CSG’s Artillery Production Target of 850,000 Shells and €17 Billion Backlog Test the Bulls

Dutch defence group CSG rebounds with US capacity expansion, €3B refinancing, and NATO-backed €17B backlog, targeting 850K large-calibre shells by 2026.

The Dutch defence and industrial group CSG is staging one of the more notable comebacks in the European defence sector, driven by a combination of aggressive capacity expansion in the United States and a freshly completed refinancing that has trimmed its interest bill. After touching a 52-week low of €12.20 in June — a sell-off triggered by short-seller reports in the spring — the stock has clawed back to €16.29, representing a near 28% gain over the past month. Yet even after this rally, the shares remain roughly 55% below the all-time high of €36.05 set shortly after the January listing, underscoring how much ground still needs to be recovered.

The turnaround narrative hinges on the integration of the Kinetic Group, now rebranded as “CSG Ammo+”, which bundles the Federal, Remington and CCI small-calibre ammunition brands. That acquisition, completed on 27 November 2024, catapulted CSG into the position of the world’s largest manufacturer of small-calibre ammunition. But the real headline-grabbing target is in large-calibre artillery: CSG plans to ramp annual production of large-calibre shells to approximately 850,000 units by the end of 2026, up from 550,000 last year. Management expects that high-margin long-range munitions will account for more than half of all artillery ammunition revenue in 2026, a shift designed to capitalise on NATO’s insatiable demand for precision firepower while differentiating CSG from less vertically integrated rivals.

To deliver that production surge, CSG has broken ground on a “Future Artillery Complex” at the Iowa Army Ammunition Plant, operated through its US subsidiary MSM North America. The facility, backed by a contract with the US Army worth up to $635 million, will eventually produce up to 36,000 loaded 155mm artillery shells per month under the government-owned, contractor-operated (GOCO) model. Separately, a new factory in Wisconsin will see the Firecrest Aerospace unit manufacture turbojet and turbofan engines for drones and precision weapons, with an initial investment of $15 million.

The scale of the order book is staggering. At the end of the first quarter of 2026, CSG reported a confirmed backlog of approximately €17 billion, fuelled largely by NATO member states ordering both land systems and large-calibre ammunition. For the full year 2026, management is guiding for revenue between €7.4 billion and €7.6 billion, with adjusted EBIT margins improving to between 24% and 25%. The company also aims to reduce net debt to below 1.3 times EBITDA by year-end.

On the financing side, a banking syndicate led by BNP Paribas, Société Générale and UniCredit has provided roughly €3.062 billion in refinancing, with interest rates dropping by 125 to 150 basis points — a meaningful saving that will flow straight to the bottom line.

Technically, the stock has moved decisively above its 50-day moving average of €15.13, and the relative strength index of 61.8 suggests there is still room to run before the shares become overbought. The next major catalyst comes in August, when CSG publishes its half-year results for 2026. That report will be the first to fully capture the consolidated performance of the expanded US manufacturing footprint and the synergies from the transatlantic integration. For investors, the €17 billion backlog is the promise; the August numbers will be the proof.