indrapresfractal azul · leading worldwide provider of proprietary solutions in niche areas leading...

March 2020

2

This presentation has been produced by Indra for the sole purpose expressed therein. Therefore, neither this presentation nor

any of the information contained herein constitutes an offer sale or exchange of securities, invitation to purchase or sale shares

of the Company or any advice or recommendation with respect to such securities.

Its content is purely for information purposes and the statement it contains may reflect certain forward-looking statements,

expectations and forecasts about the Company at the time of its elaboration. These expectations and forecasts are not in

themselves guarantees of future performance as they are subject to risks, uncertainties and other important factors beyond

the control of the Company that could result in final results materially differing from those contained in these statements. The

Company does not assume any obligation or liability in connection with the accuracy if the mentioned estimations and is not

obliged to update or revise them.

This document contains information that has not been audited. In this sense, this information is subject to, and must be read in

conjunction with, all other publicly available information.

This disclaimer should be taken into consideration by all the individuals or entities to whom this document is targeted and by

those who consider that they have to make decisions or issue opinions related to securities issued by Indra.

What is Indra?

Our Strategic Plan

Transport & Defence (T&D)

Minsait (IT)

Annex 1: Last quarterly results

1

2

3

4

5

51 What is Indra?

Indra at the core

Leading worldwide provider of proprietary solutions

in niche areasLeading Digital company in Spain and LatAm

€ 3.2Bn Revenues 2019

>140Countries

>49.000Employees

€ 225m In R&D

6

2,015

566

323

300

Transport

9%

€3,204m

Defence &Security

10%

ATM

2019

Transport

Defence & Security

ATM

Minsait

Minsait

18%

Digital 23%

1 What is Indra?

63%

Revenue Collection Control & Enforcement Safety & Signalling

Security & Border Surveillance

Air Defence & Electronic Warfare

SimulationSpace & Satellite Communications

ATM systems Communications Navigation Surveillance

Operational systems & Communications

Energy & Industry Financial Services Telecom & MediaPublic Administrations &

Healthcare

Business consulting, Digital solutions, Cybersecurity

%

7

€635

20%

€697

22%

€251

8%

€432

13%

€566

18%

€623

19%

Telecom &

Media

Financial Services

Public Admin &

Healthcare

Energy & Industry

Sales 2019

1 What is Indra?

EBIT 2019

Transport &

Traffic

Defence &

Security 145

66%

76

34%

T&D

€ m

mm

€ m

€ m

12.2% EBIT margin

3.8% EBIT margin

T&D

m

m m

Minsait

81 What is Indra?

28.023

17.252

2.240 2.092

0

5.000

10.000

15.000

20.000

25.000

30.000

50%

21%

17%

12%

Sales 2019 Employees 2019

Spain America Europe Asia, Middle East & Africa (AMEA)

9

(*) Board of Directors representation

CNMV data. Identified shareholders with

a position in excess of 3%

1 What is Indra?

18,7%

10,5%

9,8%

3,1%

57,9%

Sociedad Estatal de Participaciones Industriales

S.E.P.I (*)

Corporación Financiera

Alba (*)

Others

T. Rowe Price

Fidelity

Management Research

101 What is Indra?

(1) Before non-recurrent items of €687M

(2) Before non-recurrent items of €246M

(3) After non-recurrent items

FY16FY15

Order Intake (€M)

Revenues (€M)

EBITDA (€M)

EBIT margin

Net profit Reported (€M)

CAPEX (€M)

FCF (€M)

Net Debt (€M)

FY17 FY18

EBIT (€M)

FY19

2,651

2,850

131

45(1)

1.6%(1)

-641(1)

37

-50

700

2,744

2,709

229

162

6.0%

70

28

184

523

3,248

3,011

266

196

6.5%

127

40

186

588

3,437

3,104

293

199

6.4%

120

79

168

483

3,686

3,204

343

221

6.9%

121

76

8

552

11

AA

Indra´s presence in the main ESG indexes Supporting gender equality

Only 15 Spanish

companies listed

2nd best possible scoreOnly company in the Software

and Services sector listed for

14 consecutive years

Demonstrating strong

Environmental, Social and

Governance (ESG) practices

14 years

5 years

Prime

ESG performance above

the sector

Committed to talent

Acting on Climate Change

Score B

Relevant ESG figures*

75% 35%CO2 emissions

reduction per employee

since 2013 (scope 1 +

2)

Women within Indra

82% Local providers31% Women on the Board of Directors

Professionals trained on Code of

Ethics and Legal Compliance92%

*Figures not audited

13

Resulting in high financial stress

Cash flow draining

High debt generating difficulties on

external financing

-164€M1H15

accumulatedFCF

5.9x1H15

Net Debt / EBITDA

825€M1H15

Net Debt

Ongoing deep operational issues

Non reliable analytical accounting and lack of control of onerous projects

718€M write-offs in 2015

Difficulties to understand root causes and underlying issues

Profitability de-prioritisation

Growth driven by low value added services

Cost overruns in some contracts resulting from aggressive growth

Expensive delivery model

Lack of focus on cost efficiency

Heavy corporate structure

Non optimal production pyramid management

Cash management decoupled from business activities

Excessive working capital requirements

Excessive risk assumption in commercial bids

Some products at too early stage, generating onerous projects

Contractual and legal conditions without enough self-protection

2 Our Strategic Plan

14

Much more reliable balance sheet after write-offs

2.2x

Jun

16Dec

15

6.6x

Jun

15

Jun

17Dec

16

Sustainable cash generation

FCF accumulated LTM (€M)

Net debt on the lowest point since 2015 peak

Net Debt / EBITDA LTM (Times)

Healthy P&L and balance sheet

Recurring EBIT LTM (€M)

45 199

Dec 18Dec 15

1.6% 6.4%

163181184 184

-136

132

186

Jun

17

104

Jun

15

Jun

16

-50

Dec

16

76

-114

Dec

15

Includes 78€M cash cost from

personnel optimisation plan in

2015, and 51€M in 2016

Dec

17

Dec

17


150

168

Jun

18

Dec

18

1.6x

Jun

18

Dec

18

15

Greater focus, accountability,

agility and flexibility

Healthy

sales growth

Margin

enhancement

New Specialised Operating Model

Ongoing Productivity Upgrades

Product

Portfolio

Evolution

Segmented

Commercial

Processes

02 03

04

01


16

Operational synergies

Corporate services will continue to be shared to leverage the

scale effect and without losing synergies

Economies of scale within the T&D and the IT business (in

Offering Development, Cross-Selling and Production) will be

totally captured

Improved strategic flexibility

Easier potential alliances, joint-ventures and M&A

Increased management focus and accountability

Businesses split facilitates specialisation (e.g. more focused

international commercial activity)

Split allows for clearer accountabilities

Increased agility and time-to-market

Simplified management structure within the new division

Decision-making and execution processes will be faster and

better suited to each single business needs

~

Indra

T&D

Corporate functions +

shared services

Minsait


17

Deploy Lean manufacturing, Lean IT production and apply Automation

Extend scope of our Global Business Services and rationalise our indirect costs base

Intensify our Pyramid management and Delayering

Optimise procurement

Ongoing Productivity UpgradesProduct

Portfolio EvolutionSegmented Commercial

Processes

Invest to reinforce those productswhere we already have a leading position

Apply digital technologies to further position our offering in the smart ecosystem

Complement selectively ourproprietary products portfolio to sell complete end-to-end solutions

Increase commercial intensity with strong incentives and systematic tools

Apply a segmented commercial approach with new more specialised profiles

Establish alliances / JVs for commercial acceleration in selected geographies


18

Other uses (€M) (5)

2015-2017E

CAPEX (€M) (4)

1. Pro-forma values including full consolidation from Tecnocom

2. Organic growth. Constant exchange rates as of 2016 (average FX in 2016)

3. Includes the estimated CF generated in 2015-17E, excluding the estimated impact from the cash outflows from Tecnocom acquisition (191€M), headcount plans (129€M), onerous projects (~145€M)

and the accumulated CAPEX in the period

4. Accumulated CAPEX in the 2015-2017E and 2018-2020E period respectively

5. The uses of the cash flow generated in the 2018-2020E period are contingent upon fulfilment of the Strategic Plan

6. Includes the FCF generated in the period according to Indra’s definition, excluding CAPEX and the last part of the pending cash outflows associated with the headcount reduction plan in Spain (~40€M)

~610 (3)

100-110

550-650 (6)

150-200

Restructuring Plan 129

Tecnocom acquisition 191

Onerous projects ~145

Deleverage (consensus end FY17) ~40

2018-2020E

Continue deleveraging

Reinstate dividend policy

Selective bolt-on acquisitions

Revenues (€M)

EBIT (€M)

CAGR 2016-2020 (2)

3,121

180

Low single digit

>10% (p.a. growth)

2016 (1)

Total Cash Flow (€M) [~€775m since First Investors Day]


19

T&D

Transport Mid to high single digit

ATM Mid single digit

Defence & Security

Mid to high single digit

Minsait Low single digitIT

1. Organic growth. Constant exchange rates as of 2016 (average FX in 2016). 2. Proforma including full 2016 revenues from Tecnocom

Source: Indra

CAGR1 (16-20)Excluding

2018

Eurofighter

revenues fall

355€M

270€M

599€M

1,897€M2

Revenues 2016


21

All our clients are facing the digital transformation of their operations

Satellite

Communications>10%

Simulation 4%

Electronic Warfare 4%

Border Surveillance 6%

Air Defence 3%

Safety &

Signalling>10%

Operational Systems >10%

Control &

Enforcement6%

Revenue Collection 8%

Sources: Markets and markets, Indra Analysis

TransportAir Traffic ManagementDefence & Security

Communications,

Navigation,

Surveillance

5%

Air Traffic

Management 3%

The smart

segment

of all

these

solutions

is growing

over 20%

Expected CAGR 17-22 (%)Expected CAGR 17-22 (%) Expected CAGR 17-22 (%)

3 Transport & Defence (T&D)

22

Indra's accessible geographies will grow

Revitalised NATO push for 2% GDP defence expenditure

European Defence Fund investing up to 5.5€Bn/year

Geopolitical uncertainty is increasing amidst growing security threats

"Cyber threats are becoming more common, sophisticated and

damaging (…) In 2016 NATO experienced an average of 500

incidents per month – an increase of roughly 60% over 2015"

NATO Cyber Defence Factsheet, May 2017

"The events that shaped 2016 added a new sense of urgency

and determination to see Europe delivering on its potential in

defence"

European Defence Agency 2016 Annual Report

0

500

20202016 2018

Global Defence procurement

(ex North America), $Bn

+4%

Indra's home market in Spain is launching a new investment cycle

Strong R&D programs launched by 2015 now entering

into production phase

Additionally, new R&D programs starting

+3% CAGREurope

+13% CAGRLatAm

+9% CAGRMiddle East & Africa

+6% CAGRAsia Pacific

Note: NATO (North Atlantic Treaty Organisation). UN (United Nations). Source: IHS Jane's Defence Budgets 2017

"Effective border security is key to the effective implementation of

counter-terrorism measures"

UN, 2017

And Security market gaining relevance linked to an increase in border control and surveillance


23

1. Defence Simulations

2. Simulation Solutions

for Training

PlatformsDefence

SystemsSecurity Cyberdefence Space

Training

Solutions &

Services

1. Airborne Systems

2. Naval Platforms

3. Eurofigther and

A400M participation

1. Electronic Defence

2. Countermeasures

3. Military Air Bases

4. Integrated

Command and

Control Systems

5. Airspace

surveillance and

control

1. Border surveillance

and protection

2. Safe Cities

3. Smart Borders

4. Safe Communication

1. Cyberdefence

Systems

2. Simulation and

Training

1. Communications

Solutions

2. Navigation and

positioning

3. European Space

Surveillance and

Tracking Service

1. Aeronautical MRO

Services

2. Technical support

3. Full Maintenance

Logistics &

Maintenance


24

A400M

2003-2024

NH90

1992-2024

Tiger

1988-…

Eurofighter

1986-…

There have been significant developments linked with the new Spanish investment cycle

Existing long-term high volume programs are still in progress

SST

2003-2024

Note: DASS (Defensive Aids Sub-System). DIRCM (Directional Infrared Counter Measures). CAS (Close Air Support).

SST (Space Surveillance & Tracking)

Integrated frigate mast

90€M in R&D phase

~350€M in

production phase

Electronic warfare system

~350€M project,

not including

associated

platforms

Space surveillance radar

15€M R&D

~340€M

production

project, with EU

funding

Vehicle systems

28€M in R&D

phase

~300€M in

production

phase 1

Sustainment, sales and export opportunities

Future upgrades of main subsystems (e.g. radar, DASS)

Systems (e.g. DIRCM) and simulation

Systems (e.g. CAS)

and aftermarket

+8x8

2015-2027

F110

2014-2027

Santiago

2015-…


25

Airborne

Platforms

•BPE

•BAC

•BAM

•FFG

•F122

•K130

•Eurofighter

•A400M

•C-295

•F/A-18

•F1

•NH90

•P3

•B707

Naval

Platforms

•Chinook

•CH53

•Tigre

•Cougar

•U212/214

•T-209

•OPV

•F100

•F105

•S70

Land based

Air Defence Electronic Warfare

Border Surveillance

Naval

Land

based

•BPE

•BAC

•BAM

•F100

•F105

•FFG

•S70

•S80

•F122

•K130

•U212

•U214

•T-204

•AWD

•ASW

•OPV

Satellite Communications

•Eurofighter

•A400M

•A330 MRTT

•F-18

•AV-8B

•Tiger

•Seahawk

•NH90

•Wildcat

•Chinook

•Cougar

•H135

•H225

•H175

•H145

•A320

•B737…

Military Simulation


26

FCAS

Scope: Define NGWS capabilities and common architectures

Define and update technology development roadmaps

Establish program framework for all the phases

Indra’s Role: SP´s nominated Co-Contractor, together with Dassault in FR and Airbus D&S in GE.

Scope: Ensure timely results for various demonstration projects during NGWS Design Phase

Activities to be supported by SIMLAB to allow consistency amongst main stakeholders

Indra’s Role: SP’s nominated Co-Contractor, together with Dassault in FR and Airbus D&S in GE.

Scope: Development of technical breakthroughs in Sensors, Defensive Aids and EM effectors.

Next generation of smart distributed systems to be more sensitive, flexible and robust

Incorporating Big Data, Artificial Intelligence and advanced communications.

Indra’s Role: International Prime contractor and Program leader in this pillar in all three countries.

Scope: Information and Intelligence gathering, sharing and exploitation, operating in cloud

Rely on advanced architectures, cybersecurity, distributed computing and communications.

Indra´s Role Prominent role at international level and Pillar leader/Main contractor in Spain.

1) Joint Concept Study (JCS)

2) JCS Inter-Pillars Consistency / SIMLAB

Ne

xt

Ge

ne

rati

on

Fig

hte

r

En

gin

e

Re

mo

te C

arr

iers

4)S

oS

/Co

mb

at

Clo

ud

3)

Se

nso

rs

En

ha

nce

d L

ow

Ob

serv

ab

ilit

y T

ech

.National

Coordinator

NationalCoordinator

Pillar Leader

3-Nation(3*)

Pillar Leader Spain

NGWS

The NGWS is a System of Systems (SoS) that includes a New Generation Fighter (NGF)and a set of unmanned vehicles (Remote Carriers - RC) to expand the capabilities of the fighter, with all those assets interconnected and operated through a Combat Cloud

MAIN AREAS OF PARTICIPATION FOR INDRA

1) Joint Concept Study:

2) JCS Inter-Pillars Consistency / SIMLAB:

4) Systems of Systems/Combat Cloud:

3) Sensors:

(3*) Final role to be confirmed

27

IA1: ConceptStudy

IA2: Phase 1APrototype Concept

Phase 1BPrototypes and

Concepts

Phase 2Individual Flight Demonstrators

Phase 3NGWS capabilities Demonstrator and

initial phase of Development

NGWS PDRDevelopment initiation

IOC

Development and Industrialization

Program

1st flights

System Concept

Phase

(incl. launching of

R&T and

demonstrators)

Demonstration

Phase

(incl. R&T maturation

and ground / flying

demonstrators)

Development,

production…

Framework Agreement signed by the Ministries of Defence of France, Germany and Spain in Le Bourget’19

>€8bn total investment

IDR participation

IDR participation

IDR participation

IDR participation

IDR

participation

28

10

20

30

0

7

17

2016

Passenger traffic (RPKs Bn)

4.7%

2036

Note: RPKs (Revenue per kilometre). Source: Boeing Market Outlook 2017-2036; Markets and markets; Global airport construction review, CAPA

Maintenance and replacement

of legacy systems

Very long development cycles,

high client loyalty

Potential new ATM systems operators

Already ~400 airports under

construction or planned for

Innovative technology to solve

aerospace congestion (e.g. Europe)

Increase of air passenger traffic worldwide

Increase of flying aircrafts worldwide

3 drivers of sustained demand for ATM systems

80

0

20

60

40

23

Aircrafts in service worldwide (k)

2016

47

3.5%

2036

Expected stable ~4% growth in the ATM market



1. Aeronautical

Information

Management

2. Message Handling

Systems

3. System Wide

Information

Management

4. Air Traffic

Management

5. Operational

Meteorological

Information

Indra Air

Automation

Indra Air

Communication

Indra Air

Navigation

Indra Air

Surveillance

Indra Air

Drones

Indra Air

Information

1. Air Traffic Control

Automation Systems

2. Air Traffic

Management

Solutions

3. Advanced Controller

Working Position

1. Automated

Communications

Functionalities

2. Digital Voice

Communications

Control Systems

1. Navigational

Products (ILS, DME,

DVOR, GBAS)

1. Surveillance

Solutions1. Connect drones

safely

2. Manage unmanned

traffic

3. Neutralize drones

30

~200 Control Centres

~1,700 Instrument

Landing Systems (ILS)

~400 Secondary Radars

(MSSR)

Note: Most significant countries with Indra's presence highlighted

Indra ATM businessis present in

176 countries


Developing long lasting relationships with international reference clients

Enaire in Spain 35 years

DFS in Germany 20 years

iNATS n the UK 10 years

31

Europe has a challenge in air traffic management due to air

traffic congestion and the fragmentation of aerospace

Note: SESAR (Single European Sky ATM Research)

iTEC by Indra

Coflight

Coopans

Other potential

iTEC partners

In 2004 Eurocontrol, the European Commission and a

selection of industrial partners took the lead to solve this

issue and increase interoperability

Indra is one of the key industrial partners of SESAR

7 European countries have already joined the iTEC Alliance along

with Indra to fulfil present and future SESAR requirements, and

+20 countries still pending to adopt a decision


32

Further develop remote

towers to be a reference supplier, leveraging SESAR

Indra already has leading technology installed (e.g. Norway)

Grow on aftermarket

leveraging our significant asset base of ~200 control centres, ~1700 ILS and ~400 radars

installed

Develop leading

Cybersecurity technology, fulfilling latent demand

Successfully evolve iTEC

with the future requirements of the Single European Sky, leading the SESARinteroperability

Evolve CNS products

and service model (e.g. GBAS) to maintain the technological and commercial leading

position

Expanding into new segments to complement Indra's offering

Keep evolving leading products in current segments with technological updates

Note: ILS (Instrument Landing System). GBAS (Ground Based Augmentation Systems). ADS–B (Automatic dependent surveillance – broadcast). SESAR (Single European Sky ATM Research)

We will gradually grow our CapEx in our product portfolio in 3 years


PRODUCT PORTFOLIO EVOLUTION

33

Change in infrastructure operating models are generating additional opportunities

Increased demand for intelligent systems adapting to

the coming trend of Smart Transport

Requiring mobility, interconnectivity and real time

steering

More flexible asset management demand is requiring

new systems

More efficient and scalable

New opportunities for private players, as public

administrations are externalising their operations and

sharing risks (PPPs)

Change of cycle in infrastructure investment and therefore increased technology demand

+5% growth in global

investment for Transportinfrastructure

expected until 2025

Changed trend in

Spanish infrastructureinvestment

• -4% growth 2010-2014

• +2% growth 2015-2025

Indra has the perfect mix: transport business

know-how, proprietary products and digital capabilities

+10% expected growth

(+20% for Smart Transport)

Transport infrastructure technology demand increased by

• New investment cycle

• Need for maintenance and upgrade of already existing

infrastructure

+

Source: Oxford Economics, Assessing the global transport infrastructure market


34

0

50

100

20172015 2016

Lack of focus and high risk assumed

implementing excessively tailor-made solutions in international unfamiliar environments

Weak control and risk management during projects

execution. ~90M€ impact on EBIT 2015-2017 due to restructuring

needs and expected ~ 1/5 of sales

at 0% margin in 2017

Opportunity cost: commercial activity focused on solving existing issues with clients instead of expanding the business

2010 2015 2020 2025 2030

0

20

30

Real

US Energy Information

Administration 2015 forecast

Internally, management issues identifiedExternally, drop of the national market in Spain linked to public investment…Infrastructure investment in Spain (US$ Bn)

Brent price ($/barrel)

…and economic slowdown in countries highly dependent on oil prices

Sources: Oxford Economics. EIA Annual Energy Outlook 2015; real data from World Bank.

CAGR '10-'14-10%

CAGR '14-'174%

CAGR '17-'302%

~15$/barrel gap average

Our Transport business did not evolve as quickly as the market demanded


35

Portfolio rationalisation and development of more standardised and packaged solutions

Evolve proprietary products, strengthening our position in the Smart Transport market by taking them to the next technological step by gradually growing CapEx

Product Portfolio Evolution

New organisation and team

New governance model (e.g. new organisation, new profiles, increased specialisation)

Improved commercial processes (e.g. competitors intelligence, KPIs and incentives)

New commercial plans on existing clients and prioritised geographies

Segmented Commercial Processes

Opportunity to become an international reference in rail Safety & Signalling (ERTMS) beyond the local market

Potential upsides

Restructured organisation and new team already in charge

New operational plan improving control and risk management

Ongoing Productivity Upgrades

New structure and external talent recruited for top management positions Reinforced clients and competitors view

Note: ERTMS (European Rail Traffic Management System)


36

Mova

Consulting

Mova

Collect

Mova

Traffic

Mova

Protect

Mova

Experience

Mova

Comms

Mova

Care

1.Ticketing

2.Toll

3.Back Office

1.Safety

2.Enforcement

3.Video surveillance

4.Cybersecurity

5.On-board systems

1.Information and Publicity for passengers

2.Entertainment

3.Digital User Experience

1.Communications

2.IoT Platforms

3.IT Transport Infrastructure

1.Infrastructure O&M

2.Technology O&M

3.Transportation Services O&M

4.New operation models

1.Planning & Optimization Systems

2.Bus Control Systems

3.Rail Control Systems

4.ITS Control Systems

5.Tunnels Control Systems

6.Airports Control Systems

7.Ports Control Systems

8.Design and Building of Control Centers

9.Transport Control Terminals

1.Consulting and Planning for Transport and Infrastructures

2.Design Engineering for Transport Infrastructure.

3.Construction Engineering for Transport Infrastructure

4.Project Management Services

5.Operations Consulting


37

Note: ASFA-Digital (Safety & Signalling System)

Mova

Consulting

Mova

Collect

Mova

Traffic

Mova

Protect

Mova

Experience

Mova

Comms

Mova

Care

Riyadhticketing

AFC system for

public transport in

Riyadh

T-Mobilitat

Greater

integration of

collection and

Contactless

Urban Tunnels Control Centre

Tunnel control

centre in London

ASFA-D

High-end solution

for rail safety in

Spain

High SpeedMecca-Medina

Most complex

project in the

Middle East

Panama Canal

Expansion of the

canal, a reference

in technology and

security systems

Electronic Toll Management in Texas

Integrated tolling

operation

Sidney Trains

Intelligent video

surveillance

technology

ITS ColombiaSystems for control

and radio-

communications for

the Bogotá-

Villavicencio highway

Port CommunitySystem

National Port

Network

High SpeedControl Centre

Rail Traffic Control

Systems

Renfe High Speed Systems

Equipos embarcados

y entretenimiento

Algiers Airport

Project and

supervision of the

construction of

the new terminal

of the Int. Airport

Kenia AirportOperations

Integration of all the

land operations


39

Digitalisation is a direct driver

for value

In 2015 digital was an emerging

business, today it is on the CEO

main agenda

Market conditions are

expected to be favourable

NASDAQ 100 outperformed S&P500 by

17 p.p. since our first IDay in 2015

Top 5 most valued companies

2006 2016

Source: Market and markets, Gartner, International Data Corporation (IDC), BCG Perspectives 1. Cyber 17-22 CAGR, IoT 16-20 CAGR, Cloud 17-20 CAGR, AI 16-22 CAGR

16%

Cloud

55%

11%

20%

Cyber IoT AI

Expected average annual

growth1

Technology is the 2nd most cited priority for

CEOs after growth…

…42% of CEOs say "digital first" or "digital to

core" is their company digital business posture

"CIOs now have a unique opportunity, but they

must 'flip' their information, technology, value

and people leadership practices to deliver on

the digital promise"

4 Minsait (IT)

40

€ -67mEBIT

€43mEBIT

Pending write-offs

Brazil´s losses

Heavy cost structure

Limited standardisation of

proprietary products and disperse

portfolio

Lack of control and proliferation of

onerous projects

No additional significant write-offs

Brazil´s business turnaround achieved in 2018

Leaner cost structure

Rationalised portfolio and structured product offering

Increased control and tracking due to an improved analytical

accounting and reduction of onerous projects

2015 2018

4 Minsait (IT)

€76mEBIT

2019

41

Minsait commercial

brand for Indra

Launched in 2016, focused on digital transformation

Transformation trigger of our move to high value

Now becomes the brand for our whole IT division

Rationalisation and standardisation of our product portfolio easing implementation

Creation of a new set of value propositions tackling all challenges derived from required

business transformations of our clients

Migration of our products to Cloud

New product delivery model with specialised centres of excellence

Portfolio enhancement

Consolidated leadership in Spain and LaTam with high

complementarity

Payment Processing solution to enhance our product portfolio

Operating synergies delivered as expected. Restructuring process is

over

Reinforced control and

delivery model

Increased control in tender offering process

Closer monitoring of less profitable projects

Sharp reduction in the number of unprofitable projects

Selective Acquisitions

Reinforcement of Digital and Proprietary Products

Improves our time-to-market

Completes our end-to-end offering

4 Minsait (IT)

42

Value propositions

for all Industries

Products Services

Modular suite of products (under the brand Onesite), leveraging open ecosystems and a strong set of strategic alliances

Combination of on-premise and cloud offering, with increasing focus on As-A-Service models

Minsait end-to-end set of solutions to transform businesses: From strategy/ideation, implementation & transformation to operations

Concrete value propositions aiming to generate impact through business and technology (legacy & new) transformation

Set of capabilities and expertise that, combined, make up Minsait value propositions

From strategy & management consulting to IT & digital consulting, ERP consulting, cybersecurity & operations

4 Minsait (IT)


43

432

251

697

635

2019

32%

35%

12%

21%

(

(

(

)

)

)

)(

A set of value proposition in 4 main domains…

New products, services and business models

Advanced customer relationship delivery models

Advanced technologies, processes and operations

Business protection solutions

… to all the different industries

Oil & Gas Utilities Airlines Industry ...

Banking Insurance

Media Telecom

Energy & Industry

Financial Services

Telecom & Media

Public Administrations

& Health Elections Health Public Sector

€ 2,015 m

4 Minsait (IT)


44

Digital (23% of Minsait sales)

Digital Consulting and Technology

ERP Consulting Cybersecurity Operations

We optimize and evolve key processes through leading business management solutions

We preserve our clients’ assets and digital identity creating secure client experiences

We manage our clients’ operations through a differential approach

We open up new paths in the strategic definition and transformation of our clients’ businesses

We create differential experiences and state-of-the-art generation solutions that drive our clients’ businesses

Business Consulting

4 Minsait (IT)


45

Energy & Industry

Telecom & Media

PublicAdministrations & Health

Airlines

Revenue accounting

Multi-channel reservation

Payments

Banking

Digital bank

B2B relations

Opening accounts

Oil & Gas

Refining

Transportation

Safety & Environment

Elections

Electoral solutions

Digital Democrazy

Protection

Public Sector

Taxes

Justice

E-goverment

Health

Management system

B2B processes

Network

Financial Services

Utilities

Generation

Distribution

Commercialization

Insurance

Complete platform

Integral solution for the sales forces

Multi-channel tools

Telecom

Advanced analytics

Customer´s

experience

Media

Corporate Services

Customers & channels

Operations

Industry

Manufacturing

Assets

Workforce

4 Minsait (IT)


46

We are helping the

Regional Government of

Andalusia in its digital

transformation

We drive the

implementation of the

new home medical

assistance concept

We are experts in

technology solutions

used to manage electoral

processes

We help private banks

during their transition with

our platform

We create the first fully

digital bank in Argentina

Financial ServicesEnergy & Industry Telecom & Media Public Administrations

& Health

Transforming the core

insurance industry from

customer’s perspective

We improve the

competitiveness of the

nº1 airline in Brazil

We reduce costs through a

new billing model for

Telefonica

We are leaders in energy

industry solutions for the

transmission and

distribution grid

We developed, together

with Repsol, a solution for

early detection of

hydrocarbon spill

We build the new online

sales channel for a leading

retailer in optical services

(eCommerce)

We are leaders in card

processing in Spain and

America

We help customers port their

number, with processes

adapted to the customer and

country

We improve the

customer’s experience

optimizing the back office

We guarantee optimized

communications for Vivo,

using more than 33,000

km of fiber optic

We make a difference in

the management of

more than 400 electoral

processes

4 Minsait (IT)


47

Business Analytics··Big Data··Robotics··Automation··Artificial Intelligence

4 Minsait (IT)


48

4Global Production

3Pyramid Optimisation

2 Delayering

1Lean & Automation

Apply full end-to-end Lean approach, fostering a culture of continuous

improvement and placing automation at the core of our operations

Reduce management layers to increase agility and accountability while maximising efficiency

Reshape our production and delivery pyramid

Increase off-shoring by leveraging our existing capabilities in Latin America

~1.5-2ppinduced direct

margin increase

by 2020

ONGOING PRODUCTIVITY

UPGRADES

4 Minsait (IT)

50

• 2019 Order Intake (+7%) grew again above revenue growth (+4% in local currency)1

4

2 • Backlog up +11%, surpassing the €4.5bn mark at 1.4x revenues, new record for Indra

• FCF reached €8m driving Net Debt / EBITDA LTM ratio down to 1.8x (1.6x excluding SIA acquisition)

7

5

• EBIT grew +11% in 2019, pushed by Minsait profitability (3.8% EBIT margin), despite the lower

contribution of the Election Business

6

• Net profit stood at €121m and improved +1.3% due to higher tax rate (29% in 2019 vs 25% in 2018)

3 • Revenues up +4% in local currency in 2019. Minsait revenues grew +6%. By geographies, America

stood out (+12% in local currency). 4Q19 Transport & Defence revenues temporary down due to

delays in milestone certification of specific projects

• Indra renewed its presence in the major sustainability indexes and generated more than 1,400 jobs in

Spain (more than 3,000 in the last two years)

51

Reported +3.2%

FY19 Sales Growth

Local Currency +3.6%

Organic1 +3.3% Organic1 -1.0%

Reported -1.5%

4Q19 Sales Growth

Local Currency -1.0%

1. Excluding the ACS acquisition which started to consolidate on October 1st, 2018 and the FX impact

€m€m

Delays in

milestone

certification of

specific

Transport &

Traffic projects

52

434 399

504 549

609 665

1,5561,591

3,1043,204

FY18 FY19

50%

14%

16%

20%

50%

12%

17%

21%

+9% / +9%

-9% / -8%

+2%

+12% / +9%

+4% / +3%

430 453

586 623

739782

1,6821,828

3,437

3,686

FY18 FY19

49%

13%

17%

22%

50%

12%

17%

21%

+6% / +6%

+5% / +5%

+9%

+7% / +6%

+8% / +7%

Local Currency / Reported

Revenues (€m)


Order Intake (€m)

Spain

America

Europe

AMEA

53

4,065

4,511

FY18 FY19

+11%2,719 3,014

FY18 FY19

+11%1,345 1,498

FY18 FY19

+11%

1.31 1.41

FY18 FY19

+8% 2.292.54

FY18 FY19

11%0.70 0.74

FY18 FY19

+6%

Minsait backlog (€m)Indra backlog (€m) T&D backlog (€m)

Indra backlog/revs LTM T&D backlog/revs LTM Minsait backlog/revs LTM

54

T&D

Minsait

€145m

€76m

66%

34%

FY19 EBIT and Margin

4Q19 EBITDA and Margin

FY19 EBITDA and Margin

4Q19 EBIT and Margin

FY19 EBIT by divisions

9.4%

10.8%6.4%

6.9%

11.8%13.5%

9.1%10.3%

55

34,864

39,855 40,365

6,900

7,3277,379

1,943

1,9001,863

20,000

25,000

30,000

35,000

40,000

45,000

50,000

dic.-18 sep.-19 dic.-19

4,991

-37

-43

427

510

52

Minsait

T&D

Overheads & Others

Total workforce

49,607*

-o/w >3,000 BPO

-o/w >700 Digital Services

o/w >2,500 in BPO Latam

49,082

5,375

43,707

525

FY18 9M19 FY19

*742 SIA employees not included

56

Revenue growth(in constant currency)

EBIT growth

FCF before NWC

FY19

+4%

+11%

€139m

Guidance 2019

Low single digit

>10%

>100 m€

Guidance 2020

Mid single digit

>15% (>€255m)

>150 m€Free Cash Flow €8m

57

T&D

FY19 Order Intake (€m)

Transport & Traffic

Defence & Security


FY19 Revenues (€m) 4Q19 Revenues (€m)

Local Currency / Reported Local Currency / Reported

617 623

570 566

FY18 FY19

48%-1% / -1% 48%

+0% / +0%1,188 1,189

52%52%

+1% / +1% 229 197

181177

4Q18 4Q19

44% -2% / -2% 47%

-9% / -9%410374

56% 53%-14% / -14%

733 644

590 832

FY18 FY19

45% +41% / +41%56%

+11% / +12%1,323

1,476

55%44%-12% / -12%

Delays in milestone

certification of specific Transport & Traffic projects

58

4Q19 EBITDA and MarginFY19 EBITDA and Margin

4Q19 EBIT and MarginFY19 EBIT and Margin

16.2% 15.5%

13.2%12.2%

16.2%18.8%

T&D

14.0%17.0%

59

Energy & Industry

Financial Services

Telecom & Media

PPAA & Healthcare

MINSAIT

FY19 Order Intake (€m)

Local Currency / Reported Local Currency / Reported

FY19 Revenues (€m)


4Q19 Revenues (€m)

62 65

115 119

180 187

163 171

4Q18 4Q19

12%

22%

35%

31%

12%

22%

35%

32%

+6% / +4%

+5% / +4%

+4% / +4%

+6% / +5%

+5% / +4%520 542

240 251

436 432

661 697

580635

FY18 FY19

13%

23%

34%

30%

12%

21%

35%

32%

+6% / +4%

+0% / -1%

+5% / +6%

+10% / +10%

+6% / +5%1,9162,015

239 262

418522

785791

672635

FY18 FY19

11%

20%

37%

32%

12%

24%

36%

29%

+12% / +10%

+25% / +25%

+1% / +1%

-5% / -6%

+5% / +5%2,114

2,210

60

FY19 Operating Margin1

MINSAIT

4Q19 Operating Margin1

1. EBIT before Other Operating Income & Expenses, including: staff reorganization, integration and acquisition costs, fines, amortization of intangible assets (PPA from acquisitions) and equity based compensation.

4Q19 EBIT and MarginFY19 EBIT and Margin

43

76

FY18 EBIT (€m) FY19 EBIT (€m)

3.8%

1.5pp2.2%

Significantly lower contribution from

the Election Business

27 31

4Q18 Op. Margin (€m) 4Q19 Op. Margin (€m)

5.8%0.5pp5.2%

27 30

4Q18 EBIT (€m) 4Q19 EBIT (€m)

5.6%0.4pp5.2%

9197

FY18 Op. Margin (€m) FY19 Op. Margin (€m)

4.8%0.1pp4.8%

61

FY18 FY19

-1%

140 139

Accumulated FCF LTM (€m)

-79 -85

-23

137

47

2

-5

140

-5-26

75

142

-6

-55

15

213

-108-129

-1

246

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19

FCF before WC (€m)

Quarterly FCF (€m)

FY16 €184m FY17 €186m FY18 €168mFY15 €-50m FY19 €8m

-114-136

-50

76

163181 184

132104

184 186 185157

96

168

66

-9-25

8

62

*

(IFRS 16 impact)

Net Debt Bridge – Cash Flow (€m)

o/w +26 M€ IFRS 16

Includes SIA

acquisition (€67m)

FCF = €8m

* €281m excluding IFRS 16 impact

63

3646

35

-82-70 -75

37

47

46

6-10

+11

+10

+13

24

-6

-11

-1

Net Working Capital (DoS)

2018 2019

Inventory

Accounts

Reveivable

Accounts

payable

9M19

64

837

700

523588

483552

3Q15 4Q15 4Q16 4Q17 4Q18 4Q19

Net Debt (€m)

Net Debt

Net Debt / EBITDA LTM Ex IFRS 16

(Factoring)1

(173)

(187)

(187)

(187)

(187)

1. Non-recourse factoring

(187)

1.6x excluding SIA acquisition

485 excluding SIA acquisition

6.6x

5.4x

2.3x 2.2x1.6x 1.8x

65

80

637

86

246

187

552

356

668

Gross Debt Cash & Cash

Equivalents

Net Debt

€1,406 €855m

€552m

17

134

318

937

2020 2021 2022 2023 and

beyond

Gross Debt Maturity Profile

Bank Loans

Convertible Bonds

R+D Loans

Factoring

Other available credit facilities: €132m

Corporate Bonds

EIB1 Loans

2

1. European Investment Bank . 2. Including €246m Convertible Bond with 2023 maturity and €296m Corporate Bond with 2024 maturity

Average life (years) 3,7 4,0

FY19 FY18

Gross and Net Debt StructureFY19 % total FY18 % total

L/T Debt 1,380 98% 1,359 97%

S/T Debt 27 2% 42 3%

Gross Debt 1,406 100% 1,401 100%

Cost of Gross Debt 1.8% 2.0%

Cash & Others 855 n.m. 918 n.m.

Net Debt 552 n.m. 483 n.m.

Cost of Net Debt 2.7% 3.2%

Investor [email protected]

Avenida de Bruselas, 3528108 AlcobendasMadrid Spain

T +34 91 480 98 00www.indracompany.com

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