KNDS Reports €661m Operating Profit and €33bn Backlog as Dual Frankfurt-Paris IPO Nears Final Hurdle

The proposed dual listing of KNDS in Frankfurt and Paris now turns on a single document: a signed audit opinion from PwC. Without it, the summer 2026 window for what could be one of Europe’s largest defence IPOs will close. The auditor has yet to certify the 2025 financial statements because of a compliance review into a €1.89bn Qatar contract from 2013, though that inquiry has cleared current and former employees of any wrongdoing.

The German-French armour group behind the Leopard 2 tank and Caesar howitzer published its full-year numbers on schedule, posting a 15.9% revenue advance to €4.4bn. Operating profit jumped to €661m from €500m a year earlier, lifting the EBIT margin to 15.0% from 13.2%. The munitions segment was the standout performer, with sales climbing 24.7% to €612m. Land Systems Germany contributed €2.5bn and Land Systems France €1.3bn. Headcount rose 7.3% to around 11,000.

Even more striking is the order book. It swelled from €23.5bn to €33.1bn, nearly doubling in two years as NATO allies accelerate rearmament programmes. That pipeline underpins a pre-IPO valuation that analysts put somewhere between €15bn and €20bn.

Yet the free-float structure will be unusually tight. The German government, via KfW, plans to acquire a 40% stake, matching the French state’s existing holding. That leaves just 20% of shares for public trading at listing. Both governments intend to trim their positions to 30% each over the next two to three years, which would expand the free float to about 40% – a level more palatable for index inclusion and institutional investors. For now, liquidity concerns may weigh on the stock’s appeal.

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

In a final pre-IPO balance-sheet tidying move, KNDS sold 5.8 million shares in gearbox specialist Renk on May 19 via an accelerated bookbuild at €44.95 apiece, netting €269m. The disposal cut its stake in Renk to roughly 10%. A special dividend of up to €2bn for existing shareholders is also under discussion.

Management has locked in governance ahead of the listing. Christian Schulz, formerly CFO of Renk Group, joined the board to chair the audit committee, bringing IPO and defence-sector expertise. The external probe into the Qatar contract, conducted by law firm Freshfields, found no evidence of criminal misconduct, removing what was seen as a key compliance risk. Lazard Inc. has been appointed as financial adviser.

The board is targeting a launch in June or July 2026, subject to market conditions. PwC must deliver its sign-off by the end of May to keep that timetable on track; if it slips, September becomes the fallback. KNDS insists preparations remain “fully in line with the original schedule,” but the waiting game is on.