OHB SE
XETRA:OHB
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
41.4
47.5
|
| Price Target |
|
We'll email you a reminder when the closing price reaches EUR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
OHB SE
Earnings Call Analysis
Q1-2024 Analysis
OHB SE
The recent earnings report revealed that total revenues for Q1 reached EUR 26.7 million. While this figure has been deemed a historic record for the company, the sentiment surrounding it was lackluster as profitability indicators, including EBITDA and net profit, did not match prior years, showing declines instead. Earnings per share dropped to EUR 0.25 from EUR 0.41, highlighting a toughness faced in terms of profitability. This decline was attributed, in part, to a 10% increase in shares outstanding since late December, now totaling 19.2 million shares.
Despite the modest Q1 showing, the management expressed an optimistic outlook, emphasizing their focus on revenue growth rather than specific numerical guidance. The leadership steered away from rigid forecasts given the changes in their strategic approach. They believe that opportunities for growth abound, particularly as they continue to innovate in their technological offerings and assess market dynamics.
The company currently holds an order backlog of EUR 1.7 billion, which, while stable, is seen as ordinary compared to historical figures over the past 15 years. This backlog does not excite investors, yet management remains committed to improving this metric through diligent efforts. Their strategic priorities focus on enhancing their product offerings and expanding their market share which could eventually lead to an uptick in orders.
On the operational front, several exciting developments were reported, particularly in the space industry. The Rocket Factory Augsburg is progressing with tests for their upper stage, paving the way for a launch anticipated not earlier than August 1. Concurrently, advancements are being made with the Ariane 6 launch vehicle, with strong confidence from the management that launches will commence by the end of July. These advancements could boost the company's visibility and attractiveness within a rapidly evolving industry.
The company is also making strides in its digital endeavors, particularly through its MeerKAT program. As production progresses, management is investing in these digital capabilities to potentially provide enhanced services and products in the near future.
Management provided an overview of the ongoing discussions surrounding regulatory approvals from Germany and Belgium pertaining to a takeover bid by KKR, which currently holds a 9.9% stake in the company. Though the team expressed confidence in receiving the necessary approvals, they acknowledged the importance of preparing contingency plans should these be delayed or denied. This aspect highlights the inherent uncertainty in navigational approvals amid corporate actions.
Looking ahead, the company has strategically planned an Annual General Meeting for June 26, and upcoming earnings reports are scheduled for August and November. These events will be crucial for shareholders to assess ongoing performance and potential realignment with stated growth initiatives. Management is committed to keeping stakeholders informed while ensuring that they are positioned to respond to market needs effectively.
You don't have any saved screeners yet
So welcome to OHB's Analyst Conference for Q1 2024. Sorry for the little hiccup. I'll walk you through the slide. I hope you have been able to retain the documents, and you have seen our Q1 numbers. And we do it as we always, I would quickly walk you through. And then obviously, we have time for a Q&A session.
So the business segment overview has not changed. So the consolidation is the same as it was at last year's end 2023. Also, the strategy has not changed. So this is still the strategy OHB 2025, shaping the future that we are pursuing, and we believe we are on a good way of achieving that. Of course, many things are going on at OHB at this current time. So -- it's just important to recall what our goals are. I'd like to start with a quick overview on the status of the takeover of -- the public takeover offer that was done by KKR that is still underway. I don't want to walk through all these points again. You see lots of green dots or green approvals. What is really the status is what is in the blue box below. So approvals for foreign direct investment in 2 out of 10 countries are still pending. So we still have 2 countries, including Germany, where the process has not been completed.
We don't see this as a concern. We believe we're on track. We feel that this will be completed in the next weeks. And we feel that everything should be finalized before our annual meeting at the end of June. Yes. KKR will seek to complete the regulatory approvals quickly. And there is still the information on the status on the office [ offer.com ] but there is nothing new compared to what I just said. So the agreements that we are doing between KKR, Federal Republic of Germany and OHB are on a very good way.
Moving on to the next slide. Quick overview what happened in the first quarter, we have fundamentally changed our -- I mean, fundamentally, we have significantly changed our governance model in OHB and we have reestablished the executive committee. What has changed, obviously, is that at the [indiscernible] level at the end of last year Lutz Bertling left. And now the first one in the dark blue is Markus Moeller for sales and strategy, Kurt for financial and Daniela for Legal and Integrity and it's Klaus for human resources and myself as the CEO, as before.
We have established in the Executive Committee leadership in the 3 domains. Space system is officially still myself, but Chiara Pedersoli as the CEO of OHB System since January and also takes part in the executive committee. Aerospace is headed by Ulrich Scheib, Digital by Arne Gausepohl and both are new appointees. Ulrich Scheib took over April 1 as a successor of Hans Steininger and Arne Gausepohl starting from January 1 for the Digital business, he took over from Lutz. And also, we're very happy to welcome Kristina Wagner as our new CTO and Digital -- Chief Digital Officer; and Sabine von der Recke is Chief Communications and Public Affairs Officer; and Oliver Salisch still is the Chief M&A and Investment Officer. So this team is now [indiscernible], Chiara, Ulrich, and Arne. I already announced their respective roles.
Chiara took over for me because I was doing Board, CEO of OHB Group, OHB SE and for a long time also CEO of OHB System and Chiara now leads or OHB system, and I joined the OHB System Supervisory Board. Very similar at MT, I said Ulrich Scheib, has succeeded Hans and Hans is now a member of the Supervisory board of MT Aerospace, and Arne, I already explained. And here the other 3 persons, Kristina Wagner joined us from KUKA where she had various management positions. She was very much involved in the innovation work there, and we believe this is a very good background to help OHB for the next phase. Oliver and Sabine you're already familiar with.
Just a few highlights that we had in the first quarter. And you see here an image of PLATO payload, integration of PLATO cameras is going on. That's very exciting. You remember, PLATO is the mission that is chasing extra planetary, I mean, head of the potential habitable planets in other solar systems. A big progress also at OHB Italy, additional 12 satellites from the IRIDE program have been ordered. That's a big success. Yes, another big success I see is the development we had with Arctic Weather Satellite also small satellites. And historically, we have always been, let's say, known for large institutional programs, but now we do those 2 programs, IRIDE and the Arctic Weather we are building full constellations for small satellites, and that's a big success in Italy and in Sweden. And obviously, this is an integral part of our strategy to serve the satellite market from very small to very large satellites.
And we also do, we have just recently, of course, made significant progress also on our MTG peak observation, geostationary weather satellite. Another successful bid for us was LEO-PNT. That's satellite constellation with 4 small satellites for Galileo. It's navigation of Galileo -- succession of Galileo technology preparation for future global navigation satellite systems from Europe. So obviously, after the defeat in the second round of Galileo -- second generation of Galileo. This has been a big success to be involved in navigation standards again.
Quick status at our larger business, Rocket Factory Augsburg has completed the test on the upper stage is now preparing the test. They are now preparing, as we speak, the tests on the bigger first stage in Scotland and SaxaVord on the Shetland Islands. So a lot of work goes on in terms of preparation of the space for there. I was there 3 weeks ago, and I was really excited to see the space board growing. And so we're looking forward to -- the first stage integration being completed and the hot firing test campaign starting hopefully soon. So we are still working under the assumption that we have a launch later in the summer. We call it now, not earlier than August 1, and that is what it we feel is not ear than August 1. That's what we work for. But of course, the team is excited and yes, I will see.
And the aerospace also makes good progress. And the overall Ariane system makes very good progress. So we are very confident that Ariane 6 will launch within the all known launch period from mid-June to end of July. I think preparations are going very well. We're just a supplier in this, but we are congratulating Ariane Group and the whole Ariane team to really work this now very successfully -- and we're excited to see the launch and hopefully, many of them to follow afterwards. So it's the return of the comeback of Ariane is just a few weeks away.
In terms of digital, we're moving along with our MeerKAT program. You see here the photo of an installation there. Yes, I don't want to go into more details there, but I think this has become now -- indeed the program that is installed. The deliveries have started earlier this year and serial production is going on. So we're quite happy also there.
In terms of order backlog, yes, it's flat. It's not exciting. We're not really excited with the level of order backlog of EUR 1.7 billion you see compared to the last years, the last 15 years. It's like we're somewhere in the middle, but we're obviously working very hard. And I saw that also Markus joined the call, so we are also ready to answer questions in sterling today but he is ready to ask -- to answer questions about. Let's start us of...
Yes.
Yes. Now turning to Q1 numbers. That not I told, I said already same level that it was basically last year. total revenues slightly above total revenues at EUR 26.7 million. I saw that in our press release, we called it a record -- historic record Q1 number. I'm sure myself checked this. It was not -- it didn't feel very exciting this number. So we're not enormously proud of this number, but it's the historic all-time high. That's good to know, we're are happy to report that. EBITDA, net profit are not historic all-time highs for Q1 because they are lower than last year. So this is something we might talk about a little bit later. It's not exciting. Q1 was in terms of these numbers, not a surprise, but it's also not an excitement. I don't know if we're not exceptionally in one or the other direction.
Earnings per share is EUR 0.25, instead of EUR 0.41 so it has -- has also to do that since late December last year, we have 10% more shares outstanding. So this is now 19.2 million shares. And this all translates into this chart here that basically profitability compared to where we were in the previous years is rather weak, it's pretty much on the level of 2020. So yes, whatever. If you look at the overall development over the last few years, this is the outlook. You see here -- this is the outlook we presented at our Capital Market Day in January. That's obviously still the outlook. We are not guiding in the same specific way than we did in previous years because our -- let's say, our philosophy has changed there. We are basically giving an outlook of growth, and that's what makes us pretty optimistic about the future.
Here, you see also the EBITDA and EBIT numbers previous years and going forward, well you have to say that the 2023 numbers are exceptionally good because of one-off effects of last year, but that has been explained at our recent conference call we had when we presented 2023 numbers.
So this basically concludes the quick overview. The next big event coming up is that on June 26, our Annual General Meeting, and then we go on for the remainder of the year as scheduled in August and November with 6 months and 9 months report.
So now I turn it back to Marcel and open. I think we're opening the floor for questions. Thank you for the time being.
Yes. Thank you. [Operator Instructions] So will you should be able to talk now?
Yes. Hi. Good morning, everybody. I hope you can hear me fine. Perfect. Just not much from the equity side, it's particularly interesting, but maybe on the takeover side, a question from my side. In a hypothetical scenario that the FDI approval from Belgium and Germany might not go through. Is there a Plan B that you have in mind? Is KKR would be then a minority shareholder, but would they like completely withdraw from the deal? Do you have any idea just for a hypothetical scenario? And would you still delist in that scenario?
And the second question is probably for Markus, but we can take the first one, the answer to the first one now.
Henry, I'll start. Yes, KKR now is a current shareholder with 9.9% after last year's capital increase. So they are already invested. And obviously, the takeover is a binding takeover offer. We are very certain that we will get the approvals from Germany and Belgium as well. And we feel that we are pretty much on time. Should something happen and it would not be granted. I don't know. I don't think we have mapped our plan for that because the overall probability is so high that it would happen, we believe that we would probably have to -- if there are concerns in those processes in Germany and Belgium. We have to work on these concerns and find an arrangement that fulfills those concerns so that the approval will be granted. Because we have to remind ourselves at the end what we are doing.
I mean we are not changing control. We are not selling majority. We're not selling a company with basically having a transaction where current free float will become the ownership position of the financial investor. So it's not changing the scope or the power of, let's say, the Fuchs family in the company, the leadership will remain. So again, we are pretty certain that this will go through. And again, I think it's more a question of exactly when and exactly the details of the arrangement. So I don't know, but if you ask the delisting, I think we are planning to delist. But obviously, you can only delist it if the shares are within a small number of ownership. So I mean you cannot delist when the free float still is at whatever, 25%.
Yes. Yes, got it. Just was just a hypothetical scenario, I mean that the capital increase went through. So it's a good sign that the remaining takeover approval will also come. This was just a what-if scenario. And maybe the second question more directed to Markus. I've read some news about Germany being unhappy with the IRIS2 in the current tender process. I read something about a ground system going to France and not to Germany. Is this what it's like politics causing the delay in the final contract signing?
Henry, yes. So look, I can give you my OHB perspective, and it's a technical one. I don't think that politics is the major delay for this one. It's a very complex project, including a consortium structure with many partners. So that in itself is a large transaction, and that has always certain complexities in terms of time, #1; and #2, we're a partner of this consortium, but what we understand is the consortium is engaged with the customer, which is the commission in a large bid. I think it's very natural that if you have to bring the pieces together that you have some delays. So I would say, yes, there are always politics in the background. It's a federal program for Europe. But on the other hand, the delays that we see are delays that could be expected in a program of that scale, size and challenge.
Okay. I can't see any further questions in the chat. There are also no raised hands.
I mean quickly -- when going private is underway. So I would like to thank all of you who are still interested in OHB still following OHB very much for your continued support and your continued interest. And I can say it's exciting. I hope to see you again, hopefully at ILA because early June is ILA in Berlin, we will have a nice big booth. Everybody will be there. So there's a lot of opportunities to talk in person with me with Markus, with everybody. If you are interested in what's going on in the space industry. I can tell you, space is still the place to be. It's very exciting. And running through these quick slides, just I think gives you a little flavor. For example, what happens in the launch at the moment in Europe.
But also on satellites, we recently had another launch. We didn't even put it on a slide. In late April, we launched 2 Galileo satellites very successfully. They are now supporting the constellation. We have a couple of other launches coming up soon like the Arctic Weather and also others. So it's an exciting time. It's an exciting industry. And again, let's see again in Berlin at ILA or at our -- in a digital format at our next call in August. We will obviously still be a listed company for the rest of this year, that's for sure. And we will obviously keep on informing the markets. And Marcel and whoever myself are always available for questions and -- but also background exchanges.
So this is my time talk just to give you the chance to ask more questions. I'm looking for a final time to myself if we have other questions or any hands being raised and he says no. So I'm looking to my watch and it's 25 past 9. So I would like to thank all of you for participating and for your support of OHB and I'm closing this call now, and wish you all a good day. Thank you very much.
Thank you very much.