KNDS Turns to Idle Car Factories as Record Orders and €33bn Backlog Drive Pre-IPO Expansion
Published on 05/28/2026 at 06:11 | Redaktion boerse-global.de
The Franco-German defence contractor KNDS is scouring Europe for spare automotive capacity to keep pace with a historic inflow of military orders. CEO Jean-Paul Alary confirmed active discussions with carmakers in Germany, where factories such as Mercedes-Benz’s Ludwigsfelde site and Volkswagen’s Osnabrück plant are being considered for conversion to armoured vehicle and land-systems production. The logic is simple: reuse existing industrial infrastructure rather than build from scratch, allowing the company to ramp up output faster than conventional greenfield projects.
The urgency stems from numbers that have been piling up fast. KNDS posted revenue of €4.4 billion for 2025, a jump of 15.9 percent on the previous year, while the order intake surged to a record €13.5 billion. That left the backlog swelling to €33.1 billion — roughly seven times annual sales — and the group ended the year with about 11,000 employees, a figure it intends to grow further in 2026. The operating margin improved to 15.0 percent from 13.2 percent, lifting earnings before interest and tax to €661 million, compared with €500 million in 2024. Management attributed the momentum to rising European and NATO defence budgets and the restocking of heavy weapons arsenals.
All divisions contributed to the expansion. Land Systems Germany saw revenue climb 17.4 percent to €2.5 billion, Land Systems France rose 9.6 percent to €1.3 billion, and the ammunition business, a particular beneficiary of the integrated weapons-and-ammunition strategy, sped ahead by 24.7 percent to €612 million. The group noted that customers increasingly favour complete solutions from a single supplier, reinforcing the logic of its “one-stop-shop” model.
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To buttress its balance sheet ahead of a planned dual listing in Frankfurt and Paris, KNDS has also been tidying up its portfolio. On 19 May 2026 it placed 5.8 million shares in the RENK Group, the gearbox manufacturer, through an accelerated bookbuild, raising roughly €262 million. The transaction pared KNDS’s holding in RENK to about ten percent, and the proceeds are earmarked to strengthen the capital structure for the IPO.
The initial public offering itself is pencilled in for the summer of 2026, with a twin flotation on the Frankfurt and Paris exchanges. Internal preparations are said to be on track, though a political debate in Berlin over the size of the German state’s stake remains unresolved. The defence ministry favours a 40 percent holding to maintain strategic parity with the French government, while other ministries argue that a 30 percent blocking minority under Dutch law would suffice. Whichever outcome prevails, the company’s leadership insists that the window for the IPO remains open this year.
With a record order book, a swelling workforce, and a hunt for underused auto plants to ease production bottlenecks, KNDS is positioning itself as one of Europe’s most assertive defence champions. The challenge now is to translate that industrial ambition into a seamless public-market debut.
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