Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- OHB SE (XTER:OHB, Financial) secured a significant contract for Harmony satellites worth approximately 280 million euros, enhancing its position in the Earth observation sector.
- The company successfully launched several satellites, including the Arctic weather satellite and two Galileo satellites, showcasing its operational capabilities.
- Order backlog has increased from 1.749 billion euros at the beginning of 2023 to 2.1 billion euros, indicating strong demand and future revenue potential.
- Adjusted EBITDA reached a record high of 72.5 million euros for the first nine months of 2024, reflecting improved profitability.
- The partnership with KKR is expected to enhance operational efficiency and project profitability through a comprehensive transformation program.
Negative Points
- Revenues have slightly decreased compared to the previous year, which could indicate challenges in maintaining growth momentum.
- The unsuccessful first stage test of the Pocket Factory Augsburg in August resulted in a total loss, highlighting potential risks in new project developments.
- The delisting process remains uncertain, with no clear timeline or milestones, which may create uncertainty for investors.
- No new significant military space projects have materialized, which could impact future growth in this sector.
- The potential merger of competitors Thales Alenia Space and Airbus Defense and Space poses a risk to OHB SE's supply chain and competitive position.
Q & A Highlights
Q: Can you provide an update on the benefits and long-term value KKR can contribute to OHB, and how the cooperation is unfolding?
A: After closing with KKR, holding 28.6% of shares, we are implementing an improvement program called "Up to Champ." This involves enhancing efficiency and organizational aspects. The process is ongoing, with initial results visible. KKR is aiding in operational expenditure, indirect staff costs, and project profitability, aiming for increased profitability and success. (Respondent: Unidentified_1 and Unidentified_4)
Q: Could you update us on the delisting process, including timeline and milestones?
A: The transaction closed in September, and we plan to remain listed through 2025. While my family and KKR hold about 94% of shares, we haven't decided on the next steps for delisting. We're comfortable with the current position and aim to eventually go private to strengthen and grow the company. (Respondent: Unidentified_1)
Q: Can you share insights on your new military contract and future pipeline?
A: We have secured a 1.2 billion order intake, with a third from military customers. This includes direct military customers, the European Union's Defense Fund, and strategic partnerships with large military platform companies. We anticipate continued investment in space technology, with three large projects expected by 2026. (Respondent: Unidentified_5)
Q: What are your thoughts on the potential merger between your competitors, T and A?
A: While rumors of a merger have circulated for years, no firm announcements have been made. Such a merger could impact our supply chain and teaming capabilities, but industry changes are common. We are monitoring the situation and see potential opportunities to position ourselves as an alternative. (Respondent: Unidentified_1 and Unidentified_5)
Q: How does KKR's involvement influence OHB's strategic direction?
A: KKR aids in strategic discussions, especially in comparing with North American best practices. While they hold a minority share, our focus remains on becoming a European space champion, emphasizing satellite building, launching, and operations. Our strategy has become more focused on space activities. (Respondent: Unidentified_1)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
