Despite €17bn Backlog and Vertical Fuze Expansion, CSG Stock Slides to Near 52-Week Lows

Despite 13.8% revenue growth and €17B order backlog, CSG's stock drops 57% as investors demand reliable deliveries and margin stability over headline contracts.

CSG posted another quarter of double-digit revenue growth and a record order book, yet its shares have shed more than 57% from a January peak as investors focus on execution rather than headline orders. The defence group’s stock stood at €15.29 on Friday, down 2.4% on the day and 15.4% lower over the past seven days. Over a 30-day horizon the loss widens to 12.2%, leaving the equity just 12% above the 52-week trough of €13.65 reached in early May.

The divergence between operational strength and market sentiment has become stark. First-quarter revenues climbed 13.8% year-on-year to €1.544 billion, while operating EBIT rose 8.7% to €372 million. The order backlog expanded 15.1% to €17 billion, with a further €27 billion in the active pipeline. Defence Systems, the main earnings engine, generated €1.251 billion in revenue during the period — up 26.5% — and an operating margin of 28.4%.

Against that backdrop, the group announced on 3 June contracts worth a high double-digit million-euro sum for mechanical and electronic fuzes for large-calibre ammunition. Two European NATO countries placed the orders, with deliveries due to start in 2026. The fuzes are critical components, especially for 155mm artillery rounds, and the deal underscores CSG’s push deeper into the supply chain.

The company is pursuing vertical integration in partnership with South Africa’s Reunert. A new joint venture, Fuchs Electronics Europe, will manufacture electronic fuzes at the ZVS site in Dubnica nad Váhom, Slovakia. The plant is designed as an independent supplier that will serve not only CSG but also other European munitions makers. “Fuze technology is a bottleneck in Europe’s ammunition supply chain,” the company noted, adding that modern electronic fuzes support multiple modes — impact, delay, timed and airburst detonation.

Management’s full-year guidance remains unchanged: revenue of €7.4–7.6 billion, an operating EBIT margin of 24–25%, and capital expenditure of about 8.5% of sales. The group aims to produce roughly 850,000 rounds of large-calibre ammunition in-house by the end of 2026, up from 550,000 last year, plus up to 400,000 rounds from reactivated production lines. Net debt is expected to stay below 1.3 times EBITDA.

Yet none of this has arrested the slide. The 50-day moving average of €19.66 now sits 22.3% above the current share price, while the relative strength index of 32.9 points to oversold conditions. Annualised 30-day volatility has reached 76.7%, reflecting persistent instability. “Pure order announcements no longer move the market,” one analyst remarked. “Investors want to see reliable deliveries, margin stability and cash generation.”

The next major catalyst is the half-year report due on 7 August. Until then, the share price will hinge on tangible production ramp-ups and contract fulfilment rather than further strategic announcements. CSG’s vertical expansion into fuzes strengthens the long-term investment case — but the market is demanding proof that the group can convert its €17 billion backlog into predictable earnings.