QinetiQ Group (QQ) Trading Update summary

Trading performance and outlook

• Organic revenue growth for FY25 expected at approximately 2% with underlying margin around 10%, including £25-30m in one-off charges.

• FY26 revenue growth forecasted at 3-5% with margins of 11-12%.

• Order intake for the year projected to exceed a book-to-bill ratio of 1.

• Cash conversion remains strong, with net debt expected to be in line with last year and net debt to EBITDA at about 0.5x for FY25.

• Share buyback programme extended by up to £200m over the next two years, following completion of the current £50m tranche.

Segmental and regional performance

• UK Defence Sector (c.50% of revenue) continues strong performance due to longer duration contracts.

• UK Intelligence Sector (c.25% of revenue) faces further delays in short cycle contract awards, leading to resizing of capabilities.

• US Sector (c.25% of revenue) sees growth in long-term programmes but ongoing delays in higher margin product sales.

US business review and exceptional charges

• US operations undergoing restructuring under new leadership to support future growth.

• Goodwill impairment charge of approximately £140m expected at year end due to market and operational factors.

• Additional one-off, largely non-cash charges of £35-40m identified, mainly in legacy US operations.