QinetiQ集团（QQ）：需要解答的问题

2025E2026E1,931.61,977.2212.2247.6195.5233.224.9131.03 2027E2,083.8263.3251.135.10 David Farrell * | Equity Analyst44 (0)20 7029 8407 | david.farrell@jefferies.comAndy Douglas * | Equity Analyst44 (0) 20 7029 8166 | andrew.douglas@jefferies.comVanessa Jeffriess * | Equity Analyst44 (0)20 7548 4123 | vjeffriess@jefferies.comRichard Hill * | Equity Associate+44 (0)20 7548 4540 | rhill1@jefferies.com The Long View: QinetiQ Group plcInvestment Thesis / Where We Differ•QinetiQ has struggled to grow its international revenue streams atattractive margins, and faces somewhat of a strategy refresh with itsFY27F revenue target of £2.4bn now looking unobtainable•There has been significant management changes to both the US andAustralian businesses which underscore our questions marks aboutstrategy•Despite strong revenue growth there has been no margin expansion(indeed there has been margin declines) which has not been adequatelyexplained in our view•Lack of re-rating relative to peer group reflects lack of EPS momentumand rising concerns about execution.Base Case,420p, -3%•EMEA Services organic revenue growth of3.5%in FY26F rising to 5.0%in FY27F.Operating margins of 11.5% in both FY26Fand FY27F.•Global Solutions organic revenue growth of+3.6%in FY26F rising to 6.6%in FY27F.Operating margins of 9.5% in FY26F and 10%in FY27F•Price Target of 420p based upon an SOTPmethodology, taking an equal weighting of ourEV/Sales value (1.25x multiple) and EV/EBITmultiple (10.7x) applied to annualised FY26Festimates.Sustainability MattersTop Material Issue(s)- Data Security:As a key supplier in the National Security supply chain, QinetiQmust ensure that the organisation’s security meets governments’ and other relevant requirementsworldwide. A failure to do so could result in a loss of ‘licence to operate’.Company Target(s):1) 50% reduction in Scope 1 & 2 and 30% in Scope 3 by 2030, and Net Zero by2050; 2) 30% female employees by 2030.Questions to Management:1) What is involved in the new sustainable procurement guide forsuppliers? 2) How much of the current investment in digitalization is aimed at increasing therobustness of systems versus operational efficiency? 3) To what degree does QinetiQ promote salesinto areas beyond UK, US and Australia?Link to ESG Sector Report:HerePlease see important disclosure information on pages 14 - 19 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Upside Scenario,650p, +50%•Calendarised FY26F Revenue is 10% ahead ofour forecasts.•EBIT margins in FY26F of 13%, top end ofmedium-term guidance.•Assume target multiples 20% ahead of ourbase case (EV/Sales of 1.50x and EV/EBIT of12.9x).•Derived Target Price of 650p. Downside Scenario,330p, -24%•Calendarised FY26F Revenue is 10% below ofour forecasts.•EBIT margins in FY26F of 11%,whichassumes no recovery back towards 12%-13%range.•Assume target multiples 20% below of ourbase case (EV/Sales of 0.94x and EV/EBIT of8.0x).•Derived Target Price of 330p.Catalysts••FY25 Prelims 22-May 25•1Q26F Trading Update 17-Jul 25•Outcome of the Strategic Defence Review,expected in Spring 2025•Discrete orders that bolster the backlog, andtherefore revenue visibility•Securing funding for awarded US contracts•Improvementinmarginsinvestments come to an end•Signs of operational leverage in either division asgrowth2 The Questions That Need AnsweringWhether the upcoming FY25 results provide a clearing event for QinetiQ really depends upon thedegree to which management can satisfactorily answer the following questions.Is Global Solutions just an inherently more volatile business?Over time, QinetiQ's margin has gradually declined, from c15% in FY17 down to 11.3% in FY24.This has been somewhat by design within EMEA Services, with QinetiQ investing in its UKMoD facilities to deliver growth rather than simply maximizing margins. There has also beeninvestment in technology and Net Zero. In FY25F, the group has also had to deal with costabsorption in its UK Intelligence business, especially in 2H.Less palatable, and more concerning, has been the performance of the Global Solutions division,which has not only seen margins slip but, in FY22 and FY25F, also experienced significantoperational challenges, which all but eroded annual profitability. In FY22 this was a result oftechnical and supplier issues on an unnamed US contract, while in FY25F, this is a result ofprovisions relating to inventory and cost recovery on legacy US operations, of which £25m to£30m was taken above the line and £35m to £40m below the line (which would make it lossmaking on a reported basis). With ongoing restructuring costs from US Global Solutions likelyto endure through FY26F, management has already guided to margins in the upcoming year tobe between 9% and 10%.As a result of weak performance in Global Solutions in FY25F, QinetiQ has had to take a c£140mimpairment of goodwill, some of which relates to discount rates (£30m), but much more relatesto pr