OHB SE (OHB) Earnings Call Transcript & Summary

Good morning. Welcome to OHB's earnings call for the Annual Report 2025. I'd like to welcome you here on behalf of OHB. We are here together with -- I'm here together with Tim, Tim Tecklenburg, our CFO; Daniela Schmidt and Kurt Melking, and we're obviously ready for questions. I hope you have been able to download the materials this morning. I will quickly walk you through the slides, and then Tim will take over for the financial part. The OHB business segment has not changed. This is the same business segment chart that you saw in our Q3 results a couple of months ago. What has changed in the course of 2025 is that our ACCESS TO SPACE division has been changed because we took over 100% of MT Aerospace AG. We created the European Spaceport Company. And of course, in this part is also the Rocket Factory Augsburg in a few smaller parts. Quick recap of 2025. We had multiple successes in launches in 2025. Very important was on July 1, the weather satellite MTG-S1, that's Sounder, as we call them. The Sounder satellite has been developed by OHB completely, the payload in Oberpfaffenhofen, very sophisticated optical payload, and the satellite platform and the overall satellite in Bremen here at OHB Bremen. We're very happy with the results. So that has been a very big success. Successful launch also in August with the launch of our Earth observation satellite, NAOS, for the Luxembourg government. It's a military satellite that OHB Italy developed and built for the Luxembourg military, has been successfully launched. In November, we had a batch of 8 satellite of Eaglet II satellites for an earth observation constellation called IRIDE for the Italian government. There will be more launches. So we're launching a full constellation for Italy. And in December, we had another launch for Galileo first-generation satellites. And there will be 2 more launches on Galileo this year. So we're nearing the end of the full ramp-up of the Galileo satellites of the first generation. If we look to 2025, of course, we have been able to secure a number of significant contracts. We had a business expansion. So one of the big successes was the LISA Science satellite that we won in a competition for the European Space Agency, ESA. It measures gravitational waves. I'll leave it there how this works in detail, but it's a very fundamental science mission that we believe we will hear very good news over the course. We have been able to contract the deal with the DLR, the German Space Agency, the Heinrich operational contract for the operating services over the next years. And with ESA, we have been able to -- ESA and TAS Italy, we have been able to contract our share in the Argonaut mission for the independent European launcher earlier European lunar access program. So the Argonaut is a lunar lander that Europe will build for moon exploration, and we are a co-partner with TAS-Italy. In terms of business expansion, we had our growth in Sweden. We inaugurated a new factory. And by the way, yesterday, we announced the Sterna contract, about EUR 250 million. For this contract, this facility has been developed and built. We bought a company called OHB TechniSat now. I mean, OHB Vogtland now, we bought it from TechniSat company located in Schoneck for the industrialization and serial production. It will help us there. It's a small factory, but it will be helpful to ramp-up production capabilities. We created a company in the U.K. in Bristol, OHB SPACE U.K. This is now in the buildup phase for -- actually for the assembly integration and test of big satellites initially in the frame of European Space Agency Science program. Total order intake was very significant in the SPACE SYSTEMS division with more than EUR 1.5 billion. That was a big success for Markus Moeller and his team and the whole company actually. Here, you see a quick recap of the 2 investments that we made in Sweden and in Schoneck in Vogtland. Yes, I talked about it. I think I can move on. I think it's part of our continuous expansion. We are investing. Currently, we are building a new significant clean room in Italy in Torino for OHB Italy. You see growth there. As we can say in more general, OHB Sweden and OHB Italy are massively growing and are very successful. And obviously, that requires also new facilities and more space. And U.K., I don't have a photo of the U.K. here yet because it's in the course of being implemented, but that's another focus of our investment that we will see in -- actually, I think, starting 2026 that we will invest in a significant facility there in the Bristol region. MT Aerospace had a very successful year 2025. We took over the remaining 30% stake in MT Aerospace. So now we own it 100%. That has been a good step, I believe. The Ariane 6 business is ramping up. We signed recently the contract for the flight model 16 to 42, which obviously gives us security to plan over the next years to ramp up. We do have substantial contracts also from other rocket companies in the U.S. and elsewhere. And we have significant growth with regard to our military programs where MT Aerospace has a significant role also in military. The digital activities, just summarized in one slide. We had a good order intake last year, EUR 250 million for our OHB Digital. And yes, I guess this is a business that was not very much in the highlight of the public attention, but it's a solid growth and a solid deliveries, mainly in what we call midstream, the antenna business, the ground segment operations, but also in the geospatial area where the commercial data resell is growing as well. Last week, OHB celebrated its 25th anniversary of listing. We had the IPO completed on March 13, 2001. We went public at the so-called Neuer Markt. Since then, we are one of the few remaining successful companies listed previously at Neuer Markt. And if you just look at the numbers that at that time, the revenue was EUR 15 million, 1-5, with about -- with 125 people. And now 25 years later, it was EUR 1.2 billion with about 3,800 people. You see that we had a very busy 25 years. And actually, the shareholding at that point in time, the Fuchs family had about 70% and now we have 65.4%. So we have been able to grow substantially, massively over 25 years without significant dilution. Yes, I mentioned it briefly yesterday. OHB Sweden has been able to finally sign the contract for EPS-Sterna. This is a big success, 20 satellites, EUR 250 million roughly is the volume for the development and building up of the satellites. I can say that I'm very happy to see these constellation successes at OHB in Sweden, but also in Italy with IRIDE. So we are able to succeed competitively in these markets much smaller satellites. This is the Sterna satellites are satellites in the range between 100 and 200 kilo, 150 kilo satellites. So that's a very different market segment from what you see in our capability in Germany or here in Bremen, but it's a lucrative market, and we can also be competitive there. And actually also with IRIDE and even smaller satellites, it's the 50-kilo class where we have been able to have a constellation implemented. And actually, as we saw, rolled out, that's quite a big success. A quick view of what has changed and the development of institutional budgets is obviously one of the significant drivers of growth of the whole space industry in Europe. And there's a huge shift towards defense across key institutional budgets. You see that the geopolitical landscape, of course, creates a push for increased sovereignty across Europe. ESA has increased its budget at the last year's ministerial conference here in Bremen by about 32%, which is a significant growth for ESA as an institution, EUR 22.3 billion. The European Commission has even bigger growth in their planned next multi-annual financial framework. We'll see more detail, but EUR 131 billion for defense, including space, is very, very significant, and space will play a significant part within this budget. Next to that, obviously, Deutsche military, Bundeswehr, has a plan implemented for EUR 35 billion for space-based security infrastructure that has been announced by Minister Pistorius last fall, and that's a significant increase. And this is all part of the overall overarching increase in investment in NATO with the decision that was taken last year by member states to go up to 5% of GDP for defense budgets, 3.5% directly in military and 1.5% in infrastructure related to that. So that basically, this one chart gives the overall picture of the boom that you now see in space around Europe. A few details on the ESA budgets. I don't want to go into detail, but the EUR 22 billion have been broken down very, very specifically to the different lines of activity, earth observation, navigation, space transportation, and we are playing a good role in some of these bigger parts of ESA budget. I mentioned the growth of the MFF for -- actually, it's the MFF proposal. It's the MFF proposal by the commission. And the proposal there is for the time frame 2028 to 2034 to have significant budget increases for Defense and Space in one budget. As you can see, comparing the numbers, the current budget line for the budget 2021-2027 is EUR 30 billion broken down the way you see it here in the EU space program and EU defense funding. And it was, in the previous budget cycle, 2014-2020, it was EUR 12 billion. So you see a massive increase, including defense funding, space programs and Horizon Europe, which is also taking care of Space and Defense. So we cannot obviously detail it down, but I think it's just a fundamental commitment of Europe or actually the commission so far to invest. That has to go through the approval process with member states, with parliament. Obviously, this might change, but I think it's a significant data point. The EUR 35 billion for security-related space infrastructure in Germany is much more detailed. If you look to the website of the Ministry of Defense, you can see the German space military strategy, and you can see very, very detailed what Germany is planning to do. Of course, the geopolitical landscape requires in the view of the German government significant space infrastructure, significant buildup of capabilities. So a number of constellations are mentioned in this document. And as we can see that this is also being implemented, satellites, of course, ground infrastructure, on-demand launch capabilities, everything is mentioned there. So you will see Germany becoming a very active and leading partner in military investment and space. So I hand it over to Tim to walk us through the financials. For the time being, thank you very much. But obviously, I'm here for questions.

Yes. Thank you very much, Marco. Also from my side, a warm welcome. Really great to have you in our call. As Marco has already mentioned, from our perspective, 2025 was also, from a financial year, a very successful year. We have grown. We have grown in all our segments. And I'm happy to walk you through the key financials right now. As this is one of our key metrics, I start with the order entry. And we were able to kind of reach a level of EUR 2.1 billion in 2025, contributed by all the segments, as also Marco has shown, for instance, SPACE SYSTEMS segment with about EUR 1.6 billion. And this is a significant growth versus 2024 with a level of 23% and corresponding also in 2025 with a book-to-bill ratio of above 1.5, which is clearly a sign that we are growing. As such, also our backlog is showing this growth. And as you can see here, we have reached a level of EUR 3.2 billion, which is an all-time high and provides us with a really comfortable outlook for the year to come. And it is also the fact that considering, and this is shown by the arrows here in the mountain chart, that after each Ministerial Conference, there was a time of growth in order backlog. And considering that we have already now when the Ministerial Conference took place in 2025 November in Bremen here, that we are already at an all-time high, provides in addition to the information given by Marco, also positive outlook for the future. Looking into the KPIs into a little bit more detail, especially our total revenue grew by 25%, up to a level of EUR 1.25 billion, which is a significant growth. And it is also mirrored by the growing profitability. We were able to disclose an adjusted EBITDA of a level of EUR 125.6 million, which is also quite above the previous year stated adjusted EBITDA. And also related to that, the adjusted EBITDA grew to a level of EUR 84 million, which is also a relevant increase in comparison to previous year. What's important for us to master the growth is that we also grew our employees, especially our operational colleagues that are the engineers, technicians that are really kind of doing [ to kind of move the growth ahead. ] I hear an echo. I'm not sure who that is. It's gone. All right. So overall, this is very also important that we grew in employees in order to fulfill our promises to the customers. And connected to that is also that on the support functions, we were flat rather also shrinking. So that is we are maintaining our cost controls as in the past. Showing the development over the last years is showing that we are clearly growing. We have exceeded also the EUR 1 billion level of 2022 with the already mentioned EUR 1.25 billion. And we are surely aiming to continue this path with a level of about EUR 1.4 billion in 2026. And the same development, we want also to continue with the profitability. You see on the adjusted EBITDA and EBIT, we are clearly growing. And also we expect that we also grow to a level of about EUR 150 million, give or take, in 2026, which is corresponding to a level of 11% margin. This growth is also nourished by our order intake. We see and expect also a growth here. And this is kind of based on the funds that were shown by Marco before. And on the right-hand side, you can see that there are opportunities in basically every segment in our portfolio and the different product categories, be it earth observation, SATCOM or also in the launch areas. As we see that also in 2025, as also already disclosed, our colleagues from the [ Aerostructure ] area where we kind of manufacture components for the Ariane 6 launch vehicle are growing significantly and also internationally. So overall, we see that we had a very successful year 2025. And for sure, it's also our ambition to continue this path. And as such, I'd like to show you some highlights from our financial calendar. Today, our full year 2025 results call, then we continue our calendar with some conferences, but also then especially with the disclosure of our Q1 figures, and then in June, the general assembly. With that, I'm closing the presentation. Thank you very much for your attendance. Once again, thank you very much for following in 2025, and we are looking forward to continue our discussions with you right now with the Q&A section, but also throughout 2026. Thank you for your support.

Yes. Thank you, Tim. I would like to open the floor for questions. [Operator Instructions] First one is Simon Keller from NuWays.

Can you hear me?

Yes. We can hear you.

Yes. To start, my question is, can you share any details on the SATCOMBw 4 tender? Would it be fair to assume that you capture 1/3 of the project?

Yes. Thank you for the question. Maybe we answer them one by one. As you know, on this program, we have released 2 ad hoc news in late January and in early March, where we give a statement to the status of this procurement process. Other than that, we are not in a position to comment on any details. We have obviously also seen media reports in the past weeks about it, and we have had many questions on it also in the -- from media. But beyond our ad hoc statements, we are not in a position to comment on any details. And this is why also speculating about potential share volumes is much too early from our side. And so we unfortunately cannot go into any details of that question.

Understood. Then 2 financial questions. On -- firstly, on personnel costs. In Q4, they have been noticeably low. What was the reason for it? And what personnel cost run rate should we assume into '26? And also on transformation costs in '26, do you expect any? And if so, at what level? And then I hop back into the queue.

Yes. Thank you very much. With regard to the personnel expenses, on the one hand, we weren't kind of getting all the colleagues on board as we would have expected. Overall, this was in line with the previous quarters. What you noticed correctly is that we had, as you know, one incident with 2024 with one project. And in course of 2025, we had been able to kind of make good progress on kind of dealing with the incident. And as such, it was the case that we, on the one hand, utilized provision that we built in 2024 for the cost of 2025, which were mostly personnel costs. And then in addition to that, we also kind of adjusted for this project with regard to all the expectations. And as such, this was also kind of by means of utilizing the provision and on the other hand, reducing the personnel expenses accordingly. So which is then a wash that is without any impact on the results. And to answer your second part of your question with regard to the projection, we see that this should be in line with the previous quarter. So that is we will kind of continue the way it was in 2025 in the first quarter. And then with the second question on transformation costs, I think that in the last year, we did made really good progress in our so-called [ Up to Champ ] program, which is a transition program, which we launched. And those kind of transformation costs were associated with those aspects. And we will continue in 2026 with the transformation, cost control, other project efficiency measures. But we don't expect as of now a level of the same magnitude as 2025, but we will see how this will play out in 2026.

Okay. One quick follow-up question then because you mentioned now this provision for the SARah project, I assume. Can you share how much of this provision has been released in '25? And is it now completely released? Do you still have something in your books? And do you expect something in '26 to be released as well?

Thank you very much. With regard to SARah, we had here, we have 2 components, which we kind of utilized in 2025. This is, on the one hand, the costs that were immediately associated with that and then also the adoption. And based on that, we are having in our books still a provision remaining level of about EUR 9 million. And we expect that in 2026, we also continue to really kind of finalize it. And so we'll utilize it most probably, but this is to be seen.

Okay. I can see no further raised hands. So maybe I just hand over to Marco for some closing remarks.

Yes. Thank you very much. Obviously, you have further time to think about it if more questions are coming. And I believe we will put this call online in the next hours or days or whatever. So obviously, should you have more questions, you can directly contact us at the Vorstand, but also, of course, Marcel for this. And I guess from my side, I can only say thank you very much for your attention into OHB. And from my side, I can only look here if you see at the Vorstand. This is today actually, I think, your last appearance at the earnings calls. And I would like to thank Kurt for his, I think, 37.5-year work at OHB. And obviously, for the last, whatever, 10 years or so at the Vorstand. And from my side, a big thank you. And again, I think by the end of the month, Kurt will retire. He will be staying close to OHB. But in terms of investor contacts directly, this is the final event we have together.

Last years for the support from your side. And from my side, it's everything okay. Now it's time to leave the go in retirement and after really successful and good years here at OHB.

Thank you. And I guess that's now a moment to close the call. Marcel is nodding, so there have not been further calls or questions coming. So again, thank you, and have a good day. And again, we very much appreciate your interest in OHB. Bye-bye.

Thank you very much.