CSG 9M 2026 Trading Statement
This trading statement provides a review of key financial and operational developments for the nine months ended 30 September 2026 ("9M 2026" or the "Period").
Financial highlights
Michal Strnad, Chairman and CEO of CSG said:
“Overall, CSG has delivered a good performance for the first nine months of 2026. Revenue rose 6.1% year on year, and 9.5% in Defence Systems, and we continue to execute well on our backlog. Timing and business mix shaped the third quarter. Revenue we expected in Q3 will now be delivered in Q4. Demand remains robust, including across medium and large calibre ammunition and Land Systems. This gives us the confidence in our full-year revenue guidance.
“Order momentum continued globally through Q3. In Poland, the contracts worth more than €250 million combined that we signed with HSW and Dezamet have taken our partnership with Polska Grupa Zbrojeniowa to a strategic level. We will now also be playing a central role in a major programme to equip the Latvian Armed Forces, with our MORANA howitzer at its core, and we won bridge-laying vehicle orders across Europe, the Middle East and Southeast Asia. In the small-calibre segment, we were selected to supply police forces across all five Nordic countries.
“Importantly, we are successfully taking greater control of our supply chain. The acquisition of the Gnaschwitz site in Germany brings nitroglycerin production in-house and, with the Walsrode nitrocellulose site, anchors our German energetics platform. Full in-house production of energetics by the end of 2027 is our main driver of future margin growth. We’re on track to reach that goal, alongside production capacity of 1.1 million rounds by the same date.
“We are making good progress in growing our US presence. In the third quarter, we broke ground on the Future Artillery Complex in Iowa, established CSG Land Systems North America in Michigan, and announced Firecrest Aerospace’s jet engine production in Wisconsin. CSG also secured a U.S. Army framework contract for ammunition plant modernisation under a $4.2bn program. Together with our Ammo+ business, these steps strengthen our position as a long-term industrial partner in the US.
“We’re also positioning CSG for the future. In October, we entered the space market through becoming the largest shareholder in MDA Space, a leading listed global space technology company. This move into space is a natural extension of our defence and aerospace strengths, and over time it will enable us to provide customers with a wider range of capabilities.
“In 2026, CSG has been actively recalibrating its supply chain to service the increasing customer demand for extended range ammunition. Over the course of Q3, almost all of our in-house ammunition production was for extended range and we are uniquely placed to service this market due to our extensive in-house capacity and vertical integration across the energetics supply chain. During Q3, we saw a temporary and negative effect on our margins as we sold down our inventories of standard range ammunition at lower market prices. The shift to 100% in-house, vertically integrated extended range production will support our ability to achieve our medium-term operating EBIT margin target.”
“CSG continues to be very well positioned to benefit from the current and longer-term defence market dynamics in Europe and beyond and to meet the durable and deepening demand we are seeing for our solutions. We remain on track for a good full-year performance.”
Strategic and operational highlights
CSG made significant progress in the first nine months of 2026. The Group won major contracts across ammunition, vehicles and air defence, advanced its vertical integration in energetics, expanded its manufacturing footprint in Europe and the US, and built new positions in advanced technologies.
The Group also entered the space sector in October by taking a 9.5% stake in MDA Space, a leading global space technology company. The investment positions CSG strongly for the future, delivering on its strategic ambition to evolve into technologically advanced industries.
The third quarter built on the Group’s earlier momentum with the following developments:
M/L Ammunition vertical integration and own production ramp-up
Land Systems
Aerospace, Defence Electronics and Advanced Systems
Ammo+
Further strengthening of the Leadership Team
CSG continues to build a leadership team that matches its scale as a global defence group. The Group is attracting experienced executives from leading international defence companies, strengthening its management capabilities and supporting its global ambitions.
Building on the appointments announced at H1 2026, and alongside its investment in MDA Space, CSG has created a dedicated space team which currently comprises: Ladislav Stahl, a former NATO space intelligence and security advisor who previously led the Czech Republic's Satellite Centre, as Head of Space Strategy and Technology; Filip Kocián, a space industry investment and corporate development specialist, as Space Director, Corporate Development; and Cameron McKenzie, a senior Canadian aerospace and defence executive formerly with L3Harris WESCAM and CAE, as Senior Adviser, Canada.
Key Group financials
Financial Outlook
CSG reaffirms its full year Revenue guidance of between €7.4 to €7.6bn. This includes c.€300m of Revenue that has shifted from Q3 2026 into Q4 2026. Significant Land Systems order milestones fall in Q4, when the associated revenue will be recognised. As market demand has shifted towards long-range ammunition, the Group accelerated the sale of standard-range ammunition from inventory at lower market prices than historical periods. Reflecting this, together with anticipated strong growth into the year end in Land Systems, where margins are still building as programmes ramp up, the Group now expects FY 2026 Operating EBIT margin of approximately 21% (previously 24–25%).
Net working capital continued to build through the period. This reflects investment in critical components for long-range ammunition, which now makes up substantially all of the Group’s M/L ammunition production, together with a build in Land Systems inventories. With longer lead times on both, delivery timing moves into 2027, together with the related working capital unwind and cash release. As a result, the Group now expects net working capital below 35% of revenue for FY 2026 (previously below 20%).
Guidance for FY 2026 capex intensity remains at approximately 8.5% of revenue..
The Group's medium-term financial guidance is reaffirmed, with mid-term operating EBIT margin expected to be supported by completion of the shift toward 100% in-house extended range production with vertical integration strategy on track for completion by end of 2027.
Presentation Notice
A management presentation and Q&A for analysts and investors will be held today, 11 November 2026 via a live webcast and conference call beginning at 10:00 CET. A recording will be made available following the conclusion of the presentation. Registration for the webcast and conference call is available at the company's IR website, https://investors.csg.com/en. Participants who wish to ask questions during the presentation are encouraged to join via the conference call.
Enquiries
Investors and analysts:
Peter Russell, Head of Investor Relations
peter.russell@czechoslovakgroup.com
Media:
Tomáš Kotera, Director of Communications
tomas.kotera@csg.com
Andrej Čírtek, Spokesperson
andrej.cirtek@csg.com
+420 602 494 208
Barabino & Partners
CSG@barabino.co.uk
Notes
The financial information contained in this announcement is unaudited.
This announcement includes certain alternative performance measures (APMs) that are not defined or specified under International Financial Reporting Standards (IFRS) as adopted by the European Union. These measures are used by management to provide additional insight into the underlying performance of the business and to enhance comparability between reporting periods by adjusting for items that may distort the view of the Group's ongoing operational performance.
In 9M 2025, the PPA-related step-up on acquired assets was charged as those assets were consumed. These costs have been excluded from Operating EBIT and EBITDA, which increased both measures by €32m, to ensure a like-for-like comparison with 9M 2026
Cash Conversion means Operating EBITDA less Capex divided by Operating EBITDA.
Pre-tax Operating Cash Flow means Operating EBITDA, less change in Working Capital less Capex.
Adjusted net leverage = (Net debt – €731m invested in JVs/strategic stakes – €700m financing of sub-supplier capacity expansion) / LTM Operating EBITDA; reported 2.4x
9M and Q3 2025 Operating EBIT has been restated to reflect PPA-related depreciation charges, ensuring a like-for-like comparison with 9M and Q3 2026 respectively.
Group Performance Review
Group revenue and profit
Overall, the Group continued to demonstrate strong industrial and financial performance for the first nine months of the year. Group revenue for 9M 2026 was €4,761 million, up 6.1% year on year. Growth was primarily driven by ongoing demand for M&L ammunition and the continued ramp-up in Land Systems, with a further contribution from improving conditions in Ammo+. Revenue for the three months to 30 September 2026 was €1,510 million, down 11.7% year on year. This reflects a mix shift toward Land Systems and long-range ammunition in M/L Ammo, both of which have longer lead times, resulting in a shift of revenue into Q4 2026 and into 2027.
9M Operating EBIT was €1,102 million, with margin of 23.1%. Margin reflects the evolving business mix, alongside investment in Ammo+ to support the recovery in US commercial demand. These factors are offset by increasing efficiency and vertical integration in M/L Ammunition, a higher-margin mix from long-range ammunition, and operating leverage. Operating EBIT for the three months to 30 September 2026 was €317 million. In addition to the accelerated sale of standard-range ammunition from inventory in Q3 2026, Land Systems relative contribution continues to increase, and margins in this business are still building as programmes ramp up.
Order intake, backlog and visibility
The Group monitors backlog and pipeline as key indicators of future revenue visibility. The record order backlog was €18bn at 30 September 2026 (Dec 2025: €15bn), with approximately €0.9bn in new orders and €1.5bn recognised as revenue in the quarter. Pipeline under negotiation was €29bn, for a total opportunity of €47bn, providing strong multi-year revenue visibility and a clear view of future industrial activity.
The Land Systems business accounted for 57% of the Group's total backlog, followed by M&L Ammunition (32%), Ammo+ (8.5%), Aerospace & Defence Electronics and Advanced Systems (2.5%), confirming CSG's transformation beyond ammunition.
The Group categorises backlog orders as orders from signed and effective contracts, long-term framework agreements and contracts that are not yet fully finalised and effective but based on previous experience and the nature of negotiation, are counted towards forecasts as nearly certain. The Group's multistage backlog, comprising fixed (signed and effective), frame (long-term framework agreements for which the specific conditions of fulfilment are to be negotiated at later stages), and soft backlog (contracts that are not yet fully finalised and effective but based on previous experience and the nature of negotiations), provides high revenue visibility, with historically strong conversion rates from soft to frame and fixed backlog, underscoring the reliability of backlog as an indicator of future revenue.
Pipeline projects include projects in various stages of negotiation deemed reasonably achievable based on previous experience in the market and with customers.
Contract wins and order momentum
In the first half of 2026, CSG secured a c.$2.5 billion air defence contract and a $300 million-plus armoured vehicle order in Southeast Asia, around €550 million of large-calibre ammunition contracts with European customers, and c.$100 million of US law enforcement contracts, led by the FBI. The third quarter added further orders across Europe and international markets, broadening the Group's customer base:
These awards reflect the Group's growing ability to compete across a broad product spectrum, from ammunition and components to vehicles and engineering systems, and confirm its evolution into a more diversified global defence group, with a strengthening position among NATO governments, European partners and customers internationally.
Strategic acquisitions, joint ventures and investments
CSG's M&A and partnership agenda has been active throughout 9M 2026. In the first half, this included stakes in Hirtenberger Defence Systems and 4iG, the acquisition of DOMAR MS in Poland, and new joint ventures with EURENCO, FNSS and Reunert, as well as in Greece and Azerbaijan. In the third quarter, the emphasis remained on transactions that reinforce vertical integration, expand production capacity, strengthen supply-chain resilience and deepen the Group's footprint in key defence markets:
Segment Performance Review
The Group reports two core business segments: CSG Defence Systems and CSG Ammo+. Defence Systems brings together the Group's activities in military land systems, medium and large-calibre ammunition and related defence technologies. CSG Ammo+ represents the Group's global small-calibre ammunition platform.
Defence Systems
Defence Systems revenue was €3,793 million in 9M 2026, up 9.5% year on year. It comprised 80% of Group revenue. Operating EBIT was €1,056 million, resulting in a margin of 27.9%. Execution remains the primary operational focus: order intake remains good, with continued effective management of the supply chain, logistics, and export licence timing.
Vertical integration remains central to margin development in M/L Ammunition. The Group strengthened its energetics platform in the third quarter with the acquisition of the 57-hectare Gnaschwitz site in Saxony, Germany. An initial investment of more than €100 million will establish production of nitroglycerin, ammunition and components. Together with the MSM Walsrode nitrocellulose site, which remains on track for the end of 2027, Gnaschwitz forms the cornerstone of CSG’s German energetics base, serving both M/L Ammunition and Ammo+ as well as external customers. Elsewhere, Lavrio in Greece is already producing 155mm ammunition, with base bleed production beginning this year and TNT output targeted for the end of 2027. The EURENCO joint venture in Slovakia is set to start producing bi-modular charges in Q2 2028. The Group remains on track for fully in-house production of propellants and energetics by the end of 2027.
As these facilities come online, the contribution from recommissioning has fallen and will be at negligible levels by mid-term, as expected. The Group’s mid-term targets don’t depend on recommissioning. The product mix has continued to shift heavily toward long-range, with substantially all production in Q3 focused on extended range production and completion of the recalibration of production lines to focus on extended range production.
Market demand and supply constraints across energetics, including bi-modular charges, continue to drive pricing. Long-range ammunition pricing remains stable. Demand for standard-range ammunition has moderated compared with previous quarters, and the Group responded by selling standard-range rounds from inventory, keeping production focused on long-range.
Land Systems is a major growth engine for the Group. It now accounts for 57% of the order backlog, up from 46% at the half year. Operating EBIT margin was approximately 15.5%, still weighted toward the production phase. Nevertheless, production capacity is running slightly ahead of plan and passed 1,500 vehicles at the end of the third quarter, about half of the 3,000-unit annual ambition set out at IPO. Sizeable first-half wins were followed by further order intake across several products and markets in the third quarter. This included a major MORANA-led programme in Latvia, chassis contracts in Poland that took the PGZ partnership to a strategic level, and bridge-laying vehicle orders across Europe, the Middle East and Southeast Asia. The US is a growing focus. Through CSG Land Systems North America in Michigan, the Group expects to build its position in self-propelled artillery and high-mobility tactical vehicles as part of a broader plan to localise production in the US.
CSG continued to expand its capabilities across propulsion, unmanned systems, counter-UAS, autonomy, radar and systems integration. Building on first-half partnerships with Ukrainian Armor and PGZ, the Group strengthened its propulsion base in the third quarter. Jet engine production for unmanned aerial systems, including target and loitering drones, will come from Firecrest Aerospace, a new US joint venture in Wisconsin. Together with a companion technology centre in the Czech Republic, this gives CSG propulsion capability on both sides of the Atlantic. Several US tenders are underway, and US revenue is expected from 2027. The Group also added missile interceptor, counter-drone and hypersonic technology through a strategic minority stake in North Vector Dynamics in Canada.
In October, the Group added autonomy and alternative navigation for unmanned vehicles through a cooperation agreement with Bavovna, and an autonomous counter-drone system through the SwarmShot project with Mossberg and Palladyne AI.
CSG also entered the space sector in October, becoming the largest shareholder in MDA Space with a 9.5% stake. Space is increasingly central to security, from communications and navigation to Earth observation, which makes it a natural extension of the Group’s defence and aerospace capabilities.
Ammo+
Ammo+ revenue was €971 million in 9M 2026, or 20% of Group revenue. Operating EBIT was €79 million, with a margin of 8.1%. After market weakness into the first quarter of 2026, renewed US commercial demand remained strong through the end of the nine-month period, despite inflation concerns, with run-rate volumes close to peak levels. Investment in workforce and production capacity, and copper price volatility weighed slightly on profitability. However, robust demand enabled further pricing progression over the period, underpinning margin.
As the largest small-calibre ammunition producer in the Western world, the Group is broadening its customer base beyond the US commercial market. Following the FBI rifle ammunition award in the first half, Federal was selected in the third quarter to supply duty and training ammunition to police forces across all five Nordic countries. Ammo+ will also benefit from the Gnaschwitz site, improving supply security and cost control for critical inputs.
Segment Revenue
Defence Systems Revenue by subsegment
Segment Operating EBIT
Revenues by geography
CSG is becoming a more diversified global defence group, expanding across products, customers and geographies. The Group maintains a strong presence within Europe and NATO, and approximately 69% of the Group's revenue was derived from NATO countries in 9M 2026, underscoring the Group's positioning within NATO-aligned defence markets. Ukraine's share of Group revenue declined to 17% as CSG's growth expands in other markets, including the United States and Southeast Asia. For the nine months to 30 September 2026, Europe excluding Ukraine accounted for 50% of Group revenue, the United States 19% and Ukraine 17%.
* Includes purchases intended for the Ukrainian end-market paid for by another nation or party.
Financial Review
Raw materials and consumables items include consumed materials, movement in stock of products and work in progress, purchase costs of sold goods, change in allowance for inventory. External costs item includes administrative costs and other external costs, services and supply relating to production, transport and travel expenses, cost of energy, rental, repairs and maintenance.
Cost structure
Raw material and consumables costs were €2,526 million in 9M 2026, up 7.1% year on year, primarily reflecting higher sales volumes in line with revenue growth, as well as input costs for copper, propellants and other materials used in ammunition production. External costs were €473 million, up 29.1% year on year, driven by the level of operational activity and production and delivery volumes in the period. Employee benefits expense was €509 million, reflecting continued payroll discipline and efficiencies gained through integration. Depreciation and amortisation was €119 million.
Cash Flow and Net Working Capital
Pre-tax Operating Cash Flow was €(200) million in 9M 2026, with cash flow positive in Q3. Net working capital was €2,949 million (42.0% of LTM revenue). Consistent with the pattern described at Q1 and H1 2026, net working capital reflects pre-stocking of key components, primarily within the M/L ammunition segment, through both direct inventory purchases and advances to suppliers. CSG also provided material advances to Tatra Trucks to secure chassis supply for the Land Systems segment. A seasonal unwind of net working capital is expected in Q4 2026, when the majority of deliveries and corresponding cash release are concentrated.
Capital expenditure
Capital expenditure amounted to €255 million. Capex intensity (capex as a proportion of revenue) was 5.3%. Investments continued to support the Group's strategy to modernise infrastructure, scale up production capacity and invest in technological upgrades that will sustain long-term operational competitiveness.
Tax and interest
Income tax expense was €218 million (9M 2025: €182million), primarily reflecting the change in profit before tax. Net finance costs were €176 million.
Capital structure and liquidity
Consistent with its long-term strategy, CSG has deployed capital into joint ventures and strategic stakes to broaden its capabilities and supply base, for total consideration of €731m.
In addition, during Q3 2026 CSG has extended financing to key sub-suppliers in order to support them in expanding capacity of long lead time components necessary to support the Group’s growth. The total value of financing extended has been €700m. This is a temporary move designed to ensure that the markets can accelerate in line with CSG’s ambitions.
Reflecting these movements, Net Debt to LTM Operating EBITDA has increased to 2.4x. Without the investments in joint ventures and strategic stakes and financing to extend key sub-supplier capacity, Net Debt to LTM Operating EBITDA would be approximately 1.6x.
In July, CSG refinanced its senior facilities. The new facility totals €3,062 million, with the drawn amount unchanged at approximately €1.7 billion. Interest cost is reduced by 125–150bps, maturity is extended to six years, and two syndicated facilities are merged into one, with terms moving towards unsecured investment-grade.
Debt structure of the Group
Group Financial Statements
Consolidated Statement of Profit and Loss (1 Jul – 30 Sep 2026)
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flow (as defined by Group)
Consolidated Statement of Cash Flow (as derived from IFRS)
Alternative performance measures – reconciliations
Adjusted Operating EBIT and EBITDA
PPA adjustment relates to Q3 2025, 9M 2025 and FY 2025 only.
Adjusted Net Debt and Adjusted Net Leverage
Disclaimer
This communication contains information that qualifies as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
This announcement may include forward-looking statements, which are based on CSG's current expectations and projections about future events. Forward-looking statements can be identified by the fact that they do not relate only to historical or current facts and sometimes use words such as 'may', 'will', 'seek', 'continue', 'aim', 'anticipate', 'target', 'outlook', 'guide', 'guidance', 'projected', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe', 'achieve' or other words of similar meaning. By their nature, forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors because they relate to events and depend on circumstances that will occur in the future whether or not outside the control of CSG. Such factors may cause actual results, performance or developments to differ materially from those expressed or implied by such forward-looking statements. Accordingly, CSG cannot give any assurance that forward-looking statements will prove correct and no undue reliance should be placed on any forward-looking statements. Such statements should be regarded as indicative and illustrative only, and CSG does not provide any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. Forward-looking statements speak only as at the date at which they are made. CSG expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statements contained in this announcement to reflect any change in its expectations or any change in events, conditions or circumstances on which such statements are based unless required to do so by applicable law.
CSG's FY2026 profit forecast reflects the forward-looking expectations of CSG which is based on a number of assumptions and estimates about future events and actions, including management's assessment of opportunities and risks. Forecasts are inherently uncertain because of events or combinations of events that cannot reasonably be foreseen including the actions of government, individuals, third parties and competitors and the data and assumptions used by CSG in calculating the FY2026 profit forecast are subject to change as a result of uncertainties due to the operational, economic, financial, accounting, competitive, regulatory and tax environments, among others, or as a result of other factors of which CSG is unaware. Should one or more of these assumptions prove to be inappropriate or incorrect, CSG's results could materially deviate from the FY2026 profit forecast. Additionally, the materialisation of certain risks could have an impact on CSG's operations, financial position, results or outlook and thus jeopardise the FY2026 profit forecast. CSG makes no undertaking and gives no assurance as to the achievement of the FY2026 profit forecast. Investors should treat this information with caution and should not place undue reliance on the FY2026 profit forecast. Operations carved out of CSG prior to the IPO are excluded from 2025 figures to provide a like-for-like comparison with FY25 current operations.
CSG's ability to achieve financial objectives is inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond CSG's control, and upon assumptions with respect to future business decisions that are subject to change. As a result, CSG's actual results may vary from these financial objectives, and those variations may be material.
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