Hensoldt AG Raises Long-Term Revenue Targets to €10 Billion

Hensoldt AG has significantly raised its long-term revenue ambitions, targeting €10 billion in revenue by 2035, building on its existing goal of €6 billion by 2030, fueled by rising global defense spending. The announcement, made at the company’s Capital Markets Day in London, signals a confident outlook driven by a record order backlog of €10.4 billion as of September 30, 2026.

The increased targets reflect a broader trend of increased defense budgets, particularly within NATO member states, which have committed to spending at least 3.5% of their GDP on defense by 2035. In Germany, defense spending is projected to rise from approximately €108 billion currently to over €180 billion by 2030, including funds from a special allocation. Hensoldt anticipates the addressable market for defense electronics to grow by around 10% annually, reaching approximately €76 billion by 2031.

Beyond the headline revenue goals, Hensoldt refined its medium-term targets, now projecting annual revenue growth of 15-20% starting in 2027, and an adjusted EBITDA margin increasing by approximately 0.5 percentage points per year, reaching around 21% by 2030. This margin improvement is expected to occur off a higher revenue base, translating into greater absolute earnings gains. The company also anticipates a cash conversion rate of around 50% of adjusted EBITDA and a payout ratio of 30-40% of adjusted net income.

To support this growth, Hensoldt is actively expanding its capacity, securing a significant increase by mid-2027 with further expansion planned through 2029. The company is also focusing on software development, anticipating its first customer orders for its MDOcore software suite in 2027, and aiming for service revenue to account for around 25% of total revenue in the long term. The company expects revenue of approximately €2.8 billion for 2026, and an adjusted EBITDA margin of approximately 19.0%.