Annual Report2023
Global Growth Strategy
How HENSOLDT successfully captures new markets
In 2023, the world watched the major flashpoints in Ukraine and in the Middle East, as well as increasing tensions between China and Taiwan. HENSOLDT looks beyond, using a global strategy for profitable growth to lay the foundation for a successful future, independent of the current crises.
The latest geopolitical conflicts have demonstrated once again that the significance of sensors and electronics has never been greater than at present. This defence industry submarket alone already has a volume of around 25 billion euros and global growth here is forecast to be around 9 percent per year. This is because, similar to many other areas, data and their analysis and use in real time often become critical factors. Or, as HENSOLDT CEO Thomas Müller has put it in a nutshell: “Tomorrow’s armed forces will to a large extent have to rely on networked sensors to give them a superior assessment of the situation.”
Already today, this manifests itself in HENSOLDT’s bulging order books, which provide a solid basis for sustainable and continuous profitable growth. All the while, HENSOLDT is adapting to these trends, continually expanding its international business with a “tailored strategy” (Celia Pelaz, Chief Strategy Officer), including beyond the existing core markets in Europe, and investing in the implementation.
“Tomorrow’s armed forces will to a large extent have to rely on networked sensors to give them a superior assessment of the situation. Today, we are already laying the technological foundations for this battlefield of the future and will take advantage of the various growth areas. More and more, our portfolio will be equipped with artificial intelligence and we are investing heavily in further digitalising our sensor solutions and in multi-sensor data fusion.”
Thomas Müller, CEO HENSOLDT
“We always use the same toolbox, but every country and every opportunity is unique. This is why we have tailored strategies for our key regions and a very diversified set of tools for winning new business. Whether in Germany, Europe, or in international markets – our flexible, adaptable approach is based on a combination of technology, local industrialisation, and upstream development of the supply chain.”
Celia Pelaz, Chief Strategy Officer
Europe –
Together for Success
Given its already strong industry presence beyond the German home market, with locations in France and the United Kingdom (UK) and the corresponding portfolio, HENSOLDT is in an excellent position. However, partnerships are the key to future success, firstly through alliances with other European original equipment manufacturers (OEMs), and secondly, in HENSOLDT’s role as a German sensor solution champion, acting as a partner in important European cooperation programmes.
FCAS
The Future Combat Air System, the future successor of the Eurofighter, reached its next project stage in December 2022. HENSOLDT has meanwhile launched a programme in which startups from NATO and allied countries develop ideas for new sensors.
European Sky Shield
This is a European initiative under which 19 European countries are working on a joint air defence system. Orders have already been received for HENSOLDTs TRML‑4D radar from the Baltic states and Ukraine – including through convoy partnerships with other companies in the industry.
Submarines
HENSOLDT equips Norwegian Ula class submarines with advanced periscopes and optronic mast systems.
USA –
Ready for a Mega Market
The US armament market makes up just under half of the global market. In order to take better advantage of this potential, the local HENSOLDT Inc. was changed into HENSOLDT North America (NA) in 2023. This makes it easier for the company to meet local security requirements and to comply with the provisions of the Buy in America Act by entering into selective partnerships.
TRS‑3D and 4D radars
As a partner of Lockheed Martin, HENSOLDT supplies radars for the new littoral combat ships of the US Navy and for coast guard vessels.
M1 Abrams
Partnering General Dynamics, HENSOLDT supplies improved laser range finders under a modernisation programme for these tanks.
South America –
Greater Security
for the People
In South America, HENSOLDT takes part in a number of projects of the regional security and defence forces.
Brazil
As part of the Tamandaré project, HENSOLDT equips frigates of the Brazilian navy with a combined radar (TRS‑4D) and identification friend-or-foe (IFF) solution.
Chile
As part of a comprehensive overhaul of three frigates of the Chilean navy, these vessels will be fitted with the TRS‑4D surveillance and target acquisition radar from HENSOLDT.
Asia –
Customer Proximity as
a Path to Success
With agility and proximity to the different customers in the highly diverse Asia region, HENSOLDT responds locally to the specific requirements and very special needs. Local projects there receive support in the form of targeted solutions supplied from locations in Australia and New Zealand. This approach pays off, both in existing alliances and through new partnerships that provide access to new profitable markets and projects.
Japan
For its currently largest single customer, HENSOLDT equips VIP and transport planes as well as helicopters with the MILDS missile launch detection sensors, an electronic self-protection system.
India
HENSOLDT participates in the upgrade of a submarine of the Indian navy with high-end periscope SERO 400 and supplied self-protection systems for helicopters. The subsidiary HENSOLDT India Ltd. ensures close coordination with customers and partners in the country.
Indonesia
Together with HENSOLDT France and UK, a tailored sensor package and a combat management system have been developed, which are being used to modernise two minesweepers of the Indonesian navy.
(South) Africa –
Regional Market Presence,
Global Success
With sites around Pretoria and Cape Town, South Africa is HENSOLDT’s biggest production location after Germany. Not only does this improve access to African markets, including the MENA region, but HENSOLDT South Africa also plays a key role on the company’s road to becoming the leading platform-independent provider of defence and security sensor solutions with a global reach.
In South Africa, HENSOLDT, in a strategic alliance with BAE Systems, is developing the new Striker II fighter pilot helmets for the fleet of Typhoon combat planes of the Royal Air Force (UK). In addition to the optical sensors, HENSOLDT is responsible in this project for the development of the intelligent tracking system, which will make the Striker II one of the most modern fighter pilot helmets in the world.
As a subcontractor to Hensoldt UK/Spectrum Dominance, HENSOLDT South Africa takes part in European reconnaissance projects by contributing land-based sensors.
The South African Radar Business Unit entered into an agreement with Air Traffic and Navigation Services (ATNS), which is responsible for air traffic management in around ten percent of the world's airspace.
HENSOLDT supplies active and passive radars for air surveillance and air defence to a number of countries in the MENA region.
For Mauretania, HENSOLDT has designed an integrated sea surveillance system, which effectively monitors more than 700 kilometres of coastline and coordinates and directs the government’s activities at sea.
Germany –
from the Home Market
into the World
In its home market, which is as important as ever, key technologies and solutions from HENSOLDT make up the core of German defence electronics. As a leading provider of sensor technology, the company supplies systems for platforms such as the Eurofighter, the Leopard 2, for submarines, frigates, and equipment for soldiers on the ground. By the same token, these German programmes are often considered a ‘launchpad’ for the development of other national and international projects of the next generation. The 100 billion euro special fund, the commitment to NATO targets (2% of GDP to be spent on defence), and the continuing support for Ukraine have added to that momentum. In 2023, this was reflected in four major contracts, among other achievements.
In the course of further digitalising the German land forces, HENSOLDT equips the Puma infantry combat vehicle with a new optronics and self-protection system.
The German armed forces are receiving additional TRL‑4D radars to improve airspace surveillance.
To upgrade the Eurofighter, HENSOLDT and its Spanish partner INDRA are developing a new radar.
In order to give the German armed forces close-range air defence capabilities, HENSOLDT, alongside partner companies Rheinmetall and Diehl, will supply them with solutions for short-range and very short-range air defence (NNbS).
“In a changing defence environment, HENSOLDT is well positioned and ready to deal with the significant expansion ahead”, says CFO Christian Ladurner to summarise the developments of 2023.
To deal with the high order backlog and order intake, appropriate measures have been taken and programmes launched. The growing internationalisation and industrialisation will form the basis for making this expansion sustainable and profitable. With our proven delivery reliability and highly qualified employees. With efficient project implementation and investments in organic and inorganic growth. For appropriate solutions today and to meet the security needs of tomorrow. And ultimately in a company whose decisions are based on data-based real-time control and implementation of all business processes. Find out more in the next sections of this Annual Report.
“In a changing defence environment, HENSOLDT is well positioned and ready to deal with the significant expansion ahead. On the back of a solid order backlog, strong focus on efficient project implementation, our strategic positioning in the market and our ability to generate profitable growth, we at HENSOLDT have created a sound basis for further optimising our processes along the entire value chain and for continuing to demonstrate our robust ability to grow and financial strength in the future.”
Christian Ladurner, Chief Financial Officer