TKMS (TKMS) Q1 25/26 earnings summary

Executive summary

• Achieved inclusion in the MDAX index shortly after spin-off and stock market debut, now among Germany’s 90 largest listed companies.

• Order backlog reached a record €18.7 billion by end of December, up 13% year-over-year, with sales coverage at 8.6x.

• Revenue for Q1 25/26 was €545 million, stable year-over-year, with adjusted EBIT unchanged at €26 million and margin slightly improved to 4.8%.

• Key operational milestones included delivery of legacy submarine projects, ramp-up of 212CD submarines, MoUs with Canadian firms, and major new orders from Norway and Germany.

• Strong progress in Wismar shipyard and innovation in anti-torpedo and AI-enabled sonar technologies.

Financial highlights

• Q1 25/26 revenue was €545 million, down slightly from €550 million in Q1 24/25; adjusted EBIT stable at €26 million, margin 4.8%.

• Free cash flow positive at €33 million, down from €901 million due to prior year’s high advance payments.

• Gross margin improved to €95 million in Q1 25/26 from €83 million in Q1 24/25.

• Net income for Q1 25/26 was €4 million, compared to €24 million in Q1 24/25.

• Operating cash flow of €58 million; liquidity remains strong at nearly €1.5 billion.

Outlook and guidance

• Upgraded revenue guidance for FY 2025/26 to +2% to +5% growth (previously -1% to +2%).

• Adjusted EBIT margin expected above 6%, with consensus at 6.3%.

• Midterm guidance reaffirmed: ~10% sales CAGR, EBIT margin above 7%, CapEx and net debt targets unchanged.

• Cumulative free cash flow of over €400 million targeted over three years.

• Dividend payout ratio guidance at 30%-50% of consolidated net income, starting in 2027.