KNDS Races to Expand Production with Auto Plant Reuse and Norway Factory to Meet €33bn Order Backlog Ahead of IPO
31.05.2026 - 06:04:12 | boerse-global.de
The defence contractor KNDS is under mounting pressure to turn its record €33.1bn order book into delivered hardware, a challenge that is shaping the narrative ahead of its planned dual listing in Frankfurt and Paris this summer. With orders from over 40 armed forces worldwide for platforms such as the Leopard 2 tank and Caesar howitzer, the company has embarked on an aggressive capacity-building drive that includes repurposing idle automotive plants and constructing a dedicated tank facility in Norway.
Revenue climbed nearly 16% to €4.4bn in the most recent fiscal year, while operating profit rose to €661m from €500m. The order intake hit a record €13.5bn over the same period, reflecting what KNDS describes as a structural shift in the geopolitical environment and rising NATO defence budgets. The backlog ballooned from €23.5bn at the end of 2024 to the current €33.1bn, underscoring the urgency of scaling manufacturing.
Efforts to boost output are already visible. In April, the company launched a new assembly line in Munich-Allach for the Boxer 8x8 armoured vehicle, where it now produces ten drive modules per month. But the most ambitious expansion is in Norway, where a new centre dedicated to the Leopard 2A8 is under construction. From the third quarter of 2026, this site is expected to roll out up to 36 tanks annually, with the first deliveries to the Norwegian army scheduled for 2027. The facility will use geothermal energy and feature its own test tracks, marking a significant investment in sustainable defence production.
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On the home front, KNDS is in talks with Volkswagen and Mercedes-Benz about taking over disused car plants in Osnabrück and Ludwigsfelde. CEO Jean-Paul Alary confirmed the discussions in late May, with a planned investment of roughly €1bn at the Ludwigsfelde site alone. Converting these former automotive factories into military vehicle production lines is seen as a faster route to capacity than building entirely new plants.
Despite the operational momentum, the company’s valuation has been trimmed by its advisers. The expected market capitalisation now stands at a maximum of €20bn, down from earlier estimates of up to €25bn, with difficult market conditions weighing on sentiment. The dual listing is slated for June or July, with approximately 25% of shares to be floated. Germany and France will each initially hold 40%, with plans to reduce those stakes to 30% over the long term. Berlin intends to acquire its shares at the IPO price from the Wegmann family, which is seeking to exit its holding.
The political dimension adds another layer of complexity. The German Bundestag is due to scrutinise the shareholder pact between Berlin and Paris in the coming week, while progress on the auto plant acquisitions could provide a further valuation boost. Crucially, voting rights are to remain evenly split between the two governments regardless of the number of shares each holds after the stake reductions.
KNDS insists the IPO timetable remains on track, dismissing speculation about delays. With a backlog of €33.1bn and demand for armoured vehicles only intensifying, the company is striving to convince investors that it can simultaneously expand capacity, run the existing production lines, and navigate a delicate ownership transition — all at a pace that matches the urgency of Europe’s rearmament push.
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