TKMS Management Hits the Road to Bridge the Gap Between Record Orders and Fading Share Price

TKMS management faces skeptical investors at roadshow as record €20.6B order book contrasts with 31% stock decline. Key test: convincing market cash flow issues are temporary.

The management of TKMS faces a sceptical audience next week as it embarks on a three-city roadshow to address a glaring disconnect: a record order book pushing €20.6 billion and a stock that has lost nearly a third of its value since January. The company will hold court in London on 22 June at the Deutsche Bank Defence Conference, followed by the Jefferies German & Swiss Corporate Conference in Baden-Baden two days later, with an additional stop in Milan.

The sharp share price decline reflects both company-specific headwinds and a broader sector rotation. TKMS closed on Friday at €71.10, down 4.3% on the day, joining a selloff that also hit Rheinmetall, Hensoldt and Renk with losses between 1.6% and 3.2%. Market participants have been taking profits on defence names after geopolitical tensions briefly eased. Since hitting a 52-week high of €102.90 in late January 2026, the stock has shed roughly 31%. The weekly loss alone came in at just under 6%.

Behind the technical damage lies a mixed financial picture. First-half results for the 2025/26 fiscal year showed revenue rising 10% to €1.17 billion and adjusted operating profit climbing 14% to €60 million, lifting the EBIT margin to 5.1%. The order backlog reached a record €20.6 billion as of 31 March, providing more than nine years of planning visibility. Yet free cash flow tumbled to minus €72 million, a swing driven by planned project outflows and an absence of customer advance payments — the same factors that had generated a large positive cash flow in the prior-year period. Whether investors accept that explanation will be the central test of the roadshow.

The company’s long-term growth story remains intact. TKMS, spun off from thyssenkrupp in October 2025, is a global leader in non-nuclear submarines and, through its Atlas Electronics subsidiary, supplies naval warfare systems. It is currently building two additional 212CD-class boats for Norway and is in talks with Canada and India over projects that could involve up to 18 further submarines. Any one of those wins would stretch an already record backlog.

For the current fiscal year, management has reiterated guidance for an adjusted EBIT margin above 6% on revenue growth of 2% to 5%. The medium-term target is to push the margin beyond 7% through better contract terms and improved resource utilisation.

Technically, the stock is approaching the €70 support level. The relative strength index stands at 37.6, edging towards oversold territory but not yet there. The 50-day moving average sits at €81.02, more than 12% above the current price, suggesting any recovery would need to overcome significant overhead resistance.

The next hard data point will come on 12 August with the quarterly report. Until then, the investor conferences in June will shape sentiment — and management will need to convince the room that a record backlog can eventually translate into stable cash flow.