Renk Rewires Rheine for Defence Work as Order Book Hits €7.4 Billion

Renk plans to lift military work at Rheine from 5% to 30% of output by 2030, as H1 2026 orders rose 29.7% and its backlog hit a record €7.4 billion.

Renk is converting its Rheine plant into a site with a far heavier defence footprint. The company said last Monday that headcount there will climb from roughly 450 today to more than 500 by 2030, but the more consequential shift lies in the production mix: military work is set to rise from 5% of output to 30%.

That decision slots into a run of capacity announcements Renk has pushed out since late August. Chief operating officer Emmerich Schiller, cited by dpa-AFX, had already flagged that tank gearbox output would climb from under 600 units in 2023 to more than 800 this year and beyond 2,000 by 2030. Backing that ramp-up is an investment envelope of as much as €325 million through 2028, aimed at digitalisation and added capacity at Augsburg and Rheine. Far from a standalone gesture, the Rheine conversion is one piece of a multi-year programme through which Renk is deepening its own manufacturing base in the defence business.

Record Backlog, Record Quarter

The order book tells the story of a company running at full tilt. Intake in the first half of 2026 jumped 29.7% to roughly €1.2 billion, while adjusted EBIT advanced 10.1% to €98.2 million and the margin widened 100 basis points to 15.4%. The backlog itself reached a fresh peak of €7.4 billion.

The second quarter stood out: at €612.8 million, it marked the strongest single-quarter intake in Renk's history. Vehicle Mobility Solutions did the heavy lifting, lifting half-year orders 42.6% to €970.4 million. A follow-on U.S. Army order for the HMPT 800 gearbox under the THOR-IV contract — potentially worth up to $691 million in total — contributed, as did an expansion of the KF41 Lynx vehicle programme booked through a framework agreement with Rheinmetall, valued at around €270 million plus options for a further €63 million.

Not every unit kept pace. Marine & Industry saw half-year intake slip 9.9% to €164.4 million, though strong demand from frigate programmes drove a clear rebound in the second quarter. Slide Bearings felt the pinch of a soft industrial climate and higher U.S. tariffs: orders fell 3.2%, revenue 4.4%, and adjusted EBIT tumbled 28%.

On the strategic front, Renk is folding in British gearbox maker David Brown Defence, a specialist in naval and land defence technology. The binding agreement was signed more than a month ago, with Bloomberg putting the valuation at $200 million to $250 million. Completion is targeted for the fourth quarter of 2026, subject to regulatory clearances still outstanding. Since the deal was unveiled, the shares have shed about 5.5% — a sign that the market is currently giving less credit to the logic of the acquisitions than to the short-term mood across the defence sector.

Guidance Held, Shares Still Searching for a Floor

Management reaffirmed its 2026 outlook: revenue above €1.5 billion and adjusted EBIT of €255 million to €285 million. Alongside the operating news, Renk published a voting rights notification under Paragraph 40 (1) of the German Securities Trading Act on 9 September — the kind of filing that documents changes in reportable shareholder stakes and carries no fresh strategic signal on its own.

Investors, however, are looking elsewhere. Friday's close came in at €42.20, leaving the stock about 53% below its 52-week high of €90.20 set in early October and just 4.4% above its yearly low. Over 30 days the paper has lost 16%, a slide that the underlying figures do little to justify.

Part of the explanation sits with the wider sector. According to dpa-AFX, defence names were showing weakness again on Wednesday after a brief recovery, having drawn a two-day lift earlier in the week from analyst assessments. A similar pattern played out on Tuesday, when a short-lived bounce in Rheinmetall and Renk faded quickly and prices turned soft once more. The broader defence complex is labouring under valuation pressure even as Renk's own operating metrics have been posting records.

That gap between business momentum and share price performance has become the defining question for anyone holding the stock. The order book, the margin trajectory and the bolt-on acquisitions all point to an intact business model, while the price action of recent weeks looks driven more by political nerves and sector-wide swings in sentiment than by company-specific risk. Whether the two sides converge will hinge largely on whether the growth Renk has mapped out for itself actually shows up in the numbers as the year unfolds — with the €325 million investment commitment through 2028 standing as the most concrete marker on the calendar.