positioning. And we want to continue to grow internationally to become a household name in Europe the U.S. and the Middle East.

We continue to operate in global markets, but we do so from a different positioning. We're not a dispensable supplier. We integrate complex systems. We have intellectual property. And we have accumulated growth and we can lead in highly critical projects. That is why we stand out. That is why we are a strategic choice. And we are not just a byproduct of a forced dependency.

The question is, do we want to be a dispensable chain link in a value chain designed in Seattle or China? Or should we build capabilities to become a much-needed partner? Well, our choice at Indra has been the second, and the results proved that we're right. The sustained growth in our order intake, the improved to profitability and the bigger backlog book show that reinforcing our own capabilities, it can be done together with global success in markets.

Before I give the word to Jose Vicente, with whom I've shared success in Indra this year, I'd like to share with you a video we have prepared to highlight the main milestones that we have accomplished all together. And of course, I want to thank the great Indra team for our accomplishments in 2025.

[Presentation]

Thank you very much, Angel, and good afternoon, everybody. And indeed, we have achieved a major step in 2025. Not only have we been able to meet the guidance we had to set for ourselves this year but we have actually exceeded it.

In terms of revenue, we committed to go beyond EUR 5.2 billion, and we have reached EUR 5,457 billion. That's EUR 257 million above our forecast, which sets us 5% above our guidance. In terms of EBIT, we set our target at EUR 490 million, and we have closed beyond EUR 517 million, which is 6% more. And in cash generation, we set the objective of EUR 300 million. We have reached EUR 364 million, which accounts for 21% above our commitment. And if we exclude the impact of TESS from our results, we have also made the guidance proposed across all our business lines.

And this performance is underpinned my clear operational milestones. First, the order intake of the group, EUR 12.7 billion, which is 2.4x the figure of 2024. We have also doubled in the group's backlog compared to 2024 of EUR 16 billion, and we decide that we keep on accelerating the transformation of the group. We have strengthened the cross-cutting collaboration across different areas to place technological capabilities at the service of all the businesses in the group. We have identified the commercial focus and we have fostered a business-focused culture.

We have increased our international vocation, and this vocation is reflected in specific achievements as we heard in the afternoon and through key international contracts, such as the Transport for London or the renewal of surveillance radars in the United States for air traffic. And we will keep on improving margins within Minsait and Mobility to bring them in line with our competitors.

In Minsait, we can see an EBITDA improvement of 0.8 percentage points compared to '24, and we have especially been able to materialize that improvement in the second half of 2025 with the arrival of the new management team. In Mobility, the improvement reached 1.3 percentage points compared to 2024. And now I would like to thank all of Indra Group team for their dedication and their commitment in this transformation, I would also like to take the opportunity to thank the Board of Directors and the Chairman for their trust.

The results we have achieved aren't an isolated event. It's actually a consistent pattern within the company. Since my arrival at Indra in May 2023, we have exceeded the targets we have set for ourselves every year. When I got here, we reached EUR 4.343 billion in revenue, EUR 347 million and EUR 312 million in cash flow. In 2024, we launched a strategic plan, Leading the Future, which was the start of a transformation and improvement phase that have lasted until our days. And this year, we once again set very demanding targets, and we have exceeded them.

In 2025, we have repeated the same pattern, which is to say, the demanding guidance once again overdelivered. At Indra Group, we are delivering an ambitious growth but with discipline and with a track record of the market can actually measure and verify year after year. Today, I can tell you that the foundations of the company's transformation are firm. And now what we need to do is to respond to the trust that our customers place in us every day. And to do so, ladies and gentlemen, there's only one way we've done it, which is delivery, delivery and delivery.

We have achieved a strong increase in order intake and our backlog all across our businesses. Order intake in 2025 reached EUR 12.7 billion, which is EUR 7.4 billion more than 2024. This growth is largely explained to the strong momentum of the defense business, as explained by the President, and went from EUR 1 billion to over EUR 8 billion, mainly driven by Eurofighter and PEMs, the Special Modernization Programs. Without PEMs, defense order intake would have increased by 23%.

But we have also seen growth in the rest of the group's areas, in air traffic, mobility and Minsait. And we have been able to keep that positive trend with solid growth of 7%. In addition, international contracts secured this year allow us to keep on growing in air traffic and mobility.

We've already mentioned radars in the United States, but also radars in the United Kingdom or Azerbaijan air traffic or rail maintenance contracts in Chile or urban traffic management in Ireland or tolling systems in Colombia or the Cairo maintenance or order renewal of the Haramain project in Saudi Arabia within mobility.

The backlog has gone beyond EUR 16 billion, more than double the previous year. And I would like to especially mention the evolution in defense that went from almost EUR 3 billion to over EUR 11 billion. At the same time, the rest of the businesses of the group have increased their backlog by EUR 474 million, showing a balanced and sustainable development. On March 6, 2024, we presented our plan, Leading the Future, a strategic plan based on 7 key strategic lines, as you can see. And today, after 2 years, I can say that we are on track to deliver our plan far above our initial targets.

Let me now highlight the most of the milestones achieved over the past year. In 2025, one of the reasons why we were able to secure the Special Modernization Plans, as the President mentioned, is thanks to the preparation that we have carried out and our ability to show we can deliver on time and on top. And especially in aerospace and defense, we have taken key steps to ensure the delivery not just of these modernization plans, but of the contracts we have been able to materialize during 2024 for 2025.

First, we have expanded our industrial footprint. And our objective is to multiply it by 4 in 2027 when compared to 2024 by adding over 100,000 square meters of production capacity. And at the same time, we have strengthened and expanded our engineering capabilities. Second, in 2026, we will produce 2.5x more units than in 2024. And this would not have been possible without the efforts that we have made to standardize products and increase their industrialization. And in this context, we have implemented a serial production in our plants, going from 2 to 3 manufacturing shifts for our key products.

Third, we have worked on tiering our supply chain. As you know, well, I come from the world of car manufacturing, from the automotive world, and this is part of its DNA. And according to that experience, we have gone from over 2,000 suppliers to 440 strategic Tier 1 suppliers while the rest of the companies have structured along that value chain, and all of these supported by an industrial management mindset and the digitalization of our operations.

Both Angel and myself know, we are both from the industrial world, and we both have experience and we are always involved in strategic decisions on new sites and suppliers and delivery. And we monitor those advancements that we have implemented a digital platform with real-time data allow us to identify when and how we should reinforce capacities to be able to meet delivery commitments and was even more relevant.

Besides all this, our clients have recognized the delivery and the commitment we have shown with improvement of the customer satisfaction score up to 86 and Net Promoter Score of 52. And this figure place us at the top of our sector and confirm that the actions deployed are having a real impact. So in short, we are not reacting to growth. We have prepared in advance to be able to deliver and execute in 2026.

And given that images are worth more than 1,000 words, I'm going to share with you a clip in which we explain in greater detail how we have evolved our industrial capabilities by boosting serial production and the scale of our operations.

[Presentation]

As I mentioned, at Indra Group, we are driving amazing industrial growth. Our objective is to at least, well, multiply by 4 our industrial footprint before 2027. We'll go from 35,000 square meters in 2024 to over 140,000 square meters in 2027. In 2024, our industrial footprint was limited, as you can see, to the region of Madrid in Spain and other 2 plants, 1 in the United Kingdom, a small 1 in the United States.

In 2025, we have expanded our domestic footprint with 2 additional manufacturing plants that are already operating. The first one in Cordoba, the south of Spain, with over 13,000 square meters dedicated to radars, both radars and counter-drone systems. The second one is in [indiscernible] in the North of Spain with over 20,000 square meters, where we manufacture and integrate land vehicles. And in fact, by the end of 2025, we already achieved the rollout of the first vehicles.

This facility, in 2026, we will strengthen our capabilities in Spain in radars, drones and counter-drone systems with new factories in Cordoba and Leon. And from an international perspective, we will consolidate our presence in the United Kingdom. And we're expanding our footprint in the United States, including new capabilities in Kansas linked to radars and radios. By 2027, we have quadrupled the industrial footprint in 2024.

In addition to our current capabilities, we will add 5 new plants in Spain and the industrial presence in the Arab Emirates. And inside that, we will reinforce our technologies of sovereignty, our proximity to our customers are our resilience. And to do so between 2025 and 2027, we will invest over EUR 400 million in CapEx in our industrial footprint. And we expect to create over 3,000 jobs with the objective of strengthening our engineering, production and delivery capabilities. And overall, we're going to move to a network with a greater scale, greater geographical diversification and broader specialization by side, ready to support the expected business growth and meet delivery deadlines.

On the other hand, in line with the objectives set at the 2024 Capital Markets Day, we keep on advancing in the standardization and industrialization of our product portfolio. This is a key step to increase our scale, improve our competitiveness and accelerate our response to cater for the market. In 2024, we set a very clear course. We're focusing on 6 major technology categories to develop integrated solutions, and amongst them, we included radars. For example, in 2026, we have multiplied by 4 the number of units produced of priority radars, reaching and exceeding the target we set for ourselves, which was multiplying by 3 the number of units in 2024.

For example, in the LTR-25, we'll go from 1 to over 10 units a year, and within Nemus, fewer than 10 to over 100 units per year. Second, we are advancing in the standardization of our portfolio, our Leading the Future plan. In that plan, we set the target of having over 60% elements in common across different markets for the main radar families and in line with our objective for the ASA radar family, where 80% of the elements are going to be shared, which will streamline our production processes.

Third, we will keep on reducing the number of radar families in our portfolio. We have set the objective of going from 8 to 13. And in 2026, we already have 14 families in line with our ideas. The standardization will allow us to strengthen our technology positioning and competitiveness in different markets.

And last, and as we committed, we have reduced our production times. And to achieve that, we have established 2 productions shifts in all our sites and 3 shifts for priority products. We have also advanced in serial production. This change in our motion towards mass production allows us to accelerate production pace and anticipate the procurement required according to expected demand. As a result, we have reached the objective of reducing by at least 50% or lead times, going from 13 months to under 6.

And please now allow me to explain what we've done in terms of our supply chain. At Indra, we have worked to structure and divide our supply chain by tiers. We want to have true driving role in the industrial ecosystem, especially within the defense sector in Spain. Today, 78% of defense procurement is carried out by 2 Spanish suppliers. 2 years ago, it was to be over above 50%. We have also increased by 70% the procurement expenditure compared to 2024, and we have increased by over 80% the average value per supplier.

In that way, we have tiered our supplier base. We have identified 450 Tier 1 strategic suppliers that account for 90% of aerospace and defense procurement. This concentration of volumes allows us to improve our efficiency, improve coordination and strengthen control over quality, lead times and costs. And precisely in terms of costs, the results are visible. We have achieved savings of over 10% in the sourcing of components for key products for the radar families, LTR-25, Nemus or PSR 2D. And our focus for these areas to be able to double those savings as we consolidate serial production.

So we are building a more structured, more efficient supply chain that's better aligned with our industrial ambition with the objective of increasing our competitiveness, our resilience and long-term execution.

In terms of space, in the 2024 Capital Markets Day, we made a clear commitment to create a business unit with an end-to-end positioning capable of covering the entire value chain and competing at a European level. Today, 2 years later, we can say that the commitment has been fulfilled. The Indra Group is already in the space domain. We have put the thesis in place to capitalize that business. And today, I can say that Indra Space is a European company with integrated capabilities across the whole value chain.

And thanks to that positioning, we have achieved strategic milestones such as being awarded the Paz II PEM of over EUR 1 billion. In 2025 Indra Space revenue exceeded EUR 375 million with an EBITDA margin of about 45%. For 2026, our objective is to keep on strengthening our value proposition and maintain our growth path to go beyond EUR 400 million in revenue.

Looking ahead, the context is favorable. Both the ESA has announced a 3% budget increase as well as Indra will increase its annual contribution. Both factors will help us improve our expectations. And to do so, it is important to account on programs like IRIS2 or Paz II in the next few years, where we will have a key role to play in the Spanish space industry.

And when talking about technology, we are leveraging AI advancements with two objectives: to increase our internal productivity and enhance our solutions offering. Internally, AI is fully integrated into our production processes and corporate functions. And we can already see an impact. In terms of software, we have been able to achieve increase of over 10% in revenue per employee driven by intensive use of AI tools. Today, over 61% of our teams use these advanced capabilities.

And we are also integrating AI into our industrial operations, and that improves operational efficiency and the quality of our industrial plants. Amongst others, we are deploying an automated visual inspection. To accelerate its use, we have established more than 10 alliance with hyperscalers and strategic technology partners. At the same time, we are enhancing our product offering. And through Indramind, we have prioritized 6 key use cases: sovereign intelligence, emergency management, drone storm, cyber defense, critical infrastructure protection and the protection of sovereignty.

The integration of tech operations is key to scale this transformation across the group by implementing AI and ensuring technology coherence and scalability. In 2025, we have also made promising the evolution of Minsait to maximize its value within Indra Group. And this means that we can find a tangible impact in productivity with an increase of over 9.7% on revenue per employee, showing a more technological and more value organization.

Talking about international expansion, we've already mentioned it. It's been an important way for Indra. We have gone from 27 to -- from 19 to 27 countries. And we are trying to focus more on those countries to be able to improve our commercial efforts.

On our M&A strategy, a fundamental pillar to strengthen our knowledge, our division is key and consolidate our presence. In 2025, as the President mentioned, we have invested -- not expanded within different corporate operations, such as Hispasat and Hisdesat in defense. And I'd also like to well, not talk about M&A., I'd like to mention something that you're expecting, which is what's going to happen with the operation. I'd like to mention what's been done.

As you know, in June, there was an ad-hoc committee created with a protocol that's been shared through the Spanish SEC. In December, the plan was approved by the Board. And in January, the Board asked me to talk to the stakeholders, to go back to the Board with feedback. And that's the process in which we are in. So we keep on working on these operations, and that's what I can tell you about this topic, this M&A topic.

And well, now let's talk about investment and talent. Last year, as you can see, we invested over EUR 472 million in R&D, around 9% of our revenue, in priority technologies such as cyber defense, gallium nitrate, photonics or applied AI with over400 agreements with universities and research centers, start-ups around the design of microelectronics, quantum technologies and the development of big data or the divestment of BPO.

And the consequence is quite easy to see. We went from EUR 87,000 per employee in 2024 to EUR 296 in 2025. I mean, if we take into account the divestment of BPO, we are now at EUR 96,000 per employee, an improvement of 20% compared to 2024. So those are important elements in which we keep on growing, we keep on advancing with our critical talent. And that's why we have been chosen as a top employer. And for Standard & Poor's, this was an important year. We've been chosen as one of the most sustainable companies worldwide and the first one in Europe in our sector. So not only are we working on efficiency. But besides that, we are also working on improving our governance.

And well, now the main financial indicators. As you can see, we have order intake of EUR 16 billion and our revenue of EUR 5.4 billion with an EBITDA margin, operational margin and EBIT and net debt of EUR 583 million. So we have been able to meet our net debt-to-EBITDA ratio of 1. So if we check the results per area, we can start in defense, a portfolio of EUR 11.3 million, EUR 8.1 million in order intake. EUR 1.4 billion of revenue. A growth of 36.4%. EBITDA margin, 18.4% and operational margin of 17.1%. And the different compared to the previous year is 1.4 in operational margin, in EBITDA, 1.6%. One is the change of mix, and second, the preparation to increase our capabilities.

And if we take a look at Air Traffic Management. It's been a good year. And we're getting closer and closer to the leaders in ATM. The commitment of the group is to be almost there with a portfolio of EUR 1.1 billion order intake, EUR 726 million and revenue EUR 5 billion. And just a short story here. When we won a tender for the FAA and we were them, a dinner with the Transportation Secretary. So we sprung it. So why are we the winner? Well, the response was easy. You have the most advanced solution in air traffic, and we want to work with the best. And that's one of the reasons why we were able to win contract for ATM. We hope is not the last one and that's what we are working for.

So we talk about Mobility. Well, good backlog, EUR 569 million in other intake, EUR 319 million revenue, and we keep on improving the efficiency, both in terms of EBITDA margin and the operational margin. Great work that's been done to refocus the business of Mobility.

On Minsait, and accounting which the sector was growing very slightly, we keep on having an increase of our backlog of 9%, over EUR 2.6 million, EUR 3.4 million in order intake. And revenues closed, that have grown almost 5% up to EUR 3.1 billion. And we keep on improving both EBITDA as well as the operational margin and our EBIT margin in a context in which companies are slightly curbing and we are able to keep on growing.

So what's our guidance for 2026? To keep on improving. And to do so, over EUR 7 billion in revenue, over EUR 700 million in EBIT and over EUR 375 million in cash flow. And our priorities, quite easy. We are preparing our scale up plan. So we did the focus phase. We believe that the phase almost finished, and we are getting ready for the scale-up phase that will be developed in the second quarter 2026. We will keep on reinforcing our capabilities to be able to deliver programs in our portfolio. And we will keep on working on international expansion and growth. And we will keep on evolving the Indra Group towards excellence by transforming its culture.

And these are our priorities. So we keep on working. And now I'll give the floor to Miguel. He will explain the financial results in detail. Thank you.

Thank you very much, Jose Vicente, and good evening, everyone. Let's continue with the financial highlights for 2025.

Starting with the free cash flow. The company reached EUR 364 million, well above the target set of EUR 300 million for this fiscal year. This number represents a 36% growth year-over-year, once again, supported by very strong growth in the fourth quarter, which contributed EUR 207 million. As we've mentioned in the past, this performance follows the historical pattern characterized by strong seasonality. The first 9 months of the year make a smaller contribution while the last quarter concentrates most of the volume and most of the free cash flow generation.

Now regarding the working capital. The evolution of days of sales shows an improvement vis-a-vis 2024. This is mainly due to the consolidation of TESS and Hispasat and Hisdesat as well as a lower level in receivables and payables, which are often offset by higher inventories driven by the increased group activity. As a result, we stand at negative 16 days of sales compared with the 27 days recorded in December 2024.

Let's now look at the evolution of the net financial debt in 2025. We closed the year with a net debt of EUR 583 million compared with the EUR 86 million of cash registered at the end of fiscal year 2024. The group's acquisitions in 2025 are the reason for this change. They amount to EUR 907 million, most notably the purchase of this Hispasat and Hisdesat for EUR 725 million and TESS for EUR 107 million. This impact was partially offset by the solid operating cash flow of EUR 587 million, driven by the good operational performance of the business and by a positive working capital impact amounting to EUR 63 million.

And then CapEx increased due to the strong commitment of this group to its industrial transformation. And taxes have also increased because of the higher profit achieved in the year. So result of all of the above, the net debt-to-EBITDA leverage ratio stands at 1x versus 0.2x it was in December 2024. It's important to remember the effect of the acquisition of Hispasat and Hisdesat in this multiple because the consolidation did not contribute EBITDA in 2025.

And finally, regarding the structure of our debt. I would like to highlight that we continue to reduce the cost of our gross debt down to 3.1% from the 4.2% we registered at the end of 2024. And then the average debt maturity stands at 3.1 years compared with 1.3 years reported last year. Finally, we closed the year with a consolidated cash position of EUR 1 billion. In addition, the company has EUR 1.175 billion available through additional lines of credit, including financing facility from the European Investment Bank up to EUR 385 million with a defined use of funds.

And with that, I'll give the floor back to Angel Escribano to close this presentation.

Thank you, Miguel. Before closing, we would like to remind you that in the first half of 2026, we will celebrate our Capital Markets Day, where we will present the next phase of the strategic plan, Leading the Future scale up. We have completed the 2024-'26 focus phase with results above expectations. We are now entering an acceleration phase towards 2030. And our ambition is very clear. As Jose Vicente has explained, we seek to surpass EUR 7 billion in revenue in 2026 and reach EUR 10 billion in revenue before 2030.

Before we play one final video, I would like to remind you that once again, the dividend payout per share is up to EUR 0.30 this year. This is a significant increase for this company, although Indra, as you know, is not a high dividend payout payer. But we create value rather. That's our focus and that's our challenge going ahead, as you all know.

[Presentation]

All right. Let me explain that this video is intended to demonstrate our commitment to the future are building because we want our very name to reflect who we are and where we are going, a national benchmark in dual-use technologies supported by the development of sovereign proprietary artificial intelligence, Indramind.

Without further ado, thank you very much for coming to this results presentation, and good afternoon.

So we will start with the analysts that are here in the room. So we will start with the Q&A session. Thank you, please.

My name is Juan Canovas from Alantra Equities. And I'd like to ask, first, in defense, we have seen that we have increased our expenditure to over 2% of our GDP. So that's every year. So what's the added expectation of Indra for '26, '27? And I would also like to ask about the FCAS because it's been mentioned quite a lot in the press. I don't know if you can update on the financing cash. I don't know if there's something to say about this program.

All right. Let me address both your questions. Regarding the spending and the goal to increase the spending in defense to 2% of the GDP, it's a decision the government needs to take as they have indicated and they've made public. And it's not for 2025. It's rather an ongoing investment. In 2026, given the growth of the GDP, 2% represents more, quite some more in fact. So once again, these Special Modernization Programs will come to be once again. And Indra is very well positioned to work in as many as possible within our capabilities. As I mentioned earlier, the focus on the 3 dimensions of the army plus cyber security, which is another important pillar of this company. We are very well positioned to bid to many programs, and we hope and expect we will be awarded many as in 2025.

And then regarding the FCAS, well, the program is doing very well. It's working well. There is some reluctance between the great French player and the great German player. I would say that we are the great Spanish player, and we are coordinating the projects. This project is still in definition. As you've read in the press, this is no secret, there might be 1 or 2 aircraft and they might be bigger or smaller. Given the events of the last 2 years, there's not much definition regarding the final outcome. But the aircraft will exist, and Indra is leading the Spanish pillar, without a doubt.

Next question, please.

This is Beatriz from Bestinver. Congratulations for your results. My first question is regarding the guidance for '26. Can you share some details about what you include from TESS, FCAS Europe and so on?

And the second question, regarding the cancellation of the payment sales. Could you go into the reasons? And do you have any other options on the table such as, let's say, there has been some noise on the press regarding the sale of the strategic consulting division.

In terms of outlook, we have detailed what we have been planning for this year, but we prefer not to mention it. So we have it by business area, defense with PEMs, with monetization plans. And we thought of them. Until we know the content, there would be -- but our Board has mentioned it. So we are working on it, And we believe we know which are the modernization plans that we can take over.

In terms of Minsait, we are carrying out a deep assessment. So we are trying to look at Minsait in the future, There are two things that are going to be important. First, making our detailed capabilities through cross-cutting. And so we've got people in AI, cloud and cyber that work in mobility, air traffic. So we want to be the radar manufacturers with the most advanced artificial intelligence. So good work has been done. And within our core business, we have seen that BPO was not part of our core business, and that's why we got it our of our scope.

Payment methods, we have seen what's been proposed to us, well, we thought that we could extract more value from it with our teams. And given that we don't need to sell it, we have carried out a deep analysis, a deep assessment. And we've seen that by integrating our CapEx and our know-how, we can improve on the efficiency. And that's why we have made our decision. That's what we do every day. both in terms of M&A and divestment as well. If we believe it to be interesting and if we can have results with third parties, we do it. And otherwise, we won't. That's the assessment we do every day with our team and with the President.

Carlos from Santander. If we exclude the consolidation of Hispasat, Hisdesat and TESS, there will still be organic growth above 10%. And the expectation of sales for the year, can you provide a bit more visibility on the growth levels you can see in the different business areas? And more specifically, in defense, I'd like to ask how you have included in the guidance to events. If I'm the wrong, FCAS, the European side, the project will finish in April. Have you included the participation in the European side, not the European PEM, but the European side in the guidance for 2026?

And second, on PEMs. We have 31 programs. They are quite complex. So do you think there could be delays due to administrations or even core decisions that could have an impact on Indra?

Well, on backlog, I don't want to get my board. But if you see this, we've got it with PEM, without a PEM. So We have assisted, but we prefer not to mention it, but we do have those calculations with PEM, without PEM in each area of defense, dominant, land, maritime, cyber defense. So we've done the exercise. On growth cycle, you've got the floor.

Thank you. Very kind. Well, there's not much we can say. It's not our decision to make. We've done our homework. And the appeal, the council has been sent to council's ministers, to the government. That's what the Supreme Court has decided. We see it is a mistake. And up until now, the courts have sided with us and our legal counsel sides with us, of course. There is nothing we can do right now except to wait. There is nothing we can do about that decision.

The only thing we know for certain is that it will not have impact on production. We're working full tilt and we really don't think this is going to come to anything.

And regarding the FCAS in Europe, the program stands this year. We also have the national FCAS program. There are two sides to it, in fact, Indra leads that program. And together with Airbus, Indra co-leads the other PEM. So that's the one we chose not to run for, and we are co-leading with the Airbus. They are working on it. And by March, they will take a final decision. So probably it will start in the first half of the year, the first 9 months of the year. This really only depends on the Spanish industry. It depends on the European industry. We're in a rush the same way the French and the German industry are in a rush. So expect to sales are EUR 205 million for the FCAS.

I'm David from JB Capital. Regarding Minsait, we've seen a relevant improvement in the margin for Minsait in Q4. Is this structural? Is this something we might see long term? Or is this temporary? And then regarding the business CapEx, your guidance is some EUR 400 million cumulative through 2027. Can you give us some visibility into what part of that investment will be in '26 or '27?

About Minsait, let me remind you that I came to the role a year ago and it seemed Minsait was going to go down a different path. First thing I mentioned in coordination with Jose Vicente was that Minsait would not be sold, so much so that, well, thanks to the work of the 2 people leading here, Jose Sebastian and Luis Fernandez, we're really turning the company upside down and creating more value out of the services rendered, which was very much needed. And this is what these we are doing. So the investments in Minsait are precisely the investments needed for the goal of the company, which is for them to become the second pillar for Minsait.

Indra is not going to focus only on defense and it's not going to stand on one pillar. Minsait, it's one company with two pillars today because IT is a very important pillar for it. There are lots of technologies around defense setting that will require IT, and a growing activity within defense is cyber defense. Cyber defense can be used by an insurance company or in a households. Everybody uses cyber defense. And in a more professional -- law enforcement agencies use it as well. So Minsait is a priority for us. It's core to the company. And it's just as important as defense.

On CapEx, we mentioned EUR 400 million. So how is that made up? In factories, vertical integration on the part of the co-business. And that's going to be over EUR 100 million of the approximate EUR 300 million. Or everything else, labs and all the other investments in radar facilities. So there's that. But that CapEx is EUR 100 million for machinery and EUR 300 million for the rest.

Great. We've gone beyond time, what we have. So if you want to close the meeting?

Yes, please to go ahead. Thank you very much. Thank you. And see you in June.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good morning. Welcome to Indra's 9 Months 2025 Results Presentation. I now hand the conference over to Mr. Ezequiel Nieto, Head of Investor Relations. Please go ahead.

[Interpreted] good morning, and welcome to Indra's earnings call for the first 9 months of 2025. My name is Ezequiel Nieto, Head of Investor Relations. Let me first call your attention to the current slide, which contains the legal framework under which this presentation should be considered. Let me now introduce today's speakers, Jose Vicente Los Mozos, Indra's Chief Executive Officer; and Miguel Forteza, Chief Financial Officer. Jose Vicente, you have the floor.

[Interpreted] thank you very much, [ Equa ]. Good morning, everybody, and welcome to Indra's 9 Months 2025 Results Presentation. Indra has continued to grow and make solid progress in executing our strategic plan leading the future delivering financial results in line with our guidance and achieving significant business milestones while we keep on transforming the culture of our company.

Starting with the financial results. So what I must say is that we are going to overcome to have better results than the ones we have set for 2025. So the first question you might ask is why are you not following the guidance? Well, our objective now is to get ready for the new programs, which require operational expenses and investments. And our priority today is to get ready for the future. Our backlog and intake have grown at double digit compared to the first 9 months of 2024. And specifically, the backlog has grown by 35%, partly due to the consolidation of TESS. And intake by 20%. These figures are prior to the PEMs, the specialization programs. Revenues grew by 6% and EBITDA and EBIT by 10%. Operating profit has grown by 11% in absolute terms and the net profit reached EUR 291 million, 85% compared to the first 9 months of 2024, in part due to the consolidation of TESS. Furthermore, with the forthcoming contracts under the special modernization programs, our defense backlog will exceed EUR 10 billion during 2026.

In terms of business milestones, I would like to highlight the main achievements in the implementation of the first phase of Lead in the future. We are implementing with a great commitment on the part of our teams. The first pillar of the strategic plan is Indra's focus on aerospace and defense. In defense, between September and October, we were awarded a prefinancing of 30 special modernization programs. Indra received over EUR 4.2 billion as coordinating company and a further EUR 3.6 billion through joint ventures in which we participate. Total, we will receive EUR 7.8 billion. And we also aspire to participate as subcontractors in 12 additional programs.

So out of the 31 programs, we are going to be involved in 29. And this award strengthens Indra Group position as a national benchmark in defense and as a driving force in Spain's industrial ecosystem. And that's something we saw yesterday, over 600 companies participated in the second meeting and being one of the biggest amount of companies in the area of defense. And this is going to be the starting point to become also reference -- European reference in defense. And these results are the outcome of months of work.

We have a streamlined supply management, and we have concentrated spending among key partners. And we must highlight that 77% of defense procurement was sourced from domestic suppliers, and we are tripling our industrial and technological footprint in Spain, enhancing our production and delivery capacity and increasing our regional presence nationwide. Another strategic pillar of the plan is portfolio rotation. And in July, we completed the acquisition of [ AirTech VAS ], specialized in unmanned aerial systems such as the Tas family. And we will also be closing the acquisition of Ispasadistar in the fourth quarter, strengthening our position in a space and secure communications. And in parallel, we are continuing to roll out Indra, consolidating its commercial positioning and its role within the group's technological growth. And at the same time, we are expanding our industrial footprint to reinforce our production and delivery to prepare to -- for the growing demand.

As well, an example I'd like to share with you is the launch of our first automated radar production line in Corda with an annual capacity above 100 Nus radar. And as you know, this radar is a benchmark that will become the future anti-aircraft system, both in Spain and in Europe or the launch of a new LTR 25 radar line with a capacity of five radar per shift.

And specifically, we will be investing more than EUR 150 million over the next 2 years in Spain. And in the United States, EUR 100 million in our factors of Vigo and [indiscernible] and EUR 50 million for a new plant in Kansas for mobility and ATM. Another key element is our investments in R&D&I, where in 2025, we will be investing between 8% and 10% of our annual revenue.

Let's now look at these items. If we focus on the defense area, we have advanced in our position as a European reference group. As you know, the sector is going through a decisive moment driven by a significant increase in investment in Spain and Europe. And there is a clear bet to strengthen technology and industrial capabilities. And in this context, if we take a look at Spain, the government through the industrial and technological plan for the security and the defense has awarded 31 programs to modernize the capabilities and the equipment of our armed forces. Out of them, 16, which is 66% will be led by Indra or joint ventures in which we participate. In addition, we will take part as subcontractors in another 12 programs, reinforcing our presence across the entire value chain. This achievement consolidates Indra group as one of the main drivers of Spain's defense industrial ecosystem like Airbus or Navantia in their respective domains, and it encourages us to continue to strengthen our industrial and technology capabilities contributing to Spain sovereignty and security.

Within this context, I would like to highlight five especially relevant programs. First, the joint tactical radio system that will provide our armed forces with secure and efficient communications, ensuring real-time information between units in the field. And second -- sorry, this program will allow all our armed forces to be able to start using this type of radio in the future. And second, the multidisciplinary connectivity in our security systems program and the anti-air artery operation center system, which will modernize the 18 systems of the Army and will create a single integrated one, enabling a more efficient and coordinated a combat control.

Third, the next-generation integrated air system, which will allow us to continue with the studies and technology packages of new generation weapon systems within the Future Combat Air System, FCIS. This is a key project for Spain's technological and strategic autonomy. And fourth, the truck support vehicle awarded to TESS for the manufacturing of a multipurpose a vehicle that we replace the Armes Amo Transport EOA, showing the State commitment to this program. And finally, the advanced manufacturing program in Sustainable Land Mobility 1, which foresees new self-propelled howitzers on wheels and the replacement of current ML109A5 units. And this program has been awarded to a joint venture formed by Indra and Escubado Mechanical and Engineering. And these programs represent a quality leap in the technological capabilities of our armed forces and position Indra Group as a benchmark within the defense industrial ecosystem.

As I have mentioned, we have made 180 degree of our assessment and this is one of our capabilities. And we have developed what we are doing in the automotive industry. A clear example is our supply chain. In under a year, we have made a significant progress in the management by concentrating more than 90% of the defense expenditure in fewer than 550 Tier 1 suppliers, that's 1500. This optimization relies on a tiered structure that mobilizes a substantial portion of the national industrial ecosystem, ensuring a solid, efficient, collaborative and competitive chain. And within this plan, we haven't left any company behind. This modernization has been used to make sure that we can all work in a more organized way. And our focus has been on strengthening our domestic supplier network.

In 2025, 64% of Indus total procurement volume has come from Spanish suppliers. We have increased by 14 percentage points the previous year. And in defense, this proportion is even higher. 77% of procurement are sourced from national companies, and our target is to surpass 80%. Through these advances, we reinforce Indus Group's role as a driving force in Spain's industrial ecosystem by fostering collaboration with SMEs, start-ups, universities and research centers as we showed yesterday in the event we held with the Spanish entrepreneurial ecosystem.

So now is the moment to escalate our manufacturing capabilities to make sure Indra becomes or turns what used to be an industrial company and now -- well, now we're going to add this industrial DNA that we truly need. And we are strengthening our Indra's industrial and technology capabilities through our ambitious plans to triple our industrial footprint by boosting our production and delivery capacity.

As we -- and it was noted by the European Commission, the European Union has around 52% of the defense capabilities it requires, which highlights the urgency of reinforcing our industrial base. Specifically in Spain, we have decided to open several production and technology centers distributed across our territory. In Hon, we are creating a production hub for the design and manufacturing of land platforms and vehicles throughout their life cycle. And I can mention today that before year-end, we will start with the first operations of 8x8 vehicles in our plant, which shows how agile we are transforming our industrial centers.

In vehicle, we are reinforcing our technology center to specialize in electronic warfare counter UAS systems, hardware design, microelectronics and command and control systems. And we are also participating in the development of gallium nitride. And in Lugo, we are expanding our air drone for ground and flying testing in collaboration with Inter. It's been designed to be able to test all of Intra's portfolio. In Barcelona, we are strengthening a specialized center -- sorry, a center specialized in communications space and cyber defense. In Ceivile and Malaga, we are creating a center dedicated to advanced software focused on space applications and unmanned aerial systems, also supported by AirTech DES in Cordoba. We are opening a new production site to increase our capacity to manufacture radars, command centers and mechanical structures. And within radar manufacturing, our objective is to have a excellence center for European radar manufacturing. And last in [indiscernible], we continue enhancing our capabilities in aftermarket activities and Eurofighter support with the new SMT car production line. To be able to support this expansion, we expect to hire more than 3,000 new professionals in the next 3 years in Spain in all our geographies.

And internationally, I would like to announce an investment of around EUR 50 million for a new plant in Kansas in the United States to be able to support the air traffic management division in the manufacturing of radars for the American market and Radio and Mobility division with free flow tolling systems. We are already present in over five states in the United States in tolling. And this plan will generate over 200 new jobs in the United States.

Let's now take a look at a new product, IndraMind. This new product that we are very proud of, it's a dual-use line, both civil and military. As we were -- as presented in the first half 2025 results from Indo Group, we continue to drive our advanced artificial intelligence platform, IndraMind. Our ambition is to offer advanced software solutions that are AI-powered that will enhance decision-making and ensure the reliability of mission-critical operations. In the recent months, we have consolidated its commercial positioning aligned with three key market trends in Production Solutions, cognitive superiority, intelligence and decision, autonomous operations and cyber resilience. IndraMind maintains a dual-use focus, addressing both civil and defense needs. But I would like you to know our value proposition a bit better. And that's why in the afternoon, I'd like to invite you to follow our IndraMind presentation event. As you can see, you have the link, the connection link on this page, and that will take place at 1800 hours Spanish time.

As a preview of what we will be showing in the afternoon, I'd like to share with you a military use case of IndraMind. It has been applied to intelligent combat systems designed for mission planning, autonomous guidance and decision support. IndraMind will enable us to simulate complex scenarios through the massive capture of data from multiple sources, satellites, radar, cameras and ground space networks, allowing a more precise and efficient planning. Moreover, it will facilitate the orchestration of fully autonomous operations through collaborative platforms that operate with distributed decision-making.

In summary, this use case allows us to first model and simulate scenarios to anticipate situations and support the decision-making process. Second, to build and orchestrate autonomous and collaborative platforms through edge computing and deployable communication nodes. And third, they will be able to ensure protected communications through secure applications and end-to-end encryption.

In the afternoon, we will go into greater detail on these and other civil applications during our IndraMind event. And let me now briefly recap the progress achieved in the first phase of Leading the Future that we presented on March 6, 2024, with the first phase lasting until March 2026.

Thanks to these advances, we continue to make solid progress on the pillars of leading the future, reinforcing Indra's focus on aerospace and defense. We have also created a new Space division with end-to-end capabilities following the acquisitions of Demos, Espzade and Eastpazade. The closing of the Eastpazade and [indiscernible] transaction is expected to take place in the final quarter of 2025. At Vincent, we remain focused on high-value offerings, expanding on our digital solutions and advancing the potential divestment of nonstrategic businesses. And in parallel, we have reorganized our digital capabilities to be able to cater for the needs of all the business units and capture efficiencies through the new cross-cutting function, tech operations, which has already been deployed under the leadership of Sebastian Valmonde. We are strengthening our international presence. We have introduced the new role of International Director, and we have simplified our model. We have gone from 27 to 19 units to increase in agility and focus. If we continue with our portfolio rotation through our acquisitions such as TESS and AirTech VAS in Defense or Demos and Ispasadistar in space.

We have also launched a joint venture in the Middle East with Edge Group for the design and manufacturing and selling radars to non-NATO countries besides other operations that we complement and reinforce our value proposition. We have also increased our investment in R&D with milestones such as the creation of Infra and the deployment of the Indra technology hub with around EUR 829 million already invested in R&D, aligned with our goal of reaching EUR 1.2 billion by 2026. And we are also strongly focused on attracting critical talent. throughout our country, and we have already onboarded 3 out of the 5,000 new hires planned for 2026.

If these three new hires, if we add to those 3,000, the other 3,000 we are going to be adding, as you will see, we would have been able to have hired over 5,000 people in our country. And to finish, I'd like to share an important piece of information, the acceleration of the market marked by a historic increase in defense investment combined with a sustained and rapid progress across the pillars of our Leading the Future strategic plan, both in operational and financial terms, places us in an exceptional position. And in fact, we expect that by the end of 2025 on a pro forma basis, we will have nearly achieved the financial targets initially set for 2026. And moreover, Indra Group's perimeter has evolved significantly.

We have executed key acquisitions in defense and aerospace, and we have launched new business lines, Indra land vehicles, Indra weapons and ammunition and Indra mine that expand our industrial technological and digital capabilities. And last, these achievements have translated into a substantial value creation for our shareholders.

Indra's share price has appreciated by more than 190% since March 6, 2024, compared to 81% in the Defense index, 58% in the IBEX and 16% decline in the IT sector. This has meant that we have tripled Indra's market capitalization in the strategic plan period, reaching around EUR 9 billion this week. And that's why I would like to thank our shareholders for their trust.

Within the plan framework, the EBITDA contribution from defense and ATM has grown and it has now reached 51% of Indus group of Indra Group. And we expect this share to increase further to the group's EBITDA in the medium term. And all of this means that the internal budgeting work for the Indra Group in 2026 gives -- provide us with financial projections well above the targets originally defined for our 2026 strategic plan. So we could say that we have completed the first phase of the plan 1 year ahead of schedule. And we have already started working for the future. T

his would not have been possible without the full support of our Executive Chairman, [indiscernible] Rivano, whose industrial and technological vision I fully share for our company. And together, we have instilled a new renewed ambition across the company that reflects the extraordinary commitment and dedication of all the people who made the Indra Group. I would also like to thank the Board of Directors for the ongoing support. As a result, Indra Group is ready to take the next step in its strategic plan, moving from the focus phase to the scale-up phase 1 year earlier than planned from 2026 to 2027 to 2026, a new stage that will allow us to multiply our reach, accelerate growth and consolidate our leadership in the strategic sectors where we operate.

And therefore, I am pleased to announce that we will hold a Capital Markets Day in the second quarter of 2026, a key milestone in the company's transformation journey. During that event, we will present the second phase of our strategic plan, Leading the Future Scale Up. We will also share at that point, the road map that will help us achieve the EUR 10 billion in revenue before 2030 as well as our strategic priorities to improve operating profitability and cash generation.

Likewise, we will like to show you how this new stage of the strategic plan will continue to generate value for our shareholders.

Let us now review the financial results for the first 9 months of the year for the Indra group. The figures reflect a solid performance, allowing us to reiterate all the financial targets set for 2025. Our backlog grew by 35%, including the impact of the consolidation of TESS, which provides us with greater stability and visibility for future growth. These results were mainly driven by the strong momentum in Defense and air traffic management businesses. Order intake increased by 20%, double-digit growth in ATM, Defense and Mobility. Revenues rose by 6% with growth across all business areas and stable performance in mobility. We have also improved our operational profitability. The EBITDA margin reached around 11.2% and EBIT margin 8.8%, both up 10% in absolute terms. And this EBIT could have been higher. But as I mentioned, our priority right now is to get ready for the plans in operational expenses, training and CapEx.

And this shows that besides tailwinds, we are working. All those of us involved in the Group are working to improve our efficiency and create a more balanced business.

Net profit reached EUR 290 million, an increase of 58% compared to 2024, thanks to our improved operations and also the incorporation of TESS. In terms of cash flow, we generated EUR 57 million, slightly less than 2024 due, as I have mentioned throughout the presentation, due to the work that we are doing in preparation for the increasing investment in defense. And finally, that debt remained practically neutral, which is a remarkable milestone in the context of strong sector growth.

If we take a look at our sales figures in detail, we have achieved a growth of 8% in local currency and 5% in organic growth. We can also see that this positive trend has been reflected in the third quarter of the year with sales increase by 8% in local currency. In terms of the distribution -- geographical distribution of our revenue, Spain remains our largest market with a growth of around 5% compared to the same period last year. In international business that already represents 50% of total sales, we can see a special strong growth in Europe, has grown 11%.

By division, Defense and ATM account for more than half of the contribution to EBITDA, reinforcing their growing weight in line with the objectives of our strategic plan in terms of the evolution of our workforce. We have achieved an evolution of 2% in revenue per employee compared to September 2024 and 3% compared to the end of last year. And we keep on attracting the best talent in the market aligned with our strategic priority of becoming an employer of choice in Spain. And as a result, we have increased our headcount by 5% compared to the first 9 months of 2024, including a remarkable increase in the defense workforce, which has been 35%. And we will continue investing in talent acquisition. And as you might imagine, if we have increased 35% in defense, you are probably able to imagine the next few months and years, our sales are going to be going to grow similarly.

And now let's continue seeing the results of our business by segment during the first 9 months of 2025. As you can see, our defense business delivered a robust growth in order intake, 47%, driven by Eurofighter programs, radar contracts in Germany and Oman and the inorganic contribution of Damos. Revenue increased by 14%, supported by Eurofighter, space and weapons and ammunition. And in addition to this double-digit growth rates, the EBITDA margin stood close to 20% and EBIT margin reached 17%. Those are figures that are true benchmark in the European defense market.

In terms of ATM, the ATM division, intake -- order intake rose sharply, 57%, mainly due to the new radar contracts in the U.K. and Spain as well as radar systems in the United States, which position us as a benchmark for the transformation of air traffic that will take place in the next few years in the United States. And that's why we have already decided to invest in the new plant in Kansas. The sales increased by 16%, driven by this double-digit growth, both in the Americas, thanks to the United States and Canada and Hi-Tech and in Europe, including the United Kingdom, Belgium and Germany. And the EBITDA margin has reached 15.3% and the EBIT margin 12.4%.

And now take a look at the Mobility division. Order intake rose by 10%, boosted by urban transport management systems in the San Francisco Bay Area as well as projects in Chile, Colombia and Romania. And we are still waiting for new mobility programs within Europe. Sales remained stable with growth both in Europe and Spain that offset the declines in the Americas. And margins have narrowed slightly in EBITDA margin, 6% and in EBIT margin as well. This is a dimension that we are working on.

And if we take a look at [indiscernible] results, we have a stable progress expanding our backlog, order intake and revenue with a growth of 14.7%, 6.7% and 3.1%, respectively. If we take a look at the other companies of the sector in our country, we can see that we are above any of our competitors. And likewise, the profitability of Minsait also improved slightly. EBITDA margin has gone from 7.8% to 8.3% and EBITDA -- sorry, an EBIT margin from 5.6% to 6%.

We can see a clear potential of further improvement. And under Luis Fernandez' leadership, I am sure this transformation will take place in a short time. It's going to be efficient. And that's why our current priority is to achieve greater efficiencies, advance on the cost-cutting deployment of our digital capabilities and getting even closer to our clients. And this is Indra Group's situation. And now I would like to give the floor to Miguel, who will provide further detail on the financial information. Thank you.

[Interpreted] thank you, Jose Vicente. Let us now continue with the main financial highlights for the first 9 months of this fiscal year. Starting with free cash flow. During the first 9 months, we generated around EUR 57 million, slightly below the figure recorded in the same period last year. However, as we mentioned in the previous quarterly earnings call, the evolution of the fiscal year follows a pattern consistent with our historical series, particularly considering the seasonality that typically affects this metric during the first 9 months of each year and which ends in a very strong fourth quarter. Therefore, we ratify our expectation of achieving free cash flow generation above EUR 300 million for the full year 2025.

Regarding working capital, although the evolution of days of sales outstanding has not been as favorable as in the same period of 2024, this variation is mainly explained by the increase of inventories in defense and ATM or air traffic due to projects with longer life cycles as well as by the rise in trade receivables. As a result, we stand at plus 21 days compared to plus 6 days at the end of September 2024. As shown on the slide, the consolidation of TESS had a significant effect, adding 46 days of sales in inventories and 52 days of sales in the heading trade receivables.

Let us now analyze the evolution of net financial debt during the first 9 months of the year. Over this period, net debt stood at approximately EUR 140 million compared with a net cash position of around EUR 86 million at the end of 2024. And this change is mainly due to the contribution from operating cash flows, which added EUR 348 million, the negative impact from working capital variation for EUR 172 million. And finally, nonrecurring financial effects associated with investments amounting to about EUR 257 million.

As a result, the net debt-to-EBITDA ratio remains at very solid levels, standing at around 0.2x. This reflects an almost neutral financial position, very similar to the one posted in September 2024. Finally, regarding the structure of our debt, we continue to reduce the average cost of gross debt now at around 3.2%, down from 4.2% at the end of 2024.

Consequently, the average debt maturity has extended to around 3.2 years compared with 1.5 years in the same quarter of the prior year. On the other hand, we closed the quarter with a cash position of approximately EUR 604 million. Finally, the company holds around EUR 790 million in available credit lines, including financing from the European Investment Bank of roughly EUR 385 million with a defined allocation of funds. We now conclude our presentation and move on to the Q&A session.

[Operator Instructions] Our first question comes from the line of Patrice Rodriguez from Bestinver.

I have a question about the PEM programs. You said that we already know the loans that will be -- or that were granted in 2025. Can you give us some color as to the percentage of total programs in connection with those loans? Have you received any details from the government concerning these PEMs? Are there any figures that you can share with us? And on the other hand, I would like to know the outlook for 2026. I understand that you are planning to invest 2% of GDP next year. I would like to know whether you have any outlook for 2026 and subsequent years?

[Interpreted] on the contracts, well, we have seen by the government. We have a joint radio systems. It's a contract that compared to the funding of EUR 768 million, it accounts for 65%. And this is the first phase because we are going to renew 100% of the networks of our army. So we expect more phase in the future. A second program, the multidisciplinary connectivity. It's a joint venture with Telefonica with a contract of EUR 785 million with a funding of EUR 380 million that accounts for 40% -- 48%, right. And the crypto capability is EUR 159 million program through Apicom with a funding of EUR 67 million. As contracts are launched, we will inform them.

Are we working for the PMs from the specialization programs. Of course, we are. I believe there's a commitment of the government of Spain and the President mentioned that they are going to invest 2% to keep on adding an increasing capability. So we are working with that hypothesis in mind, and we are working around two main axles. Space programs, we believe that we have an important element to play with here because within the European program, Phase 1 is to improve space capabilities in Europe and our country has something to say there as well. That's why we are working to make sure the SMPs include space programs, and that's why we've made the investment. We have paid EUR 725 million for Ispasad and controlling Izad and the anti system. We have a first phase ready in Spain with 18 teams, but with one of our European competitors, we are the anti-air system that's better prepared. And not only are we thinking about selling in Spain, but we are planning to sell in Europe. And we believe that in the 2026 plans, the first 18 systems that are our part of the plan in 2025, we believe that those -- they are going to be expanded throughout all the Spanish air systems. Those are two examples on which we are working, and that's why we are investing. In the case of the anti-air system, we are investing in important and robust production lines to be able to respond to the demand that the Spanish and European markets are requesting.

Next question from Juan Cánovas from Alantra Equities.

[Interpreted] going back to the prior question, could you give us more detail as to the percentage that Indra would hold in these programs, PEM programs? And concerning contracts in Europe, could you please let us know which your target is in Europe? Or how can Indra achieve the same success in Europe as in Spain?

[Interpreted] On the joint ventures. Well, as you know, once the contract is ready, we need to develop the industrial plan. So when the industrial plant is developed, we will be in a situation in which we'll be able to tell you which is our share we're going to get. Those that are led by us, those are programs we consolidate and we have to provide both the Ministry of Defense and Industry, our industrial plan because let's not forget that we need to deploy over 30%. With 30% have to be in the hands of Spanish suppliers. So as the contracts, we work on the contracts, we'll be able to share -- tell you which is the share -- the shares are throughout the value chain.

On European programs, I'd like to share with you some examples. spatial vigilance raiders and [indiscernible] two in Spain, and we believe that within the European program, we have been the first company in Europe, and that's what I showed Commissioner [indiscernible] and I showed it in Brussels a few weeks ago. We have created a portfolio with all our products, all the products that can be used within the program. And where is relevant? Well, we've already shown it in riders that do use civilian, military and the LTR 25 and the Lama radar. Those are radars that are at the same level as any other radar manufacturer in the world, may be American or European. The NTS system, well, is advanced, thanks to the joint venture we have with Ecano because otherwise, if we did not have that joint venture, we couldn't cater for whole programs within the aerospace. And that's why we are working on the possible operation with E because that's going to add to our product capabilities, and it will include an industrial DNA that the speed at which we are transforming will be extremely helpful to keep on catering for the needs of Indra objectives.

Next question from Carlos Trevino from Santander.

[Interpreted] I would like to deep dive into defense possibilities, taking into account the backlog that you announced for 2026. I believe that those EUR 10 billion would account for pure business for Indra regardless of the participation of other companies in such projects. So do you expect to include all the PEM projects into the backlog that have been awarded in Phase 1? Or do you think that there are other projects that could be assigned in subsequent years and therefore, would not be included in the 2026 backlog? I would like to know about the average life of such backlog, taking into account that we are talking about multiyear projects. And considering additional cost in order to address future growth, can you quantify how that has affected your operating profit for the year and what could happen going forward?

[Interpreted] Well, we have to make a difference between the washer and intake -- order intake. When we are saying that it's over EUR 10 billion, we are not only thinking about the plans. So we think about SFE and other international programs that -- in which we're in. And that's why in the Capital Markets Day, we will be able to provide more detail. Once we know all the 2025 programs. So once we know safe orders, we will be able to provide figure, but I believe that EUR 10 billion is quite conservative. If we take a look at everything that's going on in Europe, these are 3- to 6-year programs. And in many of the cases, this is just the first phase.

So let's talk about specific programs, the radio program. That's the first phase. In the first phase, with the first phase, we won't be able to transform 100% of the radio systems. There are going to be more phase in the next few years. So the anti-aircraft system with 18 anti-aircraft systems, that's not enough for the Spanish system. So that's one first phase. And well, it is the Ministry of Defense, the one that will set its priorities, and they will explain which are the priorities for the armed forces. What we are doing within these programs, this benchmark programs is not just thinking about Spain, but actually thinking about Europe. And taking a look at some international markets because the volume effect will improve our competitiveness to reach markets that maybe are out of our reach today.

Next question from David Lopez Sanchez from JB Capital.

[Interpreted] I would like to follow up on the prior question about the backlog of EUR 10 billion for 2026. Would that include Indra's interest as main contractor would include its participation as a member to joint ventures? And what about the financing that has been recently approved for defense programs? Can you give us some color as to how that details with your backlog and the amounts that you expect will be reported in the last quarter of 2025?

[Interpreted] In the EUR 10 billion, we include everything, both joint ventures and the ones in which its Indra. So that's the whole business figure. In terms of funding, Miguel, please?

[Interpreted] Okay. Let me explain the dynamics behind this prefinancing in order to get it right. Each contract will be associated with an account where the Ministry of Industry will be making deposits for the prefinancing that has already been granted. Such accounts will be independent accounts, restricted cash accounts, so to speak, that will only be available as stated explicitly in the agreements. We don't know the details yet, but all the milestones will be set out under agreement. Therefore, that restricted cash will be released according to such terms. When that happens based on certified milestones authorized by the Ministry of Defense, they will be recorded as cash flows for the company.

Now while the financing is on the restricted cash accounts, we are going to have a neutral financial effect with other financial assets and liabilities that will have no effect whatsoever on our debt ratios. As you very well know, these ratios are not impacted by such advanced payments. And as for the amounts concerned, they have already been disclosed. There are some prefinanced amounts for each contract, and there are some allocations that will be made in 2025 all the way to 2031, that is a full breakdown of such amounts.

[Interpreted] Something I forgot to mention to Carlos Javier Treviño of Santander is the impact of the preparation for the special modernization programs. I want you to know that operational expenses made in the third quarter. Well, I ask the team to recover to have the same EBIT as the one we had in 2024 without the preparation, so above 18%...

Next question from Carlos Iranzo Peris from Bank of America.

I have two, if I may. On the more than EUR 10 billion defense backlog in 2026, any color about how many billions or what is the percentage of this backlog that is coming from the PEM programs versus non-PEM? And then the second question, just coming back to the path to EUR 10 billion sales. I mean you already mentioned back in February this year that you could deliver EUR 10 billion sales in 2028. So I guess post PEM allocation, clearly, the growth outlook has strengthened significantly. So should we then think that it could be possible to potentially achieve those EUR 10 billion earlier?

[Interpreted] Let's try to understand this correctly, the EUR 10 billion, most of them are going to be PEMs and specialization programs but not just that. We have other elements in which we're working like SAFE or other European programs or international programs. But the base that we take as a benchmark and I still believe it's a conservative figure are the 2025 PEMs. On the EUR 10 billion, we never said 2026. What we said was that our ambition was 2030. Today, I can say, and our President mentioned already that his intention was to be able to get there by -- in 2028. And that's what we're working towards. And I believe that from today until the Capital Markets Day, we'll be able to tell you when we're going to reach those EUR 10 billion.

Next question from Michael Briest from UBS.

Just on going back to the loan program. I think I heard you say that on the MC3 program, you've got loans of EUR 380 million and the contract value is EUR 785 million. Is that ratio of loan to order roughly the same across the entire EUR 7 billion loan book? And then just in terms of test focusing on the here and now, could you talk about the deliveries in Q3? I know there were 11 in Q2 and you were hoping to do 60 as a minimum this year, but it doesn't look like there was much contribution in Q3. And therefore, do you still think you'll hit 60 units for the year?

[Interpreted] First of all, Miguel will explain the financial part on vehicles, our commitment was to be able to provide one division or 57 vehicles and reach 70. That's what we are working for. And that was our commitment, not just Indra's commitment, but the rest of the partners that are part of TESS. So [ Gomi ], [indiscernible] and Scana because this is a commitment that has to be a commitment by the 4 companies, although it is true that starting in July, Indra is leading TESS. On the figures...

[Interpreted] Okay. Let me supplement the CEO's remarks. As you know, in Q3, there were no significant revenue coming from test, but we believe that, that will come from future deliveries. As the CEO mentioned, we expect that to take place in Q4. As for financing ratios and contracts, we provided an example concerning the EUR 380 million financing for a total contract of EUR 785 million or 48%. You are right. However, we should take into account that we need to wait for the agreements to be formalized. We need to know exactly the terms and conditions governing those agreements. Otherwise, it will not be possible to start out a clear ratio and therefore, think about an increase in our backlog. We have to weigh whether phases will be established, whether they will have a full or partial scope or outreach. Nonetheless, as soon as we formalize those agreements, we will keep you posted because all that information will be included as part of our backlog and order intake. For the time being, we cannot report a standard ratio because we believe that these figures might change significantly in some cases and from one contract to another, there might be variations. Next question, please.

Next question from the line of Jessica Agrawal from Goldman Sachs.

I just have two on basically the other -- like the segments. First of all, the air traffic management. It was like a slight decline organically, but I understand it can be lumpy. So how are we tracking when it comes to that like expectation around a low double-digit growth in this segment? And how do you see that developing over the span of next 12 to 18 months? And the second one is basically like any update on Minsait as in like what exactly we completely understand there is a part like where you want to keep the core and there are some businesses which might be [indiscernible] -- which might be like available for sale. So any updates on that would be helpful.

[Interpreted] it is true that as for ATM the past quarter was not as solid as we initially expected, but we should take into account that in the first half of the year, ATM revenue grew by 25%, 26% roughly. And therefore, that is what we need to take into account. However, as for the end of the year, we expect a double-digit growth in ATM. Maybe you might remember that at the beginning of the year, we said that we expected a high single digit concerning revenue coming from ATM. Now however, we estimate a double-digit growth by the end of 2025.

As for our outlook with regards to the next 12 to 18 months, it's pretty clear as the CEO pointed out, we expect the same growth as the one we estimate for other regions such as the United States, where we said we are going to be making an investing effort in the Kansas plant through the contracts that have already been awarded to Indra, taking into account the American Aviation agencies, they are going to be investing up to EUR 10 billion in total. And we're also focusing on Asia Pacific as another region.

[Interpreted] Just to reinforce what Miguel mentioned, when we're talking about ATM, we cannot focus on a quarter because we don't really control the contracts. We are talking about over 50%. So it's normal in one country to be ahead of time, some others a bit lag behind. It's important to see the difference year-to-year. And what I can say is that in ATM, today, we have the most advanced solution in the market. And I'm saying this not just for the sake of it, but I came back from the United States 2 weeks ago, and I can say that airport authorities are very happy with Indra solution. And we have NAF Canada as well and in London, we've got Eurocontrol, the Middle East. So it's not happening by chance that we are in most markets in the world. So I'm not concerned on nonstrategic assets at Minsait.

Well, we -- both the President and myself, we know which are the assets that are not nonstrategic. There are several processes open. And if there's a proposal that satisfied the needs and the expectations of the company, we will carry it on. We are not in a situation which we can -- we want to lose value or just lose assets. If we understand that there's a proposal and that amount helps us invest on another asset that generates more value for our shareholders, we will do it. And we will inform you as it happens. So at a point in which the company is getting transformed. And we are talking about 20%, 50% of contracts, 100% in defense. We are getting our portfolio organized. We are 1 year ahead of schedule in our strategic plan. And at the same time, we haven't increased our leverage at all. So well, I believe that there's going to be a business case in the next few years to see how in 2 years, we turned around the company.

Next question from Nicolas David from ODDO.

The first one is regarding IndraMind. Could you help us understand the magnitude of the opportunity in terms of order intake you see regarding the contracts which are part of PEMs linked to digital and cybersecurity? And what could be the time frame for those allocations? My second question is regarding CapEx. Now that you have a bit more visibility on the contract we signed, what kind of CapEx to sales do you expect in the coming years? Should it increase? Or is the level of 2025 something we should consider for the future?

[Interpreted] IndraMind is a solution that Europe needs for its technology sovereignty with that dual use for civil and military. So with the President, we assessed in Indra within Minsait, we have many use cases, both civil and military, but we have a platform. And I believe that for that European sovereignty, IndraMind can provide a solution, both in military and civil cases because we already have the use cases. So on the information, well, in the afternoon, there's an event at 6:00 p.m. Spain time, and I don't want to advance any of the things that we're going to be mentioning in the afternoon because our teams are working and fighting to explain the market what IndraMind is going to be, what we are going to do with it and what we expect. And I don't think it is right to reveal beforehand what we're going to be communicating in the afternoon.

So those were the results for the first 9 months of the year. And as I mentioned, well, first of all, I want to thank our teams. Indra group has nothing to do with what I was here before I got here. The arrival of our President in January has accelerated it because we share a vision and we share a project. I believe that yesterday's event with the companies is a clear turning point of what Indra means in the Spanish sector. And we I'll finish with the idea of going to be sold or not. We are working together. We have turned ATM into a leading company globally in its sector. We have transformed mobility with benchmark projects like the projects in the United States or some other projects we are about to launch in Europe that are going to be relevant from a global perspective in defense, we did our portfolio rotation.

For example, we are experts in raiders at a world level, we are working on anti-aircraft systems. We have entered the space and securing communication. And the result of it all is that we have advanced in a year our strategic plan, and we are already working on a road map towards those EUR 10 billion.

One year ago, none of you expected Indra to achieve EUR 10 billion before 2030. And we are going to get there. But not only are we're going to get there in terms of sales, but we are going to be leaders in terms of profitability and with a very low debt. And that's possible, thanks to the work of the whole team, and we will keep on working.

Thank you very much, and see you in the annual results presentation and in the second Capital Markets Day. Thank you very much for your trust.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]