CSG N.V. (Group), the Amsterdam-based ammunition and defense industry manufacturer that acquired Vista Outdoors’ Kinetics Group in 2024 and was formerly known as Czechoslovak Group, released its 2025 annual report, noting that defense spending across NATO and partner countries continued to increase amid an increasingly volatile geopolitical environment. Demand for medium- and large-caliber ammunition, land systems, and aerospace and defense electronics remained markedly strong.

The ongoing conflict in Ukraine and the broader reassessment of collective defense within Europe reportedly drove sustained procurement activity for the company, including replenishing depleted stockpiles and entering multi-year framework agreements. Commitments by NATO members to materially increase defense expenditure over the coming decade reinforced the structural nature of this demand environment. Beyond Europe, heightened geopolitical tensions in the Asia Pacific and Middle East regions contributed to elevated defense budgets and modernization programs. At the same time, in the United States, demand in the commercial small-caliber ammunition (M/L) market remained resilient, underpinned by a strong domestic customer base and local manufacturing footprint.

Governments across Europe and other regions reportedly continued to prioritize supply chain security and domestic production capabilities. The Group said this supported investment in ammunition manufacturing capacity and vertically integrated defense platforms, areas where CSG maintains established industrial capabilities and long-term customer relationships.

Events in the Middle East
The Group reported that its direct exposure to countries in the Middle East is limited and not material to its overall operations. Based on information currently available, management said it does not expect developments involving Iran to have a material impact on the Group’s operations or financial position. The Group continues to monitor developments in the region and will assess any potential impacts as circumstances evolve.

Group Revenue and Profit Performance
Full-year 2025 revenues increased 71.7 percent on a like-for-like basis to €6.7 billion, driven by strong organic growth in the Defense Systems segment and the full period of contribution from the Kinetic Group acquisition (from the former Vista Outdoor business), as well as the inclusion of the.

The full-year revenue reportedly exceeded the €6.4 billion guidance issued at the time of the company’s IPO in January 2026 (see below for details). The year-over-year (y/y) growth was said to be mainly driven by strong demand across all major product lines, particularly medium and large caliber (M/L) ammunition, reflecting both the elevated geopolitical environment and the Group’s expanded production and delivery capabilities.

Adjusted Operating EBIT (earnings before interest and taxes) increased 60.7 percent y/y to €1.6 billion, with margins said to be “robust” at 24.1 percent of revenue, and reportedly in line with the guidance range stated at the time of the IPO. Margins benefited from scale effects in M/L ammunition and “disciplined cost control,” and were said to be partially offset by higher input costs and integration-related expenses.

Net Profit from Continuing Operations increased to €872 million in 2025, reflecting higher operating profit partially offset by increased financing costs.

Segment Summary
The Group reports two core business segments: CSG Defence Systems and CSG Ammo+. The company said this structure “reflects both the industrial logic of the portfolio and the way management allocates capital, drives operational performance and engages with customers.”

Segment Revenue

Defence Systems brings together the Group’s activities in military land systems, M/L ammunition and related defense technologies. It reportedly integrates traditional heavy industrial platforms with modern defense capabilities, operating primarily across European markets and serving NATO and allied customers.

Total revenue from Defence Systems increased significantly, up 55.3 percent y/y to €5.35 billion. This growth was said to be primarily driven by sustained demand for large-calibre artillery systems and ammunition linked to the conflict in Ukraine, including direct deliveries as well as sales to companies engaged in supplying Ukraine’s defense requirements, against the backdrop of broader NATO re-stocking and procurement activity.

Defence Systems SubSegments

CSG Ammo+ represents the Group’s global small caliber ammunition platform. The segment was materially strengthened by the acquisition of the Kinetic Group in 2024, “transforming the Group into a global leader in small caliber ammunition with significant scale in the United States.” The subsequent consolidation of Fiocchi has further streamlined the structure (see Strategic Acquisitions and Vertical Integration section below).

On a reported basis, Ammo+ revenue increased 189.4 percent year over year, reflecting the full-period contribution of the Kinetic acquisition. On a pro forma basis, revenue declined, reportedly driven by softer demand in commercial markets compared to the elevated levels seen in prior periods, particularly in the U.S. civilian market.

Segment Operating EBIT

Defence Systems Adjusted Operating EBIT grew slightly ahead of revenue, up 55.8 percent to €1.50 billion, reflecting “operating leverage across expanded production volumes, improved capacity utilization and the benefits of vertical integration and disciplined cost control.”

Ammo+ Adjusted Operating EBIT decreased as lower volumes reduced operating leverage and
the segment absorbed higher input costs, including copper, propellants and other raw materials, as well as the impact of tariffs on certain imports. In response, management reportedly introduced targeted pricing adjustments across selected product categories to mitigate margin pressure and better align realized prices with the current cost base.

Revenues by Geography
The Group said it maintains a strong presence in Europe and NATO, and approximately 65 percent of the Group’s revenues were derived from NATO countries in FY 2025, underscoring its positioning in NATO-aligned defense markets. The Group believes that the continued increases in defense spending across Europe and NATO member states further reinforce the outlook for its capabilities and strategic relevance in these regions.

Revenues by Geographic Region

Defense customers accounted for 80 percent of revenues, civil markets for 16 percent, and industrial non-defense for 4 percent.

Order Backlog and Visibility
The Group said it monitors backlog and pipeline as key indicators of future revenue visibility. Order backlog reached €15 billion at period-end (up 36 percent year-over-year), with a pipeline under negotiation of €27 billion, providing strong multi-year revenue visibility. The M/L Ammunition business accounted for the largest share of the Group’s total backlog (45 percent), followed by Land Systems (40 percent), Ammo+ (10 percent), Aerospace and  Defense Electronics (3 percent) and Advanced Systems (1 percent).


Pipeline Projects
Pipeline Projects reportedly include projects at various stages of negotiation, deemed reasonably achievable based on previous market and customer experience. The 2025 pipeline value includes ~€1 billion from the seven-year agreement with the Slovak Ministry of Defence for medium- and large-caliber ammunition.

During the fourth quarter of 2025, building on the contracts announced in the first nine months of the year, the Group secured several additional significant contracts that are expected to support future growth and reinforce its position in the defense and manufacturing sectors:

  • The Group’s Slovak subsidiary, ZVS Holding, secured a framework agreement with Slovakia’s Ministry of Defence in December 2025 to supply up to €58 billion worth of large and medium-caliber ammunition to Slovakia and other EU member states over seven years.
  • A contract valued at several hundred million U.S. dollars to supply small-caliber ammunition to the Ministry of Defence of a Southeast Asian state.
  • TATRA Defence signed a strategic contract with KNDS Deutschland to produce hulls for Leopard 2A8 main battle tanks.
  • TATRA Defence Slovakia was awarded a $1 billion+ production contract for Tatra vehicles for a Southeast Asian client.

Cost Structure
Raw material and consumables costs increased 41.0 percent y/y on a pro forma basis, to €3.71 billion, primarily driven by higher sales volumes in line with revenue growth and delivery activity, as well as increased costs for copper, propellants and other materials used in ammunition production. Tariff changes also had a modest impact on the overall increase. The ratio of raw materials and consumables to revenue increased marginally, evidencing efficient cost control and production yields despite macroeconomic pressures.

External costs increased 12.8 percent y/y on a pro forma basis to €602 million, driven by higher spending on production-related services and external supplies, consistent with increased operational activity and higher production and delivery volumes, especially in the defense and ammunition segments. External costs as a portion of the Group’s revenues reduced slightly year-on-year.

Employee benefits expense decreased by 0.2 percent year-on-year on a pro forma basis, supported by payroll discipline and integration-related efficiencies.

Depreciation & amortization expenses increased by 3.6 percent on a pro forma basis. This reflects the Group’s continued capital investment program in CSG Defence Systems, including the commissioning of new production lines, facility expansions, and automation projects to increase output across the segments. In addition, depreciation and amortization were affected by the acquisition of The Kinetic Group, completed in late 2024, which contributed toward amortization on the newly consolidated asset base in 2025. The increase further includes the impact of purchase price allocation (PPA) adjustments of €61.0m related to the acquisition (FY 2024 pro forma: €59.7m).

Adjusted Operating EBIT increased to €1.6 billion, up 7 percent y/y (+31.2 percent pro forma), with margin at 24.1 percent of revenue.

Income tax expense was €307 million (FY 2024: €210 million). The increase was primarily due to higher profit before tax and, to a lesser extent, to higher tax-deductible finance expense. Net finance costs increased by €252 million, primarily driven by higher interest expense resulting from higher debt levels. This includes the new financing raised for the acquisition of The Kinetic Group at the end of 2024, the additional debt obtained for the nitrocellulose business in Germany during 2025 and further borrowing to support the Group’s expansion and investment activities. In addition, financial expenses were affected by foreign exchange losses.

Net Profit from Continuing Operations increased to €872 million, up 5 percent year-over-year.

Cash Flow and Net Working Capital
Adjusted Operating cash flow was €61 million for 2025. Adjusted net working capital was €1.62 billion. The Group reported that Adjusted Net Working Capital as a proportion of LTM Revenue was 24.0 percent in 2025, in line with the guidance below 25 percent stated at the time of the IPO. The company said it deliberately increased working capital outflows earlier in the year to secure inventory needed to execute its order backlog, with a seasonal reversal in the fourth quarter as contracted deliveries were completed and working capital was released.

Capital Expenditure (CapEx)
CapEx amounted to €225 million in 2025. CapEx intensity (CapEx as a proportion of revenue) was 3.3 percent. Investments reportedly supported the Group’s strategy to modernize infrastructure, scale up production capacity, and invest in technological upgrades to sustain long-term operational competitiveness.

Within Defence Systems, CSG commissioned new filling capacity at Dubnica nad Váhom, Slovakia, and implemented automation upgrades at the Nováky facility in 2025, increasing large-caliber ammunition output. Additional investments in new production lines, facility expansions and automation initiatives across European operations will further increase output and efficiency.

Capital Structure and Liquidity
Net debt amounted to €3.00 billion at year-end, with Net Debt to LTM Adjusted Operating EBITDA of 1.7x, in line with the guidance below 1.8x communicated at the time of the IPO. This level of leverage reflects the Group’s strong cash generation during the year and disciplined capital expenditure.

On June 10, 2025, CSG issued CZK 10 billion notes due 2030, with a fixed rate of 5.75 percent p.a. These are traded on the Prague Stock Exchange. On June 25, 2025, CSG issued €1 billion of 5.250 percent senior secured notes due 2031 and $1 billion of 6.500 percent senior secured notes due 2031.

Liquidity reportedly remained “robust,” according to the Group, supported by solid operating cash flow and a diversified funding base. The Group continues to benefit from high cash conversion, driven by profitability and tight working capital control, providing flexibility to fund ongoing capacity expansion and selective strategic investments while maintaining a prudent balance sheet.

Strategic Acquisitions and Vertical Integration
In 2025, the Group said it continued to execute a focused M&A program designed to expand capacity, secure critical inputs and enter adjacent high-growth technologies. The emphasis remained on transactions that reinforce control over the value chain and strengthen the Group’s long-term competitive positioning.

  • In May 2025, CSG acquired the MSM Walsrode industrial Park and nitrocellulose production plant in Germany. The facility is being converted from industrial-grade to energetic-grade nitrocellulose production, a critical component of large-caliber ammunition. Management expects the conversion to deliver material cost efficiencies compared to outsourced supply, while reducing exposure to market bottlenecks. This project remains on track to be completed by the end of 2027 and will help underpin the medium-term margin.
  • CSG agreed to commit €50 million to establish Ellinika Pyromachika in Greece and reinstate TNT production at the Lavrio site. This investment strengthens the security of supply for explosives.
  • CSG also broadened its technological capabilities with the acquisition of AviaNera Technologies. This marked the launch of the Advanced Systems business segment, providing in-house R&D expertise in turbo jet and turbo fan engines for UAVs and missile platforms.
  • Additional targeted acquisitions during the year strengthened control over critical materials and advanced technologies. These included Must Solutions, focused on advanced propulsion systems for unmanned aerial vehicles, and Gama Ocel, a producer of armoured steel plates, enhancing upstream capabilities in protected vehicles. CSG also expanded its ammunition portfolio through the acquisition of ZVI Vsetín, thereby supporting the development of its medium-caliber offering.
  • CSG completed the acquisition of the remaining 30 percent stake in Fiocchi, consolidating full ownership of the Ammo+ platform, and substantially integrated The Kinetic Group following its November 2024 acquisition.

Outlook
Fiscal year 2026 and medium-term guidance reaffirmed.

 Strategic and Operational Highlights

  • Secured landmark contract awards across the year, culminating in Q4 with a seven-year framework agreement with the Slovak Ministry of Defence for up to €58bn of medium and large-caliber (M&L) ammunition and a $1bn+ contract to produce tactical vehicles for a Southeast Asian customer
  • Advanced vertical integration through the acquisitions of MSM Walsrode (nitrocellulose propellant), ZVI Vsetín (M&L ammunition), MUST Solutions (advanced propulsion systems for unmanned aerial vehicles) and GAMA OCEL (armored steel plates), alongside a new JV in Greece for the supply of TNT
  • Strengthened strategic partnerships, including a cooperation agreement with KNDS Deutschland for Leopard 2A8 main battle tank hull production, reinforcing CSG’s position within key European defense programs, and a new India JV to capitalize on procurement opportunities in this high-growth market.
  • Expanded production capacity, including licensed large-caliber ammunition production in Ukraine, automated 155mm filling lines in Slovakia and completion of a new manufacturing facility at Excalibur Army.
  • Successfully completed IPO and admission to Euronext Amsterdam, with fast-track inclusion in MSCI Standard and FTSE All-World indices.
  • Streamlined reporting into two core segments, CSG Defence Systems and CSG Ammo+, divesting 35+ non-core entities and launching the Advanced Systems division to focus on next-generation propulsion, missile and UAV technologies.

Michal Strnad, chairman and CEO of CSG, said that 2025 was a defining year for the Group.

“We delivered strong financial results in line or ahead of expectations set out at our IPO, while also executing at pace across the business. We secured major long-term contracts, expanded our production footprint and advanced our vertical integration strategy. At the same time, we undertook extensive preparation for becoming a public company, strengthening governance, reporting and capital structure. Building on that work, we successfully completed our listing on Euronext Amsterdam at the start of 2026, providing a strong platform for our next phase of growth,” he commented.

“We are well placed to capitalize on a strong demand environment driven by near-term geopolitical developments, multi-year procurement frameworks and structural defense budget increases across NATO and allied nations. Our record order backlog of €15bn provides strong multi-year visibility.

“Our focus remains on disciplined execution. We have built scale in core defense systems, expanded capacity and strengthened control over critical inputs. Our order backlog, enhanced capacity and disciplined balance sheet give supports our ability to deliver sustainable growth and drive continued efficiency improvements. We look to the remainder of the year and beyond with confidence.”

Image courtesy CSG N.V.

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