Czechoslovak Group Announces Planned IPO
Czechoslovak Group a.s. (the “Group” or "CSG"), a leading defence group based in Prague, Czech Republic, operating in Europe, the United States and in other regions including Asia Pacific, today announces its intention to launch an initial public offering of CSG B.V. (the “Company”), which is expected to be converted into a public limited liability company, and apply for admission to listing and trading of the Company’s ordinary shares (the "Offer Shares") on Euronext Amsterdam, the regulated market operated by Euronext Amsterdam N.V. (“Admission”).
The initial public offering (the "IPO" or the "Offering") is expected to consist of an issuance of new Shares for €750 million (the “Capital Increase”) by the Company and the sale of Existing Shares by CSG FIN a.s. (the "Selling Shareholder") the amount of which will be determined at a later stage. The Company will receive the net proceeds from the issuance of the New Shares. The Company intends to use the net proceeds received by it from the Offering for general corporate purposes. The Selling Shareholder will receive proceeds from the sale of the Sale Shares and/or the sale of any Overallotment Shares.
The Company has received cornerstone commitments from Artisan Partners Limited Partnership as investment manager on behalf of certain funds and accounts managed by the Artisan Partners Global Equity Team, certain funds and accounts under the management of BlackRock, and Al-Rayyan Holding LLC (a wholly owned subsidiary of Qatar Investment Authority), for an aggregate amount of €900m. These commitments are subject only to the successful completion of the IPO and customary conditions. The Offering is expected to take place in the coming weeks, subject to market conditions and other relevant considerations.
Michal Strnad, Chairman, comments: “CSG has successfully grown through organic growth and strategic acquisitions to become one of the leading global defence groups, supplying a diversified range of products to key long-term customers in Europe, the United States and other regions including Asia Pacific. The Group stands to benefit from an accelerating trend of global defence spending and its specific expertise across a range of areas, including land vehicles, weapons systems, defence electronics, and advanced systems for UAVs and long-range missiles which is closely aligned to the strategic priorities of its customers. We believe an IPO of CSG would elevate the profile of the Group within the international investment community, providing additional financial flexibility and diversity of funding sources to support further growth.”
One of Europe’s fastest growing defence companies, a critical long-term supplier to NATO states and partners
CSG sells its products to key long-term customers, ranging from government bodies (principally NATO members), including ministries of defence, to well-established companies in the Group's target industries in over 70 countries worldwide. The Group maintains a strong presence within Europe and NATO, and approximately 68% of the Group's revenues were derived from NATO countries for the nine months ended September 30, 2025 and the year ended December 31, 2024 on a pro forma basis for the Kinetic Acquisition.
The Group is the second largest medium- and large-calibre ammunition producer in Europe and largest small-calibre ammunition producer globally by sales with 35% and 13% market share, respectively6 . The Group believes that the continued increases in defence spending across Europe and NATO member states further reinforce the long-term outlook for its capabilities and strategic relevance in these regions. The Group stands to benefit from the restocking of European and NATO munitions stockpiles, with the current total European stockpile of 155mm artillery fleet at 10% of the NATO standard7.
The Group's Defence segment contracts are typically long-term. Many of the Group's contracts for medium- and large-calibre ammunition typically range from three to four years, with some contracts extending for longer than this (up to approximately six years), which reflects customers' desire for longer-term supply certainty in a capacity-constrained market. Land Systems contracts are for a minimum of three years and typically range from five to seven years, and defence electronics product support.
The Group’s global footprint comprises 39 manufacturing facilities based in the Czech Republic, India, Italy, Serbia, Slovakia, Spain, the United Kingdom and the United States.
Exposure to the highest priority defence segments, with core addressable market expected to outgrow the defence supercycle
The Group is a manufacturer and supplier of a wide range of products including M&L calibre ammunition (for combat vehicles, artillery and tanks), Land Systems (such as military, wheeled and tracked vehicles, heavy off-road trucks, and weapon systems), Defence Electronics (for surveillance, communications and command and control missions sets) and Advanced Systems (such as key systems for UAVs and long-ranged missile systems, including small form-factor turbojet, turboshaft and turbofan propulsion systems).
During the nine-month period ending September 30, 2025, approximately 79% of the Group's revenues within its Defence Systems segment were generated from sales contracts with governments or government agencies or where the ultimate owner is a government or government agency.
The Group expects to benefit from a defence spending supercycle, driven by increasing global uncertainty and elevated investments in defence from European and NATO governments, compared to historical levels. In The Hague Declaration of June 2025, NATO Allies committed to spending 5% of GDP annually on defence and security related spending by 2035. Within this 5% target, NATO Allies committed to allocate at least 3.5% of GDP annually to resource core defence requirements by 2035 (compared to the prior 2.0% target).
Renaissance Strategic Advisors ("RSA") estimate that this supercycle will result in European defence budgets increasing at a 9% compound annual growth rate between 2025 and 2030, compared to growth in global defence budgets which is estimated at a 5% compound annual growth rate.
RSA estimate that the Group’s core addressable market is expected to outgrow the defence supercycle, growing at a double digit CAGR between 2025 and 2030. The Group’s core addressable market is defined as geographic European markets and customers including the United Kingdom.
Strong topline visibility from all-time high backlog & pipeline and a track record of strong profitability
The Group recorded a 126% pro forma revenue CAGR between 2022 and 2024, as a result of a series of M&A transactions to accelerate growth in new and existing segments and reflecting strong conversion of backlog into revenue.
As of September 30, 2025, the Group's total confirmed backlog was c.€14 billion, with total opportunities of c.€32 billion comprising confirmed backlog and pipeline under negotiation.
The Group believes it has established a track record of strong profitability with 24%8 Adjusted Operating EBIT margin, which is in excess of comparable European defence sector peers.
The Company currently targets a dividend payout ratio of approximately 30–40% of net profit, payable from 2027, subject to Board approval and prevailing market conditions. This target is indicative only and does not constitute a commitment.
Strong revenue growth, profitability and recent order intake
As of 9M 2025, CSG reported revenues of €4.5 billion (+82% year-on-year on a pro-forma basis), Operating EBITDA of €1.2 billion (+79% YoY) and an Operating EBITDA margin of 26.4% For the nine months ended September 30, 2025, the Group's revenues were €4,485.3 million (+82% year-on-year on a pro-forma basis), and Adjusted Operating EBIT was €1,097.6 million (+79% yearon-year on a pro-forma basis), with an Adjusted Operating EBIT margin of 24.5%. During this period, 75% of revenues were derived from sales in Europe (with Ukraine constituting 26% of overall sales), 18% from the United States, and 6% from the rest of the world. Revenues by end market for the nine months ended September 30, 2025 was split as follows: 79% from defence, 19% from civil, and 2% from industrial non-defence sectors.
Contracts secured by the Group in Q4 2025 include:
- In December 2025 the Group secured a contract valued at several hundred million US dollars to supply small-calibre ammunition to the Ministry of Defence of a Southeast Asian state
- In December 2025, Tatra Defence, a member of the Group, signed a strategic contract with KNDS Deutschland for the production of hulls for Leopard 2A8 main battle tanks
- In December 2025 Tatra Defence Slovakia, a member of the Group, was awarded a $1bn+ production contract for 4,000 Tatra vehicles for a South-East Asian client
- The Group’s Slovak subsidiary ZVS Holding secured a framework agreement with Slovakia's Ministry of Defence in December 2025 to supply up to €58 billion worth of large and mediumcalibre ammunition to Slovakia and other EU member states over seven yea
Owner-led company with experienced management team delivering consistent growth and global expansion, with one-tier board structure to be adopted
Under the leadership of Mr. Michal Strnad (Owner and Chairman), supported by an experienced senior management team, the Group has experienced consistent growth and transformed into a globally active player across multiple markets in Europe, the United States of America and Asia, delivering approximately 800bps of Adjusted Operating EBIT margin expansion on a pro forma basis between 2022 and 2024.
Upon the conversion of the Company into a public limited liability company prior to Settlement, the Company will have a one-tier board structure consisting of five Executive Directors and four independent Non-Executive Directors. The Company’s board of directors will consist of the following Executive Directors: Michal Strnad (Chair/CEO), David Chour, Petr Formánek, Zdeněk Jurák, and Ladislav Štorek, and the following Non-Executive Directors:
- John Nicholson – will hold the position of Senior Independent Director and is a former senior NATO and U.S. Army General. In a 36-year military career, has held roles including command of NATO’s Resolute Support Mission and U.S. Forces-Afghanistan. Currently chief executive of Lockheed Martin Middle East (will stand down from role on 31 January 2026)
- Virginie Banet - has over 35 years of experience in finance, investment banking and corporate governance. Has held industry roles at Lagardère and Airbus focusing on investor relations and M&A and board positions at Mediobanca, Lagardère, Vallourec, Netgem and GTT
- Lynn Fordham - over 40 years of experience in investment, finance and corporate leadership, including senior executive roles across the oil and gas, consumer, retail, financial services and private equity sectors. Previously chief executive officer of SVG Capital plc and managing partner of Larchpoint Capital LLP
- Susanne Wiegand - over 29 years of experience in industrial strategy, defence, engineering and corporate leadership. Currently a supervisory board member at Volkswagen AG, and supervisory board member at Brenntag SE and BWI GmbH, as well as the board of Deutsche Gesellschaft für Auswärtige Politik. Was previously chief executive officer of RENK where she led the IPO of the business and Rheinmetall Electronics
The Company has appointed BNP PARIBAS, Jefferies GmbH, J.P. Morgan SE and UniCredit as joint global coordinators (in such and any other capacity, the “Joint Global Coordinators”) and, together with Česká spořitelna, a.s., COMMERZBANK Aktiengesellschaft, Deutsche Bank Aktiengesellschaft and Morgan Stanley Europe SE as joint bookrunners for the Offering and together with the Joint Global Coordinators and the Joint Bookrunners, the "Underwriters") for the Offering.
