TKMS CEO Defends Capacity as 20 Billion Euro Order Backlog Grows, but Investors Focus on the Long Wait for Cash Flow
Published on 07/18/2026 at 13:32 | Redaktion boerse-global.de
The boss of ThyssenKrupp Marine Systems (TKMS) is pushing back against a persistent question that has dogged the German shipbuilder as its order book swells: can the yards actually deliver? Oliver Burkhard, in an interview with the Frankfurter Allgemeine Zeitung, rejected doubts about the company's ability to handle the flood of work, pointing to ongoing expansions at its Kiel and Wismar sites. For the Canadian submarine program alone, TKMS plans to create up to 1,500 new jobs.
"Of course we can manage it, otherwise we wouldn't take on such contracts in the first place," Burkhard told the paper. His remarks come as TKMS pursues two multi-billion-dollar projects simultaneously. In Canada, the group is the preferred bidder for up to twelve submarines under the CPSP program, a deal valued at roughly €12 billion that could ultimately be worth as much as $43.3 billion when all add-ons are included. The final contract is expected in the fourth quarter of 2027, with first deliveries not scheduled before 2033. Burkhard has also floated the idea of a production partnership with Spain's Navantia to share the manufacturing load. The Canadian project, which Germany and Norway helped secure against a rival bid from South Korea's Hanwha Ocean, was personally backed by Defence Minister Boris Pistorius, who highlighted an estimated C$86 billion boost to Canada's GDP and 650,000 jobs.
Closer to home, TKMS has locked in a concrete sub-contract with Sweden's Saab. On Friday, the Swedish defence firm was awarded an order worth around €787 million (8.7 billion Swedish kronor) to supply command-and-weapon systems and sensors for four new F128-class frigates. The frigate program, approved by the Bundestag's budget committee on July 8, replaces the earlier F126 project and carries a total price tag of roughly €6.3 billion. Deliveries of the MEKO A?200 DEU vessels are scheduled between 2029 and 2032, with options for four additional ships that would further expand the contract.
Should investors sell immediately? Or is it worth buying TKMS?
Another major prize lies in India. Reuters reported that TKMS expects a decision by the end of 2026 on "Project 75?I," a tender for six submarines valued at around €8 billion. The company is considered a front-runner. For Burkhard, the sheer volume of potential work has also prompted discussion about industrial synergies beyond traditional shipbuilding. In Canada, the group is exploring links with German space firm Isar Aerospace, whose launch services provider Maritime Launch Services is building a rocket pad in Nova Scotia — a collaboration some analysts see as a natural fit, though potential conflicts of interest have been noted.
Investors, however, have tempered their enthusiasm. The stock closed Friday at €81.00, up 0.75% on the day and still showing a year-to-date gain of 22.36%. Yet the shares sit 24% below their 52?week high of €106.58, reached in October 2025. The run-up around the Canada news in early July briefly pushed the price toward €100 before profit-taking set in. Market observers attribute the pullback partly to concerns over the reliability of political commitments, given the last-minute restructuring of the F126 program. Deutsche Bank maintains a €110 target, but the stock’s 30?day volatility hovers near 83%, reflecting the binary nature of the catalysts ahead. A bonus certificate on the shares, capped at €108 with a barrier at €50, offers a gross return of 34.6% through September 2027 — a sign that sophisticated investors are betting on continued turbulence rather than a smooth ride.
Burkhard’s bigger challenge may be the time lag between order and cash flow. The Canadian program’s first delivery is not expected before 2033, meaning TKMS will bear heavy upfront costs for years. The first-half free cash flow already turned negative because of those pre-delivery expenses. With a market capitalisation of €5.45 billion and an order backlog that could soon double to around €40 billion, the company is now valued less on its current earnings and more on its ability to execute. The next major data point comes on August 13, 2026, when TKMS reports third-quarter results. Investors will be watching the EBIT margin, which management aims to push above 7%, as well as any update on a potential state stake via KfW. For a shipbuilder navigating a sea of contracts, the tide has rarely been higher — or the wait longer.
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