Steyr Motors Secures Major Defense Contract Fueling Growth Ambitions

Austria's Steyr Motors lands long-term Leopard 2 engine deal with KNDS, forecasts sales up to €95M for 2026, and expands via BUKH acquisition for USV and power gen markets.

A significant long-term framework agreement with European defense giant KNDS has been secured by Austrian specialty engine manufacturer Steyr Motors. The contract, extending through 2034, involves the supply of a minimum of 500 motor-generator units for the Leopard 2 main battle tank. This deal highlights the company's strategic role in Europe's expanding defense sector, which is undergoing substantial modernization.

Financial Outlook and Expansion Drive

The company's board is targeting a substantial revenue increase for the current fiscal year 2026, projecting sales between €75 million and €95 million. This represents a near-doubling from the preliminary figure of €48.5 million reported for 2025. Management also anticipates achieving an EBIT margin of at least 15 percent. This projected growth is supported by heightened activity in Asia, the MENA region, and North America.

Further momentum is expected from a new business segment focused on mobile power generation and expansion in the unmanned surface vessel (USV) market. The current order backlog stands at over €300 million, extending through the end of 2030. Beyond this, Steyr Motors has identified unbudgeted opportunities exceeding €500 million.

Portfolio Strengthened by Strategic Acquisition

In a parallel strategic move, Steyr Motors has acquired 100 percent of the shares in BUKH A/S. This mid-seven-figure acquisition significantly broadens the company's product range, extending its power output capabilities from 120-300 HP to 24-700 HP. Notably, approximately half of BUKH's revenue is derived from the defense industry, with a particular focus on the USV segment. The transaction is scheduled for completion in the first quarter of 2026, with the previous owner remaining with the company for a minimum of two years.

The new mobile power generation solutions are establishing a fresh revenue stream, with an expected cumulative turnover well above €100 million by 2030. Series production for mission-critical defense applications in this segment is set to commence in the second half of 2026.

Details of the KNDS Agreement

The core of the KNDS framework contract involves the delivery of compact 2-cylinder diesel engines with integrated generators. These units are critical for providing autonomous power aboard the Leopard 2 tank and the Leguan bridge-laying system. The order is a direct beneficiary of German military modernization programs, which are channeling significant investment into new equipment in response to the altered European security landscape.

Steyr Motors' systems are recognized for their compact design and durability, key requirements for increasingly digitized military platforms.

Asian Market Penetration Advances

The company's expansion in Asia is being solidified through a separate five-year framework agreement that includes a guaranteed minimum order volume of 750 additional engines by 2030. A joint venture established with partner Trysun has already commenced operations, marking a key step in the localization strategy for China and adjacent markets.

Steyr Motors will release its audited annual report for 2025 on March 6, 2026. CEO Julian Cassutti will subsequently present the results and provide a detailed outlook for the current year during an earnings call scheduled for 9:00 AM CET.