Hensoldt, a leading German defense electronics company, is exploring the possibility of selling its South African Optronics division as part of a strategic effort to ensure the long-term sustainability of the business. This potential move, first reported by Bloomberg and later confirmed by Hensoldt South Africa to defenceWeb, does not extend to the company’s local electronic warfare or radar business units, which will remain unaffected.
The decision according to defenceWeb comes amid a period of strong financial performance for Hensoldt, driven by growing demand for defense technologies in Europe and beyond, yet it reflects a deliberate choice to evaluate the future of the Optronics unit specifically.
According to Bloomberg, Hensoldt has enlisted Deloitte to review the Optronics business, aiming to draw interest from both industry players and buyout firms. Reuters followed up with a report stating that discussions are already in progress with around 20 potential buyers. Hensoldt South Africa described the process as “considering strategic options,” which could involve sustaining the Optronics unit within the Hensoldt Group or transitioning it to external ownership. The company emphasized that this exploration aligns with its broader efforts to adapt operations to long-term growth objectives and strategic priorities. Importantly, Hensoldt South Africa assured that this is a “strategic, non-disruptive” review, meaning that the division’s ongoing activities—development, manufacturing, deliveries, and supply chain operations—will continue without interruption during this period.
The Optronics division, based in Centurion, South Africa, focuses on advanced optical and electro-optical technologies, serving both defense and civilian markets domestically and internationally. Employing approximately 290 people, the unit generated €24 million in revenue in 2024, with expectations to surpass this figure in 2025 and beyond. Its product lineup includes electro-optical gimbals for helicopters and unmanned aerial vehicles, laser rangefinders, and housings for periscopes that are assembled at Hensoldt’s facility in Oberkochen, Germany. The division also supplies optical helmet tracking systems for BAE Systems’ Striker I and Striker II helmets, as well as the Cobra helmet, showcasing its role in high-tech defense applications. Hensoldt South Africa was clear that this potential sale applies solely to the Optronics unit, not to its GEW or Radar business units, which specialize in electromagnetic warfare, spectrum management, radar, identification friend-or-foe systems, and datalinks.
Financially, Hensoldt is performing well, which provides context for this strategic review. In the first quarter of 2025, the company recorded an order intake of €701 million, up from €665 million the previous year. Its order backlog reached a record €6.929 billion, an 18% increase from the prior year, reflecting strong demand. First-quarter revenues climbed to €395 million, compared to €329 million the year before, with the Optronics segment contributing notably through a 34% revenue increase. Profit before tax stood at €30 million. CEO Oliver Dörre tied this growth to geopolitical developments, including the war in Ukraine, conflicts in the Middle East, and pressure from the United States on NATO allies to boost defense spending. He noted that these factors are driving investment in military capabilities and technological sovereignty across Europe and Germany, areas where Hensoldt is well-positioned due to its investments in digitalization, connectivity, supply chain security, and infrastructure. As a result, the company has raised its revenue ambition from €5 billion to as much as €6 billion by 2030.
The Optronics segment’s strong performance, particularly in Europe, has been a key driver of Hensoldt’s recent success. The South African site, in particular, has benefited from higher production volumes and efficiency improvements, leading to an enhanced adjusted EBITDA compared to the previous year. Looking ahead, Hensoldt anticipates revenues of €2.5-2.6 billion, fueled by continued investment in security and defense across Germany and Europe, which should sustain demand for its products and solutions.
Amid these developments, the South African Optronics division has continued to innovate. In 2024, Hensoldt South Africa announced it was nearing completion of the Bushbaby 200 surveillance system, building on the success of the Bushbaby 100, which debuted at the World Defence Show in Saudi Arabia. The Bushbaby series stands out for its cost-effective, modular design, incorporating day and thermal cameras, laser rangefinders, and plans for future laser designation capabilities. Introduced in 2020 as a land-based, long-range imaging system, the Bushbaby enables persistent monitoring of threats such as intruders, smugglers, drones, and terrorists. The Bushbaby 100, a medium-range system, offers versatility and portability for both mobile and static operations, earning favor for its affordability and lightweight build. The Bushbaby 200, a long-range variant, features a Kenis thermal imager-based electro-optical system derived from the Argos aerial gimbal range. Leon Potgieter of Hensoldt Optronics praised its suitability for extensive land surveillance tasks, like border or coastline monitoring, thanks to its advanced geolocation and recording capabilities.
Hensoldt’s consideration of selling its South African Optronics division is a calculated step to secure the unit’s future, whether within the company or under new ownership, while preserving focus on its other South African operations in electronic warfare and radar. This move unfolds against a backdrop of robust growth for Hensoldt, fueled by geopolitical shifts and a thriving Optronics segment. Even as the division faces this potential transition, its ongoing innovation with products like the Bushbaby series demonstrates its value in addressing modern security and defense needs. As Hensoldt navigates this process, it remains committed to leveraging its technological strengths to meet the evolving demands of global markets, with a clear eye on sustained growth through the end of the decade.
