CSG Battles Back From Short-Seller Ambush With Production Data and Revenue Forecast

The Czechoslovak Group has been fighting a two-front war this spring — one on the battlefields where its ammunition ends up, and another in the financial markets where short sellers have been tearing into its stock. The Prague-based defence contractor, which listed on Euronext Amsterdam in early 2026, has watched its shares shed roughly a third of their value in the past month alone, landing at €17.45 and dangerously close to its 52-week low.

Management is now pushing back with a detailed operational update designed to separate fact from fiction. The company has reaffirmed its full-year revenue guidance of between €7.4 billion and €7.6 billion, with an operating margin holding steady at around 24 percent. Those targets, the board insists, remain firmly intact despite the market turbulence.

The €58 Billion Framework That Was Never a Backlog

Much of the investor confusion — and the short sellers' ammunition — centres on the massive Slovak munitions framework agreement announced in late 2025. The headline figure of €58 billion grabbed attention, but the company is now clarifying what that number actually means. It is a seven-year procurement roadmap, not a guaranteed order book. Participating states call off individual purchases as needs arise, which is standard practice in the defence industry.

To date, only about €1 billion of that framework has been converted into active pipeline orders. That gap between the eye-popping headline and the reality on the ground has fuelled much of the recent selling pressure. The company is also working to put its existing €14 billion order backlog on firmer footing, though short sellers continue to question whether those orders can be delivered on time and on budget.

Should investors sell immediately? Or is it worth buying CSG?

Production Capacity, Not Just Warehousing

A key criticism from the bear camp has been that CSG merely refurbishes or resells older ammunition stockpiles rather than manufacturing fresh rounds. The company is pushing back hard on that narrative. It produced roughly 630,000 rounds of medium- and large-calibre ammunition in-house last year, with manufacturing spread across facilities in Slovakia, Spain and Serbia.

For 2026, CSG plans to boost that output by about 20 percent. A new production line in Slovakia will add capacity for an extra 70,000 rounds annually. Further out, management is targeting total in-house production of over one million rounds. The company also pushed back on claims that it relies on a single assembly plant, pointing to a decentralised manufacturing footprint that includes sites in Greece and India alongside its core European operations.

NSPA Suspension and Balance Sheet Clean-Up

Questions have also swirled around the company's Spanish subsidiary FMG, which has been temporarily suspended from the NATO Support and Procurement Agency's tendering process. CSG stresses that the suspension was triggered by an internal investigation into an NSPA employee — not into FMG itself — and that existing contracts remain unaffected. The group says the measure has no material impact on shareholders.

On the balance sheet side, the company has moved to clear up lingering uncertainties. A three-digit million euro receivable from related parties has been settled in the first quarter. The group is also working to present a cleaner financial picture ahead of its first-quarter earnings release on May 20, when management has promised to provide concrete details on order call-offs, cash flow and the status of its global order book.

Analyst Confidence Holds Despite the Sell-Off

The transparency push appears to be gaining some traction. Shares climbed nearly 8 percent on Wednesday to €17.35, though they remain well below the IPO price and roughly 49 percent off their 52-week high. The stock has lost about 32 percent of its value over the past 30 days.

CSG at a turning point? This analysis reveals what investors need to know now.

J.P. Morgan has maintained its "Overweight" rating on the stock with a €40 price target, pointing to CSG's strong margins and its position as Europe's second-largest supplier of large-calibre ammunition. The longer-term tailwinds for the sector remain intact, the bank argues, particularly with NATO's Den Haag declaration calling for member states to spend 5 percent of GDP on defence. If alliance members follow through, the order flow for European defence contractors looks secure for years to come.

For now, all eyes are on May 20. That date will give investors their first real chance to judge whether the substance behind CSG's framework agreements matches the scale of its ambitions.

Ad

CSG Stock: New Analysis - 7 May

Fresh CSG information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

Read our updated CSG analysis...

en | NL0015073TS8 | CSG | boerse | 69286893 |