TKMS (TKMS) Q4 24/25 earnings summary

Executive summary

• Achieved record order intake, driven by major submarine contracts and strong demand for modernization services, marking the first year as an independent, publicly listed company with significant strategic progress.

• Revenue grew 9% year-over-year to EUR 2.2 billion, with adjusted EBIT up 55% to EUR 131 million and free cash flow up 53% to EUR 784 million.

• Joined the MDAX index, increasing market visibility and investor access.

• Major operational milestones included successful sea trials, new technology launches, delivery of submarines to Turkey, and ramp-up of the Wismar shipyard.

• Benefited from rising German defense spending and modernization, with a robust order backlog and long-term revenue visibility.

Financial highlights

• Order backlog reached EUR 18.2 billion as of September 2025, up 55% year-over-year.

• Adjusted EBIT margin improved to 6.0%, with net income at EUR 108 million and EPS at EUR 1.65.

• Gross margin increased by 8.1 percentage points to 17.6% year-over-year.

• Operating cash flow nearly doubled to EUR 948 million, supporting a strong liquidity position.

• Free cash flow reached EUR 784 million, supported by customer prepayments.

Outlook and guidance

• Reaffirmed midterm targets: 10% sales CAGR, adjusted EBIT margin above 7%, and CapEx gradually declining to 4% of revenue.

• Dividend payout ratio of 30%-50% of net income to begin for fiscal year 2025-2026, with first payment in 2027.

• For 2025-2026, expects moderate revenue growth between -1% and +2% and EBIT margin in the EUR 100-150 million range.

• Growth profile is back-end loaded, with significant ramp-up at Wismar expected to drive future sales.