German submarine maker TKMS reported a $22 billion order backlog - a new record - and raised its 2026 sales outlook on Wednesday, citing a boost in demand for warships at a time of rising geopolitical tensions.
Like many of its peers, TKMS has been riding a surge in investor demand for shares in defence companies triggered by the war in Ukraine as well as US pressure on Europe to step up its military capabilities.
That boost was among former parent Thyssenkrupp's primary motivations for spinning off TKMS last year, allowing it to compete more effectively in global multi-billion euro submarine tenders, most notably in India and Canada.
"In view of current geopolitical developments, our customers continue to show a high demand for advanced maritime capabilities," CEO Oliver Burkhard said.
"As the only fully integrated maritime systems supplier in Europe, we are ideally positioned to meet the needs in all dimensions of our industry." Sales are now expected to rise by two per cent to five per cent in 2026, from a previous range of minus one per cent to up to two per cent.
This compares with an average forecast of 2.9 per cent in an LSEG poll of banks and brokerages.
Sales in the October-to-December quarter - the first of its fiscal year - fell one per cent to €545 million ($649 million), while adjusted operating profit was little changed at €26 million, the group said, as it confirmed it is still targeting an operating margin of more than six per cent this year.
(Reporting by Christoph Steitz in Frankfurt and Tom Kaeckenhoff in Duesseldorf; Editing by Matthew Lewis, Ludwig Burger and Joe Bavier)