Czechoslovak Group (CSG) reported sales in its CSG Ammo+ segment, which includes the former Vista Outdoor Kinetic Group segment, slid 11.5 percent in the half, to €631 million ($723 million) from €713 million a year ago. Still, CSG said the segment’s performance improved sequentially versus the first quarter.

Operating profits in the segment slumped 26.7 percent in the half to €51 million from €70 million a year ago, although margin improved to 8.1 percent from 4.5 percent in the first quarter. In the first quarter, operating earnings in the segment fell  68.5 percent as sales decreased 20.5 percent.

The CSG includes the Kinetic Group portfolio (Federal Ammunition, Remington Ammunition, CCI, Speer, HEVI-Shot, and Alliant Powder) alongside European legacy brands like Fiocchi Munizioni, Baschieri & Pellagri, and Lyalvale Express. Kinetic Group was acquired in late 2024.

Highlights for CSG Ammo+ cited in the earnings release included:

  • Volumes and profitability in the U.S. commercial channel “have been recovering steadily since late Q1, with H1 exit run-rate meaningfully ahead of Q1. Investment made into workforce and production capacity to meet that demand.”
  • Awarded contracts with total value of c.$100 million from the FBI and other law enforcement agencies. The FBI rifle ammunition contract, which covers all four requested product categories, is one of the largest law enforcement contracts in The Kinetic Group’s history. Deliveries are expected to begin in the current year.
  • Signed an agreement enabling the U.S. army to use Federal’s patented Peak Alloy ammunition case technology across multiple cartridges and weapon systems.

Czechoslovak Group said about the CSG Ammo+ segment, “The segment benefited from improving demand and firmer pricing in the U.S. commercial channel through H1, alongside continued investment in workforce and production capacity. In law enforcement, the Group’s FBI ammunition supply relationship was further strengthened through the award of a $77 million rifle ammunition contract. The Group is the largest small-calibre ammunition producer in the Western world, and NATO certification of its US-produced brands was obtained in the first quarter of 2026, with certification of the full product portfolio to follow, which will support participation in European NATO small-calibre tenders.”

Company-wide, revenue of €3,251 million grew 17.2 percent year on year, driven by continued strong momentum across the Group’s core Defence Systems businesses. Defence Systems revenue were up 27.0 percent.

Operating EBIT company-wide increased 8.7 percent to €372 million with a margin of 24.1 percent, in line with guidance. Defence Systems margin of 28.5 percent. Net profit from continuing operations reached €572.3 million, up 84.8 percent.

For the second quarter, total revenue was €171 billion, up 20.3 percent. Operating EBIT grew 16.5  percent to €413 million. Net profit from continuing operations surged 94.2 percent to €272 million from €140 million a year ago.

Management Commentary
Michal Strnad, chairman and CEO of CSG, said: “We delivered another period of strong performance in H1 2026, with revenue up more than 17 percent year on year. Demand for our products remains robust and we have taken further strategic steps to launch new products and systems, deepen our vertical integration and expand our presence in key international markets.

“The launch of CSG Land Systems North America, the establishment of our Washington, D.C. office and the start of construction of the Future Artillery Complex programme in Iowa position us to significantly expand our presence in the world’s largest defence market and open a wider base of addressable revenue.

“We continued to strengthen our capabilities in advanced technologies, building on our position in air defence and propulsion for unmanned aerial systems. Our new US joint venture, Firecrest Aerospace will scale our drone and precision-strike propulsion offer to meet growing demand from US and allied customers. In addition, CSG’s strategic investment in North Vector Dynamics extends our capabilities in precision-guided missiles, counter-unmanned aerial systems, and next-generation hypersonic technologies.

“We also continued to strengthen our leadership team, welcoming experienced defence executives into senior roles across the Group. Our ability to attract talent of this calibre is a clear validation of the opportunity we see at CSG, and our position as a leading global defence group.

“The structural drivers of demand for CSG’s solutions remain durable and are deepening. We reaffirm our full-year guidance and look to the second half with confidence.

Financial Outlook
The Group reaffirmed its FY 2026 guidance. CSG continues to expect revenue in the range of €7.4 billion to €7.6 billion, Operating EBIT margin is projected between approximately 24 and 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+. Group margin is expected to reflect a higher mix contribution from Land Systems, while 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.

Operational Outlook
By year-end 2026, the Group expects its own production of large-caliber ammunition to reach approximately 850,000 rounds, up from 550,000 in 2025, driven by the working capital investments made to effectively secure critical components and accelerate output. An additional 400,000 rounds of recommissioning production is anticipated in the year. In 2026, long-range ammunition is expected to represent about 60 percent of total revenue from large-calibre ammunition. While the long-range segment requires greater investment in critical components it offers a higher margin opportunity.

Image courtesy Federal Ammunition/Czechoslovak Group