Colt CZ Group SE reported revenues in the first quarter ending March 31 in the U.S. fell 31.2 percent to CZK 1.65 billion ($79 mm). The decline reflected seasonality of orders in the military and law enforcement segment, a slight recovery of the commercial market, as well as a decline in revenues in the ammunition segment due to U.S. import tariffs and the subsequent shift of some deliveries to European markets.

Companywide, sales reached CZK 7.3 billion ($348 mm), representing a year-on-year increase of 32.7 percent. The gain reflected a combination of organic growth and the consolidation of the new energetics segment following the acquisition of Synthesia Nitrocellulose and Synthesia Power.

Adjusted EBITDA net of extraordinary items reached CZK 2.1 billion, up 72.1 percent year over year. The increase is related to strong profitability, primarily in the ammunition and energetics segments. Adjusted net profit after tax for Q1 2026 reached CZK 950.6 million, which is 73.9 percent higher than in the same period in 2025.

“The first quarter of 2026 confirmed the strength of our diversified business model and the relevance of the Group’s strategic direction. We achieved the best first-quarter results in our history, both in terms of revenues and profitability. In addition to the strong performance of the traditional firearms and ammunition segments, the new energetics segment also made a significant contribution to the results, becoming one of the key pillars of our future growth. For the remainder of the year, the successful completion of strategic tenders, continued emphasis on operational efficiency, and further strengthening of our position in both European and non-European markets will be key,” said Radek Musil, CEO of Colt CZ Group.

“The record results also come shortly after the successful completion of the dual listing on the Euronext Amsterdam, which strengthened our position among internationally publicly traded companies,” added Musil

Revenues and Geographic Breakdown
Compared with the results as of March 31, 2025, the Group’s revenues for the first three months of 2026 increased by 32.7 percent to CZK 7.3 billion. This result is a combination of organic growth in the original segments and consolidation of revenues from the energetics segment ollowing the acquisition of Synthesia Nitrocellulose and Synthesia Power. The increase in sales was recorded especially with the military and law enforcement customers. The continued strengthening of the Czech koruna against the USD and EUR also affected the revenues negatively.

Revenues generated in the Czech Republic in the first three months of 2026 increased by 96.7 percent to CZK 1.0 billion, mainly due to the consolidation of the new energetics segment from January 1, 2026. Revenues generated in the United States declined year-on-year by 31.2 percent to CZK 1.7 billion. The development in the USA was affected by several factors, primarily seasonality of orders in the military and law enforcement segment, a slight recovery of the commercial market, as well as a decline in revenues in the ammunition segment due to introduction of US import tariffs and the subsequent shift of some deliveries to European markets. Revenues generated in Canada for the first three months of 2026 amounted to CZK 906.7 million, representing a year-on-year increase of 349.2 percent thanks to a newly realized rifle supply contract for Canadian Army. Revenues generated in Europe (excluding the Czech Republic) increased year-on-year by 76.6 percent to CZK 3.2 billion in the first quarter of 2026 thanks to the company’s strong performance on the European market and the consolidation of the new energetics segment from January 1, 2026.

Revenues generated in Africa increased in the first quarter of 2026 by 11.3 percent to CZK 71.7 million due to new orders from both the firearms and ammunition segments. Revenues in Asia for the first three months of 2026 slightly declined by 11.7 percent to CZK 270.9 million due to seasonality of orders. Revenues for the Latin America region in the first three months of 2026 amounted to CZK 122.8 million, which is 18.0 percent lower year-on-year. Revenues from sales to other parts of the world reached CZK 19.6 million in the first quarter of 2026, down by 15.7 percent year-on-year.


Firearms Segment
The firearms segment includes the design, production, assembly and sale of firearms, tactical accessories and optical mounting solutions for the military and law enforcement, personal defense, hunting, sport shooting, and other commercial use. In the first three months of 2026, the number of sold firearms declined by 22.0 percent to 122,787 units, mainly due to seasonal effects in the military and law enforcement segment and changes in the sales mix structure. Despite the overall decline, the number of sold Colt Canada long firearms and CZ handguns in the USA increased. Sales on the U.S. commercial market recorded a slight increase for both key brands – Colt and CZ.

Despite the decline in sold firearm units, revenues from the firearms segment in the first quarter of 2026 amounted to CZK 3.5 billion, representing a year-on-year increase of 23.3 percent, primarily thanks to a favorable sales mix and new contracts in the military and law enforcement segment. In terms of profitability, the adjusted EBITDA margin in the firearms segment reached 14.6 percent in the first quarter of 2026.

Ammunition Segment
The ammunition segment includes the design, production and sale of small-caliber ammunition, including pistol and rifle ammunition for military and law enforcement, sport shooting and hunting. The production of shotgun shells complements the small-caliber ammunition product portfolio. The ammunition segment also includes the production and sale of grenades, other military material and ammunition manufacturing machinery, including its development. The ammunition segment includes revenues from the subsidiaries Sellier & Bellot, swissAA, and the relevant part of revenues of Colt CZ Defence Solutions. In the ammunition segment, the company achieved revenues of CZK 2.3 billion in the first quarter of 2026, representing a year-on-year decrease of 14.2 percent, primarily due to lower sales within the Czech ammunition initiative and negative foreign exchange developments. Despite the decline in revenues, the ammunition segment maintains strong profitability. The adjusted EBITDA margin amounted to 33.6 percent, exceeding the Group’s overall adjusted EBITDA margin by almost 5 percentage points.

Energetics Segment
The energetics segment includes the development, production and sale of energetic nitrocellulose used primarily for the production of propellants and propellant charges for ammunition, as well as industrial nitrocellulose, oxycellulose for medical use, and selected chemical products. The segment also includes the production and supply of energy for the industrial area in Semtín and Rybitví. The energetics segment generated revenues of CZK 1.5 billion in Q1 2026, representing an increase of 25.3 percent compared to the same period in 2025. As expected, the energetics segment reported strong profitability. Adjusted EBITDA reached CZK 803 million and the adjusted EBITDA margin amounted to 52.5 percent in the first quarter of 2026.

EBITDA and Adjusted EBITDA
The Group’s EBITDA (including extraordinary items) increased in the first three months of 2026 by 43.8 percent compared with the same period of 2025 to CZK 1.7 billion, thanks to the profitable ammunition segment and the consolidation of the energetics segment from January 1, 2026. The Group’s growing profitability was reflected in the EBITDA margin, which reached 23.7 percent in the first quarter of 2026 compared to 21.9 percent in the same period last year. Adjusted EBITDA for the first three months of 2026 reached CZK 2.1 billion, representing a year-on-year increase of 72.1 percent. The most significant extraordinary items were one-off expenses related to commodity hedging of Sellier & Bellot and expenses related to inventory revaluation of Synthesia Nitrocellulose. The adjusted EBITDA margin amounted to 28.5 percent in the first quarter of 2026 compared to 22.0 percent in the same period last year.

Depreciation and Impact of Purchase Price Allocation of Recent Acquisitions
Total depreciation and amortization in the first quarter of 2026 reached CZK 849.9 million, representing a year-on-year increase of 120.6 percent. Of this amount, the impact of purchase price allocation related to the acquisition of a 51 percent stake in Synthesia Nitrocellulose amounted to CZK 422 million and Sellier & Bellot amounted to CZK 150 million.

Profit (loss) before tax
The Group’s profit before tax increased year-on-year by 32.7 percent in the first three months of 2026 and reached CZK 917.1 million. Profit before tax in the first quarter of the year was influenced by several factors. Higher operating profitability and a positive result from financial operations had a positive effect. On the other hand, profit before tax was reduced by increased depreciation and amortization influenced by the purchase price allocation of the new acquisition.

Investments
The Group’s capital expenditures reached CZK 597.8 million in the first three months of 2026, representing a year-on-year increase of 121.5 percent. Capital expenditures represented an 8.2 percent share of total revenues for the reported period, which is slightly above the Group’s full-year guidance and is influenced by the distribution of capital expenditures across individual quarters. Almost 80 percent of the total CAPEX was directed to investments in the Czech Republic. More than 50 percent of capital expenditures were invested into the firearms segment, approximately one-third into the energetics segment, and approximately 15 percent into the ammunition segment.

2026 Guidance Confirmed
In the outlook for 2026, Colt CZ Group will continue to pursue significant contracts in the military and law enforcement segment, particularly within NATO and EU member states and in cooperation with the NATO Support and Procurement Agency (NSPA). At the same time, it is strengthening its position in other markets, especially in Asia. Successful tenders, timely execution of contracts, and the pace of recovery of the US commercial market will be key to achieving the outlook, while the company focuses on mitigating the impact of weaker demand and import tariffs through cost control and the launch of new products to the market. FX-rates developments of the USD and EUR may have a mildly negative impact on the Group’s performance.

A significant growth factor in 2026 will also be the new energetics segment. Thanks to its high profitability, the company expects this segment to account for approximately 16 percent of the Group’s total revenues and around one-third of adjusted EBITDA.

In view of the above-mentioned facts, the Group confirms its 2026 outlook within the originally communicated range.

Image courtesy Colt CZ