Czechoslovak Group reported sales in the CSG Ammo+ segment, which includes Vista Outdoor’s former Kinetic Group that was acquired in late 2024, fell 20.5 percent to €291 million ($338 mm) from €366 million a year ago. The decline was attributed to “challenging conditions” in the U.S. marketplace.

Operating profits in the segment slumped 68.5 percent to €13 million from €40 million a year ago.

Czechoslovak Group said in its statement about the CSG Ammo+ segment, “Q1 performance reflected challenging conditions in the US commercial channel, which persisted through most of the quarter. From late Q1, the company has observed a meaningful improvement in demand, accompanied by higher pricing. CSG has been significantly investing in its workforce and operational capacity to service that demand, resulting in temporary margin compression. Revenue and margin are expected to materially build as the year progresses. In law enforcement, the Group recently expanded the scope of its FBI ammunition supply relationship and is actively building 5.56mm production capacity to serve additional US defense and law enforcement demand.”

Company-wide, revenue of €1,544 million was up 13.8 percent year on year, driven by strong momentum across the Group’s core Defence Systems businesses. Defence Systems grew 26.5 percent.

Operating EBIT company-wide was up 8.7 percent to €372 million with a margin of 24.1 percent, in line with guidance. Defence Systems margin of 28.5 percent.

Management Commentary
Michal Strnad, chairman and CEO, CSG, said: “We’ve seen continued strong momentum in Q1, with revenue up 13.8 percent and robust demand across our markets. In Defence Systems, we’re converting a record backlog and winning business at pace. Our contract wins this past quarter span NATO Europe, North America and Southeast Asia, across vehicles, air defense systems and ammunition, evidence of a broadening customer base and an increasingly diversified offering.

“In Ammo+, from late Q1 the Group has observed a meaningful recovery in US commercial market conditions.

“We’re seeing a strong pick-up in volumes and have reinvested in an expanded workforce and production capacity to service that demand. Revenue and margin will build progressively through the year. Our broader North America strategy is taking shape as MSM North America executes a $635 million contract to design and build the US Army’s Future Artillery Complex in Iowa.

“We continue to invest in innovation, ensuring CSG remains at the forefront of fast-moving and emerging capabilities, whether in our core land systems and ammunition markets or in the advanced system adjacencies we’re increasingly focused on. Our small calibre counter-drone ammunition has completed live testing with armed forces and is being scaled for industrial production, while our turbojet engine program positions us well in the fast-growing UAV and missile propulsion market.

“We’re complementing organic investment with selective acquisitions and partnerships to extend our capabilities, enter new markets, and accelerate ramp-up. Steps toward in-house propellant production and our entry into Poland being recent examples.

“The structural drivers of demand for CSG’s solutions are durable and deepening. We enter the remainder of 2026 with confidence and reaffirm our full-year guidance.”

Financial Outlook
The company reaffirmed its FY 2026 guidance. The company continues to expect revenue in the range of €7.4 to €7.6 billion, operating EBIT margin of approximately 24–25 percent, capex intensity of approximately 8.5 percent of revenue, and net working capital below 20 percent of revenue. Revenue growth will be driven principally by the Group’s Land Systems and M&L Ammo units supported by improving conditions in US Ammo+. Margin will be supported by the benefits of vertical integration and operating leverage from ongoing production capacity ramp-up. Net debt to EBITDA is expected to be below 1.3x at year end. The Group’s medium-term financial guidance is also reaffirmed.

Image courtesy Kinetic Group