Good morning, and welcome to Indra's Q3 results presentation. Now, I hand the conference over to Mr. Ezequiel Nieto, Head of Investor Relations. Please go ahead.
Good morning, everybody, and welcome to our presentation. Thank you, everyone, for joining us today, especially those of you who have been able to come here in person. I'm Ezequiel Nieto, Head of Investor Relations, and as usual, let me refer you to the disclaimer on slide number three that shows the legal framework under which this presentation must be considered. Now, let me introduce the participants of this call: Marc Murtra, Chairman of Indra; José Vicente de los Mozos, CEO of Indra; Borja García-Alarcón, our CFO; and Luis Abril, our Managing Director of Minsait. Now, let me turn the call to Marc Murtra, our Chairman. Marc, the floor is yours.
Good morning, everybody, and welcome to our 3Q 2023 results presentation. Before our CEO showcases our strong results, I would like to highlight some relevant contextual points. We're at a time of transformation and opportunities in our key markets. The world continues to change. Security events have dramatically accelerated the concern and focus on defense and security in the European Union and its allies. We expect defense spending to grow dramatically in the coming years. Strategic autonomy strongly emerges as a global trend. Air traffic recovery has been surprisingly swift after COVID, and we are now in 2019 traffic levels. Growth for 2024 is expected to be above 4%. Mobility's new paradigms are reaching maturity, such as pay-as-you-go service, free flow, or mobility-as-a-service. Technology has changed the playing field significantly, with the growing demand for cybersecurity and generative artificial intelligence.
Gen AI, specifically, has the potential to be a game changer. We are fully aware of and have internalized the disruptive changes that are on the horizon in the realm of technology. We are actively preparing to navigate this new era. Key changes are steady, underway, and we are strategically focusing on high-value, rapidly growing market segments. So we continue with our transformation of our company. Our previous strategic reflection unfolds as our new strategic plan, which will be well-timed, ambitious, and achievable. Regarding corporate governance, we have established a new board executive committee with eight members, four of whom are independent, to accelerate decision-making. Finally, after reorganizing our key Management Team, we are now rolling out these changes to the downstream structure to ensure that they are implemented effectively.
We believe that these changes will allow Indra to successfully navigate this era of uncertainties and opportunities to achieve its full potential of growth and value. Now, José Vicente will explain the results in detail. José Vicente?
Thank you, Marc. Good morning, ladies and gentlemen, and welcome, everyone, to the war room of Leading the Future, the place where we are developing our strategic plan. We have summoned you to this specific place because we wanted you to experience the spheres where our team, from senior managers to the fresh talent, is defining Indra's future for the next 10 years. Let's move now to the slide number six, where we display the main three key result highlight. As you can see, the result for the first 9 months of 2023 continued to be strongly positive, reaching a new all-time high in orders backlogs. This commercial momentum foster revenue growth, turning into a spectacular growth in earnings per share, which grew 35% compared to the first 9 months of 2022.
Indra's revenue continued to experience double-digit growth, mainly led by Defense, FCAS and Eurofighter, and air traffic. This growth, accompanied by our focus in maintaining our operating profitability, result in the spectacular net income double-digit growth. Cash generation exceeds our historical performance, being the best 9-month figure ever, reducing financial leverage to 0.1x again. This strong 9-month financial performance and momentum will allow us to focus during 4Q 2023 in our strategic plan, Leading the Future, that will guide our transformation journey during the following year, as I will elaborate later. As other significant milestone, our M&A activity have resulted in the acquisition of a 9.5% stake in ITP, a 30% in Epicom, another bolt-on acquisition, such as Park Air in U.K. and 9.
All this acquisition met three conditions: number one, rational industrial; number two, financial sales; and third, control significant influence. Additionally, we have repurchased plus EUR 200 million convertible bond in order to prevent our Shareholder dilution. The new strategic plan will address the main challenge that the company is currently facing. It defines mid-term KPIs and clear accountability to ensure proper implementation. The main areas that are being discussed in the preparation of the plan are, number one, portfolio management based on clear M&A rule, both in terms of big bets and bolt-ons. Second, product simplification. We need to be focused on creation from a value-based perspective, targeting at an, a state-of-the-art portfolio. Important point, geographic footprint optimization. We are in too many countries, we need to optimize, considering the impact both in the go-to-market and operational model.
Very important for us, creation of a technology ecosystem, leveraging key player, startup, university, and research centers. New engineering model to ensure the highest standard in the design processes and capability, and excellence and efficiency in operation to deliver the best products and services to all customers. However, as cross-cutting capability and best practice have not been tackled up to the moment, in this strategic plan, we are currently addressing: development and implementation of digital cross-cutting capability, and talent initiative intended to become top-of-mind employer to digital and engineering, and ESG commitment. Finally, we are defining our evolution to the new Indra 4.0 from an end-to-end perspective in our processes and system. The end-to-end process to prepare the strategic plan has already started. Phase one, intending to define the strategic guideline of the company among the executive committee member, was finished with full alignment by mid-September.
Phase two, whose objective was to set up the bottom-up initiative to deliver the strategic guideline, it started by late September. This stage comprise different layer of the organization. A sample, fresh talent to work on the actual initiative, senior management to guide the junior member, and a sponsor to validate the actual proposed objective and measure under the methodology of, BCG. That's the methodology, that is, I have learned when we'll implement the resolution with Luca de Meo. I believe in this methodology to develop this strategic plan, which will ultimately ensure full participation from the different business, function, and countries, and accelerate the understanding and implementation of the plan. We expect to finalize our final draft by December of this year, and hold our first Investor Day by March 2024. We're monitoring the progress of the plan on a daily basis.
We update the master plan and the progress KPI. Today, you can ask me, "Where you are?" Today, we are at 39% done. That we monitor every day. All in all, we are in a good shape to achieve the internal strategic guideline that we agreed in phase one. Now, Borja will explain in detail our result in the first 9 months of the year.
Thank you, José Vicente. As you can see in page 10 contains the headline of our results in the first 9 months of 2023. Let me highlight the following. The first one is that the six variables that are displayed on the screen, backlog, order intake, revenues, EBIT, earnings per share, and free cash flow, are growing at double digit, and this growth come on top of the already good results presented in the same period of 2022. Second, this figure provide good visibility for the near future. The backlog that reached 1.67 to sales and the order intake that grew 10% in the first 9 months, accelerating to 16% in the third quarter. Third, despite the headwind that wage inflation implies for us, we have managed to maintain margin at 7.6%.
Our continuous focus on working capital, management, and control are giving to us good results in terms of free cash flow. And as you can see, 56% of the improvement of the free cash flow in the first 9 months come from working capital optimization. Then in page 13, we have improved our revenue per employee by 10%, keeping headcount almost stable compared to December 2022. Now, once we have the big picture, and this has been presented, let's dive into the reasons and pillars of that evolution, starting in page 15, with transport and defense.
As the chairman said, on the back of the incremental expenses in defense in all our geographies and the recovery of the air traffic to pre-COVID levels, most of our clients increasing their investment in this field, T&D backlog grew by 16% in the first 9 months of 2023, and now represent 3.23x sales of our last twelve months. Order intake grew by 6%, but remember that in the first 9 months of 2022, order intake grew by 13%, so these are very good figures. sales, going to sales, it grew 17% in the first 9 months of 2023, and 28% in Q3.
With very strong growth rate in defense and ATM, and on the back of the contribution of FCAS with EUR 100 million of sales, the mentioned recovery in air traffic investment, and the contribution of Selex with EUR 10 million of revenues since the acquisition in the second quarter. Although it's important to know that excluding Selex, ATM would have posted double-digit growth in the first 9 months. With regard to transport, it declined by 7% due to the lower contribution of saleable contracts, such as T-Mobility and the ticketing and country system in Egypt. And finally, on top of this solid revenue growth, EBIT margin grew by 11.3% at the end of September 2022, to 12.1% at the end of September 2023.
Closing the first 9 months with a figure that is consistent with our expectation for EBIT margin in Transport & Defense for year-end. Moving now to Minsait on page 20, the summary is also very strong. We have very good visibility for the near future, as is shown by the evolution of the backlog that grew 18% in the first 9 months, and order intake that grew 12%, with almost all vertical growing order intake at double-digit. Energy and industry grew at 16%, financial services at 14%, incorporating the contribution of Nexus, public administration at 9.5%, offsetting the impact of Angola in 2022, and finally, telecom and media at 7%, offsetting a relevant contract signed in Colombia in 2022.
Revenue grew at 9.6%, and as you can see in page 21 and 22, well distributed among different, the different verticals, with an inorganic contribution of Nexus of EUR 60 million in the period. Here, it's relevant to mention that if we take out the negative delta of Angola and the contribution of Nexus, the underlying growth rate of Minsait would have been 12%. And now, despite the headwind generated by wage inflation, we have managed to close the first 9 months with an EBIT margin of 5.3, a figure that is consistent with our view for year-end, that, as you know, is more than 5%. And finally, by horizontal, we have improved our mix, with digital and solution growing by 10% compared to the first 9 months of 2022, and now representing 56% of our sales.
We move now to page 26, with the review of the financial section. As you can see, as in the past, I will start with the free cash flow generated in the first 9 months that amounted to EUR 170 million, reaching a new all-time high for our company. As I said at the beginning, what is important here is that 56% of this improvement come from the working capital optimization, as we will see in the next page. In page 27, we see days of sales remain almost stable compared to September 2022. But as we are working to reduce seasonality through the efforts to improve collections, even with the same day of sales, at the end of September, we have improved working capital needs over the first 9 months versus September 2022.
Inventories that have suffered an increase in the first 9 months due to the high level of work in progress and stock building, will decline in the fourth quarter in line with the seasonality of the business. Page 28 shows the net debt evolution in the first 9 months of the year. The first step is a strong operating cash flow of EUR 292 million, due to the excellent performance of the business that we have just commented. As mentioned, net working capital needs of EUR 79 million, well below 114, posted in the first 9 months of 2022. Net interest at EUR 14 million, posting an improvement compared to EUR 22 million registered in the first 9 months of 2022.
Finally, we have paid EUR 170 million for the acquisition of the 95% stake in ITP Aero, together with EUR 45 million for the acquisition of ATM Selex division in the U.S. in the second quarter. With all this, we have closed the first 9 months of 2023 with a net debt of EUR 233 million and a leverage rate, leverage ratio of 0.6, net debt to EBITDA, as you can see in page 29. As you see, it's the same figure that we had at the end of September 2022. Now, to finish my speech, a quick look to the debt structure in page 30, where I will highlight two things.
First, we have substantially reduced the gross debt levels, as we have canceled the convertible bond that matured in October with cash, and we expect to do the same with the bond that matures in early 2024, together with some bank loans. At the same time, we have increased our liquidity position with the EUR 500 million flash five plus one plus one multilateral credit line deal signed, so that we maintain the liquidity while canceling gross debt with cash. With this, we finish the presentation. Let's move to the Q&A session. Today, we will take the first question from the analysts that are physically here with us in our room, war room, and then we will answer the question of the audience in the conference call. So, Aziz?
Hi. Okay. Well, thank you for taking my question. The first question is, given the current macroeconomic situation, could you give us some color on how you see evolution, business evolution in the fourth quarter? And secondly, after the acquisition of the 9.5% of ITP Aero, do you plan to increase your stake in the company? Thank you.
Okay. Well, our expectation for Q is in the same trend, 34, okay? We don't feel the big change to finish the year. We are confident, and I think we'll continue the trend and no the big surprise. About ITP: ITP, why Indra go to the ITP capital? Very simple. I feel more, Indra, we are a Systemistic company, okay? More and more in the powertrain, all the sensors will be in the turbine.
It does make sense to develop in the field system close with the powertrain. And ITP is one of the best company in low pressure turbine in the world. That can be a good deal from an industrial point of view to developing the future, and Spanish technology with in the powertrain. What happen in the future? Nobody knows. That will depend when Bain will decide to leave, but for the moment, we don't have news. When the moment arrive, we'll study, but now I think it's very early for this.
Good morning, Carlos Treviño from Santander. Two questions. Thank you for the opportunity first, and two questions from my side. The first one is, in your introduction, you have been talking that the new strategic plan is going to define clear M&A rules. I don't know if you could elaborate a bit on this as of today. You are also talking about transformational M&A deals, and specifically, my question there, there will be if those, transformational, bets could be, or big bets could be in the current businesses that you have, or you could consider to expand to other businesses. Even if the, those, well, even if you could be taking any, any kind of financial stake in any company, if those are going to be in your current, footprint, or you could, go to other businesses.
My second question is, you have a very strong backlog, again, all-time high. Moving into next year, if you could elaborate a bit on the kind of growth prospect that we could expect, specifically in T&D. I, I can imagine that in defense, the competition is going to be tougher. Still, you have one additional quota from the FCAS projects, but what kind of trends do you see in, in the three businesses there, in defense, in ATM, and in transport? Thank you.
Okay, I will start by the first question with the support that Marc about the M&A rule, because I think it's very important, his support in the board with the Comisión Delegada to be agile. Strategic plan is very simple. Which product, where we sell, which technology we'll use with the right people. Okay, one of the problem, it's possible water? Sorry.
Just give me one.
No, no. Oh, maybe, maybe.
Yeah, whilst they bring water, by, and thanks, Carlos. So, of course, first we need to determine and approve our new strategic framework, and what we're sharing is that we will also approve and share what are the rules, the, what is the logic with which we will do M&A operations. And that has to do, in part, with some of the speculation that there has been in the past. And I can advance that they will have an industrial logic, the rules, and will always make financial sense, and that will be easy to check, by markets. But at this stage, we can't really advance anymore because we need to wait for the Capital Markets Day.
I think the important point is, management, we are working in the strategic plan with ideas. A strategic committee from the board are working here. Now, thanks to the Marc's support with the Comisión Delegada, we can accelerate the decision, and now we are working, everybody in the same line. Thus, can be more agility of the company. About the backlog, today, Indra increased the credibility about the Defense programs in Spain and Europe. Example, FCAS. We have shown to the defense minister and the supplier that we have the capability to become the prime with FCAS. Because we have take this leadership, we'll discuss with our partner in France, with Dassault, and Germany, with Airbus. And today, we have deployed more than 70% the activity in the Spanish ecosystem, with agreement with the company, with a startup we'll integrate in FCAS.
That when you increase your credibility, it's normal the backlog grow because more and more we become legitimate, not only in Spain, also in Europe. For example, maybe you don't know, but in the last 14 Initiatives in Europe for R&D, Indra has been in 90% of this. Okay? That's now we continue to grow, but be careful, we need to continue to refocus the product. My feeling is we produce too many things. We need to be focused, and this product, we need to industrialize. I give you the example about the radar. We have today 70 different radars with 0% commonality. We are going to go to 5 radar families with 60% standardization.
That is the big change, because we need to develop program in Europe, but also we need to accelerate the sale in international, because more and more we look that we have opportunities.
Y es, good morning. And Iván San Féli x at Renta 4 Banco. Well, congratulations on the results, and thank you for taking my question. I'd like to ask you on Minsait EBIT margin. So far this year, it's 4.53. It will probably be quite similar year-end. Do you see or should we expect a big improvement coming up next year? I know that the previous management talked about a potential 7%. Do you think that's achievable in a few years' time? Thank you.
Before going to Luis, I want to thank all the job that Minsait do, because now we are aligned with this closure, all the activity in Minsait. They are strongly working, and they are involved in Leading the Future to give the sense what is with the future. But I think Luis?
Yes, thank you, IváN. Margin is probably one of the challenges we have in Minsait, okay? Because, as you know, for achieving this 5.3, we have had to offset the impact that last year had the project of elections in Angola. Which, as you know, you know, these kind of projects are typically projects of good margin. Plus also, every year, in Minsait, in this business, we have to offset also the impact of salary inflation, which is significant. You know, last year it was around 6%, and we've been able to offset that. You know, next year, we won't have to offset elections, but probably we will have salary inflation as well.
But still, we do have the levers that we typically are using for keeping on improving margins consistently, as we've been doing in the last two, three years. You know, we have efficiency levers. We'll keep on pushing the change of the offering mix towards a more high-value added offering, and so on and so forth, okay? We'll probably equilibrate a little bit the mix of geographies we do have, trying to go more to high-value added geographies. So we will keep on acting on all those levers for keeping on improving margins. We will guide on the margins we will be able to achieve in 2024 in a few months.
But you know, our goal, our target initially, is to, as you said, keep on improving.
Hi. Hi. Yes, Antonio Marquina from JB Capital. I would like to ask you about some rumors in the press regarding Hispasat. I would like to ask you if it's one of your M&A pipeline targets that you will have, and if so, I would like to know the synergies of this potential deal. Thank you.
Well, if I read all the speculation will go in the press every day, I think I don't answer about speculation. The only point is space is strategic in the future in defense. Why? Because all communication will go by the space. If one country wants to be sovereign in the communication, need to control the communication. That is we are studying in the strategic plan, how Indra can work in this new ecosystem, and that is part of a strategic plan that I don't answer speculation, but we are working in defense, how to develop in the sea, in the land, in the air, and the space. That's part of strategic plan.
Hi, Alvaro Lenze from Alantra Equities. Thanks for taking my questions. The first one you mentioned is you plan to do some rationalization of your footprint and product portfolio. I would like to know, and some also industrial synergies. I would like to know whether this would be reinvested to accelerate growth, or should we expect further margin improvement in the future in the T&D business? And also, something that you have not mentioned regarding the strategic plan is regarding Capital allocation. Of course, M&A and consolidating and growing in Defense and IT is important, but what about Shareholder remuneration? Could you provide some guidance on that? Thanks.
Well, I think about IT. I left Luis, but I think he has answered. He continued to work the team to increase profitability.
Yeah, on IT, and then if you want on defense, I don't know if you asked for defense or for both. But on IT, basically, again, well, we will keep on pushing on the same trend with been following the last couple of years or something like that. On the product portfolio, basically what we've done is to focus on what we call the four accelerators, which in terms of offering are payments, what we call phygital, which is the integration or oral solutions, which fall under the category of the integration between the physical and the digital world, with sensors and these kind of things. That's like the second accelerator. Then you have data cloud, and then the fourth one is cybersecurity.
Our idea, you know, a part of all the services that we typically provide, is to push hard on these four accelerators. You know, and that's gonna be part of the refocus. Probably, yeah, in the new strategic plan, we'll make some adjustments, you know, on these priorities in terms of offering, you know, but it is gonna be more or less, at least in IT, following the trend that we've been following in the last two, three years.
About capital allocation, we'll start, but also I think it will be important that the chairman say what is the opinion about capital allocation. You know, we have three type of strategy. First one is efficiency, second one is develop a strategy alliance, and third is to buy. That we're working in the three axes, and the board, I leave the chairman to give his vision about this strategy.
Many thanks, José Vicente. So one of the characteristics of the markets where Indra is operating is that we have many, many opportunities. We have opportunities in defense, we have opportunities in mobility, we have opportunities in IT. And within defense, as the CEO was saying, we have opportunities in all four domains. So what we need to think very carefully about is the priorities. We need to think very carefully about how much money we're gonna invest in CapEx to develop technologies, to improve productivity, and to grow in terms of M&A. So unfortunately, I can't answer or we can't answer at this stage, but this is probably one of the parts where we're giving it more thought. You know, where is it we're going to go towards?
What are the priorities, and how it all makes sense so that there is efficiency, synergy, and scale, eh?
About Shareholder maybe.
Ah, yes, sorry. Thanks, José Vicente. As part of all this, we need to think very carefully, you know, how much money we return to our Shareholders and how much we reinvest. But what we'll do is we'll explain the logic very, very well, and the why of the logic. Gracias.
Just good morning. Alfonso Enrique from CaixaBank. Thank you for taking my question. I just have one. We have seen yesterday news reports talking about Shareholder changes in Telefónica and the possibility of Indra participating in these shareholding changes. Can you comment on that, please? Thank you very much.
As José Vicente was saying, we don't comment on speculation. We reiterate, you know, we take our investments very seriously. We wanna do industrial investments, and anything that has to do with our strategy, we will be sharing with you, as I said. But I do take you to the backlog of speculation that there has been in the for a long time with regards to Indra.
Hi. Hello.
Hi. Hi. Yes, one question regarding wage inflation. What do you expect regarding wages to increase in the next year, in 2024? What are your forecast, especially in Minsait, please?
Depend on the country, okay?
In Spain.
Well, I think we are studying, and we'll go to the board, a guideline for the teams. But for the moment, we didn't decide it. That Luis and myself, in Minsait in Spain, we need to decide it and approve by the board.
Still, we feel a little bit less pressure on human resources than one year ago. Last year it was 6% overall, but still we have to make the calculations for the budgets, and so on and so forth.
Now, maybe we can give the floor to those in the conference call in case they have questions.
Ladies and gentlemen, the conference Q&A session starts now. If you wish to ask the question, please press star followed by five on your telephone keypad. Once again, it's star followed by five if you wish to ask the question.
No question, good news. No question, good news. That is no question. First, I want to thank all you all analysts, because in the last month, I think you have supported too much with very clear return that... Ah, one question.
Yes, we do have questions. The first question comes from the line of Laurent Daure from Kepler Cheuvreux. Please go ahead.
Yes. Morning, gentlemen. A couple of questions from me as well. The first one is, I would like to go back on the Q3 performance of T&D. You had an operating, an EBIT margin of over 15%, with a strong contribution from FCAS. And I thought the FCAS program was a bit less profitable than the defense business. So what made you achieving such a great margin in the third quarter? My second question is on the Minsait. I mean, a lot of your competitors are talking about the markets slowing down quite massively in past weeks. So what is your short-term view? Do you see any changes in utilization rate, conversion of bookings, or do you still see the same trend as in previous months?
My final question is, back to the comments you made about the fourth quarter, to make sure I understood well. Basically, when I look at the guidance, I know it's, it was over a certain amount, but the guidance is calling for pretty muted growth in the last quarter of the year. So if you could reconcile your comment about, potentially a strong Q4 and the guidance which, which were just maintained. Thank you.
If you agree, I will start by the last one, and later, Borja and defense and Luis Minsait will answer. You know, I arrived five months ago. In July, in H1, I think the company had the potential. I want to know what is the maximum potential this company can deliver, and we decided we should pull of the mark to increase 4%, okay? Now, is for for Q, okay, we are in good trend, but I don't know in detail this company. That I prefer to be at this moment, and it's a strain for me, conservative, but it's my first years in the company, I want to assure the closure of 2023, okay? It's for that we have decided not to increase the guidance. We need to see, you know, now situation is very unstable.
I prefer to finish with the guidance we give in July, and to be focused in the strategic plan and to finish the year and prepare in good time, 2024.
Yeah. Thank you, José Vicente. Lauren, hi. Well, with regard to the margin at T&D, two things. First of all, we are performing well in terms of FCAS and Eurofighter, so that's the results, results you see. But it's important to know, as you know well, that it's difficult to extrapolate our quarter to the you know, to the total picture of the company. So I think in order to have a picture of how it's gonna be evolving in the fourth quarter, your view should be that we are gonna maintain margins about 12%. So take this quarter as a good quarter, but it should not be extrapolated to the future with that margin.
I take the one on me and say, thank you, Lauren. Well, you know, the truth is that we see no significant signs of a slowdown so far. We cannot deny there's uncertainty, that is true, and, you know, we have some of our peers being probably a little bit, you know, a little bit more pessimistic than what we are. You know, but the matter of the fact is that we see, you know, consistent demand. We see things are running pretty well. We see no changes in utilization rates, as you were saying, nor in the conversion of bookings. This may be because of several reasons.
You know, the matter of the fact is that our customer base is composed basically of large, of large customers, which are probably less exposed to potential crisis than SMEs. Also, we have several or many multiannual contracts and we probably participate in projects which are very core in terms of activity of our, of our customers as well. So we see the activity quite resilient. You know, and in any case, we all know that this sector is late cyclical and there's uncertainty. But so far, as I was saying, no, no signs of the slowdown.
You know, it's true, the only thing is what I was commenting before, that probably we feel, which is not necessarily bad, we feel a little bit less pressure on labor markets and, you know, churn rates of labor force has probably go down a little bit, but that's all.
Thank you.
The next question comes from the line of Gregory Ramirez, from Bryan, Garnier & Co. Please go ahead.
Yeah. Yes, good morning, and thank you for taking my question. Just to get, I would say, a bit more insight on Q4, what, where, I would say, first of all, on Minsait, the comp base, could you remind us the comp base related to the elections in Angola in Q4 of 2022? And my second question is regarding the FCAS. So you mentioned EUR 100 million contribution over the first 9 months. What do you expect for Q4?
I take that. Yeah, on the cost base, I mean, you know that the key element in the cost base of the IT business is basically labor. vis-a-vis 2022, you know, the cost inflation was 6%. So that's what we had to offset in order to achieve the margins that you are seeing.
FCAS?
Yeah, with FCAS, for 2023, we expect to see EUR 140 million in revenues.
That we have an integrity 100, that for Q4 is 40.
Thank you very much.
The next question comes from the line of Kathinka de Kuype r from UBS. Please go ahead.
Hi, thank you for taking my question. Most have been answered, but just a few quick ones for me, please. Just coming back on current trading, so you're not seeing any deal signing being delayed or anything due to the macro? And second of all, in Minsait, can you just comment on the pricing trends that you're seeing in the market? And then finally, how should we think of headcount growth for next year, given that this year you kind of have a flat headcount? Thank you.
Well, I answer on number one, and Luis will continue number two. I think about current trends, it depend on the business, okay? Not all the trends are the same in air traffic or defense or TI. That depends on the business, the trend is different. For example, in TI, it's slower than stronger we look in defense. That, and also the market is not the same in Europe, that Latin America. That it depend on the business and the market. The trends are different, and we are studying, and we are adapting at this trend. About pricing Minsait, Luis?
Thank you, Katinka. On pricing on Minsait, you know, there's a lot of competition, you know, and it's tough to maintain prices at current levels because, you know, particularly in those services which are not very high value-added, competition is tough. But still, we are managing to keep prices at a relatively good level, doing different things and acting on different levels. You know, one of them is the one I was mentioning before, which basically consists of changing the mix. We do less services now, and more high value-added projects around the four acceleration vectors I was mentioning before. And that allows us to increase prices a little bit.
You know, but for the same base of, if you want, of activity, let's take, you know, BPO services. The matter of the fact is that there's a lot of competition, you know, as you know.
Well, about 2024, it's a little early in this macroeconomic context and geopolitical situation in the world. But I can say to you today that 2024 for us will be a good year. Why? Number one, number one will be, I think with the new organization, that we have a pro business unit, we can improve the efficiency in our business. That's number one. With the decision we'll take in our Strategic plan, we can see some first results, and additional to the market trends, we can show you when we'll announce the result of 2023 and our plan Leading the Future, the trend. But we continue to be optimistic, but realistic, and we need too many work to be done inside to become a good company. We're in the process.
Okay, thank you very much.
That's the final comments before that, our chairman close out this session. First, I want to thank you, all you analysts, because in the different meeting I met you. You have been, first, confident with Indra, confident in my appointed. I told you, Indra is very good company. The talent I met here is amazing. I think with Leading the Future, we can show a transformation in this company and become an actor in different worlds today. That is clear in IT with Minsait, we are referring. In air traffic, we are referring. In defense, we need to grow to become somebody in Europe. And mobility, we need to be focused in technological mobility. We know where we can go. I think your continuous feedback support us, and thanks us to take the best decision.
Thank you, and I see you when we close out 2023. Bye.
Yeah, and I want to thank José Vicente for bringing his tremendous energy to the company, and it's great working with him, and things are, I think, going very well. Also, Luis, for his ongoing and continuous wonderful work on the IT business, which you know is a tough business. It's not for everybody. And we see the future with optimism. Of course, we have to deliver, we have to focus, we have to work hard, and there are always risks, but risks always comes with return. So thank you, everybody, and thank you, Borja, and the team for organizing this.
Okay.
Okay, bye. Have a good day.