Good morning, and welcome to Indra's nine-month 2026 results presentation. I now hand the conference over to Mr. Ezequiel Nieto, Head of Investor Relations. Please go ahead, sir.
Thank you. Good morning, everyone, and welcome to Indra's nine-month 2026 results presentation. My name is Ezequiel Nieto, Head of Investor Relations. Before we begin, let me briefly draw your attention to the disclaimer on the current slide, which sets out the legal framework under which we will have the presentation. Joining me today are Josep Maria Recasens, Chief Executive Officer of Indra, and Miguel Forteza, Chief Financial Officer of Indra. Let me now hand over to our CEO to walk you through the key highlights of the period. Reca, the floor is yours.
Thank you very much, Ezequiel. Good morning, everyone, and thank you for joining us for the presentation of Indra Group's first nine-month 2026 results. Let me start saying that the first nine months of 2026 have been a period of strong execution for Indra. We delivered double-digit growth across all our key financial metrics, fully in line with the 2026 targets, supported by accelerating order intake, a record backlog, and a sustained demand across our core markets. Importantly, this growth was accompanied by a further improvement in profitability, reflecting the increasing scale of the business and the quality of our portfolio. Beyond the financial performance, we also continued to strengthen the foundations for future growth. We simplified the group's organizational structure to enhance execution and decision-making while expanding our industrial footprint through the acquisition of a new plant in As Pontes.
We also reached important milestones in two of our key programs. In defense, the VCR 8x8 program continued to advance steadily, reaching a total of 101 units delivered by the end of September and demonstrating the successful ramp-up of our industrial and production capabilities. In space, the signature of the IRIS² contract further reinforced our position in one of Europe's most strategic sovereign initiatives. Finally, we completed a number of targeted acquisitions that strengthen our capabilities in strategic technology domains, including cybersecurity, autonomous systems, advanced sensing technologies, and quantum computing, broadening our technological capabilities and supporting our long-term growth ambitions. These developments reflect the progress we are making across the key levers of our transformation. Let me now take you through each of those levers and provide some tangible examples of how they are already translating into execution.
Building on the five principles I shared with you in the last conference call, that is speed and delivery, quality and reliability, sovereignty, competitiveness, and dual use, I am going to elaborate on our five levers to play offense in our markets that are in profound transformation. First, offensive talent. The industry is competing for a new generation of engineers, AI specialists, and highly skilled professionals. Attracting them is important, but developing and retaining them will be just as critical. For that purpose, lean operating models are key to entice these professionals. Second, offensive product. Our customers expect more sophisticated, more flexible, and increasingly integrated solutions. We need to shorten development cycles, accelerate innovation, and continuously evolve our product portfolios. For Indra, product development will be key going forward. Third, offensive industrial. Demand is increasing, and the industry must be able to respond.
This means expanding capacity, strengthening supply chains, and above all, delivering at greater speed and scale without compromising quality. Fourth, offensive ecosystem. No company can address today's defense challenges alone. Success will increasingly depend on stronger partnerships with other players, suppliers, startups, research institutions, or governments. We have a crucial role to play in strengthening the national ecosystem while forging strategic partnerships across Europe. And fifth, offensive technology. Artificial intelligence, quantum advanced sensors, or cyber are rapidly transforming our industry. Our challenge is not simply to access these technologies, but to integrate them into our products and industrial processes faster than ever before. These five levers are closely connected. Together, they will determine which companies can grow, execute, and lead in the next decade. Let me start with offensive talent. We have recently established a leaner leadership team, reducing the size of our management committee by 1/3.
The objective is straightforward: to accelerate execution, strengthen end-to-end accountability, and speed up decision-making. We want clearer accountability and high-performing teams working seamlessly across the company. To achieve this, we are organizing ourselves around four fundamental roles: think, sell, deliver, and corporate. Think will shape our long-term strategy and direction. Sell will drive growth, deepen client relationships, and expand our commercial footprint. Deliver will ensure we meet our commitments on time, on budget, and on the highest quality standards. Corporate will enable the entire organization to perform effectively every day. This is the culture we want to build: one company, one team, and one goal. A simple organization with clear accountability, faster decisions, and stronger collaboration, fully focused on execution and results. Offensive product. We have reached an important milestone in air traffic, demonstrating our ability to deliver highly complex projects simultaneously across different geographies.
In just one week, I repeat, in just one week, we successfully commissioned four control centers in Argentina, India, Indonesia, and Peru. This achievement reflects not only the strength of our technology, but also our ability to execute at scale. Working closely with the air navigation service provider in each country, our teams have supported every stage of the process, from implementation and validation through to the final commissioning, adapting our solutions to each customer's specific operational requirements. These new systems integrate route, approach, and tower operations, helping our customers manage their space with greater safety, efficiency, and capacity. This is a strong example of what we can achieve when we combine leading technology, deep customer relationships, and world-class execution. In the U.S., we continue to make strong progress with the Federal Aviation Administration.
In the first nine months of the year, we have delivered 10 primary and 20 secondary radars as part of the historic modernization of the country's air traffic surveillance infrastructure. This is a program of significant scale. By 2027, we expect to achieve up to 185 state-of-the-art radars, bringing greater reliability and performance to the U.S. air traffic management system. At the same time, we are making strong progress on the NEXCOM program, having already delivered more than 3,500 radios. Accelerating industrialization is becoming a critical competitive advantage in defense, and the wheeled bridgelayer vehicle is a very good example. We signed a contract in January, and less than a year later, we are on track to have the first system ready for customer demonstration. This is the pace at which we want to operate.
Our strong backlog brings significant opportunities, but also important delivery commitments, and we need to consistently turn those commitments into results for our customers. In parallel, we are rapidly building sovereign engineering and manufacturing capabilities without compromising on quality. We cannot do this alone. We are playing a crucial role in strengthening the national industrial ecosystem. Let us continue with our offensive industrial. Gijón is a strong example of the pace at which we are also transforming our industrial footprint. Just six months after acquiring the site, the facility is already operational and contributing to our growing manufacturing needs. The refurbished plant is already supporting the VCR 8x8 infantry fighting vehicle program, combining advanced Industry 4.0 capabilities with proving ground facilities designed to ensure the highest standards of quality and operational performance.
To replicate this model, we have created dedicated teams to systemize the integration and ramp-up of newly acquired industrial assets, reducing the time needed to bring additional capacity up and running. Our objective is clear: to turn acquisitions into operational capacity as quickly as possible. Staying with the VCR 8x8 program, the delivery of 101 vehicles before the close of the third quarter represents an important milestone and, above all, reflects the strong acceleration achieved in recent months. Since Indra took control of TESS, we have significantly increased the pace of deliveries and strengthened the program's industrial execution. By the way, I am pleased to share with you that this week we delivered additional 18 more units not shown in this slide. Bringing the year total to 78 and the whole program to 119.
We expect to announce further deliveries in the coming weeks, clearly exceeding our guidance of 90 units for 2026. The acquisition of our new facility in As Pontes represents another important step in the transformation of Indra's industrial capabilities. With an investment of around EUR 18 million, we are adding almost 15,000 sq m of industrial facilities dedicated to the production of integration of military vehicles. The new facility will integrate amphibious combat vehicles, military bridging vehicles, and wheeled artillery systems for the Spanish Armed Forces. It will also provide us with the capabilities to integrate, test, validate, and commission these platforms, including an enlarged proving ground. Together with our facilities in Gijón, As Pontes will strengthen the industrial footprint of our land vehicle business in northern Spain.
More importantly, it will help us build and move on a scalable and highly efficient industrial base capable of supporting the significant growth ahead of us. Let us move to the next chapter, which is the offensive ecosystem. For us, sovereignty is not only about developing critical technologies, but also about building the ecosystem capable of sustaining them over the long- term. Through the National Special Modernization Programs, we are committed to achieving approximately 76% national industrial content, mobilizing a broad Spanish industrial ecosystem of more than 1,000 suppliers, and around 60% of which are small to medium enterprises. This gives Indra a unique ability to act as a catalyst, transforming defense investment into industrial and technological capabilities across Spain. The QAS 35 program has already involved more than 180 Spanish suppliers across over 16 autonomous regions, creating a genuinely nationwide industrial footprint.
Importantly, more than 55% of those suppliers are small, medium-sized enterprises, together with more than five universities and technological centers. Looking ahead to 2035, the program's industrial plan envisages a 79% national contribution. That translates into approximately EUR 800 million flowing into the national industrial ecosystem, strengthening Spain's technological and industrial capabilities. We are ultimately talking about product, industrial capacity, and national ecosystem able to deliver critical defense capabilities at scale. Let me turn now to the offensive technology. IRIS² is one of Europe's most ambitious strategic programs and a major step forward in strengthening its technological sovereignty. The program will deploy a new multi-orbit satellite constellation to provide secure, resilient, and sovereign communications across Europe and beyond. IRIS² will serve governments, defense, and security users, while also supporting commercial connectivity and broadband services.
With a total investment of EUR 15.6 billion, IRIS² will become one of the largest and most complex space programs ever developed in Europe. Its architecture will combine low Earth orbit and medium Earth orbit satellites, together with a dedicated very Low LEO constellation and an advanced ground infrastructure. The program will reduce Europe's dependence on external communication infrastructure and strengthen its ability to operate autonomously in critical situations. The combination of the satellite constellation and the ground segment will also provide greater resilience and additional connectivity when conventional networks are limited or disrupted, supporting governments and emergency services during crisis. With the first launches planned for 2029, IRIS² is now moving from ambition to deployment. Hispasat will play a leading role in IRIS².
As a member of the SpaceRISE consortium alongside Eutelsat and SES, it has been appointed prime contractor for the entire ground segment, covering antenna infrastructure, control systems, and connections to ground networks. This represents a budget of more than EUR 1.6 billion and will be the largest and most complex ground infrastructure developed in Europe for a space program. With an additional EUR 300 million budget, Hispasat will lead the development of the very Low LEO layer, focused on direct-to-device mobile connectivity or new experimental services. This marks the first time a Spanish company has taken such a leading role in a major European space program. For Hispasat, IRIS² represents a major step forward, placing the company at the heart of Europe's future secure satellite communications infrastructure. From 2031 to 2038, Hispasat will hold commercialization rights for IRIS² services, opening a significant new opportunity in the satellite communications market.
These rights will enable Hispasat to develop and commercialize a new generation of connectivity services based on non-geostationary satellite infrastructure. For citizens and businesses, this will translate into applications such as direct-to-device connectivity, maritime emergencies, or broadband connectivity, particularly where terrestrial networks are unavailable or insufficient. The potential for this infrastructure goes well beyond the commercial market. The same satellite capabilities will provide secure and resilient communications for governments and armed forces, including in strategically important areas and situations where conventional networks may be disrupted. This combination of civilian and military applications increases both the strategic relevance and the potential utilization of the infrastructure. IRIS² brings together commercial opportunity and strategic sovereignty through a truly dual-use European infrastructure.
As you may know, on October 27th, Indra Space celebrated the signature of two contracts with the European Space Agency, European Commission, and the EU Agency for the Space Programme to develop new ground stations for the second generation of Galileo, Europe's satellite navigation system, for a budget of EUR 52.3 million. Finally, we are taking decisive steps to reinforce our position in the critical and dual-use technologies that will shape the future. Our agreement to acquire 30% of TRC represents another important step, strengthening our cybersecurity capabilities through highly specialized sovereign technology. With the acquisition of 100% of Dares Technology, we are adding advanced synthetic aperture radar and image processing capabilities to our portfolio for applications such as unmanned systems. We have complemented these moves with a EUR 10 million investment in Qilimanjaro Quantum Tech through IndraMind.
This investment places us closer to the development of physical AI, precision robotics, and autonomous systems. By combining these capabilities with Indra's industrial scale, we are accelerating the development of strategic technologies and reinforcing the technological sovereignty that is essential for Europe. Having reviewed the progress across the key levels of our transformation, let me now turn to how this strategic and operational progress translates into financial performance during the first 9 months of 2026. Backlog reached a record EUR 22.2 billion at the end of September, more than doubling year on year with 133% increase. At the same time, order intake grew by 82% to EUR 8.1 billion, driven primarily by the exceptional momentum in defense and by the landmark IRIS² award, which further strengthened our space business following the integration of Hispasat and Eutelsat.
Revenues increased by 29% year on year to EUR 4.6 billion, driven by an outstanding growth in defense, which doubled its revenues, and by continued expansion of our air traffic business. Importantly, we continued to improve profitability while growing at scale. EBIT margin reached 9.8%, up one percentage point versus the first nine months of 2025, and at 10.4% excluding the impact of Dares consolidation. In absolute terms, EBITDA and EBIT increased by 62% and 42% respectively. Net income amounted to EUR 355 million, representing a 22% increase versus the first nine months of last year. On cash generation, free cash flow reached EUR 1.7 billion compared with EUR 57 million in the first nine months of 2025. As we have explained throughout the year, this performance is driven by the prepayments received in January under the Special Modernization Programs.
As a result, we closed the period with a net cash position of EUR 1.2 billion, implying a net debt to EBITDA ratio of - 1.4 x. This exceptionally strong balance sheet provides significant financial flexibility and positions us well to support the group's strategic priorities and future growth ambitions. Looking more precisely at the third quarter on a standalone basis, we continued to deliver strong growth, with revenues increasing by 26%, largely driven by the outstanding performance of defence, where revenues grew by more than 95%. This solid top-line performance was accompanied by resilient profitability, with EBIT margin remaining stable year-on-year at 9.4%, despite the continued ramp-up of major programs and the strong growth profile of the business. Revenue growth remained broad-based across the group, combining a strong underlying momentum with the contribution from the business integrated over the last 12 months.
As a result, revenues increased by 28% in local currency and 16% organically, demonstrating the strength of our core businesses. From a geographic perspective, growth was particularly strong in Spain, driven by the excellent performance of our defence and space activities. As a result, the weight of Spain within the group continued to increase during the period, a trend that we expect to continue in the coming periods, supported by the ramp-up of Special Modernization Programs. International operations nevertheless remained a substantial part of the business, accounting for 42% of group revenues, with solid growth in both AMEA and the Americas. One of the most significant developments during the period has been the continued evolution of our business mix. Aerospace and defence continued to increase its contribution across the group, representing 80% of backlog, 46% of revenues, and 69% of EBIT in the first nine months of the year.
This reflects the strong growth of our defence activities and the increasing contribution of Space, further reinforcing our exposure to markets with a strong long-term growth and visibility. As we continue to scale the group, productivity becomes a key management priority. At the end of September, the group had almost 59,000 employees, a 4% reduction compared to a year ago, mainly reflecting the continued optimization of our Minsait workforce. More importantly, revenue per employee increased by 34% year-on-year, highlighting both the strong growth achieved across the group and the continued improvement in operational efficiency and business mix. Let us now take a closer look at the performance of each division and the key factors driving growth and profitability across the portfolio. Starting with the defence business, the first nine months of 2026 confirmed the very strong momentum we are seeing across all key performance indicators.
Defence continues to benefit from an exceptionally supportive demand environment, which is reflected in both the commercial performance and execution of our existing programmes. Order intake increased by 80%, further reinforcing the strong visibility of the business, while revenues doubled year-on-year as major programmes continued to move into execution. Lastly, profitability remained at the sector-leading levels with an EBIT margin of 16.1%, or 20.1% excluding the TESS consolidation impact. Looking specifically at the third quarter, Defence maintained a very strong momentum seen through the year, with revenues increasing by 95% year-on-year. This growth translated into another quarter of a strong profit expansion, with both EBITDA and EBIT increasing by around 50% compared to the third quarter of 2025. Underlying profitability remained resilient, with EBIT margin reaching 17.3%, excluding the impact of TESS.
Turning to Space, the integration of Hispasat and Hisdesat has significantly expanded both the scale and strategic relevance of the business. As a result, backlog exceeded EUR 4.8 billion, while order intake reached EUR 2.2 billion, including a EUR 1.9 billion contribution from the IRIS² program. The first nine months following the integration of Hispasat and Hisdesat have already demonstrated the value of the transaction, driving revenue growth of more than 370% while supporting a significant improvement in profitability, with EBITDA margin reaching 40% and EBIT margin 9.9%. Overall, these results confirm the strategic rationale of the integration and the growing importance of Space within the group. Looking specifically at the third quarter, Space continued to expand rapidly, with revenues increasing by 329% year-on-year, supported by the integration of Hispasat and Hisdesat, as well as double-digit growth across its operations in Spain, the Americas, and Europe.
Profitability also remained strong, with EBITDA and EBIT margins reaching 39% and 8.5% respectively. Air Traffic continues to demonstrate why it is one of the most attractive businesses within the group, combining growth, profitability, and strong commercial momentum. Order intake increased by 27%, mainly driven by radar contracts, supporting a backlog growth of 26% to EUR 1.4 billion and a book-to-bill ratio of 1.85 x. Revenues grew by 23%, supported by radars, air traffic systems, and the CANADA High Tech program, while profitability remained on an upward trajectory. EBITDA and EBIT both delivered double-digit growth, with margins improving to 15.7% and 12.7% respectively. Focusing now on the third quarter, Air Traffic accelerated its growth trajectory, with revenues increasing by 39% year-on-year, supported by radar and radio contracts across the U.S., EMEA, and Europe.
EBITDA and EBIT also delivered double-digit growth in absolute terms, while margins remained at very healthy levels, with EBIT margin reaching 12.8%. Looking at Mobility, the key highlight for the division was the exceptional commercial performance during the period, with order intake more than tripling year-on-year, driven by the Transport for London contract in the U.K., railway systems maintenance in Saudi Arabia, and the Transport for Washington contract in the U.S. This strong order intake lifted backlog by 74% to EUR 1.7 billion and the book-to-bill ratio of 3.57 times. This commercial success provides a much stronger foundation for future growth and improves the visibility of the business going forward. Moving on the third quarter, on a standalone basis, Mobility maintained a positive revenue trajectory, with sales growing by 3%, supported by double-digit growth in Spain.
Importantly, EBITDA grew faster than revenues, driving a 40-basis point improvement in EBITDA margin to 6.3%. Finally, let me conclude the divisional review with Minsait, which continued to deliver a resilient performance while progressing through its ongoing transformation. Reported revenues increased by 1%. Excluding the impact of BPO, the disposal organic growth reached 3%, providing a clear view of the underlying performance. Growth was supported by public administrations healthcare, where revenues increased by 12%. Profitability remained stable, with EBITDA and EBIT margins unchanged year-on-year at 8.3% and 6% respectively. Zooming in on the third quarter, Minsait delivered organic revenue growth of 1%. Profitability remained broadly stable, with EBIT margin at 6.6%, compared with 6.7% in the third quarter of 2025. Overall, these results reinforce our confidence in the group's trajectory.
We continue to see strong demand across our core markets, a growing backlog, and increasing scale in our aerospace and defense activities, all of which support our ambitions for the year ahead. With that, let me hand over to our Chief Financial Officer, Miguel Forteza, who will take you through the remaining financial items in detail.
Thank you, Reca, and good morning, everyone. Starting with free cash flow. Reported free cash flow reached EUR 1.7 billion in the first nine months of 2026. Compared with EUR 57 million in the same period last year. As previously explained, this exceptional figure mainly reflects the prepayments received under the 2025 Special Modernization Programs or PEMs. At the end of September, the net contribution from these prepayments stood at EUR 1.8 billion. As the corresponding programs move into execution, these funds will be progressively deployed and reported free cash flow will normalize accordingly.
That said, during the third quarter, we unlocked additional PEM-related prepayments, which partially offset this expected reduction. For comparability, we also adjust for the EUR 187 million of factoring used as previous period ends. We discontinued this practice at the beginning of 2026, as it no longer provides an efficient source of financing given our current cash position.
After adjusting for both the PEM prepayments and factoring, comparable free cash flow amounted to EUR 70 million. This performance remains consistent with the investment profile required to execute our growing backlog, and we remain confident in delivering our full-year free cash flow guidance of more than EUR 375 million, excluding the impact of PEM-related prepayments. Turning to working capital, the position improved significantly, reaching negative EUR 1.9 billion at the end of September, equivalent to - 109 days of sales, compared with + 21 days a year earlier. This evolution was mainly driven by the prepayments received under the Special Modernization Programs. That is - 119 days of sales, together with those related to TESS and Hisdesat, equivalent to - 97 days of sales. These effects more than offset the higher level of inventories in absolute terms, while inventories remained broadly stable when measured in days of sales.
Let me now walk you through the evolution of our net debt position. The group closed September with a net cash position of EUR 1.2 billion, compared with net debt of EUR 583 million at the end of 2025. This improvement was driven by reported free cash flow of EUR 1.7 billion, including the substantial working capital benefit from the PEM prepayments. The underlying operating performance was also strong, with operating cash flow increasing to EUR 668 million, compared with EUR 348 million in the first nine months of 2025. At the same time, capital expenditure rose significantly to EUR 374 million, in line with the investments required to support the group's industrial transformation and future growth. For a like-for-like view, the bridge on the right adjusts the reported position for both the EUR 1.8 billion of net PEM prepayments and the EUR 187 million factoring effect.
On this basis, adjusted net debt would have stood at EUR 431 million at the end of September. As a result of these factors discussed, the net debt to EBITDA ratio stood at -1 .4x at the end of September, reflecting the group's reported net cash position. More importantly, excluding the net contribution from PEM prepayments and the factoring effect, leverage would have remained at a very comfortable 0.5 x, providing us with significant financial capacity to fund our strategic priorities and future growth. To conclude the financial review, our debt profile remains diversified and well-balanced. Gross debt stood at EUR 1.4 billion at the end of September, with 88% classified as long-term. The average cost of gross debt declined to 3%, while the average maturity stood at 3.6 years. Our consolidated cash position reached EUR 2.6 billion, mainly reflecting the PEM prepayments already discussed.
In addition, the group had close to EUR 1.15 billion of available credit facility, including a EUR 385 million facility from the European Investment Bank earmarked for specific uses of proceeds. Overall, our liquidity and leverage position provide a strong foundation to support the execution of the group's growth plans. With that, we have reached the end of our presentation, and we will now open the call for questions.
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Ladies and gentlemen, the Q&A session starts now. If you wish to ask the question, please press star, followed by five on your telephone keypad. Our first question comes from the line of Marco Vitale from Mediobanca. Please go ahead.
Good morning. Thanks for taking the questions. Just a couple. First, if you could just provide us a high-level outlook on the intake for the fourth quarter of the year. We are expecting the launch of new PEMs. However, we also understand that the political landscape could be volatile in the final quarter of the year. So just wondering, what are your thoughts on the time of the PEM? Second, on defense, we noted a slight, say, profitability erosion despite the ramp-up in volume. So if you could elaborate on what were the key drivers for such profitability slowdown. Thank you.
Okay. Thank you, Marco. I will go for the first, providing you some color of our outlook till the year-end. Let me start with Defense. We now expect around 80% increase in terms of revenues ex-Space, obviously, in comparison with last year. You know that we have been verbally guiding that we will get around EUR 600 million from PEMs this year. We think we can clearly achieve that number, more than EUR 400 million from TESS. You have just heard the CEO talking about these 18 new units. In terms of margins, we can end up the year around 18%-19%. In the Space, we think we can finish the year above EUR 400 million revenue mark. ATM, we expect double-digit growth with an EBIT around 12% and 13%.
In Minsait, we expect revenues to grow low single digit and with a similar EBIT of similar than last year EBIT, so that is around 6.6%. In Mobility revenues, around mid-single digit and an EBIT around 5%. Answering the second, I will let the CEO talk about the potential future PEMs. Regarding the margins on Defense, clearly, if you take out the TESS dilution effect, we deliver 17.3% in terms of EBIT in comparison with the 20% of the first nine months. We clearly expect, as we already said, a normalization on that margins throughout the year and finish around 18%, 19%. Basically, these lower margins were basically explained by less contribution from the Eurofighter and the FCAS programs, which total around EUR 80 million in comparison with EUR 400 million of the first nine months. I think that mainly explains that. I will let the CEO—
Thanks, Miguel. Regarding the second question about the forecast about the PEM progress from now until the end of the year, I would say that we should expect a similar behavior as last year in 2025. This is not a decision that lies on our hands. It is more the Ministry of Defense in charge of deciding when those PEMs will be made public. As an information, you have just recently seen that one of those PEMs has been already communicated for Navantia. We do not see any kind of indication, deviation, or jeopardization of the PEM 2026 as we speak.
Thank you. Very clear.
Thank you. Our next question comes from the line of Juan Cánovas from Bestinver Securities. Please go ahead.
Good morning. Thank you for taking my question. One for Miguel and one for Reca. For Miguel, I know you've talked about full-year guidance, but given that your EBIT is growing already at 42% year- to- date and the implicit for fourth quarter, just to give you guidance, is only 24% growth. What is behind your thought in not increasing guidance for the full-year? My second question regards IndraMind. I wonder whether you can give us some color. In slide number seven, you put IndraMind at the top, reporting directly to the CEO. But I guess it is buried into Minsait. So I do not know whether you can give us some KPIs or some outlook for IndraMind. Thank you.
Okay. Thank you, Juan. We are pretty comfortable on reaffirming our guidance of EUR 7 billion revenues and EUR 700 million EBIT levels. I think on revenues, we are performing in line with our internal expectation. As you've seen, obviously, we think that, as I just stated before, Minsait growth will be on the low single-digit area. But on the other hand, we expect Defense to grow a bit higher. We are thinking about 7%. We think we will end up more around 80%. I think we just reaffirm our guidance in terms of revenues and EBIT for the full- year, and I think that we are exactly in line to deliver on our targets.
Thanks, Miguel. Maybe about the second question regarding page number seven, so the slide above mainly. Let me give you a little bit of background. When I joined the group, the leadership team was about 18 people. 18 people around the table, and it was, for me, a kind of karaoke meeting. For the sake of agility, decision-making process, and accountability, it was absolutely necessary to reduce the number of members in the leadership team in that respect. This is why we went down from 18 to 12, so a 30% efficiency. In that respect, it has been driven by a set of functions elimination, or a merging of different functions, like Defense and Space in one block, or Air Traffic and Mobility in another.
Here is where the IndraMind plays a role, because I cannot anticipate that much, because this is going to be part of the Capital Markets Day. You can imagine if we put IndraMind at the top of the company, it is because IndraMind is expected to play a significant role, as already communicated December 2025, when IndraMind was publicly explained to the audience. We reaffirm our vision, and that IndraMind will play a significant role, especially because, as I explained many times, intelligence, software, AI, robotics, aligned with dual-use technologies and solutions, are going to be a key differentiating factor versus non-intelligent objects.
Okay. You are not willing to anticipate any KPIs on IndraMind-
No
-at the moment?
No.
Maybe I can give you some-
Okay. Thank you.
-numbers. But I think IndraMind is doing times more better than expected last year.
Thank you.
Next question, please.
Our next question comes from the line of Michael Briest from UBS. Please go ahead.
Good morning. Thank you. Great news on the Space contract wins. I know the CMD is going to have a lot more detail, but can you say anything about the phasing of CapEx and revenues through the end of the decade before we get to the 2031 phase? I think pre-acquisition, there was talk of EUR 400 million of committed CapEx. Can you say something about the timing of that? On Minsait, IndraMind's doing well. Can you say why you saw the deceleration, and you now expect margins to be at the sort of flat year-on-year rather than improving? Is it competition? Is it demand? Which parts of the world, which industries are exposed to that? Thank you.
Okay. I will start with Space and give you some color around this new achievement for Indra, which is, as said, the award of EUR 1.6 billion on the ground segment, as the CEO was explaining, and EUR 300 million for the Low LEO layer. To give you some color, you should expect modest contribution for this year. Very modest, so don't expect much. For the rest, expect around 70% of the total expected revenues, so this EUR 1.9 billion, to be recognized by the end of 2030. I think that's mainly, and 30% from 2031 to 2035. In terms of CapEx, don't forget that this is mainly fully pre-financed by the European Commission, this program. There are another potential layer of CapEx.
We move it from EUR 400 million to around between EUR 500 million and EUR 540 million, which will allow Hispasat to have, on an exclusivity basis, the potential commercialization of all the services and applications stemming from the constellation. That will imply that CapEx, but it will be a back-loaded CapEx. The bulk of the CapEx will rely on 2031 onwards. You shouldn't expect on this program, or you should expect less than EUR 100 million till 2030 in terms of CapEx. Right?
Yeah. Regarding the last question of Minsait, yes, we are quite close to the Capital Markets Day, and probably there, we will be capable to offer more detail about our vision about Minsait. But independently from that vision that I am asking you is that regarding demand, our large clients' IT budgets are definitely continuing to grow and remain robust. However, there is a kind of a trend that we are noticing that is due to the uncertainty about the degree of transformation that AI will bring in general terms. It has an implication or an impact in the contract renewal cycles. In fact, those renewal cycles are shorter. There are far fewer long-term renewals, and in some cases, decision-making is being delayed. This a bit what we are perceiving and seeing right now from our side.
Okay. Thank you.
Thank you. Next question, please.
Our next question comes from the line of Carlos Treviño from Santander. Please go ahead.
Good morning. Thanks for taking my questions. Mainly are two follow-ups on two topics you have been talking before. The first one is on the full- year guidance. Is there something that could you be worried about reaching the guidance. I was thinking initially perhaps some delays in defense. You were asking on this before, but then is there anything else that could you make to be worried about and not able to reach the guidance? Mainly in revenues, I would say. My second question is also follow up on Minsait. Organic growth was only 1% in Q3, but I was surprised that growth in digital and solution was also only 1%. Reca, you were answering before about some delays in the decision-taking process from customers. Is this especially impacting digital and solutions, or is there anything else impacting this part of the business? Thank you.
It is an overall behavior. I would not point out in that domain you were mentioning. It is a general behavior without any kind of particular focus on one area, one industry, or in one market. It is a general pattern that we are observing from our side.
No, on the first question, Carlos, I think we are not worried in terms of not reaching our revenues. We have a revenue growth of 29% first nine months. We are broadly aligned with the 28% growth implicitly embedded in our full- year guidance. We just commented on our view on defense revenues, probably surpassing 80%. I think that brings us a lot of comfort on that sense. We do not forget that Minsait is also growing organically at 3% for the first nine months, and also positive growth on the third quarter. Again, we feel absolutely comfortable with our guidance throughout the year.
Very clear. Thank you.
Thank you, Carlos. Next question please.
Our next question comes from the line of David Holmes from Bank of America. Please go ahead.
Hi. Good morning, guys. I just wanted to come back to the defense revenue growth. You are talking to 80% plus revenue growth in 2026 now. I think previous expectations were 70%. That is quite a substantial increase. Can you just help us understand what has driven that increased revenue in the defense business, please? I will ask my second question afterwards, if that is okay.
Okay. Thank you, David. A couple of points here. First, in terms of PEMs, we are confirming that we can reach the EUR 600 million that we would expect. Do not forget that the PEMs number for the five months in terms of revenues are today EUR 374 million. So there are still EUR 225 million where we comfortably think we can reach that amount. On the other hand, we have TESS Defence, where first nine months we delivered EUR 276 million with 60 units.
There are new 18 units announced yesterday, in fact. So with that number, we think we can clearly exceed the EUR 400 million breach. Also, do not forget that Eurofighter, one of the important programs, we delivered around EUR 200 million the first nine months. We expect to surpass EUR 280 million year-end. And there are other programs that are working in line. So we think that we comfortably can reach this 80% growth.
Right.
Okay. Very clear. Second question that I wanted to ask was on space. I suppose you spent some time today speaking of the strategic importance of the IRIS² contract that you have won. I guess, you have, in the past, spoke to achieving EUR 1 billion of revenue in 2030 in the space business. I suppose my question is: Does that contract win increase your confidence in your ability to achieve that level of revenue, in the space segment?
So, again, sorry for answering more or less in the same manner as I was doing before. This is a key topic that we will address properly in the Capital Markets Day. Today was more about to highlight how relevant and important is going to be space in our business profile. We are coming from a very tiny, small business apparel for space. The acquisition of Hispasat and the participation in the consortium for IRIS² is giving us clearly another dimension of possibilities and capabilities that we can develop. On the one hand side, in terms of know-how and industrial capabilities, but also in terms of commercial communication opportunities. We are very happy to have that chance, and we will further elaborate in our Capital Markets Day in four weeks time.
Totally understand. Look forward to the CMD. Thanks for your time.
Thank you. Next question, please.
Our next question comes from the line of David López Sánchez from JB Capital. Please go ahead.
Hi. Good morning. A quick one on Minsait. Organic growth is low to 1% in the quarter. Can you help us understand how much of this growth came from Minsait, and how much from IndraMind? If the weakness is concentrated in any specific area? Thank you.
Thank you, David. I can give you some color on the perimeter around IndraMind, which is cyber defense, AI, some platform and security, which counted around EUR 280 million the first nine months. This can be compared with EUR 323 million for the full-year 2025, right? It is a clear improvement. Specifically, for some of the services, if you take the full nine months, digital grew around 11%, while professional services was going around double digit. On the third quarter, that is right, that digital solution grew around 1%. That is basically for the seasonality of the quarter. We are doing pretty well in terms of AI, for example. Payments are doing quite well, electoral processes also, and solutions. So they are working well with public administration, taking the lead on that side.
Thank you. We have time for the last question.
Last question comes from Fernando Abril-Martorell from Alantra. Please go ahead.
Hello. Good morning. Thank you for taking my questions. A couple of follow-ups. Basically on space again. You have mentioned that CapEx could go up to EUR 500 million-EUR 540 million, most of it after 2031. If that is correct, my question is what kind of expected returns are you targeting for these investments? I guess this is entirely for acquiring the commercialization rights. Second, I do not know if you can provide an update on the VAC program and the track support vehicle that in the press, there were some rumors that it was being delayed and postponed. I do not know if you can give us an update on this, given it is big in size. Thank you.
Yeah. Thank you, Fernando. On the space one and regarding the CapEx required, you are right. It is going to be between EUR 500 million and EUR 540 million backloaded, and that will be a commercialization program, so for even both military and commercial applications. Not just in Spain, but also in other geographies where Indra and Hispasat have a significant footprint. We will not disclose at this stage any kind of potential returns or margins embedded. Probably we will be providing more column, more detail in the coming future, but we cannot state at this moment more detail on this potential return.
Maybe to start finishing the meeting, let me answer your last question about the track support vehicle. Here we are in a very good situation because we are having very good discussions with our final customer, so the Ministry of Defense and the Spanish Armed Forces, in order to polish certain elements of the project. We are confident that with the complicity of our partners, of the TESS joint venture, we will meet customers' expectations, and we successfully will get the project released before the year- end. These are our expectations, and as I mentioned before in a similar question regarding to PEMs, we do not see any indication that it might deviate from our expectations. Again, we are very pleased and honored of the help we have received from the final customer in that respect. With that-
Thank you.
-I would like to close the meeting, thanking you all for your attendance, and expecting you to see here physically in Madrid in our next Capital Markets Day by November 25th. Thank you very much to everybody.
Thank you.