KNDS Books €661m EBIT and £1bn UK Order as Dual-Listing Countdown Faces Ownership Puzzle

KNDS posts €661m EBIT and €13.5bn orders, but its summer IPO faces twin hurdles: a missing PwC audit over a 2013 Qatar tank deal and a low 20% free float due to state ownership.

The defence group KNDS capped a record 2025 with earnings before interest and tax of €661m, equivalent to a 15% margin, as new orders surged to €13.5bn and the order book swelled to €33.1bn. The momentum carried straight into May: on the 26th, the UK placed a roughly £1bn order for 72 RCH-155 howitzers, cementing KNDS’s role as a linchpin of NATO rearmament. Yet the company’s planned summer float in Frankfurt and Paris must navigate an unresolved audit and a politically charged ownership structure that could leave only one in five shares in free float.

Revenue climbed 15.9% to €4.4bn, driven by a 24.7% jump in munitions sales to €612m. The workforce expanded 7.3% to 11,000 employees, while the margin improvement from 13.2% to 15% was attributed to operational efficiencies and a richer product mix. To fund the production ramp-up of Leopard 2 tanks and Caesar howitzers, KNDS trimmed its stake in driveline specialist RENK, selling 5.8m shares for €262m. It retains just under 10% of RENK, locked up for 180 days.

The IPO, however, is hostage to two unrelated hurdles. The first is a missing audit sign-off. PwC has yet to certify the 2025 financial statements because of an internal probe by law firm Freshfields into a 2013 tank deal with Qatar valued at €1.89bn. The investigation has so far found no evidence of wrongdoing, but until the final report lands, there is no certified accounts — and without that, no prospectus. Management expects the audit to wrap up in May 2026.

If clearance arrives by the end of the month, the IPO window opens in June or July. Should PwC require more time, a September slot is the fallback.

The second obstacle is the intended ownership architecture. Berlin has decided to take a 40% stake via state-owned KfW, matching the French government’s existing 40% holding. That would leave just 20% for the public. Such a low free float threatens index inclusion and would cap daily trading volumes, a deterrent for institutional funds. Tom Enders, KNDS’s chairman, argues that the “state straitjacket” must be temporary. Both governments are committed to reducing their stakes to 30% each over three years, which would lift the free float to 40% — still modest but more palatable.

The pricing of the state’s entry is also under negotiation. The German government wants to pay the same price as IPO investors, effectively pegging its purchase to the issue price to avoid overpaying. JPMorgan and Lazard are advising on the listing, which is expected to value KNDS at €15bn to €20bn. The float will primarily allow the Wegmann family, long-time owner of Krauss-Maffei Wegmann, to exit.

Enders has warned that prolonged state control could also stymie the much-needed consolidation of Europe’s tank industry. For now, the immediate focus is on the PwC deadline and the delicate balance between national security and market appetite.