| Hensoldt AG (DE000HAG0005) | |||
91,50 EURStand (close): 01.07.25 |
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| 08.05.25 07:06:21 | Hensoldt AG (HAGHY) Q1 2025 Earnings Call Highlights: Strong Order Intake and Strategic Growth ... |  |
| Order Intake: EUR701 million in the first quarter. Revenue: Increased to EUR395 million, driven by strong performance in the optronics business. Adjusted EBITDA: EUR30 million with a margin of 7.6%. Book-to-Bill Ratio: 1.8 times, with a backlog over EUR6.9 billion. Core Revenue Growth: 31% increase, 6% organic growth. Adjusted Free Cash Flow: Minus EUR107 million, influenced by working capital investments. Optronics Revenue Growth: 45% growth in the German entity. New Financing Agreement: EUR1.8 billion syndicated loan, secured up to 2032. Guidance for 2025: Revenue expected between EUR2.5 billion and EUR2.6 billion, with an adjusted EBITDA margin of around 18%. Pipeline Growth: Expected to increase by EUR3 billion to EUR40 billion for 2025-2027, and by EUR9 billion to EUR55 billion by 2030. Warning! GuruFocus has detected 6 Warning Sign with DNBBF. Release Date: May 07, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Hensoldt AG (HAGHY) is well-positioned to benefit from increased defense budgets in Germany and Europe, with a pipeline expected to grow significantly by 2030. The company has entered a strategic partnership with Quantum Systems, enhancing its capabilities in software-defined defense and opening international market opportunities. Hensoldt AG (HAGHY) reported a strong order intake of EUR 701 million in the first quarter of 2025, driven by key contracts such as the Eurofighter programs. The company's new logistics center is expected to significantly enhance capacity and process efficiency, supporting future growth. Hensoldt AG (HAGHY) has successfully refinanced its debt, securing long-term financial stability and flexibility up to 2032. Negative Points The ramp-up of the new logistics center led to a temporary slowdown in production, impacting revenue and margins in the first quarter. The sensors segment experienced a slower start due to the logistics transition, affecting productivity and resulting in lower margins. There is uncertainty regarding the timeline for increased defense spending and its impact on Hensoldt AG (HAGHY)'s revenue growth. The company faces challenges in scaling production to meet future demand, requiring careful capacity planning beyond 2027. Hensoldt AG (HAGHY) must manage the integration of external engineering resources to free up internal capacity, which could impact operational efficiency. Q & A Highlights Q: What are the main risks or bottlenecks to achieving the ramp-up in the sensors division, and what assumptions are made for the EUR1 billion additional revenues in 2030? A: Christian Ladurner, CFO, stated that there are no substantial risks in the sensors division as processes are improving. The growth is expected to be weighted towards the second half of the year, which is typical for their business. CEO Oliver Dorre mentioned that the EUR1 billion increase assumes a conservative 2.5% GDP spending in Europe, including Germany. Story Continues Q: How should we think about midterm margins if sales reach EUR6 billion by 2030? A: Christian Ladurner, CFO, indicated that historically, margins have increased by approximately 0.5% per year. This trend is expected to continue, although no specific extra work has been done on future margins yet. Q: Are further orders for the Pegasus program part of Germany's defense spending plans? A: CEO Oliver Dorre confirmed that the focus is on delivering the current three aircraft in the Pegasus program. However, discussions are ongoing with the German government about the need for additional aircraft to cover the eastern flank, with potential for 3 to 6 more aircraft. Q: How does the improved visibility on growth impact capacity planning beyond 2027-2028? A: Christian Ladurner, CFO, explained that current capacity planning is sufficient until 2027-2028. They are conducting an "Operations 2.0" exercise to assess future needs, with potential for increased externalization of engineering to manage capacity. Q: Is there an increase in demand for aftermarket products and services in the defense industry? A: CEO Oliver Dorre confirmed a strong demand for aftermarket services, driven by increased product sales and integration into logistical systems. They are also exploring new service models like software and data as a service. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. View Comments |
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| 04.12.23 13:11:04 | Hensoldt AG's (ETR:5UH) institutional investors lost 5.3% over the past week but have profited from longer-term gains |  |
| Key Insights Given the large stake in the stock by institutions, Hensoldt's stock price might be vulnerable to their trading decisions The top 2 shareholders own 50% of the company Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company A look at the shareholders of Hensoldt AG (ETR:5UH) can tell us which group is most powerful. The group holding the most number of shares in the company, around 30% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk). Losing money on investments is something no shareholder enjoys, least of all institutional investors who saw their holdings value drop by 5.3% last week. Still, the 15% one-year gains may have helped mitigate their overall losses. They should, however, be mindful of further losses in the future. Let's take a closer look to see what the different types of shareholders can tell us about Hensoldt. See our latest analysis for Hensoldt ownership-breakdown What Does The Institutional Ownership Tell Us About Hensoldt? Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index. As you can see, institutional investors have a fair amount of stake in Hensoldt. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Hensoldt's earnings history below. Of course, the future is what really matters. earnings-and-revenue-growth We note that hedge funds don't have a meaningful investment in Hensoldt. Our data shows that Germany is the largest shareholder with 25% of shares outstanding. In comparison, the second and third largest shareholders hold about 25% and 5.0% of the stock. Story continues After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions. While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily. Insider Ownership Of Hensoldt While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it. I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions. Our data cannot confirm that board members are holding shares personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO. General Public Ownership The general public-- including retail investors -- own 20% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run. Public Company Ownership We can see that public companies hold 25% of the Hensoldt shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership. Next Steps: While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for Hensoldt that you should be aware of before investing here. But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. |
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| 22.11.23 14:08:12 | German defence contractor Hensoldt sees investment opportunities in AI | |
| (Reuters) - Hensoldt sees artificial intelligence (AI) and analytics as an area with investment opportunity, the German defence electronics maker said at its Capital Markets Day. The producer of radars for the IRIS-T air defence system supplied to Ukraine said on Wednesday that mergers and acquisitions were always important to its growth strategy. "Investment opportunities arise, for example, in the areas of artificial intelligence and analytics as well as in the services and integration business," it said in a statement. According to slides from Hensoldt's Capital Markets Day presentation, the company plans to invest in AI development "across all business for all relevant products and solutions". The company, whose orders have more than doubled since 2019 due to increased geopolitical instability around the world, is eyeing acquisitions in a bid for European consolidation. "With increasing geopolitical tensions around the world, we are facing a time of great uncertainty and an enormous need for defence and security technologies," CEO Thomas Mueller said. Last week, Hensoldt announced plans for a capital increase to finance the acquisition of German military service firm ESG. The partly state-owned defence electronics specialist also confirmed its annual and mid-term guidance at its Capital Markets Day, adding that around 85% of 2024 revenue is already secured by a 5.5-billion-euro ($6.00-billion) order backlog. ($1 = 0.9168 euros) (Reporting by Andrey Sychev and Alexander Huebner; Editing by Miranda Murray) |
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| 18.11.23 07:12:32 | Are Investors Undervaluing Hensoldt AG (ETR:5UH) By 49%? | |
| Key Insights The projected fair value for Hensoldt is €52.67 based on 2 Stage Free Cash Flow to Equity Current share price of €26.68 suggests Hensoldt is potentially 49% undervalued Analyst price target for 5UH is €31.97 which is 39% below our fair value estimate Today we will run through one way of estimating the intrinsic value of Hensoldt AG (ETR:5UH) by taking the expected future cash flows and discounting them to today's value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow. Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model. View our latest analysis for Hensoldt What's The Estimated Valuation? We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 10-year free cash flow (FCF) forecast 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Levered FCF (€, Millions) €173.8m €199.6m €218.0m €230.7m €240.4m €247.8m €253.4m €257.9m €261.4m €264.2m Growth Rate Estimate Source Analyst x4 Analyst x4 Analyst x1 Est @ 5.81% Est @ 4.20% Est @ 3.08% Est @ 2.29% Est @ 1.74% Est @ 1.36% Est @ 1.09% Present Value (€, Millions) Discounted @ 4.9% €166 €181 €189 €191 €189 €186 €182 €176 €170 €164 ("Est" = FCF growth rate estimated by Simply Wall St) Present Value of 10-year Cash Flow (PVCF) = €1.8b Story continues The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (0.5%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 4.9%. Terminal Value (TV)= FCF2033 × (1 + g) ÷ (r – g) = €264m× (1 + 0.5%) ÷ (4.9%– 0.5%) = €6.0b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= €6.0b÷ ( 1 + 4.9%)10= €3.7b The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is €5.5b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Relative to the current share price of €26.7, the company appears quite undervalued at a 49% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. dcf Important Assumptions We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Hensoldt as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 4.9%, which is based on a levered beta of 0.883. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. SWOT Analysis for Hensoldt Strength Debt is well covered by earnings. Dividends are covered by earnings and cash flows. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Aerospace & Defense market. Opportunity Annual earnings are forecast to grow faster than the German market. Trading below our estimate of fair value by more than 20%. Threat Debt is not well covered by operating cash flow. Revenue is forecast to grow slower than 20% per year. Next Steps: Although the valuation of a company is important, it shouldn't be the only metric you look at when researching a company. It's not possible to obtain a foolproof valuation with a DCF model. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. Can we work out why the company is trading at a discount to intrinsic value? For Hensoldt, there are three relevant aspects you should assess: Risks: Every company has them, and we've spotted 1 warning sign for Hensoldt you should know about. Future Earnings: How does 5UH's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. Simply Wall St updates its DCF calculation for every German stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. |
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| 09.11.23 06:56:38 | UPDATE 2-Hensoldt orders slow down, but profit jumps as previous contracts pay out | |
| (Recasts headline and 1st paragraph with profitability, adds more context paragraphs 4-10, peer result in paragraph 11) By Andrey Sychev and Anna Mackenzie Nov 9 (Reuters) - German defence electronics maker Hensoldt on Thursday reported a 7% year-on-year decrease in orders in the first nine months of 2023, but cash inflows from previous contracts drove it to higher profitability in the period. Hensoldt's shares fell by as much as 8% at market open, but then pared losses and were last up 0.6% at 0839 GMT. The company said order intake came to 1.28 billion euros ($1.37 billion) versus 1.38 billion euros in January-September last year. Last year's high base was boosted by the Eurofighter jet and F126 frigate orders, the company - which produces radar and high precision optics used in aircraft, ships and tanks - said. The jump in orders last year, when governments scrambled to increase their defence spending following Russia's invasion of Ukraine, sharply increased Hensoldt's profitability in 2023. Nine-month adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by almost one-fifth year-on-year, reaching 151 million euros by the end of September. Defence contractors usually receive delayed payments for orders as their main clients are governments, which need more time to approve payments for multi-million-euro contracts. The growth drivers in its main sensor segment were TRML-4D radars and multifunction self-protection systems for PUMA infantry fighting vehicles for Ukraine and the German army. In the optronics segment, orders were boosted by optics contracts for Leopard 2 tanks and Norwegian Ula-class submarines. "The need and demand for electronic defence and security solutions to neutralise a wide range of air, sea, land, space and cyber space threats are increasing," Chief Executive Thomas Mueller said in a statement. The company confirmed its full-year guidance and said it expected a moderate year-on-year increase in order intake in the historically strong fourth quarter. Story continues Partly state-owned Hensoldt is aiming for robust growth in the future with its order backlog of almost 5.5 billion euros, as prospective new-generation weaponry would require more electronics that enhance precision and efficiency. Its French peer, Europe's largest defence electronics maker Thales, also reported an order intake drop in the third quarter. Its shares tanked despite underlying revenue growth in the period. ($1 = 0.9342 euros) (Reporting by Andrey Sychev and Anna Mackenzie; Editing by Christopher Cushing, Gerry Doyle and Emelia Sithole-Matarise) |
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| 16.10.23 08:15:31 | How Did Hensoldt AG's (ETR:5UH) 14% ROE Fare Against The Industry? | |
| Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). We'll use ROE to examine Hensoldt AG (ETR:5UH), by way of a worked example. Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors’ money. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders. View our latest analysis for Hensoldt How Do You Calculate Return On Equity? ROE can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Hensoldt is: 14% = €79m ÷ €548m (Based on the trailing twelve months to June 2023). The 'return' is the profit over the last twelve months. So, this means that for every €1 of its shareholder's investments, the company generates a profit of €0.14. Does Hensoldt Have A Good Return On Equity? Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. The image below shows that Hensoldt has an ROE that is roughly in line with the Aerospace & Defense industry average (14%). roe That isn't amazing, but it is respectable. While at least the ROE is not lower than the industry, its still worth checking what role the company's debt plays as high debt levels relative to equity may also make the ROE appear high. If so, this increases its exposure to financial risk. How Does Debt Impact ROE? Companies usually need to invest money to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. That will make the ROE look better than if no debt was used. Story continues Hensoldt's Debt And Its 14% ROE It's worth noting the high use of debt by Hensoldt, leading to its debt to equity ratio of 1.16. While its ROE is respectable, it is worth keeping in mind that there is usually a limit as to how much debt a company can use. Debt increases risk and reduces options for the company in the future, so you generally want to see some good returns from using it. Conclusion Return on equity is useful for comparing the quality of different businesses. Companies that can achieve high returns on equity without too much debt are generally of good quality. All else being equal, a higher ROE is better. Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. So you might want to take a peek at this data-rich interactive graph of forecasts for the company. Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. |
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| 10.10.23 10:01:00 | Western firms have supplied critical components for Turkish drones | |
| By Lena Masri and Amina Ismail Oct 10 (Reuters) - Turkey has escalated its use of airstrikes in its fight against the PKK and allies in Iraq and Syria in recent years. Many of the strikes are carried out by armed drones, including the Bayraktar TB2, according to local officials in Iraq and weapons experts. The drone's maker, Istanbul-based company Baykar, is run by brothers Haluk and Selcuk Bayraktar. The latter is married to Turkish President Tayyip Erdogan's daughter. The company was founded in the 1980s by their father Özdemir and began to focus on drones in 2005. The company did not respond to a request for comment. At least two Western companies have supplied critical components for the drones. Among them are optical sensors. Weapons experts say these sensors enable unmanned aerial vehicles to surveil and identify targets on the ground and execute airstrikes. There is no indication that Western companies have violated sanctions. German defence electronics manufacturer Hensoldt told Reuters it has been equipping the Bayraktar TB2 with its ARGOS II optical sensor since 2020. It said it had also supplied the sensor to Turkish Aerospace Industries (TAI) and Lentatek, two other Turkish manufacturers of drones. Hensoldt said the quantities and exact delivery dates of the sensors were confidential and could not be shared. "Without these types of sensors drones as we know them wouldn't work," said Kelsey Gallagher, a researcher with Project Ploughshares, a Canadian peace research institute. Hensoldt added that the ARGOS II is developed and manufactured by its subsidiary in South Africa and is free of any components governed by German export law or the U.S. International Traffic in Arms Regulations, which control the export of a wide range of military equipment and technologies that can be used in weapons. L3Harris Wescam, a Canadian subsidiary of U.S. defence contractor L3 Harris Technologies, has also supplied drone technology to Turkey in the past. In October 2020, the Canadian government suspended export permits for military goods and technology to Turkey while it reviewed allegations that Azeri forces were deploying drones equipped with Wescam's imaging and targeting systems against Armenia in the enclave of Nagorno-Karabakh. Canada cancelled the permits in April 2021 after finding credible evidence that Bayraktar TB2 drones, equipped with Wescam sensors, had been used in the conflict. Story continues "This use was not consistent with Canadian foreign policy, nor end-use assurances given by Turkey," Marc Garneau, who was Canadian foreign minister at the time, said in a statement. The Canadian government said at the time Wescam had reviewed images shared by Armenia and confirmed delivering a system with the same serial number to Turkey in 2020. Canadian officials and L3Harris did not respond to requests for comment for this article. Turkey did not answer a question about its drone exports. Sales of the TB2 drone have grown rapidly in the past few years. Baykar has said it has signed export agreements with 30 countries for the drone. Since 2018, customers have included Ukraine, Ethiopia, Libya and Azerbaijan, according to arms trade data through 2022 collected by the Stockholm International Peace Research Institute (SIPRI), a think tank. In July, Saudi Arabia agreed to buy the Bayraktar Akinci, another Baykar drone, in what Baykar described as the biggest defence contract in Turkey's history. In Ukraine, the TB2 drone has helped destroy Russian armoured vehicles and artillery systems. Elsewhere, Western officials have expressed concerns about the use of Turkish drones. In December 2021, a senior Western official told Reuters Washington had "profound humanitarian concerns" over the sales of the drones to Ethiopia, which could contravene U.S. restrictions on exports to the country. In May 2021, the U.S. Department of State said it had imposed wide-ranging restrictions on economic and security assistance to Ethiopia. Ethiopia accused the U.S. of meddling in its affairs. A conflict between Ethiopia's government and the leadership of the northern Tigray region killed thousands of civilians and displaced millions. |
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| 29.09.23 10:34:37 | Hensoldt (ETR:5UH) Might Have The Makings Of A Multi-Bagger | |
| If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an eye out for. Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. So on that note, Hensoldt (ETR:5UH) looks quite promising in regards to its trends of return on capital. Understanding Return On Capital Employed (ROCE) For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. To calculate this metric for Hensoldt, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.092 = €165m ÷ (€3.0b - €1.2b) (Based on the trailing twelve months to June 2023). Thus, Hensoldt has an ROCE of 9.2%. In absolute terms, that's a low return but it's around the Aerospace & Defense industry average of 11%. See our latest analysis for Hensoldt roce In the above chart we have measured Hensoldt's prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering Hensoldt here for free. How Are Returns Trending? Hensoldt has not disappointed with their ROCE growth. The figures show that over the last four years, ROCE has grown 234% whilst employing roughly the same amount of capital. Basically the business is generating higher returns from the same amount of capital and that is proof that there are improvements in the company's efficiencies. It's worth looking deeper into this though because while it's great that the business is more efficient, it might also mean that going forward the areas to invest internally for the organic growth are lacking. Story continues In Conclusion... In summary, we're delighted to see that Hensoldt has been able to increase efficiencies and earn higher rates of return on the same amount of capital. And a remarkable 141% total return over the last three years tells us that investors are expecting more good things to come in the future. Therefore, we think it would be worth your time to check if these trends are going to continue. If you want to continue researching Hensoldt, you might be interested to know about the 1 warning signthat our analysis has discovered. If you want to search for solid companies with great earnings, check out this freelist of companies with good balance sheets and impressive returns on equity. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. |
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| 15.09.23 09:59:28 | Here's Why Hensoldt (ETR:5UH) Has Caught The Eye Of Investors | |
| For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should. Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Hensoldt (ETR:5UH). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it. View our latest analysis for Hensoldt Hensoldt's Improving Profits In the last three years Hensoldt's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. As a result, we'll zoom in on growth over the last year, instead. Hensoldt has grown its trailing twelve month EPS from €0.70 to €0.73, in the last year. That's a modest gain of 5.5%. Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. While we note Hensoldt achieved similar EBIT margins to last year, revenue grew by a solid 4.9% to €1.8b. That's a real positive. The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image. earnings-and-revenue-history Fortunately, we've got access to analyst forecasts of Hensoldt's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting. Are Hensoldt Insiders Aligned With All Shareholders? It's a good habit to check into a company's remuneration policies to ensure that the CEO and management team aren't putting their own interests before that of the shareholder with excessive salary packages. For companies with market capitalisations between €1.9b and €6.0b, like Hensoldt, the median CEO pay is around €2.5m. Story continues Hensoldt's CEO took home a total compensation package worth €1.4m in the year leading up to December 2022. That is actually below the median for CEO's of similarly sized companies. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of a culture of integrity, in a broader sense. Is Hensoldt Worth Keeping An Eye On? One positive for Hensoldt is that it is growing EPS. That's nice to see. On top of that, our faith in the board of directors is strengthened by the fact of the reasonable CEO pay. So all in all Hensoldt is worthy at least considering for your watchlist. You still need to take note of risks, for example - Hensoldt has 1 warning sign we think you should be aware of. The beauty of investing is that you can invest in almost any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies with insider buying in the last three months. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. |
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| 27.06.23 05:48:44 | Institutional investors in Hensoldt AG (ETR:5UH) see €99m decrease in market cap last week, although long-term gains have benefitted them. | |
| Key Insights Significantly high institutional ownership implies Hensoldt's stock price is sensitive to their trading actions A total of 2 investors have a majority stake in the company with 50% ownership Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business Every investor in Hensoldt AG (ETR:5UH) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 33% ownership. Put another way, the group faces the maximum upside potential (or downside risk). Institutional investors was the group most impacted after the company's market cap fell to €3.0b last week. Still, the 26% one-year gains may have helped mitigate their overall losses. We would assume however, that they would be on the lookout for weakness in the future. Let's delve deeper into each type of owner of Hensoldt, beginning with the chart below. View our latest analysis for Hensoldt ownership-breakdown What Does The Institutional Ownership Tell Us About Hensoldt? Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices. As you can see, institutional investors have a fair amount of stake in Hensoldt. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Hensoldt's historic earnings and revenue below, but keep in mind there's always more to the story. earnings-and-revenue-growth Hensoldt is not owned by hedge funds. Leonardo S.p.a. is currently the company's largest shareholder with 25% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 25% and 5.0%, of the shares outstanding, respectively. To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company. Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future. Insider Ownership Of Hensoldt The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO. Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances. We note our data does not show any board members holding shares, personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here. General Public Ownership The general public-- including retail investors -- own 16% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders. Public Company Ownership We can see that public companies hold 25% of the Hensoldt shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together. Next Steps: It's always worth thinking about the different groups who own shares in a company. But to understand Hensoldt better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Hensoldt , and understanding them should be part of your investment process. But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Join A Paid User Research Session You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here |
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