TKMS (TKMS) Q3 24/25 earnings summary

Executive summary

• Sales increased to €1,587 million for the nine months ended June 30, 2025, up from €1,414 million year-over-year, with net income rising to €75 million from €62 million.

• Major contracts signed include four additional submarines for the German-Norwegian program, a €1.2 billion research icebreaker, and modernization of six submarines for over €800 million.

• The business is preparing for a spin-off and IPO, with significant legal and organizational restructuring completed and further steps executed post-period end.

Financial highlights

• Gross margin improved to €274 million from €238 million year-over-year.

• Adjusted EBIT rose to €98 million from €63 million, reflecting operational improvements and special items.

• Cash and cash equivalents surged to €1,010 million, mainly due to advance payments for new contracts and capital contributions.

• Contract liabilities increased to €2,143 million, driven by new orders and project advances.

• Order backlog reached €18.6 billion, up from €11.6 billion year-over-year.

Outlook and guidance

• Future cost structure may change due to new service agreements and increased guarantee costs post-spin-off.

• The business expects higher costs for guarantees and services after separation from the parent group.

• German corporate tax rate reductions are anticipated, but the impact is still under assessment.