Renk’s Record €6.9 Billion Backlog Can’t Break the Stock’s 42% Slide as AGM Approaches

Despite record orders and new product launches, Renk's stock has halved. Investors await AGM for proof that defence supercycle translates to profits.

The disconnect at Renk is growing starker by the week. While the Augsburg-based gearbox specialist keeps stacking up operational milestones — a record order backlog, a string of product launches, and double-digit profit growth — its stock has been cut nearly in half from last autumn’s peak. All eyes are now on next Tuesday’s virtual annual general meeting, where management will try to convince shareholders that the defence supercycle is not just filling the order book but is genuinely profitable.

A landmark order book — and a tricky AGM vote

Renk enters the AGM on June 10 with a formidable war chest. After booking €582.3 million in new orders in the first quarter — the strongest start to a year in the company’s history — the total backlog swelled to €6.9 billion. That is up from the €6.68 billion recorded earlier, reflecting an unbroken demand trajectory as NATO countries bulk up their arsenals. Germany alone is allocating more than €108 billion for defence this year.

On the agenda, shareholders will vote on a dividend of €0.58 per share. But the more consequential items involve governance and structure: supervisory board chairman Claus von Hermann is handing over to former Airbus executive Klaus Richter, a move analysts see as a further professionalisation of Renk’s oversight. Also up for approval is a domination and profit-transfer agreement with wholly owned subsidiary Renk GmbH, which will streamline internal capital flows. That structural clean-up, combined with the leadership change, signals that Renk is preparing for a more institutional phase — even as its stock struggles to regain credibility.

New products, new segments, same scepticism

Renk is not resting on its orders. At the Eurosatory defence show in Paris starting June 15, the company will showcase a full?size unmanned ground vehicle developed with Finnish defence group Patria, integrating Patria’s modular technology with Renk’s HSWL 076 transmission. Separately, Renk is entering a completely new market with the ESM 280, its first gearbox for medium-to-heavy armoured wheeled vehicles. The Augsburg plant will also mark the production of the 4,000th HSWL 354 gearbox this month — a testament to the sheer volume of legacy demand.

Yet none of this has reignited investor appetite. The stock bounced from a 52?week low of €42.12 in mid?May, recouping about 21% to trade at €51.23 — only to bump into its 50?day moving average at €51.48. The 200?day line sits at €58.85, still 13% above the current price. That gap underscores how much confidence has evaporated since October, when the shares hit €88.73.

The margin question and the weight of big sellers

Fundamentally, Renk’s outlook remains robust. Management targets revenue of more than €1.5 billion this year, and adjusted operating profit rose 10% to €42.4 million in the first quarter. The defence business is expected to account for roughly 90% of total sales by 2030. But profitability is the missing piece: the market wants evidence that Renk can scale its record orders into sustainable margins, not just volume.

One of the main drags on the stock has been the gradual unwinding of post?IPO euphoria, exacerbated by a stake sale from major shareholder KNDS. The relative strength index sits at a neutral 49.6, suggesting the stock is neither overbought nor oversold — simply waiting for a catalyst.

That catalyst could come from the AGM if management delivers a convincing margin roadmap. The next concrete test arrives in August, when half?year results will reveal whether the cost base is keeping pace with the order intake. Until then, Renk remains a contradiction: a company that has never been busier, but whose stock has never been cheaper relative to the story it tells.