Germany’s Hensoldt is exploring the sale of its South African optronics division to ensure long-term sustainability, but does not intend to sell its local electronic warfare or radar business units.
The proposed sale was first reported last week by Bloomberg, which said that Hensoldt was working with Deloitte to review the business, with a view to attracting interest from companies in the field, as well as buyout firms.
Reuters on Friday reported that discussions are already underway with around 20 potential buyers for the company.
Hensoldt South Africa confirmed to defenceWeb that it is currently “considering strategic options” for its Optronics business unit. “This includes evaluating potential paths that could best support the long-term sustainability of the business – both within the Hensoldt Group and possibly beyond it.”
The consideration forms part of Hensoldt’s broader efforts to align its operations with long-term growth objectives and strategic priorities, the company said.
The Optronics business unit specialises in advanced optical and electro-optical technologies, serving both defence and civilian markets locally and internationally. In 2024, the unit generated revenues of €24 million, with expectations to exceed this in 2025 and beyond.
Hensoldt South Africa said the possible sale move is “a strategic, non-disruptive exploration and therefor operations across development, manufacturing, deliveries and supply chain continue without interruption.”
It added that “this activity applies exclusively to the Optronics business unit and does not pertain to Hensoldt South Africa’s GEW or Radar business units, which focus on electromagnetic warfare, spectrum management, radar, IFF and datalinks respectively.”
The Centurion-based Optronics unit employs around 290 people and manufactures electro-optical gimbals, mainly for helicopters and unmanned aerial vehicles, as well as laser rangefinders. It also supplies housings for periscopes, which are assembled at Hensoldt’s facility in Oberkochen, Germany, and provides the optical helmet tracking systems used on the BAE Systems Striker I and Striker II helmets as well as the Cobra helmet.
Hensoldt as a group reported a strong first quarter with an order intake of €701 million, exceeding the figure for the same period of the previous year (€665 million). Its order backlog again reached a record level and now stands at €6.929 billion, up 18% compared to the previous year.
First quarter revenues amounted to €395 million, a significant increase on the same period last year (€329 million), partly as a result of strong revenue growth in the Optronics segment. Profit before tax was €30 million.
Oliver Dörre, CEO of Hensoldt said, “The ongoing war in Ukraine and the conflict hotspots in the Middle East dominate the geopolitical agenda. These developments, as well as increased pressure from the US on its NATO allies to further increase defence spending, are leading to increased investment in military capabilities and technological sovereignty in Europe and Germany. At HENSOLDT, we have made targeted investments in the digitalization and connectivity of our products, in securing our supply chains and in our infrastructure and locations in recent years. As a result, we now have the technologies, solutions and operational capabilities to play a significant role in the upcoming German and EU procurement programmes and to increase our previous ambition of €5 billion in revenue by 2030 to up to €6 billion.”
Revenue in the Optronics segment increased significantly by 34%, Hensoldt said in announcing its first quarter results. “The strong sales performance of the European business thus continued. Adjusted EBITDA also improved noticeably compared to the same period of the previous year. This is mainly due to higher production volumes and progress in efficiency measures at the South African site.”
Hensoldt expects positive business developments to continue. The company anticipates revenue of €2.5-2.6 billion on the back of continued German and European investment in security and defence will result in further high demand for Hensoldt’s products and solutions.
