Q3 2026 TKMS AG & Co KgaA Earnings Call Transcript
Key Points
- Tkms Ag & Co KGaA (XTER:TKMS) delivered three submarines in the first nine months, demonstrating strong execution and on-time delivery.
- The company secured a major contract for four MECO A200 frigates from the German Navy, with an option for four more, significantly boosting its order backlog to over €25 billion.
- Tkms Ag & Co KGaA (XTER:TKMS) was selected as the preferred bidder for the Canadian Patrol Submarine Program, a landmark opportunity for up to 12 submarines.
- The company raised its full-year guidance for the second time, now expecting sales growth of 10-12% and an adjusted EBIT margin of up to 6.5%.
- The submarine segment showed strong profitability improvement, with Q3 EBIT quadrupling to €46 million and a margin of 6.4%, driven by better cost control and a shift to more profitable new contracts.
- Tkms Ag & Co KGaA (XTER:TKMS) reported a negative free cash flow for the first nine months, though it expects a positive full-year figure due to milestone payments.
- The company faces ongoing execution risks with legacy contracts, such as the Turkish submarine program, which has experienced delays and complications.
- The F-127 frigate program remains uncertain, with a decision not expected until the first half of 2027, and the company faces competition from other designs.
- The order intake for the MECO A200 frigates was not yet reflected in the nine-month results, and the company noted that sales conversion from this contract will take time.
- The company acknowledged potential competitive threats in the Canadian program, with rivals like Hanwha Ocean potentially trying to disrupt the campaign before final contract signing.
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I wish you a very warm welcome to our quarterly earnings presentation for our nine-month results of the financial year 25-26.
With me in the room are Oliver Bocard, our CEO, and Paul Glaser, our CFO. And we appreciate you joining us today to our nine-month reporting event.
Our CEO, Oliver Bocard, will start with an overview of the actual key highlights and the recent developments shaping our market. And then our CFO Paul Glaser will walk you through the detailed financial results and share our outlook for the year ahead.
Finally, and before I hand over, please allow me some housekeeping remarks. All the documents from today's earnings release and for this conference call are available on our investor relations website. We will also be recording the call today and the replay will be available shortly afterwards on our IR homepage.
After the presentation, we will open the floor for questions for analysts and investors. When asking a question, please
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