CSG Targets Slovak Tank Tender with New Armoured Platform as Q1 Results Show Strong Margin

Czechoslovak Group enters Slovak tank race with CFL-120 Karpat, reports €1.544bn Q1 revenue, a €17bn backlog, and plans to boost munition output to 1.25M rounds despite short-seller allegations.

Czechoslovak Group has thrown its hat into the ring for a Slovak military procurement programme with the unveiling of a new main battle tank, the CFL-120 Karpat, developed alongside Turkish partner FNSS Savunma Sistemleri. The platform, presented at the IDEB 2026 defence exhibition in Bratislava, weighs up to 34 tonnes in combat configuration and is armed with a 120-millimetre cannon mounted in a Leonardo HITFACT-MkII turret. CSG will draw on its Slovak production base while FNSS contributes tracked-vehicle expertise. The move pits the company against BAE Systems’ CV90120 and OTOKAR’s TULPAR in a race that could shape the group's order pipeline for years.

The product launch came just days before CSG published its first quarterly report as a listed company, offering investors a detailed look at the operational momentum that underpins the expansion strategy. Revenue in the opening three months of 2026 reached €1.544bn, up 13.8% year-on-year, driven almost entirely by the Defence Systems segment. Underlying EBIT climbed to €372m, translating into a margin of 24.1% – stable against the final quarter of 2025 and within the group’s target corridor.

That margin resilience has taken on added significance given the cloud of a short-seller attack that has hung over the stock since shortly after its Amsterdam debut in January. Hunterbrook Media published a report alleging that the Czech group repackages old munition rather than producing new rounds, a claim CSG has forcefully rejected. The company notes that Hunterbrook Capital holds a disclosed short position in the stock and views the report as an attempt to support that bet. Management continues to review the allegations and has reserved the right to take legal action.

Order intake provides perhaps the clearest counter-argument. The order backlog swelled to €17bn, with an additional €27bn worth of contracts under advanced negotiation. Defence Systems registrations jumped 26.5% in the quarter, confirming that sovereign clients are placing long-term bets on the group’s production capacity.

The production build-out is accelerating. CSG aims to manufacture about 850,000 rounds of large-calibre munition in-house by the end of 2026, up from 550,000 last year. When reactivated production from stored equipment is added, total output should exceed 1.25 million rounds. A new line in Slovakia will add 70,000 rounds annually as part of a plan to raise overall capacity by a fifth before 2028. The group expects more than half of its artillery-munition revenue to come from long-range ammunition this year.

Capital expenditure will run at roughly 8.5% of sales, and net working capital is forecast to stay below 20% of revenue. The operating cash flow before taxes improved by €476m year-on-year, driven in part by a €275m receivable – stemming from the sale of the former Mobility, Perazzi and Healthcare units – that was fully collected during the quarter. That clean-up sharpens the group’s focus on defence and aerospace.

Geographic expansion continues on multiple fronts. In Hungary, CSG has taken a 49% stake in 4iG Space & Defence Technologies, giving it indirect ownership of 37% of Rába Automotive Holding, alongside military-vehicle orders and potential involvement in the country’s HIMARS programme. A joint venture with Hellenic Defence Systems in Greece is already churning out 155mm shells at a plant in Lavrio, with further calibres and upstream processing steps planned. The Austrian acquisition of 49% of Hirtenberger Defence Systems is still awaiting regulatory clearance, while two cooperation deals with Poland’s Polska Grupa Zbrojeniowa have been signed and the purchase of DOMAR MS is nearing completion. A more than $300m contract for over 100 Patriot armoured vehicles from an unnamed Southeast Asian buyer further broadens the customer base.

The Ukraine revenue share has fallen to around 20%, as the group diversifies beyond a single large theatre. European stockpile replenishment, multi-year framework agreements and rising NATO budgets provide the demand backdrop that underpins the 2026 guidance of €7.4bn–€7.6bn in revenue and an operating EBIT margin of 24%–25%.

Ratings agencies have taken note. Moody’s upgraded CSG’s senior secured debt to Baa3, citing improved governance after the IPO, a simpler capital structure and more conservative financial policies. Fitch affirmed its BBB- rating with a stable outlook – important for a company that is channelling heavy investment into capacity and partnerships.

The stock, however, remains far from its former highs. On Thursday, the shares traded at €19.29, gaining 1.72% on the day and extending the week’s advance to 18.51%. That recovery follows a trough of €15.73, but the price still sits roughly 43% below the record of €33.81 and well under the 50-day moving average of €22.40.

With the short-seller debate unresolved and the tank tender in Slovakia still open, the next major test comes on 7 August, when CSG reports half-year numbers for the period to 30 June. Investors will then scrutinise two key metrics: whether the production ramp-up is sustaining the group’s robust margin and whether the growing pipeline of contracts is beginning to restore the confidence that the market lost in the first half of 2026.