CSG’s Owner Builds a €10 Billion Side Bet as the Defence Giant Faces a Test of Its Own

Michal Strnad diversifies defense profits into hotels and healthcare, while CSG faces quarterly results and EU funding deadlines that could restore stock credibility.

Michal Strnad is preparing for life beyond armoured vehicles and artillery shells. The chairman of Czechoslovak Group (CSG) announced on 15 May a new investment platform with a capacity of €10 billion, intended to funnel money from the defence boom into hotels, healthcare, services and private equity across Europe and the United States. The move removes some of CSG’s surplus liquidity from the volatile defence cycle, but it arrives just as the listed entity enters a critical week that will test its operational credibility.

Strnad will seed the vehicle with roughly €3 billion from CSG’s Amsterdam initial public offering, which closed in January 2026. The platform will operate independently of the defence group, insulating it from the regulatory constraints that govern the arms trade. Early assets already signal the direction: the Four Seasons Hotel in Prague, a fertility clinic, authorised dealerships for Ferrari and Maserati, and the football club Viktoria Plzen. Potential targets include the waste-management company Marius Pedersen and media holdings — sectors offering predictable cashflows and local market dominance.

While Strnad builds his diversified empire, the company he chairs faces two immediate deadlines that could determine whether CSG’s stock finally catches up with its fundamentals. On 20 May, CSG publishes its first quarterly results since the IPO. The numbers will reveal the size of the one-off costs from the flotation, which the management had flagged but not quantified. Analysts also expect operational updates on capacity, order intake and cashflow — metrics that must support the growth narrative after a brutal share-price rout.

The second deadline comes at the end of May, when an EU funding window under the SAFE programme expires. A Slovak framework agreement for munitions with a maximum value of €58 billion relies on at least two EU member states joining to unlock loans with interest rates as low as 1% and long maturities. Romania has denied ministerial-level talks on participation, while Croatia is still weighing involvement. CSG plays down the risk, calling the contract a framework with maximum potential rather than a firm order, but any financing delay would add to the uncertainty hanging over the stock.

The shares closed on Friday at €16.43, more than 51% below the January peak of €33.81. The 30-day slide stands at 22.63%, despite a slight recovery in the current week. That disconnection from fundamentals is stark: CSG reported 2025 revenue of €6.74 billion and adjusted operating EBIT of €1.6 billion, with a record order backlog of €15 billion. The 2026 guidance calls for revenue of €7.4–7.6 billion and an adjusted EBIT margin of 24–25%. Moody’s lifted CSG’s secured debt to Baa3 in February, and Fitch rates it BBB- with a stable outlook. The average analyst price target from 14 brokers is €35.58.

Strnad is in parallel talks with Renata Kellnerova of PPF Group about potential co?investments and partnerships. A tie?up of that scale would allow Strnad to pursue large European transactions without leaning solely on CSG?linked liquidity. The structure he is building effectively separates the defence business from a commercial asset portfolio, while keeping financial firepower aligned.

The market’s preoccupation with the immediate hurdles — IPO costs, the SAFE deadline and a short?seller campaign that has hammered the share price — has left little room for patience with Strnad’s longer?range vision. CSG must therefore deliver on more than just the big growth story at its first?ever quarterly update. Investors want granular numbers on expenses, order conversion and free cash flow. Only after those details land can the market start to assess whether the €10 billion side bet is a shrewd diversification or a distraction from the core business.