KNDS Trims Renk Stake to €262m, Fires Up Belgian Ammo Line as Record €33bn Backlog Fuels Dual-Listing Drive

Defence group KNDS posts record 2025 operating profit, sells 5.8% RENK stake for €262M, and ramps up production as NATO spending soars, ahead of planned Frankfurt-Paris IPO.

The defence group KNDS is pulling two levers at once as it nears its Frankfurt-Paris IPO: cleaning up its balance sheet while accelerating production capacity. On the same day it unveiled a record operating profit for 2025, the company confirmed the sale of 5.8 million RENK Group AG shares via an accelerated bookbuild for institutional investors, raising around €262 million. The disposal, executed on 25 May 2026, represents roughly 5.8% of RENK’s share capital. KNDS retains about 10% of the German gearbox maker, subject to a 180-day lock-up, and stressed that the industrial partnership with RENK remains intact. Proceeds will strengthen the group’s capital structure ahead of the planned flotation.

The financial results released the following day underscore why investors are paying close attention. Revenue jumped 15.9% to €4.4 billion in 2025, driven by a 17.4% advance in Land Systems Germany to €2.5 billion and a 9.6% rise in Land Systems France to €1.3 billion. The fastest-growing segment was munitions, where sales surged 24.7% to €612 million. KNDS attributed the momentum to operational excellence and high-margin export contracts. Earnings before interest and taxes climbed to €661 million from €500 million a year earlier, pushing the EBIT margin from 13.2% to 15.0%. Headcount expanded 7.3% to around 11,000 employees, and further hiring is planned in 2026 to support the production ramp-up.

Capacity expansion is taking concrete shape. A new automated manufacturing line for 155-mm artillery ammunition has started operations in Belgium, allowing KNDS to serve surging demand from NATO countries and European end-users. The investment underscores a broader push to scale output without sacrificing profitability. The order book already reflects that urgency: KNDS secured €13.5 billion in new orders during 2025, lifting the total contract backlog from €23.5 billion to €33.1 billion at year-end. Among the major contracts were 222 BOXER RCT 30 vehicles, 84 RCH 155 self-propelled howitzers, and 200 additional PUMA infantry fighting vehicles. In total, more than 500 extra combat and support vehicles were ordered over the year.

The demand backdrop remains exceptionally supportive. In March 2026, NATO reported that European allies and Canada boosted defence spending by 20% in 2025 compared with 2024, and at the 2025 Hague summit allies committed to allocating 5% of GDP annually to core defence and security needs by 2035. The Stockholm International Peace Research Institute (SIPRI) added in April 2026 that global military spending continued to rise, with European outlays up 14% to $864 billion – directly benefiting the land systems, munitions, and armoured vehicle segments that form KNDS’s core business.

IPO preparations are proceeding on schedule. A dual listing in Frankfurt and Paris is planned for 2026, subject to market conditions, with Lazard acting as financial adviser. Tom Enders chairs the board, while Jean-Paul Alary serves as Group CEO. Berlin is reportedly preparing to take an initial 40% stake to safeguard national security interests and balance French influence, with a plan to reduce that holding to 30% within two to three years after the listing while maintaining equal voting rights relative to France. An independent investigation into legacy issues dating to 2013 has been completed, clearing the way for the audited 2025 annual accounts to be finalised.

For prospective investors, the central question is whether KNDS can sustain the margin improvement while churning out record volumes. The €33bn backlog and the new Belgian ammo line suggest the company is building the operational muscle to meet that challenge.