KNDS Carries €33bn Order Backlog Into Dual-Listing Countdown as Governments Jostle for Influence

The defence group behind the Leopard 2 tank has fired a warning shot across the bows of European equity markets. KNDS, the Franco-German armoured-vehicle manufacturer, is heading for a dual initial public offering in Frankfurt and Paris during the second half of 2026, armed with the fattest order book in its history and an operating margin that has climbed past the 15 percent mark.

What makes the IPO story unusual is the degree of state involvement. The German government has indicated it wants to take a 40 percent stake alongside the French state’s planned holding at the same level. Both are expected to pare their positions to roughly 30 percent each within two to three years after listing, keeping strategic sway over sensitive military technology without acting as permanent majority owners. That careful balancing act between public control and private capital will define the pricing debate in the months ahead.

A Backlog That Stretches Years Ahead

The headline figure that will dominate analysts’ models is the order backlog. KNDS ended 2025 with €33.1 billion in contracted future revenue, up sharply from €23.5 billion a year earlier. That jump followed an extraordinary year for new business: order intake hit €13.5 billion, more than three times annual sales.

Revenue itself rose nearly 16 percent to €4.4 billion, propelled by growth across all three segments. Land Systems Germany brought in €2.5 billion (up 17.4 percent), Land Systems France €1.3 billion (up 9.6 percent), and the ammunition business surged almost 25 percent to €612 million.

Should investors sell immediately? Or is it worth buying KNDS?

Profitability kept pace. Earnings before interest and tax climbed to €661 million from €500 million, lifting the EBIT margin from 13.2 to 15.0 percent. The company attributes the improvement to operational efficiency and a favourable mix of higher-margin export contracts.

Cleaning the Balance Sheet for the Roadshow

KNDS has already taken steps to tidy up its capital structure ahead of the listing. In May it placed 5.8 million shares in RENK Group through an accelerated bookbuild, representing roughly 5.8 percent of RENK’s share capital. The sale raised about €262 million, leaving KNDS with a residual holding of around 10 percent subject to a 180-day lock-up. Proceeds will be used to further optimise the balance sheet — a move that signals seriousness about the IPO timeline.

The compliance side has also been largely addressed. An internal investigation into a legacy contract with the Qatari armed forces dating back to 2013 has progressed far enough for KNDS to sign off on its 2025 annual accounts. No evidence of criminal misconduct by employees has been found, removing a potential speed bump from the listing process.

New Leadership, Bigger Workforce, Rising Capacity

Tom Enders, the former Airbus chief, now chairs KNDS’s supervisory board, while Jean-Paul Alary serves as group CEO. The arrival of Christian Schulz as CFO on the supervisory board — fresh from shepherding RENK through its own IPO — sends an unmistakable signal about the company’s ambitions.

The workforce expanded 7.3 percent to roughly 11,000 employees last year, and KNDS plans further hiring to support production ramp-ups for the Leopard 2 and Caesar howitzer. Additional investment in manufacturing, assembly and R&D is also earmarked.

What Comes Next

Market conditions will ultimately determine the exact launch date, but the company says preparations are running with a “very satisfactory” degree of maturity and on schedule. Valuation expectations are pegged at €15 billion to €20 billion.

KNDS at a turning point? This analysis reveals what investors need to know now.

For investors, the macro environment offers tailwinds. NATO reported in March that European allies and Canada raised defence spending by 20 percent compared with 2024, and all members now meet or exceed the 2 percent of GDP target. The 2025 Hague Summit commitments call for 5 percent of GDP to be allocated to core defence and related areas by 2035, with at least 3.5 percent going to core capabilities.

Near-term data points include eurozone inflation estimates due on 2 June 2026 and the European Central Bank’s monetary policy decision on 11 June. The eurozone manufacturing PMI stood at 51.4 last month, while Germany’s reading remained just below the expansion threshold at 49.9.

Until a prospectus, price range and firm listing date appear, the investment case rests on the operational numbers: €13.5 billion in order intake, €4.4 billion in revenue, €661 million in EBIT and a €33.1 billion backlog. Those are the benchmarks against which the IPO story will be judged.

Ad

KNDS Stock: New Analysis - 31 May

Fresh KNDS information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

Read our updated KNDS analysis...

en | NL00000KNDS0 | KNDS | boerse | 69454547 |