KNDS Posts Strong 2025 Results, but Berlin's 40% Stake Impasse Threatens to Delay Its €20bn IPO

KNDS reports stellar 2025 with €4.4B revenue and €33.1B backlog, but Berlin's plan for a pre-IPO stake jeopardizes the 2026 Frankfurt-Paris listing.

The numbers are compelling, yet the politics are not cooperating. KNDS, the German-French armoured vehicle giant, reported a stellar 2025: revenue climbed 15.9% to €4.4 billion, operating profit (EBIT) rose to €661 million, and the order backlog swelled by nearly €10 billion to €33.1 billion. That backlog alone is more than seven times annual sales, guaranteeing years of production. But all this financial firepower cannot mask a very different kind of battle – one unfolding in Berlin over the government’s planned 40% stake in the company ahead of its intended initial public offering.

The dual listing in Frankfurt and Paris, originally pencilled in for June or July 2026, is now described by officials inside the German government as “extremely ambitious.” The rub is timing. Berlin wants to buy in before the IPO, mirroring France’s existing stake of roughly the same size, not after. That narrows the window for a political deal dramatically. With the formal IPO process effectively on hold, the entire timetable risks unravelling. The company itself has yet to publish the “intention to float” document, which investors had been expecting in the coming days.

Behind the stalemate lies a governance puzzle. Both Germany and France plan to reduce their holdings to around 30% each within two to three years of the listing, according to the original blueprint. But if Berlin cannot secure its initial 40% stake before the float, that sequence collapses. KNDS would then have to restructure the offering or push the IPO into the second half of 2026 – a delay that could test investor patience at a time when European defence spending is surging.

That surge is what makes the political impasse so jarring. KNDS booked €13.5 billion in new orders in 2025 alone, driven by NATO demand for battle tanks and artillery. The Leopard 2A8 production line is running flat out for several allied nations, while orders for CAESAR howitzers and the RCH 155 self-propelled artillery system continue to climb. The munitions segment grew nearly 25% to €612 million. To keep pace, KNDS has been expanding capacity across Europe and is even exploring the use of former automotive plants – a concrete sign of how deeply the defence industry is now reaching into civilian manufacturing.

One standout contract came from the UK, which ordered 72 of the RCH 155 howitzers for roughly £1 billion, with first deliveries scheduled for 2028. That deal alone underscores the breadth of demand: KNDS now supplies more than 40 armed forces around the world. The company’s “One KNDS” integration strategy, which aims to streamline the German and French subsidiaries, is expected to push profit margins even higher after the IPO – from the current 15% EBIT margin to an undetermined but improved level.

For now, though, the market is waiting on Berlin. KNDS is valued by analysts at around €20 billion, and its management is keen to tap public markets to finance further production expansion, R&D, and hiring. But until the German government resolves its internal disagreement over the timing and structure of the stake, the IPO remains suspended. Should the political logjam break soon, a summer listing in 2026 is still possible. If it does not, the float may slip into the second half, or be re-engineered entirely – leaving investors to watch the order book grow while the clock ticks on the capital markets debut.