Secunet Security Networks Aktie

Welcome to the earnings call of secunet Security Networks AG following the publication of the first quarter results of 2026. I'm delighted to welcome the CEO, Marc-Julian Siewert; and CFO, Jessica Nospers, who will guide us through the figures in a moment, followed by a Q&A session via audio line and chat. And with that, I'm handing over to you, Mr. Siewert.

Thank you so much, and a very good morning, dear ladies and gentlemen. It's a great pleasure to have you for our Q1 earnings call for secunet Security Networks AG. And I'm super delighted to present figures, especially on the revenue side that outperformed the very strong revenue we had in the first quarter of 2025, which were really out of the normal seasonality last year.

So we could outperform last year by more than 4% in terms of revenue, really underpinning the strong momentum we have in our various market segments. Besides that, I'm extremely happy, especially looking into the future about a very strong performance on order intake in Q1. I'll say a little bit more about that in a moment. We have a temporary negative EBIT in Q1 2026, which is driven by a onetime special effect and also by laying the foundation as we have planned to deliver higher growth and higher volumes as well as better services into our markets going forward as we grow the business and shift it into the future.

So in summary, we have a very high order backlog and order income, which gives us great visibility to underpin our annual targets for 2026. And therefore, we are also happy to confirm the guidance for 2026 with an increased level of confidence. The structural demand remains strong and is driven really by geopolitical tensions and rising defense spending as well as increased regulation and awareness in the cybersecurity sector.

So looking deeper at this highlight of order income, we see a growth of more than 90%. We almost doubled the order income in Q1, giving us a very good outlook for 2026 and beyond. And the very positive thing around this is that the order income was driven by various large projects and especially by one large project from a new regional client in the public sector, really strengthening our core with leading to a book-to-bill ratio of 1.7. And we see as a result of the high order intake, a very strong order backlog in Q1 and further increasing demand with the -- especially in terms of the German Bundesregierung, the Bundesregierung being in place and being able to operate.

Looking at the EBIT, we basically have a deeper look on the development of our workforce. So we increased the workforce by 7% year-over-year towards March 31. And we're actually happy that we could onboard very strong support and very strong, especially people in the development, which also help us to address the new fields of business, underpinning our growth and strategic levers in the cloud business, but also answering to the many threats and challenges that you might have seen from the outside world in cybersecurity, looking at artificial intelligence, and new vectors or anchors of threats into the cybersecurity sector, opening really new opportunities for us in terms of growing in our very focused core business beyond the core on the left and the right.

We need answers. We need good answers for the things that you are seeing [indiscernible] and Anthropic and other very dynamic report development that come from an outside AI revolution, I would say. So with this, we -- I would like to hand over to my colleague, Jessica, the CFO, and she will give us a deeper look into the financials.

Thank you. Thank you, Julian, and also a very warm welcome from my side. Let me now take you through our main financial figures by starting with group revenue. As you can see on the first chart, group revenue follows a seasonal pattern with Q1 typically being the weakest. As Julian already mentioned, we are quite happy that despite an already strong Q1 last year, we were able to increase top line by another 4.4%.

As a reminder, Q1 2025 was up by roughly 36% as a result of some orders that had moved from Q4 into Q1 2025. So we see it at a very -- we see it is a very positive signal that we were able to beat that already high revenue level in the first quarter of the last year. As we will see later in detail, it was particularly the Public Sector that drove this development, while the business sector is reflecting the customer's path to modernize higher security infrastructure and ARR models currently.

Looking at our EBIT, we can see that the same seasonal pattern applies for 2025 as it did for previous years to our earnings development. We typically start into the year with a slightly negative operational result. The main driver is certainly, the seasonality of the revenue would also a larger organization as we prepare for additional growth this year.

On top of this, there is a onetime effect of EUR 2.1 million. That goes back to a change in how we account for our bonus provisions during the year. So it will be effect on the full year. It will be neutralized in the next quarters and it burdened our Q1 results.

When we go now to the revenue growth by segment. the group top line increased by 4.4% with the Public Sector standing out with a growth of almost 13%. This is particularly driven by Defence & Space that were showing mid-double-digit growth and our Homeland Security division was also showing a very positive momentum with continued demand from public authorities for our border control solutions.

In the business sector, we observed that there is a substantial need for much higher security standards. At the same time, we see that the implementation of such regulation is being rather slow and customers are still finding their ways in. And the same can more or less be said about the eHealth markets, the change to the ARR models is a little bit slower than we initially thought with being still beneficial in the long run. On top of that, in Q1 2025, the demand was driven by one large project of our SINA portfolio.

When you look at the revenue by geography, you can still see that domestic revenue is playing a dominant role for group figures. The domestic revenue went up by 7% while foreign sales decreased by 20%. But I mean this is for our international sales, not an unusual development. Sales also fluctuate significantly quarter-on-quarter and a portion of last year's effect was certainly to be contributed by our international business. So compared to a rolling 12 months perspective, international business increased by 15%, which is a good development, and we are very happy about this organic growth that we could generate ourselves.

When you look at the cost development, there are, again, the one effect that I have mentioned before, both effects that I mentioned before, first of all, the change of how we seasonally account for our bonus provisions and also a bit of a larger organization that we talked about because we are working on a lot of projects also working on research and development with a lot of forces. And at the same time, you can see that we had a little bit of lower margin, which is mostly due to the high portion of hardware sales and the product mix with the hardware sales carrying a little bit of a lower margin. But in the end, expenses developed in line with what we expected, so no surprise here.

When you look at our cash flow, it is a little bit different than it was last year, but still following the seasonal pattern. First of all, we have the cash flow from operating activities, which is negative not unusual in this time of the year. We, first of all, prepare for higher revenues in the second half, but also we had a negative EBIT and EBITDA in Q1 also forcing the cash flow down.

And we had some working capital increase due to the very high order income. We have a little bit higher inventory on balance and higher working capital levels in general. I mean cash at the end of the period with almost EUR 88 million gave us a very good start into the year and still a cash balance of EUR 61 million is quite a lot of cash. I would say, please remember, we do not carry any bank debt on our balance sheet. So our M&A strategy and activities is also well supported by our cash balance.

With this being said, I would like to hand over to Julian for some comments on our outlook and also some final remarks. Thank you very much for being ...

Thank you very much, Jessica and thanks for diving us through the details of the figures which I think underpin the summary in the beginning. So we -- based on the very strong expected outlook in terms of order income and revenue, combined with a good preparation also in our inventories, ensuring the ability to deliver. We confirm our guidance for 2026.

As said before, with explicit confidence into the guidance for 2026. And obviously, we are, at the same time, setting a foundation, the structural foundation for future business in our -- for future business growth in our core field and also beyond, especially supporting our customers in the new attack surfaces and in the new threat surfaces, which we see moving extremely fast.

So in summary, we would like to share some key takeaways on how we look at the business overall. And I think it comes across that there's very strong demand for secunet's core product portfolio and services, which is reflected clearly in the order income and in the top line growth. This order income is at the same time changing its pattern becoming more becoming equally strong on a federal level and on a Germany level, let's say, remaining stable on an international level.

We are focusing on further international growth, which we have to structurally enable. And this order income pattern is also growing wider in the regional areas in Germany, which is according to our strategy where we address besides Berlin and the central government, more of the regional governments, we see first big successes.

We see strong public sector dynamics with growth in spending and as Jessica mentioned, very strong defense demand, which is coming from, on the one hand, the different Army institutions, but also from the critical infrastructure sector, we see the sector finding its way into getting ready to adhere to all the requirements to all the regulations.

We also see this sector substantially growing. So the customer base is substantially growing. We are still working on educating and working with this customer base in order to implement properly the new regulations that continuously change and really address the tax surfaces that we see changing in the world.

Order intake and backlog are on a record level, and we see the structural tailwinds which are fully intact, we rather see those increasing. We are setting the foundation internally for further growth, which led to this onetime effect, bringing the EBIT into the more natural pattern if we look back, over the last 10 years, very natural pattern. At the same time, the good news is that in a very competitive market, especially around the developer space we are still able to acquire very good talent and get ready for our future next steps and growth as well as our strategic plan.

We, therefore, confirm the outlook, and it's supported by a very strong demand, and we are very much looking forward to going through 2026 in setting the foundation for substantial growth and progress in our core businesses. And with this, I thank you very much for the attention and I think we'll hand back to move into the Q&A session. Looking forward to your questions.

Yes. Thank you very much for the presentation, ladies and gentlemen, it is your turn now. [Operator Instructions]. And the first hand up is from Andreas Wolf.

Congratulations on the strong Q1 order intake. I have a couple of questions. The first one is on hiring. How will hiring proceed during the course of the year? And then the second is related to the order entries. Could you shed some light on the type of revenues yes, within the Q1 order entries? Are those more hardware or service related? And then the third question is on the border controller systems. To what extent are you through with the installations in Europe? How much is already covered? And how much more is to come? That would be an interesting insight.

Okay. So maybe I'll start. Thank you, Mr. Wolf for the questions. Super important and good questions.

So we see the hiring to slow down over the course of the year. We really basically hired according to our plan from beginning of 2025 and into the strategic plan. So this is going to even out and be more particular in the rest of the year.

In terms of order entries, I would really underline -- so that's -- thank you for the question, giving me the chance to explain this a bit more. We really see projects over the entire ecosystem of SINA and slightly beyond with full solutions. So these orders that we see include one-off sales and then long-term service contracts, ranging from 4 to 8 years which basically give us plannable and recurring revenue.

In terms of border control, that's a real highlight, and we are really proud of that. I think all of you can observe the systems working because comparing to the European landscape is split among certain local players. We are, in the meantime, by far the biggest one. So we cater for most European countries and we are just in the progress of agreeing with additional countries to update their rollout or they are basically border control systems.

For the existing orders, we are around 70% in terms of installation. And we are fully in line. We are fully in line of every project milestone, which is special to mention because it's not the case in many of the European installations, but we are in line with every milestone, especially with the big airports going online according to the rollout plan.

And yes, it's really great to see this in the big hubs now all going live like Frankfurt, Munich and the big hubs in Germany and in the other countries where we are able. So we still see a very good momentum, and we are working on a quite strong leading market position in this field.

And the next questions are coming from Christian Cohrs.

I have also a couple of questions. First of all, if I'm not mistaken, your selling expenses have come down in contrast to the other OpEx items. I wonder if you are now expanding the workforce, does this solely relate to production, R&D and services? Or are you also eyeing to expand your sales force? And could this then also stipulate further top line growth in the years to come?

Secondly, in light of the volatile geopolitical environment, do you foresee any supply chain concerns we should have an eye on? And lastly, in your previous remarks, you mentioned that you expect recurring revenues attached to the latest order wins. Does this relate to the cloud business? And how is the cloud business developing? I mean, so far, I think the cloud business still has a lot of upside. And is this -- do you see already first signs that this potential upside is materializing?

Thank you, Christian, for your questions. Yes, our selling expenses have come down, but that is mostly because we had some presales activity and also technical sales activities in some projects and so to say, the efforts of our sales force went into those projects expense-wise. We are having a clear focus on R&D cost, but yes, we will also extend our sales force when it comes to new when it comes to new fields of service or products that we are exploring.

With the supply chain, these are being managed, is still volatile, but we have good contracts with our suppliers, and we also had a quite a good sales forecast last year or at least some assumptions on that so that we could contractually agree upon a large portion of the budget when it comes to the supply chain, still there are some volumes open. We are currently managing it's volatile, but we do not have any concerns at this point in time. For the cloud question, I would kindly refer to Julian.

Yes, happy to take this. It's super important for setting the foundation of our future portfolio. So the cloud is basically moving across the entire portfolio. And we see momentum in the cloud. As you also mentioned, there's still a lot of potential. We see also the cloud developing in line with other cloud providers. So the adoption of secure cloud environments where we have a substantial head start in terms of security certification is slower than expected on the entire chain which in turn is IC positive for secunet as we are in the progress of bringing many more applications into our cloud.

So offering final applications to our existing customer base is key not to only give basically the server environment or the compute environment, but also the usability environment in terms of real use cases, if we think of all the hundreds of faster and special purpose processes, that are used in government. So this is analyzed in detail and with more applications coming into the cloud, we see momentum increasing while at the moment, we are fully in line with our strategic plan in the cloud business.

Second part of the question referring to the specific order incomes. We see order income that impact the cloud business positively according to the plan that we have. There's a very big order we mentioned before, have cloud POCs included, so proof-of-concept installations, yet the majority of the order income really comes from the wider SINA ecosystem and from the core business.

I know it's a long answer, but allow me one last point around the cloud, the reasoning of the cloud and a real sovereign offering, I believe that secunet is positioned as the one real sovereign player with a lot of other multi-clouds around it for different applications. So real sovereign, very core secunet is super well positioned and here comes in the value proposition, the key that our cloud can connect to the SINA ecosystem in the network, especially in terms of the defense business, this is really crucial as an access point to roll out clouds into the ecosystem.

And I see a follow-up by Andreas Wolf.

Yes. I have 2 questions left. The first one is related to agentic coding. Is it something that can provide additional efficiency to secunet? Or is the agentic coding something that cannot be utilized in the secunet product development? And the second question is related on the investing activities, so CapEx or CapEx in intangibles, I should say, have increased compared to Q1 '25? Is it kind of the new run rate that we should look at the minus EUR 3.7 million at investing activities level that we saw in Q1?

I would take the first one, and thank you for this, Mr. Wolf because it's a crucial topic in all business fields. So yes, agentic coding will have additional effects on productivity and on security because we have to mirror the attack surface and the attack surface is moving more and more into AI to counter it with speed. We also need to apply it.

To your specific question, we have certain areas at the moment, left and right of the very core high security field, where we are starting to use agentic coding. And we are applying this now to parts of the developers in Q2 in a wider way. And I can just make mention of one project that we mirrored. So a project that initially took a team around 16 weeks of coding was built by one developer -- was rebuilt by one developer within 4 days.

So that's what we are looking at, and that's what we are rolling out wherever we can in terms of security requirements. And we are doing this, obviously, all in our own AI capabilities in our own cloud in a completely sandboxed approach, but happy to share more details in another forum.

And -- for CapEx, I would just give you the start. I believe that and Jessica, please underline, we had certain specific expenses, which are mainly due to the fact that the cost of storage media is substantially increasing because of the AI hype. So we have preponed some investments, especially in compute power in our cloud business. I would tend to say that it's not the new run rate, but that is a little bit out of the seasonal pattern as we took some decisions in order to still take lower prices and provide what we see necessary this year to our cloud compute capabilities. Jessica, please.

Exactly. Thank you, Julian. So basically, as Julian highlighted, yes, we had some expenses the cloud business or some CapEx for the cloud business, also a little bit higher prices, 15% to 20% also play into the game. But I think that our CapEx level is still quite low for the business as it is because it is usually really, first of all, a little bit ramping up or keeping the cloud at best practice levels from time to time, also expanding a little bit with the cloud.

But apart from cloud business, it's just a little bit of CapEx for equipment for employees. Sometimes they want all the other data center, CapEx. But it's -- I think we have still a very CapEx-light business and I'm very proud that we could keep it this way for such a long time.

And ladies and gentlemen, with no further questions, we have come to the end of today's earnings call. Thank you very much for your interest in secunet Security Networks AG.. A big thank you also to you, Julian and Jessica for your presentation and your time. Should you have any further questions, ladies and gentlemen, please feel free to contact Director Investor Relations, Christoph Marx. I wish you all a successful day around the world, handing back over to Julian once again for some closing remarks.

Thank you so much. And as the final words, I would just underline that cyber security is going to transform and to be transformed going forward. secunet is positioned uniquely in the very core of high security in Germany and Europe. We are further working on exploiting and exploring this position, narrowing the focus on our positioning while growing with our markets and in the very core use cases and challenges that our customers are facing.

Based on this, I'm fully convinced with, on the one hand, our strong position. On the other hand, our strategy going forward and this is underpinned clearly by the order income in Q1 and by the momentum as we see throughout 2026. So I look forward to seeing you. Thanks for following us. And I'm happy to really share with you the momentum going through 2026. Feel free to come back to us at any time. Thanks a lot, and have a great day and rest of the week.

Thank you. Bye.

Ladies and gentlemen, welcome to the earnings call of secunet Security Networks AG following the figures of the year 2025. I would like to welcome the company's CEO, Marc-Julian Siewert; and CFO, Jessica Nospers, who will guide us through the figures in a moment, followed by a Q&A session via audio line and chat.

And with that, I hand over to you, Mr. Siewert.

Thank you so much, and a very good morning to everyone. Thank you for joining our call with this very pleasant figures from last year. We have announced them in January, and we are happy to dive deeper today. So let's get into it. I'll give some of the highlights from 2025 and my colleague, Dr. Jessica Nospers, will then guide us through really the financial year 2025, the share and dividend planning as well as we will give a strategic outlook, obviously, for 2026. As we are going through extremely fast-moving times with a lot of impacts from the outside, I can say so much upfront that secunet is steering through this area that is somehow challenging from the outside, yet posting a lot of opportunities for secunet and the business we are in.

So looking back at 2025, we really had a record year with a revenue of EUR 458.8 million, up 13% in sales and already finally approved by the [indiscernible] and an EBIT of EUR 52.6 million (sic) [ EUR 51.6 million ], up 21% from the year ahead and all above previous year and above plan. Most importantly, we had an absolute record order income. As we always look into the future, the order income from last year obviously sets the foundation for this year and the following. So we can today with gratitude confirm the preliminary figures from January and show the significant improvements on earnings and especially a very good order situation for the current year 2026. We are also confirming our outlook for 2026, and we will go deeper in the guidance later on in this presentation.

So with this, Jessica, the floor is yours, and we look forward to more details on the figures.

Thank you very much, dear Julian. A very warm welcome also from my side. Let me now take you through our main financial figures by starting with group revenue. As you can see, revenue went up by 13% last year. So we had a double-digit growth that we are very proud of and that we could also show in the last year. We had 2 effects in 2025, leading to this. First of all, we had a strong first quarter, where revenue increased by roughly 36% as a result of some orders that had moved from Q4 '24 to 2025. And also, as usual, we had a very strong Q4 in 2025. We will see later that both segments did contribute to this development. And we also, as usual, had a kind of diversification effect, while German public authority business was not as strong as it used to be because of the special situations with the late Bundeshaushalt, Defense and Space and also Homeland Security counterbalanced this business side.

When I might give you a sneak preview to Q1, we maybe do not -- maybe change the side first. So here, you can see what I said before that we had in Q1 '24 quite a strong -- '25, quite a strong Q1 compared to 2024. And we expect in '26 to rather -- that we go rather back to the old seasonality. So in '24 and in '23, seasonality is rather as depicted here on the left side, while 2025 had this exceptional Q1. Nevertheless, it is just this exception in '25 from the seasonality pattern, and we do not expect this to happen in '26 again, but without -- with 0 impact on our guidance. So we expected this, and we are still very, very optimistic for the current year.

So coming to the next slide, we can see that in the public sector, the top line increased by 11%, more or less in line with the group development as it is also the dominating sector here. And we are very proud with this disproportionate but very positive 23% increase in earnings as seen in EBIT. It is very much driven by the high growth rates in Defense and Space that, let's say, come along with the geopolitical development, but also which is very nice, the strong growth of Homeland Security in 2025, partially due to the new entry exit systems in Schengen that, by the way, are running very well for us currently with everything being very good when it comes to the ongoing performance of these systems and not everybody in this industry can say that about their own products.

On the next slide, you can see the development in the business sector. And yes, we had a strong revenue growth. We had a high demand, let's say, around Industry and eHealth, both divisions and overall growth rate comes down to 27%. EBIT is negative as we had continued investment in our edge cloud activities, but in total, very positive momentum for sales. When we come to geography, you can still see that we have a very large portion of our revenue in Germany with 11% growth, but also a disproportionate and positive growth development in our international revenue growing by 26% year-over-year. We have good customers in Europe and the Middle East and also international organizations, EU and NATO, which we are very proud of.

Now coming to the earnings development. As stated earlier, expressed in our EBITDA and EBIT, we have a double-digit growth of 24% and 21%, respectively, results from a higher top line, fixed depression effects, but also ongoing cost discipline. And as a result, we can show a margin increase, finishing the year at the upper end of our expectations. Net income was up to 19%. Our tax payments increased in line with increasing net income. Now we are going further to cost development. We can see when we're looking at our cost development that cost of sales increased in line with the top line increases, while selling expenses and G&A show a more moderate growth with mid-single-digit percent.

R&D costs are down by 17%, resulting from quite a high starting point in 2024 after lower expenses in the years before. And we saw -- we see this slight decrease as a few extraordinary projects were finished in early '25, but there is a very clear commitment for us to increase R&D spendings in the future.

Now the next stop is our balance sheet. Our balance sheet total increased by 14%, mostly actually driven by cash on the left side, so to say, also showing a positive effect on equity, while the equity ratio was slightly decreasing. We have a very strong balance sheet. Some people call it a bit boring, which is nice. And the most relevant factor of this is that we are completely free of bank debt, which is a very comfortable situation in these days, and it will also give us additional fighting power for the future.

Now coming to the cash flow. We had a very significant increase in cash from EUR 57.6 million to EUR 87.4 million. So it increased by more than 50% last year. Operating cash flow increased slightly, but we had lower cash flow from investing that led to the overall development. Cash flow from financing is, let's say, stable as usual, very little bank debt, a foreseeable dividend and that contributes to the overall development. In '24, cash from investing activities was partially affected by a late earn-out payment. And apart from that, we had planned a few -- a bit higher investments in 2025 that were postponed a little because they need to match to the proper revenue development.

When I come to the share development and the dividend, that's the next section that we have here, you can see the overall positive development of our share price triggered by the positive business development. We outperformed both SDAX and TecDAX by far and the total increase was 59% that started in March '25 and that also led to us being part of SDAX again in 2025 in Q1.

Last slide from my side, the dividend, as you might have seen, so first of all, coming from the payout ratio and earnings by share, you can see that we have higher earnings by share with a little bit of fewer dividends. We defined a new dividend policy. First of all, we changed the basis of our dividends from the stand-alone financial segments of secunet AG, the net income to the group financial statements to net income. We anticipate that the business results of our subsidiaries will have a greater impact on secunet's Group overall financial results in the future. So that is why we changed from stand-alone to group's net income.

And also, we thought it was about time to make the payout ratio a little bit more flexible. Instead of a fixed payout ratio as in the past, the payout will be determined within a range of 30% to 50%. This will enable us to utilize the group's internal financing capacity more flexibly in case we want and can fund further company growth. In total, we believe that this is a very -- is a change that is a good balance between shareholder participation and funding future investments.

With these remarks, I hand over to Julian again for some comments on our strategy and our outlook. Thank you.

Thank you so much, Jessica. Perfect. And I believe in summary, it was -- it's all said by saying it was a record year. I want to point out the situation. There's no debt and a substantial free cash flow together with all these changes in dividend policy and our strategy, this will give us a very good basis for the future. And all this besides a demanding geopolitical environment when we speak globally. So since our last call, the world has changed ever more again. We talked last time briefly about Russia and the U.S., EU relations. If you remember, in the meantime, we had the situation around Greenland.

We had the interventions in Venezuela and now on the last mile, the recent weeks, the substantial impacts from the Iran interventions or the conflict between Iran and parts of the rest of the Western world, which basically really unravels energy prices, all kind of supply chains besides the impacts on people in the region, which we have obviously managed closely where applicable. We have taken a lot of care in the last weeks to secure supply chains for our business this year. As you probably all hear and read the situation around GPUs or any kind of memory storage devices and IT equipment is stretched. So I'm glad to say that the team was able to secure all our volumes for this year and partially beyond.

So we are taking an aggressive stance on remaining able to supply at all times, which has proven very valuable for secunet also during the COVID years. Per se, cybersecurity, if we look at the second pillar, is ever more important. It's everywhere. The world is moving extremely fast. And if we briefly look beyond our core business to what happened around artificial intelligence, around the impacts from the OpenClaw moment in the United States and beyond that basically came from Austria initially, yet had a huge impact on how AI is evolving and also -- and this I want to point out how AI functionality needs to be secured.

So there's coming a lot of use cases and a lot of cases where security becomes ever more important, even broadening the scope of cybersecurity requirements. And this will, to a certain extent, also impact our clients as well who really need to automate. We know about state deficits. We know about demographic changes. So they will have to automate to a certain extent, and we see also more uptick in requests around AI security. Sovereignty also in that context, yet in our -- also in the context of our core business plays a key role. The debate is everywhere.

And I wouldn't see in all our research, any company better positioned, more sovereignly positioned than secunet. The same, and Jessica mentioned in the defense sector, we continue seeing growing budgets and demand. We slowly see the demand really reaching the supply chains and the focus on procurement really hitting industry. So we remain in our position to -- in our vision and ambition to be the guardians of Europe's digital freedom and sovereignty and have a very clear and stringent ambition towards the end of this decade, where we really are further evolving the scope of the company and focusing on all these trends shown before.

Going one level deeper, I run very briefly through the sectors. So in the public sector, we are seeing a further expansion through the customer base, also more regional and local requests and requirements because we see that cyber threats are really reaching industry and public, especially where you have the weakest links. We have, over the last years, really secured the federal -- the state level very strongly, yet the federal level in many areas, even if it's critical infrastructure, is having a lot of catch-up to do. So we see these requests. We see also follow-on effects from the defense drive. So we're focusing on new -- in the middle pillar, we're focusing on the new technologies around confidential computing and cloud computing in the eHealth segments, which can be applied, including our industry and edge offerings that connect basically the physical world into the cloud and into the digital world.

So we see a growing footprint in this critical infrastructure area between eHealth and industry. We see substantial uptick in Cloudification, and we have made substantial progress in our own IP and product portfolio for the cloud. And we see, as I mentioned before, also the first requirements around AI, where we are best positioned with all the certifications that we were able for the Cloud business to obtain in the last years, especially important C5 and secret certifications and allowance for usage, we are far ahead on really secure -- on really providing secure cloud computing in a sovereign way for our high-value and high-security clients to eventually also enable them to use new functionality that in the transformation from previous ways of working through generative AI and agentic AI going forward.

We remain very committed, and we had substantial successes in the end of last year in the international market. We are really pushing out the ecosystem in order to enable connectivity for high-level organizations to speak among each other. For this, we had really good progress last year with the EU Commission, with the EU Parliament and also with NATO. And of course, we are extremely committed to our ambition for 2030, which we will also underpin with further acquisitions to supplement the organic growth. We still see substantial opportunities for organic growth throughout the different verticals and segments, expanding our own product service, yet we see also the need to continue with acquisitions opportunistically in terms of product portfolio and very strategically in terms of market access and to underpin our growth ambitions.

This story, especially on the organic growth, is absolutely underpinned by the substantial increase in order backlog, 36% year-over-year as of December 31, '24 to '25. We have a very strong order backlog that helps us a good start into 2026. And we also see a very strong pipeline in 2026, while we are really focusing on being able to deliver also beyond our plan. We are careful in terms of growth of workforce. We are also transforming and really modernizing some of our ways of working, substantial growth over the last 10 years is seen in the organization, and we see a lot of upside with automation and further working on this. We basically focus on having over proportional growth compared to -- much over proportional compared to the growth of FTE. And I think I should hand over to you, Jessica.

Thank you very much. You can see our guidance. We changed the idea of how we present our guidance a little bit. So we have now a range for revenue, EBITDA and also EBIT, also in a little bit kind of the idea of a reaction to the criticism that we get sometimes that we are conservative planners, so which we still might be considered after that guidance, at least I heard it from 1 or 2 of your analyst colleagues. We are quite happy with the way we present our guidance. And as Julian said before, we are also happy that we can still confirm it, although the memory media shortage is a subject that will certainly accompany us for the next few months. I think with this, we are at the end of our presentation, and we are happy to receive and answer your questions. Thank you for your attention.

[Operator Instructions] We have already received a risen hand by Mr. Wolf.

It's Andreas from Berenberg.

Yes, we can hear you.

Great. I have a couple of questions. The first one is related to the memory chip shortage and the subsequent higher hardware prices that we see in the overall IT market. What are the implications for secunet? Do you have fixed prices with your clients so that potentially higher hardware prices would be an issue that secunet has to deal with? Or can you pass those on?

The second is related to the level of IT -- of investments that we should expect during the course of '26. So you've already mentioned, Jessica, that in '25, the level of investments was lower. Should we expect a tick up again?

And the last one is related to the cybersecurity market in total. I was trying to understand today's share price reaction, someone tried to link it to Anthropic, new cybersecurity-related releases. I think this does make a lot of sense, but maybe you can share your thoughts on potential -- on the overall moat of secunet in the market that you're active in.

Thank you. So I will take the first question on storage media and all the pricing and what impact it will have. We need to differentiate a little. As Julian said before, volumes are largely secured over the contract, prices are also. There are a few media and storage or memory items or memory chips that showed a heavy increase in pricing, but also play not such a large role in the overall composition of our products. So we can absorb some of the price increases without being not beneficial for secunet. That's the first portion.

Then there's the second portion where we have contracted a large volume and also had a back-to-back delivery or sourcing from our suppliers. So that shouldn't be such a huge problem. Third of all, we are, to a certain extent, able to pass on price increases. We will certainly do so. We already have done so. We are also in discussion partly with our customers if we can also talk about a multi-period model, so to say, where you can, let's say, build up a certain level of price increases and then take it down again so that you have a pricing that might not in the first place, cover all the price increases, but have a higher pricing for an endured portion of time in order to enable our customers also to be able to kind of deal with these price increases.

But as of now, we do not see price increases coming into effect for secunet that will really distort our margin or the expectations on the margins that we have as we secured a large portion. But nevertheless, we know that the market is crazy currently. So we do everything also these discussions on multi-period pricings with our customers so that they are also in the loop, that they are part of the discussions and that we -- and that they are also aware that we think of their side too, and not only try to pass on price increases because we also need to be sure that in public authorities, they have their budget.

And if you have higher prices, they usually do not get more budget. So we are dealing with the situation, but we are also dealt with the situation, I think, quite well in the last crisis in '20 and '21. So currently, we are very optimistic when it comes to the current year and also still monitoring closely the development on the market. But some say there is already a peak. So let's see what the situation is in 3 months. But so far, no issues on our side.

When it comes to the IT investments, we are always a very asset -- we've always been in a very asset-light company. We are really seeing if we really urgently need an invest, it is also kind of triggering additional revenue. The investments will be bigger, I guess, in the future because the cloud business is a little bit CapEx heavier than the business that we had before. And I think 2025 was a little bit of an exceptional year where a few projects were postponed. Then we had this earn-out of roughly, I think, EUR 8 million to EUR 9 million that was in the 2024 CapEx level included. So I think '25 was exceptionally low, but we expect the investments to pick up again. And I think the last question on share price, Julian, would you like to take over?

Yes, I'm happy to comment, and thank you, Mr. Wolf, for the question because it's extremely relevant. And obviously, we are deeply involved in analyzing this. I think I fully share your perspective. The reactions are not really explainable, and they are not related from our perspective to the Anthropic announcements on the contrary. So I spent some really intensive time also in the United States looking deep into what is happening in the AI landscape and what does this mean for cybersecurity. And while commercial companies are obviously increasing the security levels in their systems for their own reasons because in the end, reputation is everything for these companies. And the large language model producers are very -- there's a very wide variety.

It is coming more and more together between closed models like Anthropic and open models, especially the closed models are obviously concerned about agentic AI that is going rogue to an extent. So basically, that offers a lot of opportunity, but also if applied, that creates a lot of risk. And we see it on the contrary, we rather see opportunities, especially with our secure cloud infrastructure that was built over the last years to actually enable the application of all kinds of models in a secure way, making sure that rogue agents do not mess up the systems, do not change things that are unintended.

So we are really looking deeply in that. We see 0 relation or threat from what Anthropic is doing in terms of cybersecurity, purely commercial focused on AI, closed large language models. We rather see on the other side, opportunities as AI applications pick up in the government space, where, again, there needs to be a sovereign trusted instance that really makes this secure, and that's where we see secunet.

We did not receive any further questions in the meantime. [Operator Instructions] We also received a question in our chat box by Mr. Zienkowicz. He asked, can you be -- can you elaborate on the structural changes at SysEleven?

Yes, happy to. Maybe I start and then Jessica, if you want to add. So we have rebranded SysEleven to SysEleven by secunet because SysEleven really has been benefiting from the experience of secunet, especially in the secure -- in the SINA cloud, in the high secure applications of cloud where we really offer from all I see today, a once best-in-class solution of physical segregation of tenants. So a lot of this experience comes from secunet. We have more closely aligned the collaboration between the teams, whether it's sales and development.

And for the moment, SysEleven by secunet is running the cloud business, strongly supported by secunet for the SINA cloud. And with this way, we really have creating a very clear positioning, and you will see more news coming up around this between the public cloud environment, so high secure transmission of data into the cloud, but in a public cloud environment, all the way to fully air-gapped and closed solutions for high security applications and even public cloud applications that are certified to be used for high security C5 and even other cases for high-security applications. Anything to add, Jessica?

No, thank you. Perfect.

There are, again, no risen hands or any other questions in our chat box. So I would say with no further questions, we come to the end of today's earnings call. I thank you very much for your interest in security -- in secunet Security Networks AG. A big thank you also to you, Mr. Siewert and Mrs. Nospers for your presentation and the time you took. Should any further questions appear at a later time, please feel free to contact Investor Relations. I wish you all a successful day, and I'm handing to you -- handing over to you once more, Mr. Siewert, for your closing remarks.

Thank you so much. Thank you so much for the interest and your time. I believe we are -- in many ways, we are living through a time of many tipping points that really are going to shape the future. We fully believe and the entire team is energized and aligned to play a very crucial role in really enabling these transformations and making them successful for our clients, for our customers and partners. We will focus even more on partnering and partner networks, and we look forward to 2026, to making 2026 another record year and to shaping the sovereign security industry throughout Germany and Europe. So thanks for your interest, your support, and we look forward to seeing you again soon. Best wishes.

Good day, and a warm welcome to today's earnings call of the secunet Security Networks AG following the preliminary figures for 2025. I warmly welcome the CEO, Marc-Julian Siewert; and CFO, Jessica Nospers, who will guide you through the presentation shortly. [Operator Instructions]

Having said this, I'm handing over to you, Mr. Siewert.

Thank you very much. And it's a great pleasure to see you all this morning, to have you all this morning. Today, we are reporting the preliminary figures for the fiscal year 2025. And we have great news because in a very complex market environment, 2025, secunet was able to really show what it's capable of in all the different verticals, scaling up and delivering to the market what was needed.

We were really a strong partner to our customers in these very special fields that we serve, which were really going through complex dynamics in last year, looking at the geopolitical situation. Today, it's a great day reporting the preliminary figures. We will also give some guidance for 2026 and obviously look forward to your questions and inputs following the presentation.

The market remains -- as an introduction, very briefly, the market remains driven by a lot of geopolitical developments and tensions. The pressure is high, very fast moving and cybersecurity is ever more important to sustain ever more sophisticated cyber attacks to really always be ahead of the wave. And it's our job to help our customers to always be ahead of the wave.

The sovereignty discussion has picked up substantially throughout 2025 and is expected to continue through 2026, considering the developments between the United States and other countries. So there's a big debate going on about sovereignty in Europe, which secunet gives a very proper answer to -- with the only today certified cloud environment that is really 100% certified and sovereign from a German perspective and obviously also pushing into the European Union, the EU Commission and into NATO.

Obviously, there's a very strong dynamic in the Defence&Space segment. We have the NATO 5% target, which is one target that we try to directly address in the years to come. And there's also the German EUR 500 billion infrastructure fund for the future that will be spent on physical but also on partially digital investments. We also remember from last year that the German Bundeshaushalt was extremely late, which again had an impact on the seasonality of our order incomes and also sales. However, we have seen the performance of secunet to really pick up even after the Bundeshaushalt was only approved in October. So a very strong November and December.

But let's dive into what is really exciting, the preliminary figures. And you see the highlights of 2025, underlining very substantial, very sustainable growth of more than 13% in sales, reaching EUR 458.8 million, far above still the plan, and we were able to really scale up and ramp up supply chains, manage our people to deliver up to this much higher -- much increased standard with a lot of this being in November and December. So operationally, a very good performance from the team, which we greatly appreciate.

Also, the order intake was quite substantial, which helps us for a baseline for this year to further create the foundation for our growth trajectory and the transformation of certain business models, moving more from a hardware to as-a-service and recurring revenue models. We see the EBIT at almost EUR 52 million, EUR 51.7 million, up by 22% and an order intake of EUR 532 million, up by 26%.

And with this, I would like to hand over to my colleague, Jessica, and she will give some more deeper look into the financial figures.

Thank you, Julian. Also a very warm welcome from my side to everybody. Let me now take you through our main financial figures by starting with the group revenue. As you can see, revenue increased considerably by 13% year-over-year. While an unusually strong start in the year in Q1 certainly supported this positive development, the main booster came in Q4 following the usual seasonality pattern, which is still intact.

As I pointed out in the last earnings call, orders were picking up in October and not only contributed to this favorable development, but will also give us some tailwinds for the new year, but we'll come to that in a second. The public sector grew 11% year-over-year with the division being certainly -- with the Defence division being certainly one of the major growth drivers, accounting for roughly 1/3 of total revenue.

But we are also very happy with the growth taking place in our Homeland Security division and the business sector. The latter was certainly driven by sales to enterprises that were processing classified information, security cleared industry. As pointed out in our earnings call for the 9 months figures, the Public Authorities division was facing some headwinds last year, but normalized again in Q4. Exactly. So the momentum of the business sector was around 27%. That is something that I missed to say, but certainly on a lower level compared to the Public segment.

Now I go on to the operating result. We are very happy with the development of our EBIT, of course, particularly as EBIT growth is exceeding sales growth very clearly. This is also true for EBITDA, which grew by 24% year-over-year. As a result, both margins increased and ended up at the upper end of our guided corridor. As usual, we make most of our profit in Q4, predominantly reflecting the seasonality of the business with -- paired with fixed cost [ degression ].

Coming to order intake. Order intake took a huge step forward and increased considerably by 26%, not only fueling year-end sales, but also supporting an increased order backlog, which again supports our growth ambition. The seasonality of the business is certainly also reflected in order intake. If we take a closer look at Q4, you see an increase of 72%, which in turn translates into an order intake of EUR 218 million. Besides the usual seasonality pattern, this also includes one major order we received in December.

So as mentioned before, a strong order intake positively impacted order backlog, which is up by 36%. So you can see it here on the slide. This shows our very healthy market position and also will support our growth ambition for 2026.

And with that, I will hand over back to Julian for further remarks on guidance.

Great. Thank you so much. And finally, it's really -- let me see -- sorry.

Sorry, I was [indiscernible].

Yes. Let's look at the guidance, and let's take a look at 2026, which is obviously always the most exciting to look into the future. And we are building the foundation to continue this growth momentum that secunet has seen in recent years.

We have made a few minor adjustments to the key figures compared to previous years, which I would like to draw your attention to. And as you can see, we have decided to keep the key parameters of revenue, EBIT and EBITDA, which have been our driving parameters and key performance indicators since last year. However, we have decided last year as well to put more emphasis on our margin development. In the end, this is what drives our -- on the one hand, competitiveness in the market. On the other hand is really the KPI that we can steer every day in our everyday decisions. And while this is very important and remaining a key KPI for us, we have decided to give -- to change our guidance into giving a range of absolute figures, which is then completely touchable. We have also decided to do this already today with our preliminary figures different than in recent years.

So the guidance for 2026 will be in terms of revenue between EUR 460 million and EUR 500 million, EBITDA of EUR 76 million to a range of EUR 84 million and an EBIT of EUR 53 million to EUR 58 million. You can see on the left side, the direct comparison to the preliminary figures of 2025. I think this will also give a lot more transparency to the market and to -- we are also reacting to the various questions that you have raised in the previous earnings calls and in our exchanges.

So let's keep this for a moment. And I think then we can move into the Q&A session. Looking forward to your questions.

[Operator Instructions] I just gave you the permission to talk. Mr. Cohrs, you should be able to speak now.

I hope you can hear me well. Well, I have a couple of questions. I will mention them in a row. First of all, you've had strong order intake and sales in Q4. What does this mean in terms of working capital and flow? You had a working capital buildup, if I'm not mistaken, in the first 9 months. So I would assume that there was some sort of working capital relief in Q4 and maybe very high order intake was this also linked to maybe some prepayments. So maybe you can shed some light on the cash flow trends you've had so far?

Secondly, I highly welcome that you provided already with an outlook. And I think also mentioning ranges makes a lot of sense. But could you maybe shed some light on the key assumptions for the very low end of the guidance, which actually assumes a stagnation, which is a bit belief in terms of all the megatrends you mentioned at the beginning of your presentation and the very strong order intake we have seen lately.

And lastly, you mentioned the demand drivers. Here some questions lately, there have been additional funds for space and satellite programs, which will, in the end, also mean that there must be on the ground dealing with the information. So is this a driver for future demand? Also, there are big digitization programs for the land forces in Germany. So this is also something which will increase demand for your business. And we have a digitization ministry finally in place in Germany. There are announcements that many changes in digital solutions will come up for German citizens starting next year. So is this also a potential source of new orders and sales prospects?

Sorry, I was muted. Thanks a lot. I think there were a lot of questions. So I will jump right into the questions of cash flow and working capital. Both showed a very favorable development. We had a cash -- free cash flow well above EUR 50 million and also a big release on working capital, which is between EUR 20 million and EUR 30 million, depending on how you calculate it. So our calculation -- in accordance with our calculations, it is a bit above EUR 20 million. So we had a big release coming from -- certainly from inventory to a fair amount. So that is kind of reflecting our typical seasonal pattern. So we have -- we start into the year with, let's say, a regular or good level of inventory, then this inventory decreases and then we start to increase inventory around summer. Certainly, this time, it was a bit special because due to the fact that the Bundeshaushalt was approved quite late, we build up inventory a bit more than we usually would considering the same order intake.

Could you please also -- I think you -- can you please give me a short notes what were your other questions about?

Cash flow -- you answered everything. Yes, you answered everything. Just one additional one. I asked whether you've received prepayments. You have had very strong order intake. And is this also related to prepayments? I know in the defense industry, often this is -- yes, this is linked to any prepayments.

No, we do not receive prepayments. Not substantial at least.

Yes. I think the second question was around the lower end range of the guidance. And this is really a range that we are providing to the market where the lower end is built on basically backlog and supply chain as is and obviously, the projects we see for this year, where the upper range is built on additional potential with ramp-up of supply chains, ramp-up of production. We have to, I think, keep in mind that as of today, the supply chain is quite stressed in many areas. We are seeing also -- yes, we have quite a long supply chain, let's put it this way [indiscernible] on this, and that's why we are providing a range.

Thank you also for the additional questions around the funds for space and satellite, which is an extremely interesting field of business for us and perfectly put, whatever comes from space has to be processed on ground in a very secure way and in lifetime, especially when we think about any kind of defense use cases.

And what we can say about this is that we are very close to this market vertical and that we are monitoring and obviously positioning while the actual orders or real business deals haven't been signed yet, we see potential in this field. And this will also flow into our strategy process that we are starting in February for the next cycle in order to capture parts of this market. Whether it's relevant for 2026 remains to be seen.

The fourth question around digital solutions for German citizens, I think, is quite crucial. And the company with all its verticals, especially in the cloud area and through -- where we have to understand the cloud business as an overlay or as basically impacting all our business fields, where one of the first ones might be parts of digitalization of German government and solutions for German citizens. It's the same thing. We have a number of proof-of-concept projects and MVPs, and we are looking forward to transforming these into real business. I would say it's progressed where the market is currently forming. I hope that answers your question.

And the next question is coming from Andreas Wolf.

Can you hear me? First of all, congratulations on a strong Q4 and financial year '25. My first question is related to your business sector. What is the current demand for entry and exit systems for international exports? Could you provide an update? You had a strong business in Q3 last year. How is this business field proceeding? And then on the orders that you secured in Q4 and that are reflected in the order backlog, over which period of time will those be reflected in revenues? And then regarding the EUR 500 billion fund, are you already seeing projects coming up this year? And when will the associated revenues materialize?

And my final question, the fourth one is related to chip capacity shortages in the production, which apparently lead to higher hardware prices. How is this influencing your business top and bottom line development?

Thank for your questions. When it comes to Homeland Security order intake, we are very happy with it. It shows also a good growth in this year. It is part of the Public segment, though. Just I wanted to add that the entry exit systems because it's always Public Authorities requesting them and also being responsible for them. When it comes to the order backlog, the majority of our order backlog is usually for -- order intake is for the current year. And when I look into the ratio of order backlog at the beginning of the year, around 75% for the current year with the remaining 25% having usage for more than a year. So -- and the last question was, sorry?

It was the third question, the EUR 500 billion fund, whether you already see the funds reflected in the project pipeline for this year? And the last question, the fourth one was related to chip capacity shortage and how it's influencing your business.

Yes. So maybe I'll try to start on the EUR 500 billion fund in all fairness, we -- it's split throughout the government projects, and we do not see specific large projects coming out of this. However, we see in general traction in the government. We cannot, at the moment, trace it back to which part it's coming from. I would consider that parts of the spending, especially in the armed forces are at least relieved through the various funds available. And there, we see an uptick in really how the German Army and also certain NATO states are starting to ramp up, which is helping us to really also guide for the next couple of years. [indiscernible] because it's super important to secure the supply chains. It's one thing that we take a lot of emphasis on to have additional sources. And at the moment, we see the demand that we can project not at risk, and we are securing supply chains.

You were asking about the increased prices, which at the moment, we see even more in hardware than necessarily in chip supplies, except for very high-performance GPUs. And we are obviously taking good care of passing on these price increases wherever possible, and we feel confident around the supply chain.

[Operator Instructions] And with that, I will jump over to our questions in the chat box, which are partly answered already, but I will read them out for you. From [indiscernible] will you be reporting the figures for the individual divisions in future? How are the orders received divided between these divisions?

So thank you for your question. We are giving some information on the divisions, but we are not going to report figures on order income or sales for the single divisions. I can just tell you that we had a good order income growth over all divisions, and that's reflecting also the current revenue pattern.

And could you shed some light on the high order intake in December? What was it about?

It is the usual seasonality pattern. So it was also spread between the divisions comparable to, let's say, November. But usually, from October to December, order intake is very high. So there was not a particularly thing I would like to point out about this.

[Operator Instructions] Congrats on the strong Q4. I have three questions. One, given the strong order intake in Q4, could you comment on the level of conservatism embedded in your full year 2026 guidance, particularly with regard to revenue phasing? And second, defense space has become a significantly larger contributor. How should we think about the sustainability of this momentum beyond the current budget cycle? And three, could you provide some color on SINA Cloud in terms of usage and profitability?

Great. Julie, thank you -- sorry, thank you very much for the questions, first of all. And let me go through. So the strong order intake in Q4 is -- was substantial also for 2025. So looking at only the order intake, we have still delivered a lot of this already in 2025. You now see the backlog for 2026, as Jessica outlined at 75%, which is giving us a good basis. The conservatism, as it's called here, is basically a function out of the real bottom-up planning of what is there in orders, what is there in pipeline and what can be delivered in time because the supply chain, as we discussed before, remains quite long, not only because of extended lead times, but simply in general, we have a turnaround time. And while we -- when we know orders are coming, we work with working capital.

This is what we really see feasible. And in fairness, as we see upside, that's why we're also providing a range rather than a single figure. Defence&Space has become a significant contributor with potential. And we strongly believe and from all the information we have that this momentum is going to continue until the end of this decade because the planability and again, the lead times in the entire defense industry are really substantial, even obviously much more substantial for other players than us. The planning is quite, I would say, quite reliable until the end of 2029, 2030.

The SINA Cloud is a real important portfolio element, which, as I said before, is to an extent, providing functionality and also strategically allowing us to move from more of this one-off orders, which are coming from a large frame contract. So we have large frame contracts, but they are coming from one-off orders moving into as-a-service models, moving into recurring revenue models, which is one of the -- which is going to be one of the key targets of our ambition to really transfer a lot of the business into recurring revenue models. The cloud is helping us there. At the moment, the SINA Cloud is the only real secure certified cloud, as I mentioned before. And it is, at the moment, an investment clearly to really develop to really develop the perfect proposition for the sovereign cloud offering in Germany.

And we have one more. Do you have any substantial investment plans for 2026?

Maybe I start and then, Jessica, you add. The main investment plan is what I actually just outlined in the last question is really the transformation of our business models in various clearly defined portfolio elements and especially the cloud. This is where the focus for investment lies for 2026 from a business perspective. And Jessica, please complete my answer.

Exactly. Thank you. So as Julian said, we are happy to grow the business via all divisions. We are certainly looking for organic, but also inorganic growth. And when it comes to inorganic growth, I think we have a very good position when it comes to additional funding that would be required to do larger M&A projects. But you can have a look at our balance sheet. I think there's plenty of room for some funding ideas.

And as no further question has come in, I will hold the room another moment in case somebody is typing right now. Yes. Do you also consider M&A?

Absolutely. Yes, we do.

Thank you so much. In the meantime, we have received no further questions. We, therefore, come to the end of today's earnings call of the secunet Security Networks AG. Thank you for joining, listening and all your questions. A big thank you also to you, Mr. Siewert and Ms. Nospers for your time. Should any questions arise at a later time, please feel free to contact Director, Investor Relations, Christoph Marx. I wish you all a lovely day. And with this, I'm handing over for some final remarks to Mr. Siewert.

Thank you very much. And my gratitude to everyone attending the call and to your interest in secunet. I believe, in summary, now also being for a bit more than 6 months, 7 months in the job, I believe that secunet is having a substantial momentum in this market environment as much as the geopolitical situation challenges all of us probably in private, there is potential for the company, and we take the purpose very seriously to really become the key guardian of European digital freedom. We play on the sovereignty game, and we transform the company into a future-proof also cloud-based and as-a-service-based company in the years to come using the momentum that we have from the defense space, from NATO, from the spending that has been outlined by the countries in order to ramp up the company further and continue the success story of the last decade.

So thanks for being with us, and we look forward to any additional questions to Christoph. I look forward to seeing you personally throughout the year and wish you all the best. Thanks a lot.

Good day, and welcome to today's earnings call of secunet Security Networks AG on the occasion of the Q3 figures of 2025. I would like to welcome CEO, Marc-Julian Siewert; and CFO, Jessica Nospers, who will take you through the figures in a moment. [Operator Instructions]

And having said this, I would like to give the floor to you, Mr. Siewert.

Thank you so much, and it's with great pleasure to welcome you all. Good afternoon. Welcome to the earnings call for the quarter ending September 30, 2025. And after giving a brief feeling of the strategic positioning of secunet, we are going to go through the financials, look at the outlook and then obviously happy to answer all your questions. So secunet is super well and strongly positioned in the face of government technology, right at the center between hardware security, software and cybersecurity in the cloud. So we are really addressing pressing issues of our time, and that's what I see every day discussing with diplomats and politicians.

So there are 4 major facts that are driving our business and positioning. There's, on the one hand, the geopolitical situation that we all live through every day. The start of the Russia-Ukraine war has substantially changed the perspective of global geopolitics, of Europeans positioning as well as the U.S. and EU relations, obviously. Cybersecurity has been there, and cyber attacks have been there for many years, yet they become ever more visible, and they become more visible with physical attacks as well. So people get really aware of the challenges of our time, at least when drones are flying through airspaces.

However, we have been dealing for this. secunet has been dealing with this for many years in the field of cyber, providing really secure infrastructures and communication in the network, yet also in the clients for especially government and sophisticated use cases. The fact of the importance of sovereignty has ever more increased, especially for Europe. We really see the need for sovereignty and sovereignty in that sense does not mean to close ourselves off, but to make it secure and have secure stacks and sovereign solutions, especially for the most important secrets that we need to deal with. Especially the developments in our cloud are moving forward in really providing approved sovereign cloud solutions, also providing the future for our core portfolio.

On the defense side, we can obviously see substantial developments with a NATO target of 5% of GDP, with the special funds on infrastructure and defense in Germany. So in that sense, secunet is super well positioned to play its role and to really fulfill its purpose as we go forward ensuring the digital sovereignty of Europe. In that sense, and looking back at my first 100 days, if you allow a personal view, we are really working relentlessly on working with our customers, on really improving our customer journey. We are developing our strategy that is largely developing from our core in Germany that remains crucially important into Europe and also EU institutions and obviously, NATO. The technology stack of secunet is a fantastic basis for everything that we want to do in the next 5 and 10 years.

And obviously, what impressed me most is the depth and the knowledge of the teams throughout the company. So in that sense, we wake up every single day to secure Europe, to secure Germany, and we are going to move further into European markets, positioning ourselves as the guardians of Europe's digital freedom. Following, let's say, the larger geopolitical picture, we are delighted to also look deeper into the numbers that were published yesterday.

And with this, I'm happy to hand over to my colleague, Jessica Nospers.

Thank you very much, Julian. Also very warm welcome from me. You can see the highlights of the 9 months of 2025. secunet is showing a sustainable growth trajectory. We have a significant improvement in earnings, high order intake and we face a consistently high demand for our portfolio. Revenue increased by roughly 12%, EBIT by roughly 41.3% and order intake also by roughly 7%.

Going to the next slide, let me now take you through the main financial figures by starting with group revenue. You can see on this slide, as I said before, that revenue was increasing by 12% in the first 9 months. There is still an effect from a very strong Q1 in the figures. So you can see that the quarterly figures for Q3 is increasing by 2%. We had a normalization in Q2, but we also see the positive trend to continue in Q3. There is a special effect that held back a better development. I wanted to point out to you there was a very late decision on the German federal budget. It was approved by the 18th of September. Also, in addition, after this approval, large projects of above EUR 20 million need additional parliament approval. We saw volumes picking up since the late German Bundestag decision on the budget and we are very content to see how things are developing.

From the public sector, we can see that there's a particularly increase of 9% in the first 9 months, but a slight decline in only Q3 as a stand-alone. Looking into the specific order intake, still we saw a strong increase after budgets were approved. I will come to that in a minute. Also, the divisions, defense showed a very favorable increase, public authorities also and homeland securities also developing in line with expectations. Our business sector was able to massively increase its top line. You can see that on this slide. It's an overall smaller numbers than compared to the public sector, but there is definitely an increasing demand also from non-public customers, both from the industry division as well as from the eHealth division.

Coming to the next slide, we see the revenue by region. Domestic revenue is increasing. International revenue is increasing. Growth drivers are intact, and domestic revenue can stand a little bit of short-term headwinds from the legislation. International revenue, on the other hand, went up by 6% which is also a very positive result. As Marc-Julian pointed out in his opening statement, there is a clear commitment to increase that portion in the quarters to come, and we will keep you updated on future developments.

Profitability in absolute terms grew by more than 40% as a result of a higher top line, a higher gross margin and a favorable product mix. Also ongoing cost discipline played a role in this. You can see also the positive effect from the first quarter of this year, the third quarter, but also shows 9% increase which is a positive trend. The overall EBIT margin rose from 8.7% to – from, sorry, 6.9% in the last year to 8.7% in this year. And also, you can see in this development, margin is still under the -- or below the expectations for year-end. So you can see that there is also a very big impact of the fourth quarter into -- onto our numbers.

Next slide. You can see the cash flow development. Cash flow started as usual with quite a high balance on balance -- cash on balance. Then we had a little inflow from operating activities. Cash flow from operating activities was a bit lower compared to last year reflecting quite an increase in inventory that we built up during the year on purpose to foster year-end growth due to the fact that the Parliament and the Bundestag they had quite a late approval on the budget. We needed to make sure that we are able to deliver so we built up our inventory a little bit beforehand and that is reflected in operating activities cash flow. Cash flow from financing activities is at the same level than usual reflecting the dividend that we pay out in the first half year.

Next slide. We can see order intake and I think it's quite impressive to see order intake, first of all, in the first 9 months and also in the third quarter particularly, we were still able to manage an order increase despite the non-approved budget which makes us a little bit proud. So we are quite content with the development of order intake under the current situation. Yes. So with order backlog also showing an increase and particularly starting with order backlog that developed favorably already by the end of December, and we kind of took, let's say, EUR 30 million for the first quarter out of this order backlog to turn it into revenue. And still, we could not only fill this, let's say, gap that the first quarter caused, but also increase order backlog quite considerably given the current circumstances. And this is it.

There is the outlook. Before I comment on the outlook, we can see a typical seasonal pattern here. You see also in the past year, every quarter shows an increased level of revenue. Q3 and Q4 are, as usual, the strongest quarters, both with regard to revenue and also to EBIT. And from last year's figures, you can see that almost 100% of EBIT was generated in the second half of the year. We had only a very small positive result in year-to-date June. And this year was a little bit different because we started so favorably into the year already being positive after the first quarter and then contributing further EBIT as the quarters went by.

You can see we had strong first 2 and third quarters, but still the fourth quarter is also expected in this year to provide the biggest amount of sales and also the highest EBIT contribution. This leads me to the outlook for the full year. Since revenue and earnings came in on a good level after 9 months, we confirmed our guidance yesterday and specified margin ranges in terms of EBITDA and EBIT. While we left our revenue expectations unchanged, we are now expecting to hit both margin ranges in the mid to upper end of the corridor. And this is what I would love to give you on the way.

And now open up the Q&A session. Thank you for being here.

[Operator Instructions] Mr. Kalliwoda.

Can you hear me?

Yes.

I have 2 questions. This household government budget, maybe you can specify a little bit, can we -- or maybe you can mention a certain kind of volume or next decisions? Or can we account on a certain volume or order intake? And my second question is your -- wait a bit. Yes. My second question is your foreign revenues were slightly down. Maybe you can shed some light on that. What have been the reasons? And what do you expect for the coming year in regards of foreign revenues and earnings?

So when it comes to order intake, we can see a favorable development in line with what we expected. It is also the case that we did not only wait for order intake to happen, but we already discussed with all our customers to see what their demand will be and how far we can support them in their customer journey and what kind of projects they plan to realize when it comes to the current, but also the next year. So we were prepared for most of the orders because projects were already known to us and we already worked on inventory as a few inventory items, particularly the secret products, take a little bit of time to be produced.

And so we had a preproduction of them very much in line with what we expected would be the, let's say, top sellers. And actually, that paid out. So this is a little bit of an unusual development for us to get our working capital balances up before we receive the orders, but we have made good experiences with that during COVID. So we were prepared for a positive order development. The international sales, they took off with a 6% growth compared to prior year period. So it would be nice if you could maybe specify your questions with international sales.

Yes. Percentagewise, I guess it's percentagewise, which is mainly due to the fact that the national revenue has substantially increased.

Yes, the share of the revenue. That's true. So the growth rate of domestic revenue was higher than growth rate of international. So there was a little bit of a higher share in domestic revenues in total, yes.

[Operator Instructions] We move to the Q&A chat.

Can you give an indication on how high the revenues are next year in terms of EUR 1 million? It's a question by [ Nils Herzing ].

Thank you for your question, [ Mr. Herzing ]. We currently are still working on the budget for next year. We have a very favorable geopolitical outlook as Julian just said before, but we usually never commenting on the revenue level for next year before the year has started. I cannot hear you anymore.

Mr. Kalliwoda is raising his hand again and so I get back to him. Mr. Kalliwoda.

Yes. Can you hear me? Yes, it is possible to read so much about Zero Trust architectures and where there are new technology also in the cloud. And I think you have also a technology which is similar or is it that you based on R&D are developing your software on and on to become more perfect. So what do you think about this Zero Trust architecture? This would be one question. And the second is, I think you are so successful with this family biometric border control. Has there the order intake be [ stable ] or has grown a bit on this technology?

I would try to give an answer especially on the technology stack. So indeed everything in the public cloud is now based on Zero Trust. We have developed our own very secure cloud stack and specific layers that, I would say, you can't give it a name, but it's going beyond Zero Trust. It is really the reflection of what we consider the certified levels on the hardware stack that we transform into the cloud. So Zero Trust is the basis which today it's basically describing everything that's going into the internet can be compromised and we are working against that.

So you have to identify every single device that speaks to each other in a Zero Trust logic, while we are going quite some steps beyond with our technology stack in cloud infrastructures and really aiming to really fulfill all the specifications that are needed today in the SINA ecosystem. So matching the same in the cloud. And this goes to the levels of really secure cloud computing for German powers NFD, but also all the way to NATO secret levels. I hope that answers the question. It's basically putting Zero Trust in the perspective of our technology stack.

Second question, I think it's a great question. Thank you for raising it because we have substantial great news on the European entry exit system that you might have seen throughout the various news outlets. You can see the devices in the airports and the border control throughout Europe is changing to become much more advanced and digital. It's a project a couple of years old and I would really say that in this field we have developed to be not only a substantial player, but probably one of the leading ones.

We received another question in the chat box. I will read this out.

Could you specify what portion of your revenue is recurring? And will you provide such figures in the future as the cloud transformation progresses? Additionally, could you update us on the progress you have made recently in your cloud transformation efforts?

I can maybe take the question on the recurring revenue. I can say that we may not have classical recurring revenues as if you consider recurring revenue to be really bound by a contract, but we have quite a high level of repeating revenue, at least 1/3 to 1/2 of our sales I would consider repeating due to the regularly revolving regeneration cycles that we have in our business and also the good demand that we -- good continuing and also very reliable demand we see from our SINA customers.

So certainly the more we turn into a cloud and as-a-service company, the higher the classical repeating -- sorry, recurring revenues are going to be, and we will certainly think about reporting a different set of KPIs in the future, but certainly also not in the very foreseeable future. Julian, would you like to comment on the question on the cloud? Thank you.

Yes. Thank you so much, [ Mr. Fischer ], for raising it. It's a great news that we should probably put into the call as well to have some highlights. Definitely one of the highlights is winning the Cyber Innovation Award from NVIDIA with our NVIDIA cloud stack. So it's a stack that allows NVIDIA products to run especially for learning models and teaching models to run in a secure environment, making them available for government customers that need to have a certified cloud stack. And there will be a number of official handovers will be coming, so we will definitely follow-up if there has not yet been a press release, yet there will also be an official handover ceremony. So it's not a clear answer, but definitely there will be one, and thanks for raising it.

And we come to Mr. Cohrs. Mr. Cohrs.

I hope you can hear me.

Yes, we can.

Christian Cohrs from Warburg Research. I have one question related to your actual platform. How much based on the current platform can you grow the business? Year-to-date, if I'm not mistaken, in your quarterly report, you have increased the number of employees by 8%. Cash flow from investing activities has come down in the first 9 months versus the previous year. So usually when it comes to growth, you either have to invest into people or into assets. So maybe what is the approach there? Is there more to come? Will you expand your cost base, or do you have everything in place and simply wait for the top line?

So there comes a very clear -- it depends answer from me. So it depends very much. So there are areas of our business where we certainly have a very good asset base and also very good base of people that we have there but also giving the technology that we love to further develop and we always kind of develop in line with our customer experience, certainly needs further people to grow and we are planning to grow the business quite substantially. So yes, there will be more people onboarding. The low CapEx during this year, it is in case relating to, let's say, 1/3 of the lower CapEx is relating to the eHealth market where we see a sudden change, or we saw a sudden change to an as-a-service market.

And now the as-a-service market is taking off but quite slowly because also the old connectors, they were quite surprisingly prolonged by gema to -- sorry, by gematik to continue to be approved. So let's say the service market is not taking off as fast as we had wished for it. So we clearly took a balance with the data centers that we are only building up in line with the business. So we saved quite some cash there. And in addition to that, we, let's say, have a few projects, not so much business related but also a little bit digitization related that didn't take off as quickly or didn't take as much CapEx as initially expected so that we, let's say, make a very good impact on the cash flow this year.

And there is one question in the chat box.

Are SINA products ready for challenges regarding new confidentiality risks coming from quantum computing?

Yes. Thank you for the question. And I'd like to add one sentence to before because this relates so besides everything that my colleague Jessica mentioned, we are really focusing on platformizing, on putting the entire portfolio in scalable platforms. And for this, on the one hand, we will be able to grow much faster with a proportionally less increase of people, yet we will to fulfill our plans have to further increase people as well.

And this leads me into the SINA quantum computing question. Thank you very much for that. It's a super important question. It relates to what we call encrypt now, decrypt later. So we have to make sure that whatever we encrypt today in terms of secrets, cannot be decrypted at least for 10 years, rather 15 than 10. So we have to make sure today that whatever we encrypt today cannot be encrypted by potential leaps in quantum computing, in post quantum technology in 10 years from now. And this is where we really have -- where we are really ahead of competition because we have the core products not only ready but also in certification or already certified. So it's one of our real technology or technological focus areas. And yes, I guess we have quite a leap there.

And there's one participant raising his hands and we get to you, [ Mr. Wolff ].

Okay, great. I have the following questions. So obviously the business sector has developed quite nicely over the last 2 quarters. Is this kind of the "new normal" level that we can rely upon going forward? Or was this mainly characterized by special projects that you could carry out? That would be my first question. The second question is related on the special public funds. Do you already see tenders in the pipeline coming up? Or what is your expectation here going forward with regards to those? And the third is related to the digital euro, obviously. So secunet was mentioned or has recently been mentioned in this context as well. Could you give us a hint what the opportunity might be for secunet with regard to that project?

Great. Should I start? Jessica -- maybe I try. The business sector is -- there was a lot of effort put into the business sector over a long term and it's really picking up. So I would expect it to continue developing well. We have, I think, from a reporting perspective, the business models are also changing, as my colleague Jessica mentioned before, as we are moving in certain areas from a delivery business into an as-a-service business, which for us is a great opportunity also to work in increasingly modern business model. So we will probably be very transparent around the reporting, yet we will see probably changes in the business models while the sector is going to continue growing nicely.

On the second question, I think we have in terms of the -- I would paraphrase it in a way that you're asking about the projects and tenders that are coming up in the core business. And I think our sales teams have quite a good view on what is coming. The precise timing between now and, let's say, end of next year is really depending on the German households allocations and approvals. There are certain approval steps, yet we have quite some visibility and see also progress in all the areas, I would say, that we play in. Concerning the digital euro is also that it's also a great project for us. And as much as I can say is, yes, that we are involved with security features and secure developments for the technology stack.

And at the moment, there is no raised hand and no question in the Q&A chat box. I'll wait a few more moments. This is not the case.

So from this point, thank you very much for your questions to all the participants and your shown interest in the secunet Security Networks AG. And many thanks to you, Mr. Siewert, Ms. Nospers, for the presentation and the time you took to answer the questions. And if there are any further questions at a later date, please do not hesitate to contact the Investor Relations department with Mr. Christoph Marx. I wish you all a good day, a successful time. And once again, for the last and famous words, I hand over to you, Mr. Siewert.

Thank you so much. Thanks, everyone, for participating and for your interest in secunet. I would say there couldn't be any -- and this is really my perception of the first couple of months, there couldn't be any, neither stronger purpose nor better business proposition that we start with at secunet and we're going to have exciting years ahead. So we look forward to exchanging with you, we look forward to your interest and we look forward to speaking throughout the rest of the year and beginning of next year. So thanks for the interest. All the best and see you soon.

Thank you. Goodbye.

Thanks. Bye-bye.

Good morning, ladies and gentlemen, and welcome to today's earnings call of the secunet Security Networks AG on the occasion of the financial figures for the first half of the year 2025.

I would like to welcome CEO, Marc-Julian Siewert; and CFO, Jessica Nospers, who will take you through the figures in a moment. In the background and with us throughout this call is Director, Risk Management and Sustainability, Dr. Kay Rathke. After the presentation, you will, of course, have the opportunity to ask your questions in the Q&A session.

And with that, I would like to give the floor to you, Mr. Siewert.

Thank you very much. A very good morning, dear ladies and gentlemen. Welcome to the earnings call for the first half year of 2025, which my colleague, Jessica Nospers, and I are delighted to welcome you to.

Before we talk figures, let's say three facts about secunet. At secunet, we do everything every single day to make the life of -- in Germany and Europe secure, especially in the digital space. Second, we protect sovereignty and thus, our democracy. And third, we try every day to make our customers happy and improve the experience they have when using our products and increase efficiency as a main factor of their work.

So we are delighted to look at the first half year of 2025, where we were able to achieve very positive strong results in the national and the international market. The outstanding business developments have led to very positive growth in sales and EBIT in the financial first half year. And the outlook for incoming orders continues to develop at an above-average rate and is very promising for the rest of the year and going forward. So today, we are going to look at the financial figures briefly at the strategy and our forecast and obviously then jump into the Q&A.

And with this, my colleague, Jessica Nospers, our CFO, will take you through the main financial figures in detail.

Thank you very much, Marc-Julian, and also a very warm welcome from me to all of you, too.

So when it comes to the financial figures, please, [ Elmar, ] click to the next 2 pages exactly. We are very delighted to present a much higher revenue in the first half of 2025 compared to the first half of 2024. We have increasing revenue in both Public and the Business Sector, and it is basically a very strong Q1, which pushed the first half revenue to this great height. We have growth in all segments, as I said before.

Next page, please. And another one. So EBIT also increased considerably from EUR 1.4 million to EUR 7.2 million. It grows much more than revenue, most of all a fixed cost depression and also expenditure discipline and a favorable product mix.

Next page, please. We could also grow our international and domestic sales. The share of international sales has increased a little bit from 9% to 11%, but also applied to a much higher revenue base.

Next page, please. So we can see growth in both the Public sector and also the Business Sector, and the Public Sector continues to be the most dominant sector, representing 89% of our all -- overall revenue.

Next page, please. Cash flow is still strong, but as usual, as a seasonal pattern in the first half, where we have, let's say, using up the cash that we make in the very strong fourth quarter. Also, we pay our dividends, which is reflected in the financing activities and the CapEx for investing is also usually very seasonal in the second half of the year.

Next page, please. The order development, and it is reduced a little bit. So we have order backlog of 192.5% (sic) [ EUR 192.5 million ], also reflecting the very strong first half and also the late decision on the German federal budget. This also explains why our prognosis stays the same, but we will come to that certainly at a later point.

And this is it, and I ask Marc-Julian to take over, please.

Thank you very much, Jessica. Thanks for the great numbers. And on the next slide, is very short. It's a little bit of background about me to answer some of the questions asked. So I was delighted to join secunet as CEO on July 1. And I'm currently meeting everyone, and I'm really impressed with the people around here at secunet. And the core asset are the people after all and also with our customers.

So I was previously 6 years on the Board of Veridos GmbH and led the company for 3 years as CEO. And obviously, before I had many, especially international positions. But enough about me, more important, we talk about secunet going forward.

And as a part of the new direction, we are developing our strategy as an implementation tool to achieve our ambition, which is really to safeguard the sovereignty of Europe and Germany as partner of the Federal -- security partner of the Federal Republic of Germany and prevent cyber-attacks in Germany, Europe and around the NATO countries and official institutions.

So in everything we do, we focus on security, sovereignty and our customers' needs. And some highlights from the different sectors are first, secunet becomes a cloud-native platform provider, and secunet continues to support our customers with the most secure integrated hardware and software infrastructure including the transformation into the cloud.

Second, secunet helps Europe and Germany as well as NATO with technological security and sovereignty. We see great potential, especially in the defense and space sector in the years to come. Thirdly, we are setting a new standard in a multi-cloud landscape as we are the only certified sovereign cloud provider for Red Hat OpenShift so far and the first with an approved cloud offering for classified information.

And fourth, secunet is driving the internationalization forward. We are developing strategic portfolio elements, which enable us to create interoperability between European countries, EU member states, NATO and other institutions, while always maintaining security and sovereignty.

So all in all, I believe that I have joined a remarkable company, and I'm really looking forward together with team to create the future, which is full of opportunities and potential that we are going to pull up in the years to come.

And we see on the next slide, the basis of all this is that we can shape the future build on these several pillars by driving innovation also from a very strong track record and very strong past. And we are doing this and continuing the growth path, but also controlling the cost, as Jessica mentioned before, based on the four most important points. Again, our employees, which are the #1 asset we have, the secunet customers, which it is really inspiring to speak to these customers, to learn from these customers and to speak and learn from our employees.

Thirdly, you and the people behind you, the secunet shareholders. And fourthly, our sovereign and secure technology stack out of scalable software, hardware and cloud platforms. So we are daily designing the future based on these pillars in order to continue the growth of the company and in order to continue to shape the security landscape in Europe and protect our countries from the ever-increasing cybersecurity risks that we see every day.

And by doing that, we can also confirm our prognosis and outlook for 2025, as shown on the next slide, with EUR 425 million approximately in revenue, an EBIT margin of 9.5% to 11.5%, EBITDA margin of 14.5% to 16.5%, and we are looking at a dividend, working towards a dividend per share of EUR 2.73.

And with this, I'm really looking forward to your questions. Thank you very much for being here.

Yes. Thank you very much for the presentation. [Operator Instructions] And we have the first participant with a question. Mr. Mueller, you should be able to speak now.

Yes. I would have a question to you, Mr. Siewert probably is your first call, so maybe a bit more vague, but -- if you could share your view on the whole government spending topic. So when do you expect first orders to come? And what's your view of the new government? And then also beyond the first orders, maybe if you could share your view on the spending momentum. So how do you see the cycle? And when maybe do you expect the peak of spending towards second half solutions?

Thank you very much, Mr. Mueller. It's probably one of the most important operational questions that we face that I learned about that we face every day. And the good news is that we had such a strong first half year, even though the official Bundes household has not yet finally been released. And with this, this is the basis for the actual spending that is going to come. So we expect this to be confirmed in September.

And then the purchasing will start going forward for next year and the years to come with the peak, hard to define in all honesty, yet it will definitely last until the end of this decade as we see the spending increasing and the operationalization of the budgets in Germany, and then also subsequentially throughout Europe and institutions over the next years. So we are preparing ourselves to be ready to act fast starting from -- in Q4. I hope that answers the question to an extent.

Yes. Very helpful.

Thank you very much. And we get to the next participant. Dr. Kalliwoda, you should be able to speak now and place your question.

Can you hear me?

We can hear you. Yes.

Very good. Yes, Mr. Siewert and Ms. Nospers, this defense and space sector, can you give us some more details about order volume you like to expect in next 1, 2 years? This would be my first question.

And my second question is, it's good that your margins are improving because in last years, you had nice sales growth. You bought your integrated companies, and the margins came back a bit. So -- but the integration activities, I think, are going well. Can you give us some more insight? You said the guidance on the EBIT margin will be between 9% and 11.5%. Do you expect then in 2026 and 2027 higher margins, please?

Dr. Kalliwoda, thank you very much for your questions. I would take these questions. First of all, we generally do not give too many information when it comes to info that is related to the non-segment information. But we can say that the defense sector is roughly a quarter of our total sales. We understand from our defense customers that they are, let's say, getting ready for the new budget and that they are having a planning that is for more than just 1 year.

We do not have actually concrete information on order volumes coming in. We have a good feeling, but we do not share the feeling with you. But we are very certain that we are getting in the last quarter of the year order -- orders that we are going to execute, and orders are incoming, let's say, on a daily basis.

When it comes to the margin, we confirm our prognosis, it is a bit difficult for us to give you more concrete numbers on this. I think the range is still valid for this year. Let me explain you why this is the case. The federal budget was coming in very late. We have prepared ourselves for this because usually, the budget is first, and then we see that the customers are, let's say, preparing and thinking about what they are doing with the budget that they receive. So this usually happens in November and December so that customers have, let's say, plenty of time. They usually use 3 to 6 months to get their planning on their projects ready and then they start ordering with us.

So from -- for this year, the things are a little bit different. So they only have, let's say, 6 to 8 weeks for their project planning, and they certainly did some of the planning before, but the concrete numbers are available to them only now.

So what we've done is that we had a little bit of preproduction for our defense customers because production for the defense sector usually takes a little bit longer. So we are making sure that we are ready and stock properly for the orders to come in the last half year and also quarter. But we are also very much looking to the cash flow, making sure that we are not overstocking or stocking the wrong items. So you can be sure that we are in a continuous discussion with our customers.

Nevertheless, an order in the defense sector might be between, let's say, EUR 10 million and EUR 20 million, and it will all be very focused in the last quarter and maybe even November and December. And it is always possible that things are a little bit difficult, and we are working with the organization very much to be ready for November and December. We are used to it to a certain extent, certainly, but it will put extra pressure on the organization in this last quarter because of the late budget.

So we are not having any signs that we are not reaching our prognosis, but also we do not have any signs that we are much faster this year -- so that we could increase our prognosis or be more detailed for the EBIT margin. Is your question answered with that or did I miss something?

Yes. Sure. Okay. And you included my question with the margins. You said you can't say so many details about '26.

For '26, we're usually giving our prognosis in January '26, and we are currently putting together our budget. So even I do not 100% know where we are going to stand in 2026. But certainly, we are working on giving you what you expect growth and also to a certain extent, we are looking to improve our margin, which we do not only do for you, dear investors and analysts, but also for ourselves because we are very focused on efficiency and growth and healthy growth also.

Thank you very much. And we move on to the next participant, [ Mr. Marinoni, ] you should be able to speak now.

With private bank and to be honest, I have really a follow-up question regarding your full year guidance. You mentioned that you confirm your EBIT margin target of 9.5% to 11.5%. Given the tailwind from the first half of the current business where you have been better by roughly 3 percentage points, don't you think that your guidance is really very conservative and maybe that your true low end of the guidance may be at least 10%? That's my first question.

And the second question is again about your order backlog. You mentioned that your current order backlog amounts to EUR 192 million. That's my question over which period are revenues generated. And finally, it's about your Business segment. Obviously, your EBIT margin in this segment was below last year. Can you give a little bit insight about this development?

Yes. Let me maybe start with the order backlog. I think in the order backlog, you can see very well that there was an impact of the late federal business to our numbers. We had some orders in late 2024 that couldn't be executed anymore in '24. And so they came into -- in the first quarter '25. increasing considerably the sales in the first quarter '25.

But now you see that, let's say, the preliminary federal budget is used up and also in the defense sector a little bit that our customers are preparing for a longer view. So they're not only preparing for the current year, but they are preparing for the special funds coming in. And it is a different, let's say, preparation cycle.

So you can see in our order backlog, which is below last year that this is already reflected in sales to a certain extent, reflecting the federal budget delay, let's say. And that is also why you might consider our margin development rather conservative. But it is really difficult with this late federal budget and the pressure is very much on the last quarter.

And as we know it from before, the seasonal pattern is very much usual in the fourth quarter, but also we have the issue that much more orders are going to come in, in the third and fourth quarter and need to be executed. And there could always be the same situation that not all orders can be executed in '25, but they are going to go to '26.

So we are having a huge potential from the special funds and also from the new federal budget. But also as it is coming very late in this year, we see this potential to be realized rather in the year '26 and afterwards. Order backlog margin conservation. And there was another question, [ Mr. Marinoni, ] which was...

Yes. It was about your Business Sector if it was slightly below last year. Maybe you can give a little bit insight about this development.

Sure. Happy to do so. So we see a little uptick in the demand in the Business Sector. We -- basically, our Business Sector is can be divided into two, let's say, business units or two different businesses. First of all, the eHealth business, which is health care, providing to health care. And the second is, let's say, classic industry, which has a certain level of regulation. And the classic industry with a certain level of regulation, we see that there is an increased demand for our SINA solutions, which leads to a different product mix and also higher cost of sales. That's the first thing that is, let's say, explaining the higher sales, but that's a little bit lower operating margin.

And the second thing that we had is that we -- last year, we could capitalize on some of the assets that we need for the eHealth market for the market that is turning to an as-a-service market. And this capitalization also, let's say, pushed the EBIT margin a little bit in the last half -- first half 2024.

Thank you very much. And we move back to Dr. Kalliwoda with a follow-up question, I guess.

Yes. You mentioned CapEx in the second half year will increase, or maybe you can give us some more information about CapEx, capital expenditure. And then you mentioned your foreign sales increased from 9% to 11%. Which countries did you succeed -- in which countries did you succeed? And do you think you can accelerate this growth outside?

First, your questions to the CapEx, our CapEx is -- it is a seasonal pattern that our CapEx is rather spent in the second half of the year. It is very much IT CapEx as by now, we are not a very CapEx-intense company. We have the, let's say, the IT infrastructure that we need. And this is usually -- our IT is planning a lot in the first half year. And then in the second half year, we are doing the CapEx. So that is nothing unusual, exactly. And the second question -- so is that enough for your CapEx question?

Yes.

Great. And what was your second question again, sorry?

The foreign sales.

The foreign sales. We have a very good footprint within Europe and also in the Middle East. And I'm not 100% sure, but I think it is -- it was rather European sales that increased the sales. And yes, we think that we can continue the growth path and also expand the international sales. And we focus very much, I always say, to the north and to the south because the European countries are very interested in our solutions, but also Middle East and Africa is a very interesting market for us because they're very interested also in, let's say, European solutions. Was that, okay? Did that answer your question?

And the sales and distribution stuff they travel outside to potential clients?

Yes, absolutely. Absolutely.

Thank you very much. And before we move on to the next participant on the audio line, I'll read out a question in our chat box. Can you give an update on the telematics infrastructure business?

Yes, happy to do so, and that's part of the Business Sector. So it's contributing to the Business Sector. A huge success story for us. And currently, we are on plan, according to the plan we made for 2025 and beyond. And we are also in a transformation for more solutions in the cloud and in the next phase, let's say, of the products being replaced. So it's running according to plan and contributing well to the Business Sector.

Well, thank you very much. And so we get back to the audio line. Mr. [indiscernible], you should be able to speak now and place your question.

Yes. Two additional ones from my side. First, on your cost side, you had only a very, let's say, small or under proportional buildup of workforce in the first half year, plus 5% against double-digit growth on the sales line. Are you planning to, let's say, onboard more personnel to prepare for the higher workload in the years to come in the second half already? That would be interesting to know.

And the second one, probably on the working capital side. You already did some measures around receivables that we can see. Do you see more room to improve your working capital going forward?

Okay. So maybe I'll start with the first question. Thank you very much for pointing it out. Absolutely correct. And the team is taking care really on automating and on managing under proportional growth of cost and buildup of personnel versus the increase in sales in order to deliver a proper margin to the shareholders. And we have the ability with our own products to really automate more, which we are focused on. And going forward, the answer on buildup is that the buildup will be as necessary for the precise road maps of the two sectors and in order to facilitate the cloud transformation, yet rather under proportional. And the second question, I think, Jessica, on...

Working capital. Happy to do so. Thank you. So the working capital, I think we have a very decent working capital. Our -- the fact that we have a lot of public business translates into very quick payments of our receivables. We have very good back-to-back contracts with our long-standing suppliers so that we are also having a very, let's say, nice coverage of the inventory. We work a lot with drop shipments so that a lot of the business does not really, let's say, go in stock first, wait there for a certain time and then go to the customer, but we usually make it happen that it goes directly from our suppliers to the customers.

So I think the working capital is particularly low for a business with a lot of hardware that we do. There are always things that we can improve in the working capital. But I think that our colleagues from the SEM has done an incredible job. We have a very good sales prognosis for the next few months to come, and we are steering our working capital and the inventory levels with that for -- so that I don't think that we have a lot of options to lower working capital considerably.

What we will see in the second half of this year is that we are going to have, let's say, buildup of working capital, which is more than the seasonal pattern usually guides to. And this is because of the fact that the budget was so late and that we are going in preproduction for some of our products that have a longer delivery time. But apart from that, we are always very much on the outlook to increase in efficiency of working capital.

All the best for [indiscernible].

Well, thank you very much. And at this point, we are waiting for some more participants with questions raising their hand or via the chat box. That's not the case in the meantime.

So therefore, we come to the end of today's earnings call. Many thanks to you, Mr. Siewert and Ms. Nospers for your presentation and the time you took to answer the questions. If any further questions arise at a later time, please do not hesitate to contact Dr. Rathke at the IR department. I wish you all a good day, a successful time and once again, hand over to Mr. Siewert for some closing remarks.

So thank you very much, first of all, for the moderation. And a big thank you to all of you for participating today in our earnings call for the first half year.

I would love to leave you with some thoughts on really what we do, and that's how I started is about protecting the sovereignty and the digital security and networks for Germany and Europe. And we are continuing on this path. We are going to hold up our core business and expand substantially further into international markets, into cloudifying our portfolio while maintaining the main core of it and protecting Europe and Germany from everything that's happening outside in the cybercrime and cybersecurity market. And with this, we aim to become one of the top players in Europe and drive the market or make the market for security solutions.

So we thank you for being part of secunet. Thank you for being part of our way, and we look forward to the next conferences, earnings calls and to report good news going forward. Thank you very much, and have a great day.

Thank you. Goodbye.