Hensoldt AG (HAG) Earnings Call Transcript & Summary

Yes. Good afternoon, everybody, and welcome to Hensoldt's Capital Markets Day 2025. Thank you all for coming to Ulm today. And this year, this room is really packed. And I can see there are many on the webcast as well. So great to have you all here. My name is Veronika Endres, Head of Investor Relations at Hensoldt, and I will guide you through this event today. With me are Oliver Dorre, our CEO; and Christian Ladurner, our CFO. Lars Immisch, our CHRO, unfortunately, can't join us today, but he sent us his regards. Before we begin, let's have a brief look at today's agenda. We will start with Oliver, who will open the day with an update how Hensoldt is mastering the defense super cycle. Then we will dive into the 4 axis of our North Star strategy, deliver at scale, which Christian will take you through; Pioneer software-defined defense and grow with focus, both elaborated by Oliver and then lead our teams into the future, which is presented by Oliver as well. After that, Christian will provide a detailed update on our financial outlook and performance before Oliver will come back on stage for his closing remarks. We plan a short 15-minute coffee break at around 2, 2:15 p.m. And at the end of the session, we will, of course, open the floor for your questions, both here inside the room and all who participate virtually. And now one final closing remark from my side. Please note that this event will be recorded. A video will be available on our website shortly after. And with that, over to you, Oliver.

Well, thank you very much, Veronika, and really great to have you all here in Ulm. Dear investors in Hensoldt, dear analysts, ladies and gentlemen, a very, very warm welcome from my side to our 2025 Capital Markets Day. It is my second CMD and my first one here in the beautiful city of Ulm, the very heart of our operations. Thank you very much for joining us today. Before we dive into strategy and performance, allow me to start with a broader reflection because since last CMD, the world around us has changed once again and fundamentally. The American strategic reorientation toward Pacific has become tangible. I witnessed it firsthand, starting with J.D. Vance's speech at the Munich Security Conference and most recently, through the announcements that the U.S. will reduce its presence in Eastern Europe, particularly in Romania. At the same time, here in Europe, Germany has formed a new and most decisive government. The dead break for defense spending has effectively been removed and Germany and many of our allies have now committed to spending 3.5% of their GDP on defense. In short, Europe will be ready soon. Yet when I speak with our customers, the armed forces, the operators, the people who stand and watch every night, I sense two things: optimism and concern. Optimism because the political will and the budgets are finally there, but concern because the threat is immediate. Russian drone activities, airspace violations, hybrid attacks and all of these have increased exponentially. Our customers are not preparing for 2030. They are thinking about tonight, about 2026 to 2028, the critical years before the buildup fully takes effect. That's why we have adopted their language, a simple but powerful operational mindset, fight tonight, support our customers with maximum readiness by making the best use of existing systems and improving them through software and data; fight tomorrow, deliver at scale, providing the next generation of interconnected multi-domain capabilities. This dual mission supporting readiness today while building strength for tomorrow defines what we, what Hensoldt does. There's another aspect of this reality we must recognize. Operational security matters. Russian Espionage activities are real, including the collection of intelligence on industrial sites and production capabilities. We ask for your understanding that going forward, we will be more careful about what we share publicly, fewer details about facility locations, production numbers or unit references. We have the duty to protect our people and our customers, and we take that responsibility very serious. That said, we will still show as much as possible. And during today's site tour, you have seen for yourself how much progress we have made. With that context in mind, the changing world, the immediate threat and our growing responsibility, let me turn to Hensoldt's own journey because the past year has been very busy, demanding and extraordinarily productive. Last year, we presented to you our North Star strategy, a comprehensive framework for growth, innovation and leadership. Since then, we have delivered and the Hensoldt investment case has become even stronger. Today, our story is clearer and as said, stronger than ever. Hensoldt continues to benefit from a step change in market growth, especially in Germany and across Europe. We are Germany's defense and electronics champion with the German government as anchor shareholder and a very strong political support. We are a technology and innovation leader with software-defined defense and our multi-domain operations software backbone called MDOCore, paving the way not only for the fight tonight, but for long-term competitiveness. And we are multi-domain defense player, serving all branches of armed forces with smart software-enabled interconnected sensors. Exactly 334 days after our last CMD, we are not only giving you an update, we have entered a new era of our business. Let's take a closer look at how our ambition translates into growth. Since introducing North Star, growth formula last year, we have refined our approach and raised our target from EUR 5 billion to EUR 6 billion by 2030. That means we are committed to doubling our revenues at an accelerated rate, but doing so sustainably with efficiency, resilience and profitability. This is not about chasing numbers. It's about building a scalable sovereign and sustainable growth engine. Before we start, let's quickly revisit the North Star structure now reordered to reflect what the past has taught us. You've all seen this picture before, but let me briefly recap. At the foundation is deliver at scale, building a scalable, resilient and efficient industrial base for European security. That is where we create the operational backbone of our Hensoldt 2.0. Next is pioneer software-defined defense, our strategic ambition and future differentiator. With MDOCore, we now have a clear right to win as the integrator of multi-domain data-enabled solutions. Third, grow with focus. Our commitment to expand internationally strategically and sustainably beyond Germany and Europe, our strategic regions, the United States, Canada, the Middle East, India, APAC and Australia play a central role here. And finally, lead our teams into the future because none of this happens without people. We have become a unique employer of choice with a motivated and rapidly growing team. Together, these 4 axis from North Star, the framework that guides us towards sustainable growth and European technological sovereignty. So what progress have we made in just under 1 year? Let's jointly take a look. The progress across the company has been impressive and inspiring so many hands, so many minds working in concert toward one goal. Operationally, we have made decisive progress. Our new logistics center is live. The new Optronics Campus is coming online, and we have launched Operations 2.0, a key milestone we will return to later today. Strategically, we have established a dedicated SDD organization, signed key partnerships and were selected for major software-defined programs, including the new reconnaissance vehicle, Luchs 2. Internationally, we have formulated regional strategies, introduced key account management for our most important customers and refocused our international organization. Culturally, we have launched our evolution initiative to strengthen leadership and collaboration, and we have welcomed over 1,000 new Hensoldians to the team. That is, to our understanding, transformation at scale, operational, strategic and human. With a strong foundation in place, it's time to look outward at the world that surrounds us and the opportunities it presents because the super cycle we anticipated last year is no longer a forecast. It's happening right now. So let's turn to the environment that will define our next decade of growth and see how Hensoldt is seizing the second chapter of the. Ladies and gentlemen, when we met in London last year, we spoke about the world entering a turning point defined by instability, strategic competition and the return of hard security. A year later, we can say it clearly, the super cycle has arrived. The drivers are geopolitical. They are structural, and they will shape our business for the next decade and beyond. Let me start by taking a step back and look at what has changed in the global security environment since our last Capital Market Day. The now almost 4-year long war in Ukraine and the Russian threat to Europe's Eastern flank have only grown more acute. News of Russian airspace incursions, drone activity near European military sites and hybrid operations have become almost daily occurrences. At the same time, the situation in the Middle East remains tense. Even though the release of hostages from Gaza brought relief, tensions are far from easing. The continue to disrupt maritime traffic in the Red Sea and the civil war in Sudan is intensifying. In Asia, we have again seen major clashes between India and Pakistan, both on the ground and in the air. Meanwhile, China is ramping up military pressure on Taiwan and against neighboring states in the South China Sea. And as I said last year, and it remains true today, what different is not the crisis that exists, but that they are happening all at once and at accelerating speed. Let me be very clear. The threat to Europe from Russia is real. This will define the mission of European armed forces for the foreseeable future, and therefore, it defines our mission, too. But amid all these challenges, I remain confident because what we are seeing today is not paralysis. It's a real political and industrial awakening. We can now clearly see the defense super cycle is becoming a reality. Last year, we faced deep uncertainty in Germany. The coalition had collapsed, spending decisions were frozen and the Zeitenwende was being absorbed by urgent replacement programs. Today, the picture has changed completely. We have a decisive new government, continuity in the defense ministry and crucially, the dead break has been lifted for defense spending. Germany has fully committed to 3.5% of the GDP for defense and has already integrated it into its multiyear planning. This translates into a defense spending of more than EUR 150 billion in 2029. The order ramp-up is tangible. We see it in our own order book every month. Across Europe, Capitals are following suit. Many have now committed to the same 3.5% target. And at the European level, the Readiness 2030 initiative has been launched with also EUR 115 billion in loans already allocated to strengthen defense capabilities across the member states. The most recent NATO summit confirmed what we have long anticipated, plans for up to 50 additional brigades, enhanced airborne and maritime capabilities and major new investments in reconnaissance and deterrence. Last year, we said, for the first time in decades, we see a broad political consensus to reconstitute a credible European defense and deterrence capability. This year, this consensus is turning into concrete action, signed contracts and already delivered equipment. Some argue that peace in Ukraine might ease tensions. Ladies and gentlemen, this view from my perspective, have formally just recently traveled to Ukraine, that view is mistaken. An end of hostilities would simply free Russian forces to shift their focus elsewhere towards our Eastern allies. The demand for air defense, sensors, self-protection will continue to rise and not just this year, but well into the 2030s. A key driver of this transformation is Germany, taking for the first time, full responsibility for Europe security. It does so through major equipment procurements and also by deepening cooperation with its Eastern -- with its European partners, for example, through the European Sky Shield initiative. One of the most significant and long overdue developments is that Germany has stepped up. This, we call it Zeitenwende 2.0 was symbolized by 2 decisive moments in May this year. First, when Chancellor Friedrich Merz declared Germany's ambition to build the strongest conventional army in Europe. And second, during mustering tank Brigade 45 in Lithuania when he stated the protection of Vilnius is the protection of Berlin. These are not symbolic words. Since May, we have seen them turn into policy, turn into budgets and recently turning into orders. Imagine this only a few years ago, even 1 year ago, what a change in mindset and what a change in responsibility. For Germany, we now see a clear path to 3.5% defense spending by 2029. For the rest of Europe, at least 2.5% by 2030. In contrast, U.S. defense spending is expected to remain largely constant relative to the GDP. For Hensoldt, this means opportunity and obligation. As Germany leads, we are ideally positioned to capture this growth reflected in our strong order backlog and the orders still to come before year-end and into early 2026. This renewed sense of purpose isn't just rhetoric. Germany is matching its ambition with real reform and money. The political commitments we've heard being backed by concrete action. The planning and procurement acceleration law has been enacted, cutting bureaucracy and speeding up every stage of the procurement process. The BAAINBw, Germany's Defense Procurement Agency has expanded its capacity significantly with over 150 parliamentary proposals expected to reach approval by the end of 2026. The Chancellery, Ministry of Defense and Ministry of Economic Affairs and Energy have all created new structures to strengthen the defense industry. Of the known budget requests, almost all are destined for German industry. For Hensoldt, this means we have earned and will continue to hold a unique position as the national sensors champion and the partner of choice for the Bundeswehr. And I can tell you from experience, I spent a great deal of time in dialogue with political stakeholders across party lines in Berlin, Brussels and beyond. The picture is clear. Hensoldt enjoys strong political support based on trust, competence and reliability. This political momentum translates direct into market dynamics, especially in our core domain, defense electronics. We are witnessing a major increase in our accessible markets compared to our expectations last year. Germany is again leading the way with growth rates in defense electronics doubling compared to last year. Europe and international markets are following with strong momentum. 4 factors are driving this growth. One, acceleration of procurement programs, especially in the land domain with examples like Luchs 2 and Schakal. Two, a step change in electronic density on all platforms with sensors and connectivity becoming central to future operations. Three, lessons from Ukraine, showing the need to operationalize connected sensor networks in real time; and four, the launch of next-generation capabilities across all domains, air, land, sea, cyber and space. To realize this potential, software-defined defense will play a crucial role with MDOCore enabling us to harness sensor density and data availability and adapt to new operational imperatives quickly. All of this confirms that Hensoldt is ideally positioned in the German and European defense electronics market, a market with great perspective well into the 2030s. And these market trends are not theoretical. They are already visible in our books today. Since last year, we have increased our order backlog from EUR 6.5 billion to EUR 8.5 billion expected by the end of the year as defense spending, particularly in Germany has just recently taken off and is still gaining momentum, this is just a snapshot in time, and we expect further acceleration in 2026. That reflects both customer trust and our technological leadership. It's not just a number, it's our contribution to security. Our pipeline has also surged compared to 2022 when we showed you EUR 30 billion, this figure has more than doubled within 3 years. This growth is fueled by the urgent need to refill conventional capabilities, upgrade existing platforms and introduce new battlefield systems, all of which are now transforming into concrete and multiyear contracts. Let's look more closely at what drives this demand and why Hensoldt is uniquely positioned across all spending priorities. As you may recall, the accessible market in Germany is set to grow by about 20% per year through 2030, with the broader European market following at roughly half that pace around 10%. Behind this are 3 structural drivers, and Hensoldt is present in all of them. First, procurement of new systems. Customers are buying in larger quantities and at greater speed from Eurofighter to Leopard, Puma, Schakal and Type U212CD submarines. Hensoldt sensor suites are on all of them. Second, upgrades of existing capabilities from PEGASUS to Sawfish to Knightfish and P8 Poseidon, who has just come to Germany last week, upgrades are essential. As an incumbent with a reputation for reliability, Hensoldt is a natural partner for these programs. And third, development of new capabilities. Our early positioning on LuWES, Luchs 2 and the F127 frigates shows how customer intimacy and know-how translate into future business. And as volumes grow, so does demand for service, training and midlife upgrades. On top of that come accelerating high-margin revenues from our software-defined solutions, including license-based models. Over time, defense budget will gradually shift from acquisition to operations following the U.S. example, where more than half of industry revenues comes from recurring service and MRO contracts. These drivers are further amplified by a unique feature of a German approach, the focus on framework contracts open to European allies. The German government strategy of multi-nation framework contracts is proving highly successful. Each one generates multiple follow-on orders first from Germany, then from partners. This is illustrated by the European Sky Shield Initiative. The number of member nations has grown to 24 and 7 of them have already signed contracts. Hensoldt has a strong position across all key programs, TRML-4D and IRIS-T SLM currently protecting the Ukrainian skies. Leopard 2A8 with Hensoldt's future sensor -- full sensor suite. SkyRanger with SPEXER radars and Type U212CD submarines with our advanced optronics technology. Beyond these, Hensoldt is an active member in all major European collaboration programs from Eurofighter to FCAS, and we've seen Tranche 5 confirmed with Turkey joining the program only a few weeks ago. This momentum is already translating into contracts and revenues, many of them booked, others in final flow down. Since the start of this year, order intake has been strong, particularly from programs already approved by the Bundestag's Budget Committee. Highlights include over EUR 800 million from the Luchs 2 reconnaissance vehicle based on our software-defined defense architecture. Major follow-on orders for Eurofighter, air defense radars and Leopard/Schakal sensor suites. Orders from TRML-4D with weapon location capability, a tangible example of how software-defined defense improves an already great product through its life cycle. And a new partnership with Boeing for the sustainment of Germany's P8 Poseidon, strengthening our transatlantic ties. Together, these demonstrate our ability to capture both national and international opportunities at scale. Let me take one of these in a showcase, a program that perfectly embodies the convergence of our strategy and our technology. The Luchs 2 reconnaissance vehicle is a milestone for Hensoldt and for European land defense. The original requirement was 92 vehicles. It has now grown to 274 platforms with potential for even more, both domestically and for partner nations. And for the first time in the land domain, Hensoldt provides not just sensors but a connected sensor suite, CERETRON, powered by software-defined defense. This program is not only a cornerstone of the German Army's modernization, it's a proof point of our transformation from hardware excellence to software-enabled system leadership. It provides long-term recurring revenue through both hardware upgrades and software licenses. And I'll come back to this later when we talk about the full potential of software-defined defense. Finally, let me address a topic that has become strategically decisive, both for our customers and for Hensoldt, it's counter-UAS. After years of cautious growth, the counter UAV market has shifted into a new dimension. The threat is no longer abstract. Drones are now daily reality in European airspace, not just at the front line. Hensoldt plays a leading role here. Our ELYSION system integrates own and third-party sensors and effectors into one command and control layer connecting drone defense seamlessly with air defense networks. We also bring strong electromagnetic warfare capabilities, combining passive radar with jamming to detect and neutralize targets. Our first operational counter-UAS system dates back to 2015 when we protected the G7 Summit here in Germany. And we introduced ASUL, Germany's military Counter-UAV system already in 2022. And today, several of our systems are operational with the Bundeswehr and very soon with the Federal Police Service. Through our emerging partnership with German Air Traffic Control, we are also addressing civil critical infrastructure, including airports and urban areas, extending our expertise beyond traditional defense. This, ladies and gentlemen, is a perfect example of how we evolve our portfolio in line with threat scenarios, connecting technology, purpose and protection. And it is the perfect example how we leverage the capabilities acquired through ESG in combination with Hensoldt's Sensors to form a very attractive offering for our customers and create strong synergies. To sum it up, this is not longer about forecast. The defense market is in full acceleration. Budgets are rising, procurement programs are moving and customer confidence is strong. Hensoldt is ready to harness this momentum with the right capabilities, partnerships and at scale. Let me now show you how we are turning this dynamic into industrial reality because on this scale requires operational excellence, the ability to ramp up, produce and execute with speed and precision. So with that, let's move from the why to the how, and have a look at first of our North Star pillars, starting with deliver at scale, and Christian, with that, over to you.

Yes. Thank you very much, Oliver, and also a very warm welcome from my side to this day. Yes, indeed, our starting position is excellent and the scale of what lies ahead of us is extraordinary. Market forecasts show that we exceed early expectation with strong visibility from both our backlog and from our pipeline. And we are on the growth trajectory that will continue well beyond 2030. Let me start what makes the Hensoldt business model fundamentally different, and it is different from that of traditional platform manufacturers. While OEMs build and sell hardware such as aircraft, vehicles or ships, our value lies in what makes those platform intelligent. It is the sensors that perceive the algorithm that interpret and the software that connects everything into a current operational picture. Our systems are platform agnostic by design. They can be integrated across aircraft, ships, vehicles and ground systems, which mean that every new platform program in Europe or beyond becomes a potential opportunity for Hensoldt. And this independence gives us both flexibility on the one hand and resilience on the other. At the same time, our solutions are highly complex and innovation-driven. They are not one-off projects, but multiyear programs that are built to evolve over decades. Each system starts with development and integration and then generates recurring revenues through upgrades, services and life cycle support. And in short, while the initial ramp-up phase may be demanding, the return profile of our business is fundamentally long term and sustainable. Once established, each program delivers a longer cycle of profitable growth and continues well beyond first delivery. And this is what makes Hensoldt different in scaling from others. We scale intelligence, not metal. We scale capability, not capacity. And by doing so, we capture value over a very much more long-term horizon. For investors, this means that business that grows steadily, compounds value over time and maintain strong visibility and resilience even in volatile markets. And with that foundation, let us have now a look how we are turning this model into tangible operational progress and scaling it across the entire value chain. So to meet this growing customer demand, we are preparing for a step change in our operations, fundamentally transforming our industrial system to ensure scalability, resilience and efficiency. And our Operations 2.0 strategy is built precisely on these 3 pillars. It's first, scalability, ramping up production to meet increasing demand. Secondly, resilience, strengthening the supply chain and, of course, IT infrastructure to support the ramp-up. And third, efficiency, driving operational excellence and maintaining strict capital discipline. And all this goes, of course, under one guiding principle, ensuring sustainable, profitable and cash-generating growth. Let's now take a closer look how this transformation starts and how we have already laid the foundation for this next phase of industrial growth. So what you see here that already since beginning of 2022, we anticipated we were expanding production capacity step by step through continuous improvement, automization and targeted outsourcing backed by a straight CapEx plan. And depending on the respective products, our current capacity will take us now through to around 2027 or 2028. I will come to that in detail. But we now are already planning for the next phase, which we call Operations 2.0 to secure delivery capability well into the next decade. And let me highlight the following, and I'm convinced of that, good preparation has always been a Hensoldt strength. So let me show how we've already translated this mindset into new sites and tangible capabilities. So thanks to our early anticipation, we started implementing footprint expansions and efficiency measures already some time ago. In 2024, as you can see, we moved to our new Wetzlar site, a highly specialized facility for optical sites and optronic devices. This site has not only expanded our production area, but also optimized material flows and processing steps, creating more intelligent and efficient layout. Our new logistics center now provides centralized services for production sites here in Ulm, significantly enhancing both capacity but also process efficiency. In Oberkochen, we built our new facility through our real estate company. And we are creating a modern synergistic site for Optronics business, enabling more efficient and profitable operations with modular workspaces and smart layouts. And this summer, we have successfully transformed the ground-based business, one of the biggest business in Optronics segment into the new building. The remaining areas will follow now in the upcoming months. And by, yes, Q1, Q2 next year, we will be completely finished this new building. So with this foundation now in place, the question is, what's next? How do we build on the operations system ready for the next decade of demand? Now looking ahead, we are already evaluating customer needs and resulting capacities requirements on a constant basis, month by month, quarter-by-quarter, year by year. And our mission in Operations 2.0 is to build a scalable, resilient and efficient operation system, one that enables us to respond flexibly to future demand, address strategic challenges but also meet evolving product and service requirements. And now let's have a look what this means in concrete terms, especially for our 2 segments, sensors on the one hand, but optronics on the other. So as you can see, we have already achieved a remarkable ramp-up in production capacity. And those of you who were joining the site tour here in Ulm have seen this how production has changed. For example, capacity for TRML-4D and SPEXER as well as for sites for armored vehicles has increased up to 8.5x since 2021. But this, as you can see, is only the beginning. Demand, particularly for sites continues to rise sharply, requiring an additional 4.5-fold capacity increase over the next few years. This growth is also driven by higher demand in the service business, especially for the ground-based systems. As the Bundeswehr expands its circulation reserve in Germany, we say [Foreign Language] or pure availability of system by more than 90%. Fully manufactured sites are being held in stock to ensure immediate availability. By contrast, the radar services focus is more on spare parts, which explains why capacity growth there is less pronounced. Operations 2.0 target reflects the ambitious trajectory with further expansions planned, especially for air defense radars and ground-based systems, ensuring we can fully deliver on customer requirements and sustain growth well into the next decade. To enable this kind of scale, we are also continuously expanding our physical footprint and strengthening our industrial basis. As mentioned earlier, we've expanded our operational footprint in terms of square meters with sites such as Oberkochen and the new logistics center, as you can see at the slide. And just a few weeks ago, we have announced that we plan to increase production capacity for air defense radar from 2027 onwards. And at the same time, we are building redundant structures to ensure a robust delivery performance. By 2027, our total operational footprint will have been grown by 3.4x compared to 2023. Further expansions, including a second logistics center, and additional capacity for armored vehicle sites are currently under evaluation, and we will give you some more details as soon as we have it on hand. And beyond that, we are assessing strategic partnerships for suppliers and selective M&A opportunities, vertical integration. One particularly important element in this expansion is our new dedicated radar production site, the next step in industrializing Hensoldt at scale. So this new radar production site, which you can see here will further strengthen our delivery capability. It will allow us to meet rising demand, especially for air defense radars. Production of even more TRML-4D and SPEXER radars will begin there from 2027 onwards. We are now investing around EUR 80 million in this rented facility, combining resilience on the one hand with synergies across our existing footprint. Of course, scaling is only as strong as the supply chain behind. And therefore, now let's have also a look at how we are ensuring resilience and reliability along that dimension. As part of Operations 2.0 of this strategy, we are fundamentally strengthening our supply chain to resilience and scalability by continuing to grow. And we are driving improvement across 5 key areas, as you can see here. First, real-time supplier capacity monitoring, followed by targeted orders to secure capacity even on the high demand. Secondly, long-term security. So we move to multiyear high-volume contracts and material level transparency, deepen our strategic supplier relationships. Third, performance management, mapping, segmenting our supplier landscape to manage strategic partners and supply management and continuous performance. Fourth, geopolitical resilience, local for local, the new data-driven transparency, which identifies vulnerabilities, critical dependencies and allow us to focus on sourcing on Europe for a local-to-local approach. In Tier 1, we already source 90% of our parts from Germany and 95% in Europe. And this creates, at the end of the day, resilience on the one hand, but sustainability on the other. And last not least, we want to optimize strategic supplier development. Besides using our Hensoldt entities also abroad in other countries, we will focus on more partnerships and on M&A opportunities. Together, these measures will strengthen our supply chain resilience and delivery capability, ensuring that we can meet growing demand efficiently and predictably. However, resilience does not stop at the factory gate. It also means having a digital backbone behind being capable to support this type of scale. And as we expand our industrial operations, we must also support this growth with a robust future-proof IT infrastructure. And our ambition is to embed resilience across the organization, ensuring every business function that can adapt, respond and perform at scale. We are doing this by increasing flexibility via dynamic resource planning, improving customer service with clean real-time data and enhancing efficiency and compliance through automated audio-ready processes. And our key enabler, and we were elaborating now several times also in Capital Market Day is still our S/4 program. And we have achieved, and you see it here strong progress in this year. So first, we went live with CRM Service Cloud, a new digital customer touch point with real-time information. Secondly, we started CRM Sales Cloud, a fully digitalized global sales pipeline for more transparency. Third, human capital management system went live 1st of July, enabling an integrated digital journey for our expanding workforce. And fourth, extended warehouse management system connected with the new logistics center, ensuring real-time stock and material tracking. And by end of this year, start of the new year, we will go live technically with the new template, laying the foundation for a unified ERP backbone for the entire group, which drives transparency and resilience. To manage this responsibly also with the new challenges ahead with the new plans of expanding, we are following a hybrid rollout. We calibrated to minimize execution risk as we did also this year. Given the current ramp-ups, we are sequencing rollouts after critical phases to ensure continuity and stability. And in parallel, we are upgrading infrastructure underneath those systems to make sure our IT capacity grows in lockstep with our operations. Looking now on robustness. We have implemented key resilience measures such as one-off site data replication and network decentralization. We're expanding to high availability of architectures and building the disaster recovery capabilities for mission-critical applications. And our next milestone is here an additional data center, strengthening redundancy while expanding capacity for advanced use cases such as on-premise, AI, data-intensive workload and high-performance computing. Together, these steps ensure that our digital infrastructure scales alongside our industrial footprint. And I'm convinced that without a good digital footprint, you cannot scale. And this will enable us sustainable growth, operational resilience and data-driven decision-making across the enterprise. And let's now move from systems to execution. And let's be very clear at this stage. We have to manage this ramp-up across the whole value chain. And we have to systematically unlock the efficiency gains to enable scale. And of course, it begins with engineering to make every product designed for manufacturability, balancing cost, quality and time, laying the foundation for an efficient series production. It moves on with sourcing and procurement. The quantities, the things I've elaborated before, stronger volume effects, better pricing and enhanced leverage with suppliers. It follows with logistics. You can see our rack box automization which are automatic vehicles, streamlining material flow and accuracy in our new logistics center. Factory setup, a dedicated radar production for SPEXER and TRML-4D, and we will use tech-based series production decoupled from Ulm to maximize throughput at this stage. And of course, people. We are investing heavily in training and upskilling to prepare employees for new systems and production models, and Oliver will elaborate on this later. And last not least, production, every step will be optimized with lean methods and new shift models increase and by testing automated test environments, including new test cells for SPEXER and [ Optimaster ] automated platform to improve speed and reliability. And those of you who attended the site visit maybe have seen the one or the other automated test chamber. So these levels are key to now scale efficiently, reducing unit costs and driving long-term profitability. And it's not a single lever that creates the scale but their interaction. The way engineering, sourcing, logistic, production, people and testing reinforce each other. They work by multiplication. If one element fails to perform, the overall effect weakens. And this is why scaling at Hensoldt has to be and will be managed end-to-end -- as an end-to-end discipline. One we have already mastered in the ramp-up of the past 3 years and are now taking our ambition to the next level. And finally, let's now look at how we manage this transformation with the same financial discipline that defines our company. All our expansion is grounded in disciplined capital allocation. Each project is evaluated for its return profile to ensure that every euro invested contributes to long-term value creation. Our investment approach is backlog driven. We expand capacity where we have a firm order, a firm customer demand or a very clear visibility. And I think in terms of visibility, Oliver has elaborated that we have a high level at this stage. All major expansion projects are approved and closely monitored by Management Board level, underlining their strategic importance for the company and the governance. Financially, we expect CapEx to rise to around 3% of revenue over the coming years. In addition, we foresee a onetime investment of roughly EUR 80 million in 2026 to support footprint expansion, plus a CapEx buffer of about 1.5% in 2027 and 2028 to accommodate further growth. I will come to that in the finance section. In summary, we are scaling our industrial and digital infrastructure in a measured financially disciplined way, ensuring that growth remains profitable, cash generating and fully aligned with our long-term strategy. And with that, I want to hand back to you, Oliver, who will outline how our future growth is driven by the next phase of our innovation road map, software-defined defense.

Well, thank you, Christian. When we met at the CMD last year, we spoke about software-defined defense for the first time. At that time, it was still a vision, an idea of how technology could transform defense in a world where threats evolve at digital speed. 12 months later, that vision has become a reality. Every day, we see how autonomous drones and swarm tactics change the nature of warfare. Protecting people, infrastructure and military assets requires systems that can react instantly and learn and adapt and that grow more capable every time they are used. Our ELYSION counter-UAS system embodies this principle. ELYSION is modular, already operational with the Bundeswehr and one of the first systems in Europe that is truly software-defined. New AI models for drone classification can be deployed in hours, not months, sensor networks can be reconfigured on the fly. And by fusing data from multiple domains, ELYSION delivers in real-time AI support and operational picture, providing the information superiority that modern defense demands. This is what software-defined defense means in practice, systems that never stand still, that continuously evolve and that ensure protection by learning faster than the threat. To understand why this shift is so fundamental, let's take one step back and look at how software-defined defense is becoming the true core of modern warfare. Modern warfare is a contest of data, speed and decision-making. Every piece of information from radar echoes to infrared signatures or radio emissions originates from sensors across land, air, sea, cyber and space. But the decisive edge no longer lies in individual sensors. It lies in connecting, interpreting and acting on that data faster, faster than anyone else. Software is the enabler that turns raw data into operational superiority. Multi-domain operations depend on connectivity. Only software makes it possible to link diverse weapon systems at [indiscernible], exchange data securely and create a unified real-time view of the battlefield. This is what finally delivers the interoperability that armed forces have demanded for decades beyond outdated standards and across domains. In essence, the center of gravity is shifting from hardware that is fixed to software that is flexible, adaptive and continuously upgradable. That is the paradigm of software-defined defense, and it is exactly where Hensoldt is heading from Europe's leading sensor specialists to a truly software-driven defense solutions leader. Our foundation is unique. Hensoldt is the leading sensor house across all domains, and we understand how data is generated, what it means and how it must be protected. Now we are extending this strength into the digital space, connecting and fusing our sensor data across platforms and domains. This is how we evolve from a sensor manufacturer into a provider of integrated multi-domain solutions. Our ambition is clear to become the orchestrator of multi-domain operations, the company that enables information dominance through the seamless integration of sensors, software and data. That is our next chapter of leadership. And we have every reason to be confident in this ambition because we have a clear right to win in software-defined defense. First, we own and understand the data. Our sensors cover every operational domain and decades of system experience give us unique insight into how data behaves in real combat environments. Second, we are independent. Unlike many peers, Hensoldt is platform agnostic and vendor neutral, able to integrate best-of-breed technologies and give our customers true flexibility and sovereignty. Third, we are sovereign and ITA-free. Our open architectures comply fully with European regulations and scale securely within NATO frameworks and increasingly important differentiator. And fourth, we master complexity. We unite world-class sensor engineering with data fusion and AI expertise, bridging operational and information technology. And finally, we partner smartly. We collaborate where it accelerates innovation with Quantum Systems in tactical drones or with 21strategies in AI, focusing on our strength and complementing them where it creates speed and scale. Together, these capabilities give Hensoldt a decisive competitive edge, our clear right to win in software-defined defense. This foundation now takes tangible form in a product, the multi-domain operations core or MDOcore. MDOcore is the central integration platform that connects sensors and systems across all domains land, air, sea, space and cyber. It acts as the digital nervous system of tomorrow's network battlefield. It fuses data in real time, generates a shared operational picture and supports the coordinated planning and execution of mission across forces and nations. The architecture is open by design. Third-party sensors and even full weapon systems can be integrated rapidly into standardized interfaces. It meets NATO interoperability standards and provides ITAR-free backbone for allied operations. Many of the essential building blocks are already in place within Hensoldt from CERETRON and ELYSION to FCAS and LYNCEA. We are doing now -- what we are doing now is bridging these elements together within one coherent software architecture, the MDOcore. It serves as a common backbone that enables different systems to communicate, share data and operate as one, turning individual excellence into collective operational power. The demonstration you saw during today's site tour was the first live instantiation of this architecture, a concrete proof of concept for what MDOcore can do. Within just a few weeks, our engineers connected ELYSION, CERETRON, OPTARION on the same software backbone, showing how fast interoperability can become a reality. And this is only the beginning. CERETRON is our mission software suite that turns vehicles, ships, aircraft or drones into intelligent reconnaissance nodes. It connects and fuses sensor data in real time and integrates seamlessly into the MDOcore. We invested a low double-digit million amount in CERETRON's development, and this strategic investment is now paying off. Based on this technology, we secured a major contract for the new Luchs 2 reconnaissance vehicle of the German Army. The initial contract volume is around EUR 850 million, opening a wide range of opportunities in Germany and Europe, leading to roughly EUR 2 billion of potential order intake in the future. And importantly, the program includes long-term license revenues for CERETRON software upgrades and extensions. So CERETRON is more than a successful product. It is the proof point of our software-defined defense strategy, demonstrating how software investments can create recurring, scalable value and program success at the same time. And CERETRON is not a one-off case. We are already seeing how targeted software investments multiply in value across our portfolio. Software has become a powerful growth lever for Hensoldt. With relatively small focused R&D investments, we unlock major program revenues, a low double-digit million investment in CERETRON translates into more than 20x that value in program turnover. With ELYSION, a single-digit million investment created over 30x of that amount in orders. The key, ladies and gentlemen, is ownership. Owning the software and the intellectual property gives us control over functionality, security and future upgrades, ensuring that value creation stays within Hensoldt. In the past, software was a hidden component within a hardware product. Today, it is the defining enabler of capability and increasingly a driver of growth. This marks an evolution of our business model from primarily product-based sales towards a broader recurring and data-driven revenue base. With our smart and connected sensors like TRML-4D, the MDOCore as our backbone for solutions like CERETRON and ELYSION, we are building the foundation for scalable software and database services revenues beyond 2030. The traditional hardware market will one day reach its natural limits in volume. The future lies in smart and connected sensors that receive continuous software upgrades, keeping platforms relevant and extending their life cycles. At the same time, platforms such as MDOCore enable predictable, recurring license revenues require lifelong software upgrades and data-driven services. This creates resilience and a new quality of customer relationship instead of delivering once, we evolve together. For our investors, this means a higher share of software and services in our portfolio, stable margins, recurring cash flows and a business model that grows in value over time. And this is not the end of the story. It is the beginning of a new chapter for Hensoldt as a true orchestrator of multi-domain operations. Our path is clear. We combine the deep sensor DNA that defines who we are with the digital intelligence that defines where we are going. Our early investments in software-defined defense have given us a first-mover advantage, as I would call it, we are now scaling up with clear targets over the next 3 years. By 2028, we will have invested a high double-digit million euro amount in R&D dedicated to software-defined defense and core digital platforms. We are building a scalable software and data-centric business with continuous capability upgrades, modular licensing and long-term recurring revenues. The first contracts are signed. Customer feedback is excellent, and our architecture is ready to scale across domains and across nations. At the same time, we are reinforcing our ecosystem with strategic partners, accelerating integration, adding specialized capabilities and ensuring interoperability across NATO and allied forces. This is how Hensoldt will pioneer software-defined defense by progressively transforming from a hardware specialist into a software-enabled solutions leader. By combining European sovereignty with global competitiveness and by turning data, the most valuable resource of our time into decisive operational advantage. Ladies and gentlemen, software-defined defense is no longer a vision. It's happening today here at Hensoldt. We have the products, we have the architecture, and we have the momentum to lead this transformation, and we will continue to shape the connected intelligent sovereign defense of the future. So we have seen how software-defined defense is becoming the technological core of our future growth. a transformation that changes how our systems are built, delivered and evolved. Now let's take a step in the North Star journey and talk about where this growth happens because technology alone is not enough. It's about our commitment to expand globally, but with clarity, discipline and purpose. Growth is not just about doing more. It's about doing the right things in the right markets. Let's begin by looking at our long-term geographic ambition and how we are positioning ourselves to balance immediate opportunities with sustainable strategic reach. It's fair to say that the massive short-term budget expansions in Europe, especially in Germany will temporarily shift our revenue distribution more towards our home markets. But we are very clear-minded about the long term. Our goal remains 50-30-20, a balance 50% Germany, 30% Europe and 20% strategic regions beyond. Germany will remain our strongest market and strategic base, the place where we develop sovereign solutions for our most important customer and participate in programs that strengthen the Bundeswehr. We deliberately focus on programs open to European allies so that our German innovations can be scaled across Europe. In Europe, beyond our home countries, we concentrate on high opportunity markets in the Nordics, Eastern Europe and, of course, Ukraine. Here, we see strong potential for cross-selling existing Hensoldt products and solutions without developing bespoke systems abroad. Beyond Europe, we are focusing on a select number of strategic regions, the U.S., Canada, Australia, APAC, India and the Middle East. We pursue these markets through local partnerships and government-to-government frameworks, leveraging proven products and services. This approach keeps our footprint focused, our execution lean and our growth scalable in the long term. Of course, such targeted international strategy also need the right structures, clear responsibilities, customer focus and collaboration across the group. Over the past months, we have introduced a new key account management system and adapted our go-to-market approach to support focused growth in our key regions. In Germany, we are establishing strategic account teams for our main customers from the Bundeswehr, B2C to our major OEM partners like Rheinmetall, Airbus and KNDS, B2B. Internationally, we have identified some 30, 40 key accounts across our priority regions. Each one is managed with clear ownership and close alignment between business development, sales and divisions. Our international sites in France, U.K. and South Africa are also important pillars of this success. In the past 12 months, we have continued to integrate them into our global operating and governance model, leveraging their individual strengths, especially when it comes to deliver at scale. This transformation makes us faster, more customer-centric and better coordinated across markets. It also ensures that every opportunity is pursued with the full strength of the Hensoldt organization behind it. Now while structure and focus matter, what truly brings our strategy to life are our people, our colleagues across the world who represent Hensoldt every day. You will now see a short video with 7 colleagues from around the world sharing insights from their markets and what Hensoldt means to them. [Presentation]

Yes. We wanted to give you this impression. I have visited in my time with Hensoldt all the sites, and I can just tell you it's really a great team, which I'm very proud of. Every time I meet the teams abroad, I'm reminded of how much diversity, creativity and dedication we have across our global network that has been reflected in the video. These colleagues make Hensoldt more international by the day, and they embody the openness and curiosity that drives our success. Finally, grow with focus also means expanding our ecosystem through partnerships, innovation and selective M&A. We continue to build on strong network of partnerships to develop new business opportunities and expand market access. You see some of our key partners on the slide from established industrial relationships to new technology collaborations. Let me highlight a few. With Deutsche Flugsicherung, we aim to partner on counter UAS and air traffic control solutions, protecting critical infrastructures. With Diehl Defence, we are co-developing software-defined systems, combining sensors and effectors to multiply the capability of European air defense. With Quantum System and AVILUS, we are combining mission software and UAV platforms with Hensoldt's sensor know-how, a strong fit for software-defined defense. And with 21strategies, we are advancing third wave artificial intelligence, applying tactical AI directly into defense applications. We are also deepening our collaboration with Technical University, Munich, connecting to a powerful network of researchers and start-ups. This helps us identify emerging technologies early and engage with founders who might one day become Hensoldt partners. These start-up investments are crucial to keep pace with innovation. At the same time, we remain disciplined in traditional M&A. Our pipeline focuses on value-accretive targets in Germany and Europe, fully aligned with our strategic road map and financial guardrails. It's about expanding intelligently, not for size, but for capabilities, technology and strategic fit. So to summarize, grow with focus means being deliberate. It means leveraging our strong home base in Germany, deepening our European partnerships and expanding selectively into strategic regions. It means acting globally, but always guided by one purpose and one culture. And that brings us naturally to the next axis of our North Star, lead our teams into the future because growth and technology are only as strong as the people behind them, the leaders and the teams who make Hensoldt what it is today. Let's look at how we are shaping the culture and the people that will carry this company forward. When we speak about growth beyond 2030, we must speak about our people because no matter how ambitious our strategy, no transformation succeeds without a strong team and the right culture behind it. At Hensoldt, we have built something special, a company that is both high-performing and deeply human. Our people share a strong sense of purpose to make a difference for a safer tomorrow, and that purpose translates directly into performance. That is why we are proud to position Hensoldt as an employer of choice, not only in defense, but in the entire European technology landscape, a place where people find meaning, where people find opportunities and the confidence to grow with us. This ambition rests on 4 pillars: systematic attraction, development-driven growth, meaningful retention and our leadership in sustainability. That creates a strong fundament for our purpose. Let me start with attraction. The competition for talent, especially in engineering, software and AI has never been fiercer. To stay ahead, we have made recruiting a strategic discipline where we combine targeted campaigns with real partnerships, sponsorships like Jugend forscht that inspire young talent early career days and on-site events for technological experts and dedicated campaigns that reach specialized groups from software engineers to former soldiers. Our focus is not on mass recruitment for positions we frequently search for, but on precision, identifying the right profiles, building communities and staying visible in all our home countries and home locations. Our refer a friend program has become a real success story, accounting for around 1/5 of critical hires. Our employer ratings, for example, 4.3 on Kununu reflect how people experience our culture. And with nearly 70,000 applications this year, Hensoldt is firmly established as an attractive modern employer. Equally important, we are investing in the next generation, 30% more apprenticeship positions since 2023, combined with our Hensoldt fit curriculum that blends technical depth with personal growth because the future of our company starts with the people we train today. The second pillar is development. We believe that learning is not a side activity. It is part of our DNA. Our training portfolio includes more than 600 internal courses and 40,000 participations per year, complemented by digital formats like LinkedIn Learning and mentoring programs that connect experienced leaders with young talents. We use these formats not only to transfer knowledge, but to build capability in project management, systems engineering, AI and in leadership. Our [ Beyond Horizons ] learning journeys promote an innovation mindset and our professional certification program ensures that our people are globally competitive. Talent identification and succession planning are now fully digital, helping us build a robust talent pipeline and fill key roles internally for sustainable growth. This is how we create continuity and resilience as we grow and perhaps most importantly, we are strengthening leadership. Our leadership principles, ownership, collaboration, excellence and innovation are not just words on a slide. They are becoming a part of how we lead and decide every day. The third pillar is retention or more precisely belonging. A strong culture is a reason why people stay, perform and grow with us. Our culture evolution initiative drives this forward, combining top-down leadership development with bottom-up initiatives that encourage collaboration and innovation. We also take well-being seriously in those stressful times. Our new health and leadership survey connects leadership behavior directly to employee well-being because sustainable performance depends on balance. As a result, health-related performance losses have gone down significantly in the past year. And in addition, our employees perceive leadership at Hensoldt to be stronger than in other companies. We offer flexible work models, targeted benefits and a growing employee share program. Today, 2/3 of all Hensoldt employees are also our shareholders. That is a powerful sign of identification. And with a retention rate above 95%, our people are not just staying, they are choosing to stay. This is what it means to lead our teams into the future to combine ambition with care, performance, purpose and leadership with humanity. Our sustainability strategy is built on 5 pillars; climate, society, compliance, innovation and diversity. Together, they guide how we operate, how we invest and how we measure our impact. Let me briefly walk you through these 5 pillars. Climate. We are on track to become carbon neutral by 2035. Between 2020 and 2024, we reduced our direct Scope 1 emissions by 22%, and we now use 100% green electricity in Germany, France and U.K. Last year, we calculated our full Scope 3 footprint for the first time, an important step towards reducing emissions across our value chain. Society. We take our role as a responsible industrial citizen seriously. Through initiatives such as Made for Germany, we engage in constructive dialogue with policymakers to strengthen security and innovation. At the same time, we continue to focus on health, well-being, integrating these topics into our leadership and employee surveys. Compliance. Our business is grounded on integrity. We have reinforced our global ethics and compliance program, introduced a 24/7 whistleblower tool and continue to provide mandatory anticorruption training for all employees and partners. Innovation. Sustainability now starts at the design table. We evaluate new ideas using sustainability criteria, invest in eco design and develop digital road maps that make both our products and our operations more efficient. And last, diversity. We are making steady progress. Women now represent 25% of our leadership team, and we have rolled out group-wide unconscious bias training to ensure equal opportunities for all. Our consistent efforts are reflected in our external ratings, a benchmark we take very seriously. In 2025, we achieved a Sustainalytics score of 21.5, ranking second in the global aerospace and defense sector. MSCI rates us A, positioning Hensoldt among the industry leaders. S&P Global places us well above the sector average with 45 out of 100 points. And EcoVadis awarded us a bronze medal, putting us in the top 35% across all industries. These results matter not only as a recognition of progress, but as a clear sign to our investors and partners that Hensoldt operates responsibly, transparently and sustainably. Strong ESG performance reduces risk, enhances resilience and strengthens our reputation. In short, it's good for the business, and it's the right thing to do. Our people and our sustainability strategy are 2 sides of the same coin. They secure the future of Hensoldt, building a company that performs, endures and inspires. With that, let's move now how we lead our teams and how we deliver financially. And this is over to you, Christian.

Ye,s. Thank you very much, Oliver. Yes, what we've seen is just and underlines the truth is central for Hensoldt's success, and our performance is built by people and proven in numbers. So let me now take you through how that performance translates now into financial results, our outlook and how we continue to balance growth on the one hand, profitability, but also resilience, which is key for our business. So now first of all, a quick recap, first 9 months, strong across all key performance indicators. So we have achieved an order intake of more than EUR 2 billion, driven by our air defense radar programs, Eurofighter and the U212A submarine program. Group revenue reached over EUR 1.5 billion, representing a 14% increase in core revenue. Our Optronics business continued its strong momentum, while Sensors gained significant traction in the third quarter, exactly as anticipated following a slower start in the first half. Backlog rose to EUR 7.1 billion, a new record, resulting in a book-to-bill ratio of 1.3x. And our profitability reflects this healthy top line performance. Adjusted EBITDA increased by 13% year-on-year to EUR 211 million with a strong margin of 13.7%, slightly better than last year. So in summary, we are firmly on track to meet our full year guidance with strong growth, robust margins and a solid balance sheet, an excellent foundation as we are in the final quarter of the year. Let's now have a closer look at our segments, how they developed and the performance where it's coming from. Starting with Sensors. Order intake reached EUR 1.7 billion, exceeding last year's high comparison base. That corresponds to a book-to-bill ratio of 1.3x. And the growth as in orders was driven by major orders from Eurofighter re-baselining, the [indiscernible] program and TRML-4D radars for Ukraine. Revenue increased to over EUR 1.3 billion, fully in line with our expectations and excluding the declining share of pass-through revenue, core revenue grew by 12%. Adjusted EBITDA improved to EUR 199 million with only minor product mix effects. Some temporary dilution came from the ramp-up of the new logistics center in the first half as elaborated, and an investment that will pay off in the future in productivity and scalability in the months and years ahead. Turning to Optronics. We achieved a strong order intake of EUR 328 million, corresponding to a book-to-bill ratio of 1.4x, driven by the orders of U212A submarine program, retrofit, gimbals and sites for ground-based systems. Revenue performance was excellent, continuing the strong momentum of previous quarters. And the German entity stood out with 27% growth in the first 9 months, driven by accelerated production in ground-based systems. And as outlined before, we reached an important milestone, the transfer of ground-based business in Oberkochen from the [ former ] size building to the new Optronics campus. And this will provide the space and the efficiency needed to sustain our growth in this area. Adjusted EBITDA in Optronics rose to EUR 12 million, reflecting higher volumes. Overall, both businesses, both segments are performing well, delivering growth, profitability and operational resilience. And now let's turn to the full year guidance and our midterm outlook. So following the parliamentary approvals following the processes we have seen in the last weeks and several major procurement programs in Germany, we have significantly raised our book-to-bill guidance from 1.2x to a range of 1.6x to 1.9x. As Oliver has mentioned earlier, key programs -- we expect to book key programs such as Eurofighter tranche 5, the Luchs 2 reconnaissance vehicle in the coming weeks, both of which will have a substantial impact on our order book. And we also specified our revenue guidance for EUR 2.5 billion in full year. And of course, the rollout of the new logistics center, plus the move of the ground-based system business and new facilities represent a long-term investment in our competitiveness and into our efficiency. And while it temporarily moderates revenue recognition, it's an essential enabler for future scalability. We are guiding to an adjusted EBITDA of 18% or higher, maintaining the strong profitability as we expand capacity. Free cash flow conversion remains at 50% to 60% and net leverage target is unchanged to 1.5x, underlining our disciplined balance sheet management. Dividend payout will also remain at 30% to 40% of adjusted net income, fully aligned with our commitment to shareholder returns. And now from short term to medium term, let's now look how our expectations and beyond look like. In 2026, we expect the momentum in our order book to continue. We expect 1.5x to 2x book-to-bill ratio, ongoing demand and order momentum. Sales are expected to grow by around 10% EBITDA margin improvement of 50 basis points, driven on the one hand, operating leverage, efficiency gains, but also efforts for production capacity. Given the ongoing CapEx for infrastructure expansion, we mentioned this EUR 80 million, the cash conversion will be a little bit lower to around 2026, a temporary effect we have planned for. And let me also highlight that we will not show it in the one-offs. We will put it in our recurring figures to make it more transparent also for you guys. Also some words then will follow. At the same time, we continue to reduce net leverage and maintain our disciplined balance sheet approach. For the midterm, we expect order intake to continue outpacing revenues, translating into an average organic growth of around 15% to 20%, slightly more back-end loaded as the large programs, as I've outlined in the beginning, ramp up. Margins will continue to expand by about 50 basis points per year, reflecting scale and productivity gains, while cash conversion normalizes again to around 50%, coming back to 50% to 60% from 2028 onwards. Again, here, 1.5% CapEx reserve planned in the normal cash conversion. Dividend policy is unchanged, 30% to 40% net income payout ratio, supporting both investor returns. In short, the outlook combines strong momentum with sustained profitability and disciplined financial governance and from the near term to our long-term ambition and the confidence behind our 2030 targets. So as explained earlier, we confirm the ambition to achieve EUR 6 billion revenues in 2030. And our confidence in this goal has only grown since we have froze this guidance by EUR 1 billion in May. This increase across defense budgets across Europe has now fully materialized, especially in Germany, which continues to lead the way in modernizing its armed forces. And this provides sustained tailwind for order pipeline and long-term demand visibility. We are seeing that this translates into firm orders for key products from air defense radars to ground-based systems. And all of this strengthens our belief in sustainable organic growth supported by demand on the one hand, technological leadership, strong market visibility and which could lead, I have to say, on an even higher organic revenue growth that assumed until now. By 2030, we expect an adjusted EBITDA margin of 20% or higher, reflecting both scale effects and the efficiency gains achieved via operations 2.0. And importantly, our journey will not end 2030. We see a smooth, sustainable trajectory beyond driven by next-generation technologies as outlined today, the growing service business and software-defined defense. Let's now take a moment to look what underpins this confidence in hard figures, meaning revenue visibility, revenues backed by order backlog. We expect order backlog to reach EUR 8.5 billion by end of this year, the strongest in our company's history. This gives us visibility we need to go for capacity expansion. Around 91% of our 2026 revenue will be secured through both long-cycle orders and recurring short-cycle business. For 2027, it will be 65% of revenues already presecured. And for 2028, roughly half of our expected revenues is already covered by existing contracts. And this visibility is a major asset, one that few companies in our industry can match. And now let's know how this growth turns out into across our segments and across our technology. So while sensors has driven our growth in the last 3 to 4 years, clearly, now we move to a more sustained and balanced growth ahead of us. Sensors will stay and continue to grow by air defense, Eurofighter and PEGASUS. Optronics will grow even faster, supported by strong order back book, the ramp-up in ground-based systems first and foremost, driven by Army programs. In addition, software-defined defense is now contributing to our top line and will account for around 8% of total revenue by 2030. This diversified growth across both segments, complemented by digital and software-based revenue streams creates resilience and long-term profitability. And as you know, innovation is the backbone of Hensoldt's growth story. And so now let's look at how R&D investments look like. Innovation has always been and will be Hensoldt's DNA and remains the foundation of our competitiveness on national, international and global markets. We stay with our investment policy, 5% to 6% of our revenues, we will invest into self-funded R&D. Customer-funded R&D has risen from 8% in 2020 to 15% in 2025 and will continue to grow on an absolute level. In absolute terms, this means at the end of the day, a sustainable increase in total R&D funding, and it also shows that customers trust Hensoldt by these pure figures, giving Hensoldt more and more R&D funding to be done. Within the R&D portfolio, we are increasing focusing on software-defined defense, digital architecture, AI-driven capability and ensuring that the technologies remain at the forefront of customer needs in all of our key products. And this will secure technological sovereignty, global competitiveness and sustained growth potential. And now let's have a look at the second basket of investments on CapEx and how we are investing now in the physical backbone of our growth. And as you can see on this page, we have steadily increased CapEx to support footprint expansion and capacity growth. As you have seen, Wetzlar, Oberkochen new logistics center. And let me show you 2 ways of CapEx. The one will be the base CapEx for maintenance and ongoing expansion, which will grow a little bit across the horizon until 2030; and on the other hand, we will have infrastructure. We have moved -- we have seen 2024-2025, CapEx level are elevated as we complete this key infrastructure investment, logistics center Oberkochen as you can see. And now for 2026, we will have this new radar production site for Spexer and TRML-4D and this is why CapEx will peak to approximately 6% next year. From 2027 onwards, we have elaborated that we have some ideas. Additional logistics is the one, additional capacity for ground-based systems is the other. Nevertheless, it's not concrete yet, but we have planned with a capacity and CapEx reserve for approximately 1.5%, which should be sufficient and CapEx normalizing to 4%. And also on this stage, from 2027 onwards, we will also shift our one-off policy in this regard that only S/4HANA will stay in as a one-off, but all other one-offs will be removed to be more clear in our quality of earnings. All these investments are fully aligned with deliberate scale, building the industrial and logistics capacity to fulfill the growing backlog efficiency. And now let's move on to the next enabler of growth strategy, our financing structure. And in summer of this year, most of you know that we successfully refinanced our syndicated loan through a new syndicated facility and promissory note, and thanks also to the partners here in this room who have supported us. And this is complemented by a EUR 400 million bank guarantee line. This was a decisive step for HENSOLDT, strengthening the independence, flexibility and resilience. And key highlights include that we got the release of legacy securities from previous leverage buyout structure. We financing has secured until 2032, long-term stability. We have improved the margin ratchet, and we have a more diversified debt profile, reducing risk and increasing resilience. And in short, this new structure gives us an excellent foundation to continue executing our growth strategy confidently and independently. And with that in place, let me conclude the financial section with our capital allocation priorities, which are more or less unchanged. First, fueling the growth. We will continue to invest, as you see in the figures in HENSOLDT 2.0, scale in production, strengthening technology and developing our people. Secondly, sharing the growth, we maintain a dividend policy of 30% to 40% payout of adjusted net income that our shareholders will anticipate and participate in our success. Strategic acquisition. We pursue value-accretive M&A, particularly in Germany and Europe, focusing on technology and markets, but also now on the value chain. And last not least, financial discipline. We adhere to a conservative debt profile, maintaining flexibility on the one hand and resilience on the other hand. And this disciplined framework will ensure that we can invest, that we can deliver and then we can reward on a sustainable ongoing basis. Yes, coming to the financial takeaways. Last not least, First, we have a very strong order book, and this provides us with an excellent visibility and the decisions we take are well balanced. We are operating in markets poised for sustainable multi-decade growth. We combine profitable expansion with disciplined cash generation, enabling reinvestment, dividends and value-accretive M&A. And we remain deeply committed to innovation, investing in R&D and leading the transition to software-defined defense. And with that, we are absolutely confident in the path ahead, a path of disciplined growth, technological leadership and long-term value creation. And with that, back to you, Oliver, for the wrap-up and closing remarks.

Let us have a look at what drives our business in the future. Beyond 2030, we see continued sustainable growth supported by both geopolitical need and technological transformation. Geopolitically, hybrid conflicts have become the new normal, reinforcing the political consensus around credible defense and deterrence. NATO's 5% of GDP target, including 3.5% for core defense investment will ensure a high sustained spending. Technologically, growth will be driven by massive investments in conventional capabilities, long-term service and upgrade cycles and the rise of software-defined systems. These elements ensure recurring revenues and long-term customer engagement with our technology, customer intimacy and delivery capability, HENSOLDT is right at the core of this transformation. Ladies and gentlemen, when we called this Capital Markets Day, delivering North Star a new era for our business, we meant it because what you have seen today truly marks the beginning of a new chapter, perhaps even a new book in the HENSOLDT story. We have evolved from being pure-play defense manufacturer of defense electronics to become a leader in multi-domain solutions from building sensors to building connected systems that see, understand and act across the domains, land, sea, air, space and cyber. This is what it means to deliver North Star. It is not only about growth, it's about transformation of our technology, our business model and our role in Europe's security architectures. At the heart of this evolution lies software-defined defense and our new solution, the MDOcore. They make our systems adaptive, networked, upgradable, turning sensor data into operational insight and insight into action. With them, HENSOLDT moves from supplying components to enabling decision superiority. And that brings us back to the idea I introduced earlier today, fight tonight and fight tomorrow. Our customers must fight tonight, meaning they must defend themselves with the systems already in service; while preparing for the next generation to arrive against an adversary with mass, they need more class, and they need it fast. That means software-defined data-driven solutions that connect sensors, extract meaning and create shared situational awareness on the battlefield. But it also means delivering hardware at speed, upgrading and ramping up production to keep their systems combat ready. So even as we innovate through software-defined defense, we are stretching our operations to the limit to deliver at scale right now because speed of delivery has become as decisive as technological superiority. At the same time, we are preparing to fight tomorrow, expanding capacity, industrialize at a pace to meet the rising demand from 2027 onwards, this new generation of systems will begin to enter service and ramp up towards 2030. And when they do, they will already be enabled by our SDD and MDO solutions, more connected, more autonomous and more effective from day 1. That is what delivering North Star means in action, fighting tonight with intelligence and speed, fighting tomorrow with scale and innovation and building a future where both come together seamlessly. Our future business model is built on exactly this foundation, smart and connected sensors, leadership in multi-domain operations through software-defined defense and recurring higher-margin revenue streams from services and data-centric software. We will maintain and evolve our growing installed base, while developing new models such as Software as a Service and digital mission enablement. But this transformation does not happen in isolation. The entire defense industry is changing. New players are entering the market, companies like and the [indiscernible] and the Schwarz Group bringing fresh technologies and new perspectives, start-ups such as Helsing, Quantum Systems, SAC, ARX or Titan are accelerating innovation and challenging traditional boundaries. And major OEMs like Rheinmetall are expanding their reach across domains, redefining their roads. In this dynamic environment, HENSOLDT stands confident and clear. We master scalability and multi-domain operations. We are becoming increasingly software driven. And we act as bridge builder between established and emerging players, shaping a new European defense ecosystem built on collaboration, openness and trust in Europe's own capabilities. That is why HENSOLDT is stronger, more agile and more future-ready than ever before. We are scaling, we are connecting, and we are shaping the future of Europe's defense. We are delivering on North Star with purpose, with rigor and with a determination to protect what matters most. Europe's freedom and security. Thank you very much for your attention.

Thank you, Oliver. Thank you, Christian. We are happy to take your questions now. [Operator Instructions] And we start with Sash.

It's Sash Tusa from Agency Partners. Three brief questions, 2 of which are probably interlinked. Your slide on partnerships, did not include Leonardo, which is one of your second largest shareholder. And when they acquired their shareholding in you, they made a lot about a partnership there. You don't seem to reciprocate on that. I wonder whether you could talk about your relationship with them at the moment. And then -- and this may or may not be related, the very little reference to FCAS in your presentation. Where do you think the whole FCAS program will go? And what is your Plan B for if France or Germany can't agree? And then the final question is just on M&A. I just wanted to check that I understood what you say about possibly buying into your -- into the value chain. Does that mean that you would expect to buy more of your -- or some of your suppliers as a means of strengthening your own resilience?

So thank you very much, Sash, for asking these questions. A good opportunity to bring the elephants out of the room. So Leonardo. Well, Leonardo was not mentioned on this slide, but that is not a message in that regard. I mean, traditionally, we have a very strong relationship with Leonardo. Yes, they are our shareholder, but also on project program level, we do cooperate very well. Best example is the Eurofighter. So ever since I joined as CEO, I'm in a regular exchange with Leonardo. So we have also regular strategy meetings. Unfortunately, some of the, let's say, programs, which bear a lot of opportunity, including the tank program of Italy, didn't really mature to crystallize or catalyze this good cooperation, which is still in place. So earlier this year, we had a German, Italian roundtable with the government. And I think that is probably the paradigm when Leonardo entered as a strategic investor into HENSOLDT, it was before the Zeitenwende. At that time, I think it was very clear that we were heading for a more European approach on defense. Ever after the Zeitenwende, it is also that we see a strong impetus, which, of course, HENSOLDT takes profit from that we look at national sovereign capabilities. And that's what probably why recently, there was not a big momentum despite this very strong cooperation that we do have with Leonardo. That's why we didn't see this as a, let's say, strategic relevant element to put on this slide where you have the dynamic players like start-ups, new partners that are opening international regions to us. But again, the message is not that we put that at stage. So I think the future of Leonardo and HENSOLDT is very much connected to how does the European also G2G political network evolve? Are we willing to work together in some of the programs? And then I think Leonardo and we, as many other European players Indra, Thales, and so on, we are ready to give the industrial dimension to it. Probably that leads the way to FCAS. Yes, at the moment, I think the press is full, probably also read one of my quotes where I said the behavior of one of the partners is rather irritating because personally, I still am a strong believer that Germany and France as the strongest nations in Europe need to join forces to drive things forward. And also looking at the sensor pillar, which is the core of what HENSOLDT is doing in FCAS together with Thales and Indra, I think here, we have the opposite picture of what we see between Airbus and Dassault on the level of the next-generation fighter. We had a very trustful and also very innovation driving partnership with our competitors, Thales and Indra in that pillar because we had engineers coming together that really were driven by joint innovation by driven -- by bringing technology forward. And I think on the very top level, that's why this political will doesn't yet translate into a concrete program is we see and that aligns with what I've said before, there is no real willingness on compromise. And as long as we have this confrontation, we have to see how this goes out. The Chancellor Merz took it as a topic. So as we -- and you know from the media, there will be meetings in December where actually I think there remains a strong will to secure, to rescue this program, which is heavily under stress at the moment. Going forward, I believe that probably it would not die, but it will take a total different form. We hear the stories that probably the focus shifts from the fighter to the system of system, where we have manned, unmanned teaming, where we have networking of sensors and all of that. And I mean, you heard the story about MDOcore and also part of the MDOcore IPR is based on what we did in FCAS. So I think in that regard, I have no real concern despite as a European, I would regret if this opportunity disappears. But from the HENSOLDT perspective, we see that in every new form of FCAS, we will have our share. And also looking at manned unmanned teaming, looking at Forton UCAV, which is currently under discussion in Germany, probably also while FCAS was struggling, the focus shifted technology-wise. And in all these programs, we are very present, and I see a strong future for all the engineers that so far have worked in FCAS.

Yes. And your question regarding the value chain. So the answer is clear, yes. And why it's yes? First, we have to understand that it's not only HENSOLDT, there are also the big other OEMs, 65% approximately of the revenue is sourced. That means the value chain as such is one key success factor or key decisive factor in order to maintain this ramp-up besides investing in people, capacity and so on. And this leads me to the fact that transparency on the value chain is key, where we are building up the necessary tools that -- and then there has to be a good screening, who of the investors and who of the suppliers is willing to ramp up, who is able to ramp up with the structure, and also understanding that 80% of ours and also of other OEMs are small and medium-sized companies. And there are then this goes along with challenges on the one hand, but also opportunities. And there might be the one or the other critical supplier for us where it makes sense that we go for vertical integration to secure, on the one hand, supply, but also secure capacity to be more balanced in this regard. Certainly, yes.

Ross, go ahead.

Ross from Morgan Stanley. Three questions on your 2030 targets. First of all, on the EUR 6 billion, I think you previously kind of tagged this to an assumption of 2.5% of GDP in Europe. But in your slides, you think Germany is going to be at 3.5% and the Rest of Europe is going to be at 2.5%. So why is the EUR 6 billion not higher? Or is this just a timing issue with the ramp-up? Secondly, how much of the EUR 6 billion is M&A? Again, I think you previously said it was around EUR 600 million, but I couldn't get the ruler out to work out on this slide how much that is. And then lastly, just on margin, obviously, at least 20% EBITDA. How should we think about this at the EBIT level?

Yes. Maybe to start with your second question. I think when you calculate these figures through, I think we end up now in a figure of approximately EUR 5.7 billion by 2030. So it's a little bit higher than before, when we ended up in 5.4%. So this is what we also indicated that we see more room for organic revenue increase. So this is the first answer. The second is, yes, why are we not increasing? I think -- so let's be honest, Germany is really the forefrontner, yes, and it's really materializing, but also be honest, the one or the other European member who has even signed off this 3.5% is some are hesitating. So we do not see the same maturity level as we do in Germany. So there is for me, the one or the other question mark. And we have to look at 2026, 2027, how this turns on, if there is more upside also from states who are currently a little bit under pressure, it could be -- it could give us further tailwind, but this is how I look at it currently. And also maybe Oliver to add.

Yes. Maybe what we have to consider on this one is, yes, indeed, we have the clarity on the 3.5% GDP spending. We have the 5-year cornerstone paper, which reflects a spending of EUR 152 billion, if I remember well, in 2029. So the money is there. But the problem at the moment is that we don't have the clear visibility what will be the contracts, especially in the outer years. At the moment, actually what happened, and you saw it with the looks that we jumped from 90 to almost 300 vehicles because what the customer did, they raised the quantities in existing programs, exploiting the full quantities of the framework contracts. But the next phase will be how do we build new capabilities with these -- with the money that is truly available. And that is for us, which does not make it very easy for us to do the math at that stage. What is the addressable volume of these shares, especially when it comes to new capabilities. The only thing what we can say today, and that is what we try to present to you during the Capital Markets Day, these new capabilities will be a lot about multi-domain operations, how can we connect, how a new class for the battlefield. And that's why we're investing now. That's why we are an early adopter on this MDOcore principles because I think that will bring us into a very good position to participate in the future new capability procurements.

Yes. And your last question, EBIT. The difference between EBITDA and EBIT is approximately 4.5%. So we had a little bit more because we started to amortize this capitalized R&D. But going forward, I see it in a more stable way. So 4.5% between EBITDA and EBIT is for me the right figure to model.

Let's move on to Sebastian.

Sebastian from BNP. I also have a question on margin. And you apparently did guide to, I think, rather 21% by 2030 because you also made a remark of 50 bps increases. You also said last week on the quarter 3 conference call that Optronics you'd see to go back towards 20%. So implicitly, that means there is not that much of a margin expansion in sensors, and that's not necessarily intuitive if we think about the growing contribution from service and the software stack that comes with it, the phaseout and also of the headwinds that you did face in the year '25. So if you could just walk us through what the sort of key elements are, that would be great.

Yes. First of all, I'd like to reiterate that. So we see end of this year, Optronics 14%. We went into this year with 10%. To be honest, also having some unclarity about the move, how will this phase out, how are we able to produce under these circumstances. And this is for me now a very good sign. Going forward, I see every year approximately 2% in EBITDA improvement because now we come to volume-based business in Optronics. It is a classic production-based business. If we ramp up, we get economies of scale out. And by 2028, I expect that margins from Sensors and Optronics will be comparable on the group level and going forward. So what does this mean in Sensor? It was the driver the last 3 to 4 years of extremely margin expansion. But now we are -- have to include things like product mix. TRML-4D will be still a driver, but there will other aspects. If there is a second PEGASUS, we know that it's lower in margins, a very important program, but lower. And of course, solutions and software-defined defense come in the first stage with some development effort, which weighs a little bit on the margin in the front years, but gives us room to improve also in the future. And this is how I currently think about that. Let's also be clear in the last year, we were always able to do some things on the margins. And -- but I'd like to stay with that level of doing the homework, delivering and then see how margins progress. And I think the last 3 years, we were quite successful to also expanding margins beyond a certain level of guidance.

May be just quickly follow-up on the PEGASUS comment you made. So there is an element of PEGASUS included in the EUR 6 billion now or how should we think about that?

There are -- is a further batch included. Yes.

We'll take Aymeric next.

Yes. It's Aymeric Poulain from Kepler Cheuvreux. You give this guidance for service increasing from 1% to 8% by 2030, but do you have a target also an ambition for the next decade? And I think you mentioned something about services overall in the U.S. maintenance and services being 50%. Is that part of an ambition to rebalance the portfolio in that direction? And then you said it won't -- this increased service will not be accretive in the first part of -- I mean, in this decade on the service increase, but what about the next decade? Do you see the software services revenue being more profitable than the hardware business today? And then last on the PEGASUS, the next 3 batch, the first orders were obviously including development costs, so EUR 0.5 billion per PEGASUS, so it's a very big number. For the next one, what would be the right level of revenue per unit, so to speak? And how much of that would include services, please?

Okay. I think, Aymeric, first of all, we have to be clear. So software-defined defense is not the same as service. So software-defined is what Sven has outlined today and what Oliver has elaborated. Services for me, maintenance, MRO, spares and something like that. And in this regard, we were at around 17% 2024. I think this year will be in the same range. And going forward until 2028, 2029, we will be approximately at 20%. On the one hand, we have an increase in service business. But with the laid out budgets, also the core, I call it, core programs in radar and optronics will grow even faster. But with having more platforms in the armed forces and on the same hand, requiring the circulation reserve, [indiscernible] for reserve, [indiscernible] availability of systems going beyond 90%, which is comparable with car industry, which is beyond 95%, yes, we will see an enormous recurring business in the service. And I -- from my point of view, I estimate that service will be from 2030 onwards more in 25%, 30%, at least, as Oliver has outlined, from a pure mass of platforms in the forces and having this business on.

There's one element to it also. And probably that is, as I explained before, for calculating the guidance on revenues and so on in service, I see a strong, let's say, paradigm shift in how the armed forces are thinking about service. So I come from a time, most of you know that I have been a professional soldier in air defense. At that time, we had a 10-minute status, and we had spare parts even delivered by helicopters to the site to keep the systems up and running. The past 3 decades, it was like that the customer hardly ordered because he had scarcity in budgets, hardly ordered any spares. They said we can buy it just in time because they could afford to have a tank, a vehicle or an airplane to sit on the site and be down for operational service or technical service. So in the discussion with the customer, we see that this is changing massively. So the first wave is that we see a growth in ordering spare parts, which is along with the product margins and so on. But I think there will be a new definition of how service will be done, and we have plans under discussion with the customer of even building mobile service troops where we go to the customer site to do the servicing for the vehicle, for our product and so on, which, of course, also comes with some investments, some conceptual changes in how we do it. So that is probably the variable in really defining the margin where on the short term, we said, okay, there will be some efforts. But in the long-term, once this new service system, which is definitely a part of Operations 2.0, once our new service system architecture is in place, then of course, we can gradually improve.

Yes. And then last question was on PEGASUS. I think when we go for another batch, I think a figure around EUR 1 billion is the right estimate, taking into account that some of the predevelopment was done already. So this is how you should -- how you could model.

Then I think Charles is next.

Charles Armitage. A couple of confirmation questions really. Your guidance for the full year was unchanged, except for the book-to-bill. Why didn't your CapEx -- sorry, your cash conversion go up with that? Was it the CapEx coming through already? And then the second one is medium term versus long-term. So over the medium term, you've got by far the strongest growth in Germany, yet I think over the long-term, you're going from 57% of sales in Germany to 50%, which kind of doesn't make sense arithmetically.

Yes. Maybe first question, why did we not improve cash conversion? I think there was a similar question on Friday because there are no advanced payments. So the good news is that we have advanced payments. The bad news is it's not a given. So it's still on a contract-by-contract decision negotiation, heavily arguing in each program to do that. So currently, what I see as we had in the last 2 years that the increasing working capital we need to grow is balanced by advanced payments. However, not more, but it gives us a cash conversion performance, what I see this is balanced. Yes. So a second and maybe Oliver, you can contribute. Of course, there is much potential also go beyond 2030 with respective growth rates. But let's also be clear, we are now in 2025, 5, 6, 7, 8 years. It's a very long time that there is enormous potential in terms of service, software-defined defense, other areas for sure. But my perspective is let's look at it step by step as we move forward and then adapt in a certain direction, but tailwind is there for sure.

Further questions? David?

Just one slightly boring one, Christian. Just because it gets a bit hard to know what you have and included in free cash and what you haven't. Have you got a guidance on net debt for '26?

Yes. I think from a pure cash performance, I think that net leverage will be 0.3x less, something like that on a pure cash performance. But I have to say we have to also have a look at lease liability. You know this IFRS 16 standard where you are required to put in more liability in a phase where you rent more space, what we currently do. So it could be that the pure cash performance is then somehow eaten up in the leverage by a lease liability. But on a pure cash performance, I would say that 0.3x lower net leverage is a good estimate.

Okay. And then just, I guess, related to that, I guess to get to those numbers, you need quite good working capital inflows in '25 and '26. Is that what you're assuming?

Yes. I think that as we also did in the last year that we are -- with these advanced payments now in place, we can outbalance working capital requirements.

Further questions? Afonso?

It's Afonso Osorio here. Just one follow-up on the growth beyond 2030. I know you said that it's 5, 6 years down the line, but is it going to go from 20% plus in 2032. Is that a peak in terms of growth? Or is that going to normalize? You're going to say 20s going to be high teens, low double digit, high single digit? How do you think about -- without putting a number 2035, how do you think about the growth and the phasing of growth into the next decade according to the pipeline you just showed as well?

Maybe to give you some indications on that because it's really far away. But when I look at the current Army programs, so what is envisaged and Oliver, you know it quite better than me, the contracts which will be placed now and also 2026, they do not last until 2029. They last until 2033, 2034, something like that. And this gives you maybe an impression that the growth rates we see between 2028, 2030 could be also there beyond 2030. So this is for me a kind of an indication because many people now currently think that German Armed Forces contract until 2029 and then it's over. But when you look at the contracts with the sizes over the years being deployed in sites and aircraft and also our negotiations with the OEMs, they go far into the 30s.

Yes. And probably one thing to add, that's why we stayed so strong on our growth ambition in grow with focus. I mean that's why we're investing. That's why I'm seeing these teams, and you saw the video with the strong teams that we have there. And they are building the relations at the moment to sell whatever we have across Germany and Europe also abroad. And that is a potential. But still, we are building those relations, and we are understanding the needs in a global defense and security market. But at least from first guess, I would see that given that the company gets more international, then as we go forward, I think we are ready to sustain this growth also over time, the strong growth also over time.

And just a quick follow-up to that. Like in terms of the 10% international revenues, like what would be the key contributors in terms of countries? I mean can you have a sense of the speakers that you put in the video on the key countries, but can you just have a sense of which countries specifically within that 10% share of international revenues would be the key contributors to that?

Yes, it's really the key countries. And as I have outlined, we're trying to align that with G2G agendas of the German government because one of the challenges along with international sales is always export regulation. Going into countries where also I have been visiting, I recently end of last year, I went to India together with the former Chancellor Scholz. I have visited Ukraine recently with the minister. We had also a delegation with Minister Wadephul, the Foreign Affairs Minister in India, again. So we try to align that, and that gives us, I mean, a very good credibility or trust that those agendas are sustainable. So it's India, where also we see that the team is making very good progress at the moment. We still see Middle East, and that goes beyond UAE, it's Saudi Arabia, looking at the Eurofighter. I think here, we see a strong change also in the position of the German government. It is the U.S. and Lou had outlined, I recently visited AUSA, we're probably also in the discussion on tariffs. We see -- and also the strong bias that Germany made on the P8s, on the F-35s, on the CH-47 that there will be some return. I met with the ambassador in Washington, where we actually discussed how can we take momentum out of all the money that Germany is bringing to the U.S. to support German companies also in their endeavor to sell into the market. And with our strong reference on the Abrams tanks, we are at the core of the U.S. war fighter. We have a strong interest of the FAA in passive radar. Our radars seem to sell very well, also talking to Lockheed Martin and some of the big primes. It seems they have a gap in this rather medium short-range part of the radar and sensor portfolio. And that's why it is very promising. In Asia Pacific, we're already, very strong in Japan, in South Korea. Also considering that South Korea is really maturing as a key player. You saw the Poland buying the tank. So that's why we put a lot of effort there. And all of this activity, which at this stage, given the size of our engine is rather slowly, rather sustainably building those relations, but once we have built the engine and once, we would see a bit of a downturn in Germany, we are ready to sell across the globe.

Tim, do we have any questions from the online audience?

Yes, we have one question. The question is, could you explain why the revenue growth in 2026 is expected at around 10% year-over-year? So what factors are moderating this outlook?

Yes. I think there is one decisive topic, and this is simply lead time. So in our industry, also in our business, including also slowdown from OEMs, we have to assume 1.5 years approximately lead time from having a push in our order books until it's reflected into revenues. And this is why I see the scheme of the last 3 years as we had this 8% to 10% growth per year also for next year. I think with the book-to-bill, we guide now for this year and rising order book next year, the prerequisites are done then to go for this additional step. In addition, we have -- we will have then more capacity for radar production from 2027. And this is why 2026 is, for me, a year of building up the lead time and from 2027 onwards delivering.

Thank you. I think, Yan, you have a question.

Yes. Yan from ODDO BHF. Just 2 follow-ups. The first one on R&D. Can you give us some indication regarding the evolution of the share of capitalization over the next 4 to 5 years? And maybe going back to SDD software defined. Can you help us understand the ramp-up of the new contracts, maybe using the Lux 2 contract. Can you give us maybe, for example, the share of the license revenues? I think the amount of the contract is EUR 850 million. So what is the share of the license in this amount?

Maybe first question, I think approximately 60% is capitalized. I think this is a good estimate also for modeling. And for the service based, I think we do not yet have it in our contracts that there are special licenses for software. This is, as Sven has outlined, this is a concept of the future. So when Lux will be fully rolled out and the platform is there, I'm sure there will be potential for the software-based topics or maybe also in PEGASUS or other programs, also combining it with MDOcore. But until now, it's not yet part of the business model. It's more a concept of vision for the future.

So I think -- just to complement, there are 2 elements, as you hopefully understood with the presentations we had today. So CERETRON is a sub-element of the MDOcore. So of course, from the Lux program, as we are rolling it out, we will get constant flow of innovation into the MDOcore. That's one element. The second element is that looking at the Lux's 2 and the various sensors that are put on this platform, there is a possibility to take the CERETRON and roll it out, and that would be the software license, not in the core of the Lux 2, it would be rather with the Leopard, the Puma, the Schakal and all the other vehicles that are out there that have our sensors and third-party sensors. They have actually a communication, a system or radios. So all of these have edge computing and storage capabilities. So we could just purely take the CERETRON software and roll it out across all the landscape of German vehicles. And that would open up opportunity of those software licenses with a good revenue and profitable margins coming out. Yes, but this is where we are currently in the concept phase. So where Lux's will bring -- make it a reality. We have first discussions with the Chief of Army, where we see a very strong shift, and that is also inspired by the battlefield of Ukraine, where Germany is leaving the idea of having dedicated platforms, functional platform, one for air defense, one for reconnaissance, one for this and that. They are rather thinking, and that's where our MDO idea where Lux could be a reference case jumps in that we rather disconnect sensors, effectors and C2, we spread the various sensors across the battlefield, we have various effectors on the battlefield and we could just decouple that from the platforms and develop this functionality across the battlefield, including then MDO assets that would fly in the air above from drones over aircraft up to satellites.

Any further questions here in the room? Tim, are there further questions coming from the online audience?

Yes. We have a follow-up question regarding the 2026 guidance. Is there any potential for upside beyond the projected 10% revenue growth in 2026?

For sure. Yes. So no, let's be clear. I think -- or maybe one step back. So 2025 was -- and we said it already in February when we laid out financials 2024, that 2025 will be a year of operational transition. New logistics center with all difficulties, to be honest, in the first quarter, and we have outlined, we have stabilized it. Secondly, Oberkochen biggest transformation program in our company. And these 2 are now stabilizing and coming to a stage where we say, okay, we see that the motor is now getting up speed. So next year, I think we will be much more stable in logistics, we'll be much more stable in Oberkochen. We will have some lead time effects from the programs, which now come in now, and we have to build up capacity for further production. So everything is in place that we could go beyond, but let's stay with the HENSOLDT policy, starting with a realistic view and doing everything, doing our homework and then look quarter-by-quarter how this phases out.

And I think that I would say it in different words. And I think the conservative way that we have looked forward, and that's a good news despite that probably some of you are not satisfied with that outlook. But the good news is really we considered all the risks that we see also based on the experience of the ramp-up we had this year. So that's why this is the conservative approach. And the good news is that there's opportunity inside. The opportunity is that the ramp-up will come. The opportunities is that with some of our OEMs in the deliveries, we are faster with regards to the lead time that also as we did, for example, with PEGASUS, so we're still counting on a contract change later this year, where we see that the customer is trying to look in the past, we had early operational capabilities. At the moment, he's even looking at very early operational capabilities, which would help us to build revenue milestones in the earlier sides of the program. That's the discussions which are ongoing. And last opportunity is for sure, MDOcore, where at this stage, we are really in very fruitful discussions with the customer, where based on some available budgets. But here, we also have the planning process of the customer where normally he leaves some head side to allocate budgets. But I would see with the pressure from the evolving threat that probably he would go into -- in the true sense of the word in building a war chest where he could finance such solutions as MDOcore. And if these opportunities float in, we are ready, of course, as we did in the past to share this with you to update the guidance and everything. But again, I'm in full alignment with Christian and even with Lars and our team here, we follow this conservative approach, probably like some of the others on the market. And so far, it is always that we delivered on our promises, and that is what we want to do in the future.

So further follow-up questions on the '26 guidance or any other questions? Tim also checking on the online audience.

There are no further questions from the online audience.

So yes, big thank you to everyone. With no further questions, we would all like to thank you very much for coming to [ Rome ] today, both here in the room and also virtually. Yes, have a safe trip back home. Have a wonderful evening, and see you soon. Thank you.

Thank you very much.

Thank you.