KNDS Puts Factory Firepower Ahead of IPO Frenzy as €33bn Backlog Tests Production Limits

Franco-German defense group KNDS scales artillery and tank output, posts 15.9% revenue growth, and targets dual Frankfurt-Paris listing as NATO spending surges.

KNDS is racing to scale up its manufacturing footprint before its shares hit the market, placing operational execution ahead of the usual pre-listing fanfare. The Franco-German defence group fired up a new automated line for 155mm artillery ammunition in Belgium in May 2026, while simultaneously delivering the first two Leopard 2A8 main battle tanks equipped with the Trophy active protection system to Norway. The message to investors is blunt: the order book is overflowing, and the company is determined to prove it can deliver.

The numbers underscore the urgency. Revenue climbed 15.9 percent in 2025 to €4.4bn, powered by a 24.7 percent surge in the munitions segment to €612m. Land Systems Germany contributed €2.5bn, up 17.4 percent, while Land Systems France added €1.3bn, a gain of 9.6 percent. Operating profit (EBIT) reached €661m, pushing the margin to 15.0 percent from 13.2 percent a year earlier — a sign that the capacity build-out has not yet eroded profitability.

Order intake hit a record €13.5bn in 2025, more than three times annual revenue. As a result, the total backlog swelled to €33.1bn, up sharply from €23.5bn at the end of 2024. Behind the headline figure lie specific bulk orders: more than 500 additional combat and support vehicles were booked during the year, including 222 Boxer RCT30s, 84 RCH155 wheeled howitzers, and 200 further Puma infantry fighting vehicles.

The Belgian ammunition line is part of a broader push to mechanise production. European armed forces are scrambling to replenish stocks of artillery shells, air-defence systems, and counter-drone equipment. KNDS is also integrating the Trophy system — developed through the EuroTrophy joint venture with Rafael and General Dynamics — on the Boxer armoured vehicle and the CV90 infantry fighting vehicle. The system is slated to become a NATO standard, with around 200 Leopard 2A8s earmarked for Germany and Norway and a further 200 units planned for the Netherlands, Czechia, Lithuania, and Croatia.

The macro backdrop remains supportive. NATO reported in March 2026 that European allies and Canada increased defence spending by 20 percent in 2025. At the Den Haag summit, allies committed to allocating 5 percent of GDP annually to core defence and security needs by 2035. Separately, the Stockholm International Peace Research Institute (SIPRI) noted in April 2026 that global military expenditure continued to rise, with Europe posting a 14 percent increase to $864bn. Elbit Systems underlined the demand by landing a $750m contract for PULS artillery systems from Greece — the kind of order that keeps NATO's supply chain under pressure.

KNDS confirmed that preparations for a dual listing in Frankfurt and Paris remain on track for 2026, subject to market conditions. The company sees the IPO as a way to gain capital-market visibility and secure financing for further growth. Meanwhile, headcount rose 7.3 percent to roughly 11,000 employees by end-2025, and additional hiring is planned this year to support the production ramp-up.

For investors, the equation is straightforward: the order pipeline is solid, the margin trajectory is improving, and the product line-up matches the prevailing threat environment. The open question is whether KNDS can scale its supply chain fast enough to turn a €33bn backlog into revenue without squeezing margins — and whether it can do so before the IPO window closes.