morning to OHB's Q2 six-month conference call. Quickly, obviously, I recap that the OHB brand business model value chain starting from development integration, then, of course, launchers in orbit operations and services to the exploitation of data. The business model and the overall organizational chart has been remained unchanged since the last months. Just to remind you that we are now, of course, working with our three business divisions, Space Systems, Aerospace, and Digital. This has been the reporting scheme starting from this year onwards. A few news in the Space Systems division. LuxSpace has signed the agreement with ESA recently for the development of the large Triton-X microsatellite platform. It's a new space microsatellite platform for launch mass up to 200 kg for low Earth orbit applications.
We are very happy that after the successful mission of Triton in 2020, now we're working to be ready mid-2023 for the first mission based on this significantly enhanced Triton-X platform. Another important order intake, we have talked about this since a long time, is the Lunar Gateway contract has been signed on May 25th between Thales Alenia Space and us. Contract volume about. Okay. Good. Sorry that I walked over a few slides that you apparently didn't see. I had a quick run through Triton-X and Lunar Gateway. Let's move to slide six then. Other activities on the Space Systems department, recently we have been successfully starting together with Thales our role in our EnVision Venus mission.
This is obviously very significant for us because Venus has been, since a long time, a very significant destination. We are also leading the design of the future sovereign European Missile Defense program. It's called ODIN'S EYE program that we're doing together with the European Defence Agency. In order to catch up a little bit, maybe we just jump to the next slide, seven. MT Aerospace has signed the supply agreement between MT and ArianeGroup in April. This obviously is another very important step in the overall Ariane 6 evolution. This contract is based on patterns of nine-12.
It seems that we're working together with the European Space Agency and the member states supporting the Ariane 6 program towards a cadence in the range of six-seven, probably seven. This would be very positive. For MT, this would help us to have an efficient production of our ship set in Augsburg. First launch of Ariane 6 is still planned for mid-2022. Recently, MT Aerospace signed an agreement with Boeing. The companies will continue to work together. We have been involved since a long time in the big SLS launcher. We're doing the domes.
Other than Ariane 6, we're having also other customers in the launch manufacturing industry that obviously helps us in diversifying MT Aerospace's business portfolio beyond Ariane business, which obviously has been very important in the Ariane 5 times. Now with Ariane 6 coming up, our strategy has always been to diversify into other products. This obviously with NASA's SLS launcher, we're very honored to be part of that. Keeping in mind that this is a U.S. taxpayer funded program, having components on this product is a sign that MT is very competitive and technically very skilled. Our investment in micro-launchers in the Rocket Factory Augsburg is moving along quite well.
Recently, Rocket Factory Augsburg has tested the entire engine with the stage combustion for more than eight seconds positively, and this is a very significant achievement showing that the engine is fully functional. This is core to our idea of Rocket Factory having a very high performance engine. Because as you know, obviously in a rocket, the engine efficiency and performance is key to the overall, let's say, success of a micro launcher. Recently, the Rocket Factory also signed an agreement with Norway, with Andøya for its launch future launch spaceport activities. We're very happy to team up with Andøya as our launch operation partner. A couple of other developments you can see here.
I just quickly glance over because we lost a few minutes in the hiccups in the beginning. I think what is important to see is that our aerospace launcher business with MT Aerospace but also Rocket Factory Augsburg is developing quite nicely now into the more and more competitive world of launching. Our third business division, digital, recently signed another contract for an e-GEOS telescope. This is more like a small series of telescopes over the last couple of years. The newest customer is e-GEOS Italian operator working together with the Italian Space Agency. We are very happy that we are continuing this successful product line. Another important activity here is in our OHB Teledata.
You know OHB Teledata is active since many years with all kinds of downstream technologies from tracking and tracing telematics. It is also active in the rail technology, station control technology, for converter plants. We have recently signed a significant agreement with the DB Energie, which is a part of the Deutsche Bahn group in charge of the power supply. This has been quite a nice contract for the digital area. Our share buyback program is moving along slowly. We have so far acquired about 27,000 shares.
Quite happy to collect slowly up to the volume that we have announced, probably in the range of 100-170,000 shares over the next couple of months. Here you see the order backlog, still very solid, about EUR 2.5 billion. We are quite happy. The vast majority of that is in the Space Systems domain. This is a chart showing an overview of our products in the micro platform domain, small satellites, micro satellites. We do have, in three locations in Italy and Sweden and in Luxembourg, products here. Initially, I talked about Triton-X contract, building on the success of the Triton mission in 2020.
Similarly in Italy, we have a second mission coming up. There was the first EAGLET mission and now a more generic product is called a multi-mission microsatellite. It's a bit bigger, up to 25 kg, and it's supposed to launch next year. We are also very active in our Swedish subsidiary, the InnoSat series. We are playing on three fronts in this market segment, all the way from 5 kg up to the 200 kg class, which makes us very comfortable in having competitive solutions for the microsatellite market.
Because this obviously is the product that is important for constellations, and all three of those are active already in different constellations, starting from Arctic Weather with our InnoSat product, Earth Observation, and also our Italian product, EAGLET. This need seems to be taking off globally. You see many, many constellations being developed. We believe very strongly in these kind of constellations for the Earth observation markets, but also obviously for certain aspects in connectivity. As always with OHB, we're trying to serve the both markets, the institutional and the commercial market. Yeah, as you could see, there have been the first missions already successfully been implemented.
We're hopeful that in this domain and this area, in the next weeks and months, we will see further successes coming into our order book. Coming to the numbers, Q2 2021 has been a successful quarter. First six months 2021 have been quite successful, as you can see here. Of course, you need to take into account that six months 2020 has been a weak period. Order backlog is much stronger because the contracts have been signed and the significant volume of those contracts to be signed have been programs decided and then in a competition won after the last ministerial conference of ESA 2019. Of course, in the Copernicus domain mainly.
You see in terms of the numbers, total revenue is slightly up. Profitability has developed nicely. EBITDA, EBIT, and all ends up in the earnings per share up 0.09 cents from EUR 0.62- EUR 0.71. Slight decrease in headcount, as you can see here. Mainly taking place in our Aerospace division, where we are adapting to the market challenges that we have with the Ariane business. If you look at the revenue and profitability evolution over the last five years, after six months, you can see we had the growth from 2017, 2018, 2019, then basically flat 2021. This obviously has also to do with the COVID slowdown that we also encountered.
In terms of profitability, we were pretty steady over those years, looking at the dark blue, which is EBIT, being at 21.4, slightly better than last year, but at the same level as 2018 and 2019. Space Systems, yeah, a steady evolution. You have to keep in mind, if you look at those numbers, that certain parts of the Space Systems activity have been regrouped into the Digital area. This explains a little bit why the volume is flat here. We're quite happy with what is going on at Space Systems. Going to the next. We're not that happy with the Aerospace and industrial products, mainly due to the Ariane business. We are encountering a decline in business volume over the last three-four years.
We believe that we hit bottom now where we are. We believe that business stabilizing overall the Ariane scenario has been able to reach agreements with regard to the development contracts how to complete that, but also then the so-called exploitation. That means the long term safeguarding of Ariane 6 as a key or as the key product for European independent access to space. This is something that you will see over the next quarters, improving those numbers again. Maybe not all the way to the old levels where we used to be years ago, but this activity around Ariane 6 should be a balanced activity in the next quarters. Our new digital division quite successful. After six months, you see EUR 52 million revenues.
Yeah, the comparison with last year is just a pro forma representation, which doesn't say a lot because, obviously starting on January first, this reporting, it's not very, let's say, significant to have a pro forma comparison. What you can see here is a strong EBIT with EUR 10.7 million. We're very happy about this. Strong margin in range of 20%, EBIT margin. It's moving well, even though obviously the biggest part of the substance here are activities that used to be part of the previous two business units, Space Systems and Aerospace and Industrial Products, as it was called before. We're seeing a dynamic positive evolution here. Our guidance is confirmed, of course.
We're confirming the guidance that we gave in February, the EUR 1 billion revenue. We're well underway in order to achieve that. This also, of course, not just applies for the total revenue, but also for the EBITDA of EUR 80 million and the EBITDA of EUR 45 million, which I don't see on this chart. Since the next chart is already moving to the balance sheet, I might add it here to this chart. Balance sheet has not really changed a lot. If you look at the asset side, it's the normal cycle over the year. Assets a little bit up from last year's ending, mainly up in contract assets, which is the ongoing business. That's the biggest change you see on the asset side. Yeah.
Maybe moving to the next slide. You can see that equity has been significantly up from EUR 223 million at year's end now to about EUR 239 million, which is positive. We're very happy about that. The overall development of the company is quite good. Also, the OCI has developed quite nicely because the appreciation, for example, in our investment in GomSpace due to the increase of the stock price of GomSpace has been quite significant. Overall, we're very happy with the evolution of the balance sheet. Financial ratios. I think it's not very spectacularly different than it used to be the previous two years.
You can see net debt in the range of EUR 200 million, a little bit lower than 2019, a little bit higher than 2020. Excluding the pensions, it's a little bit lower, which is good, EUR 107 million compared to the EUR 139 two years ago and a little bit slightly higher than last year. But you can read those numbers yourself. We are pretty much stably moving on and implementing our plans and guidance. This just shows again graphically what I just said. Overall investing is slightly lower than we had it in the previous year with EUR 9 million instead of 12 or 11 million over capitalized at a low level.
We're amortizing significantly more than we are adding to this, as you can see in the balance sheet, at a healthy level with about EUR 5 million. It's a little bit less than EUR 5 million. Yeah. Those numbers, I think, they talk for themselves. Free cash flow in the mid of the year is not very meaningful for us because our cash cycle obviously is far more significant at the end of the year. Good. That brings me to the last slide. It's 9:29 A.M., so within half an hour I was able to catch up a little bit. Of course, we have now in the fall a couple of investment conferences, September first with the Commerzbank, late November, it's with the Eigenkapitalforum and the Berenberg conference .
In between on November 10th, we will see our third quarter numbers in a webcast again. Hopefully, a little bit better prepared webcast next time, but I promise you that, we'll rehearse a little bit up front. I would like to use the time now for questions. I open the floor to the audience to questions. I think Martina will moderate that. Thank you very much for the time being.
Yes, good morning. We will now start the Q&A session. If you would like to ask a question, you've got two options. You could raise your hand, and I will allow you as a panelist then. Or the other option would be to write the question in the chat, and I would read it out loud. The first questioner is Mr. Hauenstein from DZ Bank. Mr. Hauenstein, I will allow you as a panelist now.
Yes. Hello. Alexander Hauenstein. Can you hear me?
Hello, Hauenstein.
Yes. Hello, Mr. Fuchs. Hello, everyone. I have a couple of questions. Maybe we can go one by one. First of all, with regard to Space Systems, what could be the absolute level of the segment within Q3? Especially looking into Q4, is there any reason to believe that the margin overall in H2 should be below H1? If so, why?
This sounds like a good question to quote Mörchen. Mörchen, what do you weigh in?
Our expectation is the margin we actually have in Space Systems is quite below 5%, but at the end of the day, we believe at year's end, we will be back to around 5% at least of EBIT margin in Space Systems.
Okay, thank you. The absolute level, obviously, in Space Systems for Q4 should be quite higher than as we are going probably for a strong Q4 output again, right?
Yes. Our forecast shows this very clearly, and it's also relatively normal that we have in the first half, in the first six months of the year a comparably low total revenues. We expect really what you are saying, a significant increase in Q4 of the revenues in Space Systems.
Great. Okay. Thanks for that. Coming to the next question, in Aerospace, in Q2, I understand that there's maybe a one-off effect included in the numbers. Could you a bit speak about it? And do you think this will be done for now, or is there anything further to come in Q3 and maybe even in Q4? And, related to that, Mr. Fuchs, you mentioned that you're looking for a quite balanced next quarters, you meant. Does that mean a balanced full -year actually, or does that mean a balanced means around the zero line EBIT for the next two quarters? Thanks.
Yes. The one-off effect is a principle we have put in this in Q2 due to final agreements with the works council concerning the, in German, Interessenausgleich. In English, I think the word is reconciliation of interests. This is more or less finalized. Accordingly, we have booked an additional accruals of EUR 1.9 million, and this is the final accrual. There will be no more in this fourth quarter. It's also in line with expectations that we expect an increase in revenues and an increase of the EBIT in Q3 and Q4. At year's end, we still hope that we can achieve an EBIT between 0 and -EUR 1 million. That's our expectation for the full-year.
Okay, great. Thank you. Looking again at Space Systems, Mr. Fuchs, maybe that's one for you. I'm wondering whether you could give us an update about the filing against the Galileo decision. Related to that, is there any chance that you get soon another kind of project having kind of a similar workforce necessities and skill requirements? To put it differently, is there any scenario where you will not need to find new and completely other work for your Galileo technicians and retrain them, which I understand is quite costly?
Yes, of course, this has been one of the areas where we're working hard in the last couple of months. Maybe to the status, I don't want to go into the detail, but the case is pending with the Court of Justice of the European Union. The quick case, or as it's called in German, has been completed. Now the main case is going on and yeah, this will probably take some more time. In terms of your second question, of course, we're working very hard in order to use the skills we have. The skills obviously for the first generation of Galileo, building 34 satellites of a certain class at a very competitive price.
That's the backbone. The team and the skill set is the backbone why we are very confident that, for commercial constellations, we will be successful in the next couple of weeks and months. That's also the plan why we believe that we will be able to load those skills with new incoming work. We do not foresee headcount reduction around those teams. Obviously, this means that we need to also successfully acquire new contracts. Again, I'm very confident over the next weeks that we will be successful in this domain.
Okay, sounds good. All the best for that. A final question. Ms. Mörchen, could you please give us an update on the free cash flow targets and maybe also on the CapEx side, what you're looking for? This has been in this half year a bit different in terms of CapEx than in the years before. Maybe you can lead us through with some color here, what to expect on the free cash flow side in total. Thank you.
What I expect on the cash, free cash flow side is really an ambitious question. At the end of the day, we expect the same as we had in the last years, that we have this increase of net debt in the first nine months of the year. We hope or we expect a significant reduction of net debt in the fourth quarter. If this will lead to positive free cash flow at year's end is I cannot promise because this depends on achievement of certain milestones in certain programs, and this also depends on the order intake in the next six months with potential advance payments.
Okay, that was it. Thank you.
Thank you.
The next contribution comes from Zafer Rüzgar from Pareto Securities. Mr. Rüzgar, you can ask your question now.
Yes, good morning, and thank you for taking my questions. I have some follow-ups. First on the space, let's start with the revenues here. A bit lower than in the prior year's quarter, but we have seen some progress against Q1. How is the situation now in the supply chain? It seems that we will not have again hard lockdowns as in the last year. Do you think the situation is easing? Are you more confident for the rest of the year with regard to your milestone achievements? Maybe a follow-up on the profitability here. We have seen the second quarter in a row with declining margins.
Is that decline related to the shift of business into the new segment Digital, or do you currently suffer from difficulties in the underlying business or from weaker revenue mix? That would be my first question. Thank you.
Our concern is the supply chain. We expect, as I already mentioned, an increase of material costs in the next six months. Our experience of the last six months is there are some unexpected delays, not due to COVID-19. It is our assumption. This comes also sometimes we have unexpected delays due to missing electrical parts in our supply chains. This comes with worldwide delays in the supply chain at the end of the day. This may also lead to some surprises in the next six months, but we are pretty confident if we are looking in our operational commitments, that this will have no major impact on our guidance. It is the total revenues.
Concerning profitability of Space Systems, it's part of the answer. The first answer is concerning, as you mentioned, the movement from some business to Digital have some impact, but it's not so absolutely substantial. We have some, as mentioned in our six months report, we have also some minor projects, some delays and some cost overruns. There's no substantial one big cost overrun. There are some cost overruns in some projects and some also in different companies of the Space Systems area, but this is not a major event. At the year's end, as I mentioned, I still believe that we can achieve an EBIT margin more than 5% in, for example, in OHB System, the core company of this segment, the EBIT margin is 6% in the first six months.
Some problems in some projects are.
at OHB Sweden, at LuxSpace and OHB Italy, but to some extent also in OHB System. As I mentioned, there is no one major event, and we believe that there will be no more surprises or negative surprises in the next six months.
Okay, thank you. The second one is related to digital to get a better understanding of the operation development here. How much of the increase is related to real business and how much is just the shift of revenues from other two segments? Again, here, related to the very, very strong profitability, shall we start thinking your margin target of around 10% in that segment? What could be the effects for the group profitability at the end of the year? In particular, if we consider what Mr.
Mörchen has said with regard to aerospace earnings target, and probably also with regard to space segment, it could be that you will be at the end with that profitability level above EUR 45 million EBIT.
Perhaps I can answer for the digital part. We actually said that the EBIT target for year-end will be above 10%. At Capital Markets Day and Q1 results, we spoke about something between 12%-15%. This, from my point of view, is still realistic. Why is Q1 and Q2 stronger than that? Two reasons. One is, we are building up and we are investing into digital, and we are building up a sales force and so on. There will be slightly higher cost levels in Q3 and Q4. Digital, like the rest of our business, is a project business. Actually, the cycles of projects in digital is sometimes shorter than with and significantly shorter than with satellite projects.
In Q1 and Q2, we benefited a lot from a service contract, which actually is a new one, not transferred from Space Systems or Aerospace, where we are delivering signals from space. I cannot go too much into detail here, but our product is actually delivering of services, of data services from space. And this has been a project which has been particularly profitable in Q1 and Q2. Project mix obviously has an impact as well. We can still confirm from my point of view that EBIT in Digital by the end of the year will be in the range of what we said, somewhere between 12% and 15%.
Okay, thanks. Finally, on the order intake, it has been somewhat quiet here, the last months. Do you expect a similar pattern as in the last year with a very strong H2 in terms of orders? What is your overall expectations for the order intake in 2021?
Yeah, you know, this is a typical cycle of institutional projects, which are very much driven by these cycles of so-called ministerial conferences of the European Space Agency and of large projects by the European Commission, where obviously we have one Galileo, as discussed earlier. Otherwise, our order intake would, of course, be significantly higher already this year. 2021 is just by the volumes which are addressed within the institutional market a year which is not as strong as the last year has been. You should not forget that with the order backlog we have at the moment, we are still at an all-time high. End 2020 was an all-time high, and now with still above EUR 2.5 billion, it's still an all-time high.
We are following quite a number of very serious and larger prospects in the commercial arena, so that I would not exclude significant order intake to come within Q3 and Q4.
Okay, perfect. That's it from my side. Thank you very much.
Thank you. Martina, we have further questions?
No. For the moment, we have no further questions. I would like to give Alexander Hauenstein because his hand is still raised. Maybe he has got a follow-up question. If that is not the case, then we have no further questions. Mr. Hauenstein?
Sorry, I didn't take that down. Thanks for that.
We have no further questions. Yeah.
No. It's the last chance to ask questions. Looking at the watch, it's already 9:45 A.M. If you have more questions, please feel free. If you're not raising the digital hand within the next minute or so, I assume it's gone. Mr. Hauenstein's question answered all the open points. I can just tell you that the year is developing quite nicely for OHB. I think we are moving along very significantly on a couple of fronts that Lutz was talking about, diversifying our customer base, having significant successes also beyond the traditional institutional customer base. Of course, space overall is booming.
We see a very dynamic, lucrative space industry in Europe, in North America, in Asia. That just obviously confirms that space is contributing a lot of value in many regards to what's going on on Earth. We're very grateful and happy to be part of that overall movement. I can just share with you that we feel very comfortable in 2021 and going into 2022, obviously, hopefully will then provide new perspectives on the institutional side, but again, also beyond that. This was just to fill the one-minute waiting time for further questions.
Look to Martina, if nobody else has raised his digital finger, then, of course, take the opportunity to thank you all for your interest in OHB, for covering OHB. In early November, we will then reconvene for our Q3 numbers. Here from Bremen, thank you very much. Should you have any further investor questions, obviously, Martina is available. Thanks to the whole team. Thanks to preparing this Q2 report. From my side, all the best. Thank you. Bye-bye. Have a good day.