This trading statement provides a review of key financial and operational developments for the nine months ended 30 September 2026 ("9M 2026" or the "Period"). Financial highlights:
9M Revenue of €4.8bn, up 6.1% year on year, driven by the Group's core Defence Systems businesses. Defence Systems revenue up 9.5%. Q3 Group revenue of €1.5bn (Q3 2025: €1.7bn) reflects delivery timing, particularly in Land Systems, with revenue shifting into Q4Record total backlog of €18bn (Dec 2025: €15bn), with Land Systems the largest contributor to backlog, highlighting the Group's increasing diversification. Total backlog and pipeline under negotiation of €47bn9M Operating EBIT up 0.4% year on year to €1.1bn with a margin of 23.1%. 9M Defence Systems margin of 27.9%. There was a change in business mix through the nine-month period with a higher relative contribution from Land Systems, where margins are still building as programmes ramp up. Q3 Operating EBIT of €317m (Q3 2025: €401m), with margin of 21.0%. Q3 saw the accelerated sale of standard-range ammunition from inventory at lower market prices.9M Pre-tax Operating Cashflow of €(200)m, with positive operating cashflow in Q3. As expected, higher working capital was driven by strategic pre-stocking of inventories. Seasonal net working capital unwind is expected in Q4Net Debt to LTM Operating EBITDA increased to 2.4x, reflecting growth-enabling deployment of capital into joint ventures and strategic stakes that broaden our capabilities and supply base (€731m) and financing to extend key sub-suppliers’ capacity to support the Group’s growth (€700m). Without these investments, Net Debt to LTM Operating EBITDA would be approximately 1.6xSenior facilities refinanced of €3.1bn, with interest cost cut by 125–150bps and maturity extended to six yearsFY 2026 revenue guidance between €7.4 to €7.6bn is reaffirmedAs market demand has shifted towards long-range ammunition, the Group accelerated the sale of standard-range ammunition from inventory at lower market prices than historical periods. Reflecting this, together with anticipated strong growth into the year end in Land Systems, where margins are still building as programmes ramp up, the Group now expects FY 2026 Operating EBIT margin of approximately 21% (previously 24–25%)With longer lead times on extended range ammunition and Land Systems, some delivery timing moves into 2027, together with the related working capital unwind and cash release. As a result, the Group now expects net working capital below35% of revenue for FY 2026 (previously below 20%)The Group’s medium-term financial guidance is reaffirmed, with mid-term operating EBIT margin to be supported by completion of the shift toward 100% in-house extended range production with vertical integration strategy on track for completion by end of 2027.Full 9M 2026 Trading Statement below:
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