Czechoslovak Group triumphs in 2023 with significant financial growth and strategic expansions
The Czechoslovak Group (CSG), a notable industrial and technological conglomerate, proudly announced its audited financial outcomes for the year 2023, showcasing remarkable growth across its divisions. The company's consolidated revenue soared by an impressive 71% to EUR 1.73 billion, while its EBITDA more than doubled, achieving a substantial EUR 439 million compared to the previous year.
This financial boost was mirrored in the EBITDA margin, which climbed by one-third to 25.3%. Net profits followed suit, increasing by 49% to EUR 210 million. The majority of CSG's output, representing 51%, was directed towards European markets, excluding Ukraine, with two-thirds of its sales deriving from NATO member states and the remaining from other regions, predominantly Ukraine, Indonesia, Vietnam, and Morocco.
A significant portion of sales, over 60%, was credited to the CSG Defence division, which focuses on the production of military land systems and large caliber ammunition. The defence sector accounted for over 70% of the group's total revenue, with additional contracts placed across other divisions, enhancing CSG's market stance.
Zdeněk Jurák, a board member and CFO, commented, “Our substantial growth in 2023 has been fueled by the robust demand in our long-standing sectors of large-caliber ammunition and military land systems. This is a reflection of our sustained organic growth, backed by strategic investments in production capacity and labor productivity enhancements.”
| (in EUR million, unless otherwise indicated) | FY2023 | FY2022 | Difference |
|---|---|---|---|
| Sales | 1,734 | 1,015 | 71% |
| EBITDA | 439 | 191 | 130% |
| EBITDA margin (in %) | 25,3 | 18,8 | |
| Net income | 210 | 141 | 49% |
| Sales CAGR for 2020-2023 | + 45% | ||
| EBITDA CAGR for 2020-2023 | + 75% | ||
| Number of employees | 10 000 |
Expansion and strategic shift in CSG’s Ammo+ Division
In 2023, the Czechoslovak Group (CSG) witnessed a transformative year for its newly formed CSG Ammo+ division, which emerged as a significant component of its business structure. The division, focusing on the production of small caliber ammunition, directed approximately 87% of its output towards the civilian market. This move capitalized on the renewed interest in sports and recreational shooting, particularly hunting, in the USA—a development that greatly benefited the Fiocchi Group’s production facilities in the region.
The strategic acquisition of Fiocchi Munizioni in 2022 and its subsequent full integration into the CSG framework in the past year have established a robust, independent pillar within the Group. This division operates out of manufacturing plants located in Italy, the UK, and the USA, reflecting a geographically diverse production base.
This integration played a pivotal role in boosting CSG’s financial indicators for 2023. Notably, Fiocchi contributed approximately EUR 330 million, accounting for about 19% of the Group’s total revenue. Additionally, the division faced and adapted to significant changes in its supply chain dynamics, particularly in sourcing key raw materials necessary for producing ammunition cartridges across various categories. These adaptations were crucial in responding to the increased market demand and ensuring sustained growth and efficiency within the newly established division.
Surge in aviation market fuels growth for CSG Aerospace
The aviation industry's expansion has notably accelerated the business activities of CSG's Aerospace division in 2023. A significant increase in both passenger and cargo air traffic across Europe, alongside the rerouting of flights due to the closure of Russian airspace to Western carriers, has heightened the demand for comprehensive aviation equipment and services. This has particularly impacted the need for enhanced airspace security, especially along NATO's eastern border, benefiting CSG's Aerospace operations.
The division, which includes prominent manufacturers of radar and security systems, recording technologies, air traffic management systems, and drone operations, as well as aircraft maintenance facilities, contributed EUR 225 million to CSG's financial outcomes for the year. Of this revenue, 63% was derived from defense-related deliveries, while the remaining 37% came from civil aviation uses.
CSG has established itself as a significant entity within the aerospace sector. For instance, radar air traffic control systems developed by the Pardubice-based Eldis cover over 90% of India’s airspace. Additionally, the Job Air Technic facility in Mošnov stands out as one of Europe's premier service centers for Airbus A320 and Boeing 737 series aircraft, further underscoring the division's critical role in supporting global aviation infrastructure.
CSG Mobility division gears up for expansion
The CSG Mobility division, which includes key players like Tatra Trucks in Kopřivnice, Slovakia, and DAKO-CZ in Třemošnice, Czech Republic, is poised for significant growth. Tatra Trucks, known for its uniquely designed chassis suited for off-road driving, is actively expanding its production facilities and enhancing productivity. The company's strategic goal is to double its production capacity by the year 2027 due to the persistent high demand that has tested the limits of its current capabilities.
Comprising Tatra Trucks, a renowned truck manufacturer, and DAKO-CZ, a producer of braking systems for rail vehicles, the Mobility division contributes four percent to the total revenue of CSG. This segment's development underscores CSG's commitment to advancing its manufacturing capacity and maintaining its competitive edge in the automotive and rail industry sectors.
CSG Business Projects division welcomes elite brand Armi Perazzi
In a strategic move to diversify its high-end manufacturing portfolio, CSG secured a majority stake in Armi Perazzi, an esteemed Italian manufacturer of luxury shotguns, in December 2023. Known for their exquisite craftsmanship and appeal to elite sportsmen and hunters, Perazzi shotguns hold a prestigious position within the global shooting community. This acquisition represents a significant enhancement to CSG's Business Projects division, which prides itself on a collection of premium, precision-engineered brands.
The Business Projects division, which also includes notable entities like Elton hodinářská, producers of Prim mechanical watches, and Karbox, a specialist in engineering superstructures, containers, and advanced logistics solutions, stands to benefit greatly from the inclusion of the Perazzi brand. This addition further solidifies CSG’s commitment to fostering a portfolio characterized by exceptional craftsmanship and specialized engineering.
Influence of the Ukrainian conflict on CSG's operations
The ongoing conflict in Ukraine has underscored the strategic importance of CSG’s role as one of Europe’s major suppliers of military equipment and ammunition. Through its contribution to the Czech Republic and other NATO countries' efforts, CSG supports the defense of Ukraine. This involvement has heightened the demand from allied nations to replenish their military inventories, prompting a significant shift in perception among governments, investors, and the public regarding the defense industry.
This changing perspective highlights the industry’s critical role as a foundational security pillar within the global democratic community, reflecting a deeper acknowledgment of its significance in maintaining stability and safety. The situation in Ukraine has not only affected supply and demand dynamics but has also reshaped the strategic importance of the defense sector in international relations.
CSG announces strategic acquisition of Kinetic Group
The Czechoslovak Group (CSG) has entered a definitive agreement to acquire Vista Outdoor Inc.'s Sporting Products division, now known as The Kinetic Group, for $1.91 billion. This marks CSG's largest acquisition to date and is significant within the Czech defense industry, representing a strategic expansion in the U.S. market. The acquisition aims to broaden CSG’s capabilities in small-caliber ammunition manufacturing and enhance its global distribution network. Upon completion, The Kinetic Group will operate as a wholly-owned subsidiary of CSG, with its U.S. headquarters remaining in Anoka, Minnesota, and Jason Vanderbrink continuing as CEO.
Vista Outdoor is a major player in the outdoor products market, managing over three dozen brands, including Federal Ammunition and Remington Ammunition, which are part of The Kinetic Group. The transaction is subject to shareholder approval and necessary regulatory clearances and is expected to close in 2024.
This acquisition is aligned with CSG's strategy of expanding its core business areas and leveraging its expertise in the defense and ammunition sectors. CSG plans to maintain The Kinetic Group’s leadership and invest in its operations, emphasizing its commitment to U.S. manufacturing and its role in supporting military and law enforcement agencies.
Strategic investments in 2023 propel growth and technological advancements
In 2023, the Czechoslovak Group (CSG) undertook several key investment initiatives aimed at expanding its production capabilities and enhancing operational efficiency through cutting-edge technologies. These investments are pivotal for CSG's growth strategy in various sectors.
Excalibur Army embarked on constructing a new assembly hall along with administrative facilities, intended for assembling ground vehicles for security and rescue operations. This expansion is expected to significantly increase the company’s workforce, potentially growing its employee count to 150% of its current level.
Tatra Defence Vehicle initiated a project to erect a new, eco-friendly production hall at its facility in Kopřivnice. This state-of-the-art hall will feature modern welding shops equipped with advanced robotic technologies and will be fitted with photovoltaic panels on its roof, emphasizing sustainability. The project is set to generate around 60 new jobs and includes substantial investments to enhance the existing paint shop's capacity. The completion of the hall and updated paint shop is projected for the end of this year or early next year.
MSM Group invested heavily in modernizing and semi-automating its factories in Slovakia and Spain, which has tripled production capacity at the Snina plant in Slovakia alone. These upgrades involved substantial restructuring and the introduction of robotic systems, transforming the VOP Nováky production plant into one of Europe's most modern facilities.
Moreover, Fábrica de Municiones de Granada, another MSM subsidiary based in Spain, saw its production capacity double following the inauguration of a new production plant. These developments are part of CSG’s broader strategy to enhance its manufacturing footprint and technological prowess across Europe.
Innovation and development in 2023
Throughout 2023, Czechoslovak Group (CSG) remained committed to advancing research and development across its primary business sectors, focusing particularly on defense, aerospace, and transportation technologies. Collaborating closely with prestigious Czech academic institutions such as the University of Defence in Brno, and with expert teams from the Czech armed forces, CSG has made significant strides in innovation.
Key Innovations and Projects:
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Tatra Defence Vehicle Initiatives:
- Starkom Vehicle: Developed for electronic warfare and jamming, this vehicle includes advanced features like armored cabins and ballistic protection for electronic equipment. It is designed to meet the specific needs of the Czech Army and involves collaboration with the Military Research Institute in Brno and Retia, a military systems manufacturer.
- Tatra Force e-Drive: A pioneering project, this hydrogen-powered electric mining truck prototype is developed to operate independently of external power sources. The project is spearheaded by ÚJV Řež and aims to push the boundaries of sustainable vehicle technology.
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Karbox's Technological Breakthroughs:
- EWA and SAWER Systems: These innovative mobile devices are designed to extract water from the air, with EWA capable of extracting up to 30 liters per day in arid conditions, and SAWER significantly enhancing output when using solar power.
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Tatra Trucks' Advancements:
- Autonomous Driving Systems: The new Tatra Force truck equipped with an automatic driving system represents a step towards fully autonomous vehicles. Currently, this technology is in the testing phase and shows potential for use in rescue operations and industrial applications.
These initiatives not only underline CSG’s role as a leader in technological advancements but also showcase its ability to integrate sophisticated systems into practical applications, further enhancing its competitive edge in the global market.
Social responsibility and sustainability initiatives at CSG
CSG is committed to adhering to EU taxonomy and international ESG standards, consistently monitoring its sustainability performance against GRI standards and making preparations to align with ESRS standards. The group is also working towards meeting the Science Based Targets initiative (SBTi) goals.
Across its various divisions, CSG integrates sustainability into its core operations:
- Defense and Aerospace: Focused on adopting advanced technologies that lessen environmental impacts and enhance safety standards.
- CSG Ammo+: Prioritizing the use of environmentally friendly and fully biodegradable materials and minimizing waste.
- CSG Mobility: Developing transportation solutions that rely on low-emission technologies such as electric and hydrogen propulsion.
CSG supports the extension of the life cycle of its products through comprehensive services, including the production of spare parts, and is boosting its energy self-sufficiency by installing renewable energy sources like photovoltaic systems and solar cogeneration.
In 2023, CSG mandated that all its entities engage in community service, particularly supporting civic, cultural, educational, and sports initiatives. Notably, CSG backs the "Česká hlava" project, celebrating Czech scientific achievements, and contributes to cancer research at the Institute of Hematology and Blood Transfusion. The group also supports educational activities in partnership with top Czech and Slovak universities.
In sports, CSG has formed partnerships with leading athletes in shooting and biathlon, including Olympic medalists, and supports the Italian Biathlon Association. This year, it expanded its sponsorship to include Roman Stanek, a promising Formula 2 driver.
CSG’s approach to corporate social responsibility reflects its commitment to sustainable practices and community involvement, reinforcing its position as a responsible leader in the industry.
Overview of Czechoslovak Group (CSG)
Czechoslovak Group (CSG) is a prominent industrial and technological conglomerate owned by Czech entrepreneur Michal Strnad. With a strong global presence, CSG operates key production facilities in the Czech Republic, Slovakia, Spain, Italy, India, the United Kingdom, and the United States, exporting its diverse products worldwide. The group is actively involved in the development and expansion of its core business sectors, which include engineering, automotive, rail, aerospace, defense, and the production of small caliber ammunition.
CSG is home to significant industry players such as Tatra Trucks, a leading Czech truck manufacturer, Fiocchi, a top global producer of small caliber ammunition, and Eldis, a renowned Czech radar manufacturer. The group employs over 10,000 individuals across its various companies and affiliated entities. In 2023, CSG achieved consolidated sales of approximately EUR 1.73 billion, demonstrating its robust export capabilities and widespread market reach across multiple continents.
