KNDS Overcomes Qatar Compliance Hurdle as €33bn Backlog and Profit Jump Bolster IPO Ambitions
Published on 05/28/2026 at 12:53 | Redaktion boerse-global.de
The path to a public listing for the German-French defence heavyweight KNDS has narrowed considerably after the company cleared a long-running compliance issue that had threatened to delay the process. An independent investigation into a 2013 transaction with Qatar’s armed forces has advanced far enough to allow the finalisation of audited financial statements, removing a critical condition for the prospectus. With that box ticked, the double listing in Frankfurt and Paris is now firmly on track for 2026.
Operationally, the manufacturer of the Leopard 2 tank and Caesar howitzer delivered a performance that strengthens its equity story. Revenue for the 2025 financial year climbed 15.9% to €4.4bn, while earnings before interest and taxes jumped to €661m from €500m a year earlier. That translated into an operating margin of 15.0%, up from 13.2% in 2024, driven by operational improvements and high-margin export contracts. The group’s shift towards integrated system solutions — bundling munitions, maintenance and platforms into long-term deals — is proving a profitable strategy and positions KNDS as a system architect for European land forces rather than a mere equipment supplier.
The order book tells a similar story of accelerating demand. Backlog surged to €33.1bn at the end of 2025, compared with €23.5bn a year earlier, while order intake for the year reached €13.5bn. The Leopard 2A8 is the standout product, with firm orders now exceeding 300 units from customers including the Netherlands, the Czech Republic and Croatia. Segment data released alongside the results show Land Systems Germany posting €2.5bn in sales, up 17.4%, Land Systems France contributing €1.3bn (plus 9.6%), and the ammunition division growing 24.7% to €612m.
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That order mountain is forcing KNDS to rethink its industrial footprint. Chief executive Jean-Paul Alary has confirmed that the group is exploring “very significant” capacity expansions, including talks with external industries such as the automotive sector. Idle factory space at carmakers like Mercedes or VW could be repurposed for faster assembly of military vehicles, a pragmatic solution to the capacity crunch that many defence contractors now face. The workforce has already grown 7.3% to 11,000 employees in 2025, and further hiring is expected as production ramps up.
On the ownership front, the German government has decided to buy a 40% stake in KNDS at the time of the IPO, while Paris plans to reduce its current 50% holding to the same level. Both states intend to cut their stakes further to 30% within two to three years after listing. Crucially, Berlin and Paris will command equal voting rights regardless of their exact equity percentages, locking in a balance that protects influence over sensitive defence technologies and joint projects. The founding family of Krauss-Maffei Wegmann, which currently holds the other 50%, will exit entirely through the flotation.
The IPO is expected to value KNDS at around €20bn. Proceeds are earmarked for expanding production capacity and developing next-generation land combat systems, notably the Main Ground Combat System. The company has already bolted up its balance sheet by selling a 5.8% stake in the RENK Group for roughly €262m. With the compliance issue settled, profitability on the rise and a record backlog providing multi-year visibility, all the pieces are now falling into place for what will be one of Europe’s most closely watched defence listings. The next formal milestone is the publication of the IPO prospectus.
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