Daniel. Good afternoon, everybody. I warmly welcome you to our first quarter results call. Thank you for joining us today.
My name is Veronika Zimmerman, and I'm Head of Investor Relations at Handsworld. With me today are our CEO, Thomas Muller and our CFO, Axel Salzmann, who will guide you through the presentation now. And with this, I would like to hand over to you, Thomas.
Thank you, Veronika. Hello. Good afternoon, everyone. Thank you very much for joining today's earnings call in which we would like to present our results for the first quarter twenty twenty one. After short presentation, we are happy to answer your questions.
Before our CFO, Axel Zeitzmann, is going to guide you through our strong financial performance in this first quarter, I would like to give you an update on our business and talk about current developments. Ladies and gentlemen, I am happy and proud to report that we have started the New Year even better than we ended 2020 and that our strong growth momentum continues. We walk the talk. We reached a strong order intake of more than EUR 500,000,000 and increased our order backlog to a new record level of EUR 3,800,000,000.0. The order intake was driven by both the Sensors and also Optronics segments.
I will go into a few more details in a couple of minutes. Due to our market leading high-tech platform independent solutions, we are still very confident to win further high volume projects in the future. We continue to see a national and international order pipeline of around €10,000,000,000 within the upcoming three years for Hanselt. You all have certainly seen that in news two weeks ago, the Italian aerospace and defense company Leonardo has signed a binding agreement with our shareholder KKR to acquire a stake of 25.1% in Hanselt. This is exactly the same level as the German government signed their 25.1%, as I said.
And that's become our second long term anchor shareholder. We are very excited about this investment. And as we are gaining a potential strategic partner with whom we are already cooperating successfully on a number of programs and campaigns. As a leading provider of sensor solutions, it has always been our ambition to play a decisive role in the consolidation of the European defense industry. We see multiple opportunities of working together with Leonardo and to further build on our strategy.
We certainly will be able to strengthen Hanselt's long term growth. The investment of the German government in Hanselt has also cleared its next milestone. German state owned bank, Greditanstalt fur Wiederhauwald KfW, which will hold the shares on behalf of the German federal government, has signed a purchase agreement with KKR. We expect the transaction to close in the next few days. Now as we said, Handheld's first quarter growth was underpinned by a healthy influx of orders in both Sandoz and Avtronics segment.
As I mentioned in our full year 2020 presentation in February, the contract signing related to the German Kvaatrige program for 38 new Eurofighters were imminent. We successfully signed now the contract and have booked approximately 100,000,000 Euro for our self protection systems and in the area of electronic warfare and 200,000,000 Euro for the radar MK1 Eurofighter radar for the first quarter. There will be further EUR 100,000,000, which is linked to this through a different cascading down via Leonardo in the next quarter. Our Optronics segment, and I'm very happy to see this, also contributed very nicely to the strong order intake by booking a contract of around €70,000,000 for an observation and reconnaissance system that will equip the Dutch Army's FENEC Scout vehicle. This also underpins our European growth we have foreseen and also our Optronics growth with such a big order intake.
Together with our strong baseline business, order intake in the first quarter amounted to a total of EUR $546,000,000, significantly upon up from the first quarter twenty twenty, and I have to say, even above our first very strong fourth quarter twenty twenty. Now as we said last year, our soft order backlog continues to mature. We are looking at an order pipeline of around EUR 10,000,000,000 for the upcoming three years, and we see that our soft order backlog continues to mature as we said. And I will give you a quick overview of the latest developments. We are currently expecting to book an additional contract in the framework of Quadriga, as I mentioned during the due to a different cascading down of around €100,000,000 The contract related to the four combat ships MKS-one 80 now called F126 are already with the respective OEMs and we expect to flow down in the coming months.
For Pegasus, we have negotiated the contract. The contract is now within the Ministry of Finance prior to the preparation for agreement and approval by the budgetary committee of the German parliament. And moreover, we are looking forward to further orders from Spain on back of the Eurofighter MK1 project HALCON, which is linked to the 38 Fighters of Kotriga. As you can see, there has again been significant progress across programs with our soft order backlog continuing to mature. On the big European key programs that have a potential to shape our industry for decades to come continue to evolve.
When we last spoke in February, the future combat air system seemed to be in somewhat turbulent seas. In the meantime, there has been a lot of progress and further alignment both in the industrial and political side, and we expect decisions in the next weeks to come. There's also progress in the maritime airborne weapon system. You remember that we, in this time, the mission providers, HENSOAR together with our partner Thales, are in the lead, is going ahead with new study orders. For the major ground combat system, we are confident to secure a major share of the program.
And now we are being selected for the German part of the sensor demonstrator called MTD 12. And the German parliament has just recently approved a €3,000,000,000 contract for the development of the Eurotrone, paving the way for our fair share in this program, which will be also several hundred million euros What's left for me to say before I pass over to our CFO, we continue to walk the talk and deliver on our guidance. We continue to leverage our investment in technology to gain new orders. And we continue to benefit from the growth momentum in the defense electronics sector. And with this, I will pass over to Axel.
Thank you.
Yes. Thank you, Thomas. Also from my side, a warm welcome to this results call of Hindsight. I'm pleased to provide you with details on our financials for the first quarter of twenty twenty one. The first three months of twenty twenty one, we were able to secure a number of big orders.
In the ZENSO segment, the self protection system and parts of the radar system for the Eurofighter Quadriga were booked worth around €300,000,000. Optronics recorded an order for an observation and reconnaissance system for the Dutch military vehicle TENEC with a volume of €70,000,000 In total, orders summed up to more than €05,000,000,000 and thereby increased our order intake by almost 200% compared to Q1 twenty twenty. This results in a book to bill ratio of 2.6 times. You see, we deliver on our guidance. This also reflects our strong revenue visibility.
Our revenue is fully in line with our expectations and increased by 6.2% to $2.00 €9,000,000 The ramp up of key programs developed as planned. All this results again in the firm order backlog at record level. At the end of the first quarter, our order backlog was at €3,800,000,000 and thereby €1,700,000,000 higher compared to the first quarter twenty twenty. This covers more than 2.5 times our guided review for 2021. And please remember, our business is weighted towards the last quarter of financial year and also depends on defined milestone planning.
Overall, our bottom line develops as planned. As mentioned before, our business very much rates to the second half of the year, not only with regards to sales, but also in terms of profitability and cash flow. Adjusted EBITDA decreased to €15,100,000 and adjusted EBIT to €1,600,000 Also, although the profitability in the first three months of twenty twenty one is below the Q1 twenty twenty, This is clearly related to the lower project margin for pass through revenues. In addition, we further invested in research and development and increased bid budget to ensure future growth. The adjusted pretax unlevered free cash flow is at minus €32,000,000 The first quarter of our financial year is characterized by the increase in working capital, especially in inventory.
This year, that effect is additionally reinforced by our key project in an early stage. But let me point it out once again, pass through business and major projects in an early stage developed expected. Let me summarize the key takeaways for the first quarter. We are fully on track in all KPIs. Our order intake is materialized.
We have a high visibility of revenues. Our baseline business developed as planned. And we confirm midterm guidance for all KPIs, Further growth in top line and bottom line profitability remains on high level due to efficient project execution further investments in technology leadership operative cash generation enables further deleveraging. And now we are happy to take your questions.
The first question is by Ben Hewlett of Bank of America.
Yes. Morning, not morning, afternoon, everybody. It's been a long week. Thank you for taking my question. So I've got three actually.
One, you mentioned on cash flow and the phasing and Q1 being a bit of an outflow. Can you talk a little bit about how we should think about cash flow phasing through the year? That would be question one. Second, obviously, we've seen the the Leonardo stake. On Leonardo's results last night, they talked about increased commonality between the Future Combat Air System and the Tempest aircraft, that has been part of the driver as to why they've decided to go forward in this way.
Is that something that you see as well? And maybe if you could talk about how you see the commonality playing out there. And then secondly sorry. Thirdly, you said, that you expect decisions, I think it was on the Future Combat Air System in the next few weeks. Would you be able to kind of give us some color about what those decisions are and and time lines around that?
Thank you.
Ben. It's Axel. Concerning your question with the cash flow, I think as you know, Ben, that the normal seasonality in the defense industry that you have to invest in the first three quarters into your projects and execution and that mainly your cash positioning will be coming to the year end guidance in the fourth quarter third and fourth quarter. So that is the normal trajectory. When I'm comparing the outcome for the first quarter with our internal budget, which you obviously don't know, then we come out really better than we have planned for.
So I'm totally convinced and I'm totally can confirm that we will deliver the cash flow as we have set for the full year.
Yes. And Ben, thank you for your questions. I'll take the two other ones. Yes, for sure, we have a long time relationship with Leonardo and on a couple of programs, and we are working very well together with them. So it was nearly a little bit natural that we are going to work further on the program level.
Now your specific question has been on Tempest and the Future Combat Air System. Well, we don't know yet to what extent both programs and when both programs will have certain commonalities. Let's do it very carefully. But I cite the head of the French procurement agency, Joel Barr, who said, I think beginning of this week, the signature of future Commodair system between France and Germany would also be a starting point to discuss commonalities between Tempest, the British, Italian, Swedish one and Spanish, German, French one. And now you can imagine who is in the middle of this, Because taking this future Comet Air Systems from an operational point of view, there may be some differences due to operational needs.
But there is one commonality, and this is electronics. The electronics is the most expensive thing to develop, and here we are in the middle of it. Our partner Leonardo and Hensoldt was the German part. So I think here, we see again a huge future for our business. And you remember when I said, the long term perspective for us in these next generation fighter systems is outstanding.
And for a future combat system itself between France and Germany, I can't comment on the, let's say, last points which are discussed. And the only thing I know that just now, just as we are talking, there are intensive talks to get the last hurdle to get over the last hurdles. But the political will in Germany and in France and in Spain to sign the AFCAS program, Now it's a demonstrator that Phase 1b is very high.
Okay. Very clear. Thank you. Can I just ask a quick follow-up? You talked clearly, it feels like we're moving towards a a a degree of commonality between the programs.
What would that mean for you? Like, what are the benefits for you from having more commonality between the system? Will you get to share the development cost? Would it be better from a profitability standpoint? Just how does it play out for Hensel if you do see more commonality between the two?
Ben, I think it's very early in the process to comment on this where are the benefits. But as bigger the programs are, even if you have to share with more partners, as better our perspective in the programs is. And we have, as you have seen with most state of the art radar, fighter radar in the Western world, which we got last year, and a couple of other things like the electronic warfare areas, self protection areas. We are in self protection. We are for fighter aircraft.
We are number one in the world. So we see a couple of really very good perspectives on a very long lasting basis.
Okay. Great. It's very clear. Thank you.
Next question is by Sebastian Grover of Commerzbank.
Yes. Hello, everybody. Thanks for taking my questions. The first one would be on the German decision making situation and to start with Pegasus. Obviously, there's the upcoming elections in September.
Can you just walk us through the rough time line? And would you expect that this is going through smoothly, I. E, before there's an eventual change in the overall government composition? The second question is then related to the Puma tank. There was obviously also a bit of noise in the press, which was saying, and I think, I guess, also one politician that there might be a pushout.
I think that was sort of echoed to a certain extent, at least by Rheinmetall yesterday. So if you could just give us your views on what to happen with that very, very platform. And then lastly, also on Leonardo, Can you eventually elaborate a bit more on the related opportunity and really taking a longer term view going forward? And then how it might affect the soft backlog, if there's any sort of very initial sizing of that potential opportunity possible? Thank you.
So I will start with your last point. Does this opportunity has or have an impact on our soft order backup though it doesn't have. Very clearly, we stay for the midterm. Definitely, German as as you have seen with 25% Germany and 25% Leonardo exactly at the same level as Anchor shareholders as an absolute independent company. Long term, there may be some interesting developments, but we can't say it today, because we don't know what our shareholders, the most important, the German government and the Leonardo have in mind.
But we, as Hensel, definitely stay as an independent company. And I think this is important, and this also supports our soft order backlog. And on the other side, we will have synergy effects in the programs we talked about Eurofighter. There are a couple of other programs where we are working closely together, and we will ease our relationship even more than it has been in the past and working closer together on a program per program basis. And certainly, there may be further programs in the future where we have a good way to go ahead.
Now this is a related opportunity, I think. So there will be synergies. We haven't calculated them, but we believe that there will be some very obvious and very significant ones. Now coming back to Pegasus before I answer your question on Puma. Going through smoothly is certainly difficult if you have a lot of programs going forward.
Nevertheless, I would dare to say that Pegasus is one of the most advanced programs, and we are expecting a green light very, very soon. I can't say more, but the only thing what I can say very, very soon. And please always remember, and that's very evident for our government that we already bought the three planes for Pegasus. So this is for sure certainly something which fosters our perceptions that Pegasus will go through the parliamentary program. On Puma, it's difficult to say for us.
We have been very carefully planning Puma for our Optronics business. We expect the upgrade of the Puma Lot one. For the Puma Lot two, I believe that the articles in the press, it's difficult for me to to to give you any insight in this because no one knows what at the end of the day comes through. But I can imagine this will be more difficult in this, in June where we have the latest parliamentary approval sessions.
Okay. That is helpful. And whatever you can share, but it would just be interesting to get a bit more of color how the discussions because there was obviously not only Leonardo that ultimately made the race, but there were also obviously Thales, Saab in trial, for instance, mentioned in the press and the public domain. So can you give us a sense what ultimately gave them the decision in favor of Leonardo? Was it just price?
Was it also that you were hurt? And then just kind of who's our sort of preferred partner? Any more color would be really appreciated. Yes.
So first, it's difficult for me to comment what our shareholder has decided. But if you look at the price, Leonardo paid for the 25.1%. I think this is certainly an outstanding achievement of our shareholder for its shareholding. On the let's be as careful as I can be. As far as we know, on the industrial concept, I think it has been clear for Leonardo that Henselt stays as an independent company.
And this has been maybe for the one or the other not so evident. But what I would like to pass as a clear message to our investors, We had calls with the ones who haven't been number one. And the very good relationship we have been built up during the last years with the top management, for example, of Indra and Saab continues and we agreed upon that on a program level, especially Intra. You remember with Intra, have the Eurofighter, we have the Eurotrone, we have a lot of other programs running together. There has been built a very, very high trust relationship, and this will continue.
Same with Saab, where we agreed upon a high level management meeting to go ahead on a program to program level. And anyhow, with Thales, our good old friends, we are working closely together in a couple of other programs. As I mentioned, the Maritime Airborne Weapon System, where we are close partnering the Cobra systems and so on, a couple of them. So we are working very well together with all of them. And Leonardo is not hampering at all the relationship to the others.
You know, industry, you are cooperating, you are beating each other like hell, then you are cooperating nicely and friendly again. So this is normal.
That's helpful. Thank you so much.
You're welcome.
There are no further questions, so I hand back to Veronika Zimmerman for closing remarks.
Yeah. Again, thank you all for listening. And as usual, should you have any further questions, we are happy to follow-up via email or over the phone. And, yeah, I wish you all a great weekend. Thank you, and bye bye.
Thank you. Bye bye. Ciao.