CSG N.V. Bolsters Defense Portfolio with Strategic Stake Acquisition

European defense contractor CSG expands munitions portfolio with HDS stake, boosting vertical integration amid strong revenue growth and a record 15B euro order backlog.

European defense contractor CSG N.V. is continuing its expansion of production capabilities through a key strategic investment. The company has acquired a 49% stake in Hirtenberger Defence Systems (HDS), a move that secures critical expertise in mortar ammunition. This acquisition aligns with CSG's current growth phase, which is characterized by a substantial order backlog.

Financial Performance and Market Disconnect

From a fundamental perspective, the company's position is robust. For the recently concluded fiscal year 2025, CSG reported a revenue surge of nearly 72%, reaching 6.7 billion euros. The order book also hit a new record of 15 billion euros. However, this operational strength is not currently reflected in its stock performance. Since its January IPO at 25 euros per share, the equity has declined. With a recent closing price of 23.69 euros, the shares are down approximately 21% on a monthly view, trading near their all-time low.

Expanding Munitions Systems Expertise

The transaction with Hungary's 4iG Group enables CSG to integrate smoothbore mortar systems in 60mm, 81mm, and 120mm calibers into its product portfolio. HDS is considered a global leader in this segment for the development and supply of complete systems and associated ammunition. The partnership's scope extends beyond the Austrian market. Both parties are already evaluating a joint venture in Slovakia to consolidate international distribution activities and conduct joint assembly of selected products.

Driving Vertical Integration Strategy

The HDS investment is part of a broader corporate strategy. CSG is consistently advancing vertical integration within the ammunition supply chain, a direction previously demonstrated by last year's acquisition of a nitrocellulose plant in Germany. Despite the costs associated with expansion, management is maintaining a focus on leverage. Net debt stands at 3.0 billion euros, which represents a moderate ratio relative to operating earnings. For the current 2026 fiscal year, leadership is targeting total revenue in the range of 7.4 to 7.6 billion euros.