KNDS Clears Audit Hurdle and Charges into Factory Boom With €33bn Backlog
01.06.2026 - 03:52:06 | boerse-global.de
A compliance investigation that threatened to derail the defence group's stock market debut has ended without implicating current or former employees. That removes the final obstacle to a dual listing in Frankfurt and Paris — and clears the way for KNDS to capitalise on an order book that has swelled to €33.1bn.
The probe into a 2013 weapons deal with Qatar had spooked PwC, which refused to certify the company's 2025 accounts. Without audited financial statements, an initial public offering was impossible. Now the auditors have received a preliminary finding of no evidence of criminal wrongdoing, and the risk to the IPO timetable has fallen sharply.
Howitzers for the British Army and a Norway factory revs up
The UK Ministry of Defence has placed an order worth close to £1bn for 72 remote-controlled RCH 155 howitzers, mounted on Boxer wheeled armoured vehicles. The contract runs through OCCAR, the European defence procurement agency, to ARTEC — a joint venture between KNDS and Rheinmetall. Each weapon can fire eight rounds per minute to a range of 70 kilometres, with first deliveries expected in 2028.
The Boxer drive modules will be manufactured at KNDS UK in Stockport. Rheinmetall is adding 100 jobs in Telford, KNDS is safeguarding 100 positions in Stockport, and a further 300 roles across the British supply chain are being supported. "The UK is definitely one of our most important Boxer customers and a major production site," said Florian Hohenwarter, CEO of KNDS Deutschland.
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In Norway, a new production facility built with local specialist RITEK has opened in Levanger. The plant, erected in just 18 months, includes a test track with laser range, steep slopes and a diving basin. Capacity reaches 36 Leopard 2 A8 NO tanks per year, and 37 of the 54 vehicles ordered by the Norwegian army will be assembled there. The first two systems were delivered on 30 April 2026 — those came from KNDS' earlier production run — and series output is slated to start in autumn 2026.
Empty car plants become military assembly lines
KNDS is in advanced talks with Volkswagen and Mercedes-Benz to take over disused factories in OsnabrĂĽck and Ludwigsfelde. CEO Jean-Paul Alary confirmed the negotiations on 26 May, describing the move as a faster route to capacity expansion than building from scratch.
At Ludwigsfelde, roughly 2,000 workers currently building Mercedes Sprinters could switch to military vehicle production. KNDS plans to initially share the plant and later buy it outright. The group has earmarked around €1bn for new capacity across the company.
The situation in Osnabrück is more complicated. Production there ends in 2027, but Israel's Rafael Advanced Defense Systems has already signed a letter of intent — setting the stage for a bidding contest.
US artillery modernisation offers transatlantic prize
KNDS and Leonardo DRS have submitted a bid based on the Caesar Mk 2 for the US Army's Mobile Tactical Cannon programme. Washington is upgrading its self-propelled artillery and could name a prototype winner as early as July 2026. Heavier wheeled vehicles using the AGM turret module from KNDS Deutschland on 8Ă—8 or 10Ă—10 chassis are favoured. A contract from the Pentagon would mark a breakthrough beyond the group's European customer base.
Record orders, a two-state ownership riddle and a lower valuation
The production surge is fuelled by an unprecedented order flow. Revenue rose 15.9% last year to €4.4bn, while earnings before interest and taxes hit €661m. The margin improved from 13.2% to 15.0%. The order backlog jumped from €23.5bn to €33.1bn, reflecting Europe's rearmament drive since Russia's invasion of Ukraine. New orders alone totalled €13.5bn. All three segments — Land Systems Deutschland, Land Systems France and Munition — posted double-digit growth, with munitions leading at 24.7%.
The Leopard 2 A8 alone attracted orders for 300 units in 2025 from the Czech Republic, the Netherlands and Croatia.
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On the IPO front, the consortium banks — Bank of America, Deutsche Bank, Goldman Sachs and Société Générale — have pencilled a June or July timeline, with an autumn fallback if the audited accounts are delayed. The valuation has been trimmed from €25bn to €18–20bn. KNDS aims to raise around €5bn, roughly a quarter of its equity.
The ownership structure remains a delicate balancing act. The group is currently half-owned by the French state, with the rest held by the German families behind the former Krauss-Maffei Wegmann. Under the planned deal, Berlin would buy the families' stakes at the IPO price and take 40% of the company, while Paris reduces its holding from 50% to 40%. That leaves an initial free float of about 20% — unusually tight for an industrial group of this size. Over two to three years, Germany would lower its share to 30%, increasing the public float. Critics warn of slow decision-making if the two capitals pull in different directions; supporters point to the stability state owners provide in defence.
The coming week's talks between Berlin and Paris will settle the shareholder agreement, and with it the official IPO confirmation. KNDS has cleared the compliance hurdle and posted record numbers. Now it must convince investors that a tank maker with two governments as anchor shareholders can deliver the same returns as any other listed company.
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