CSG Shares Surge 31% in Record Defense IPO Debut

Shares of Czechoslovak Group, known as CSG, climbed more than 31% on Friday during its first day of trading on Euronext. The Prague-based firm, one of Europe's top defense companies, raised €3.8 billion in the process. This debut stands as the world's largest initial public offering for a defense company and the second listing on Euronext this year. The jump put CSG's market value at €25 billion right away.

Background

CSG started in the Czech Republic and has grown into a big player across defense, aerospace, ammunition, automotive, and railway sectors. The company runs over 100 businesses with more than 14,000 workers around the world. Its main base is in Prague, but factories dot places like Slovakia, Germany, Greece, India, Italy, Serbia, Spain, the United Kingdom, and the United States.

In defense, CSG makes a wide range of gear. This includes military vehicles, trucks, weapons, artillery ammunition, and small arms ammo. It is Europe's number two maker of medium and large-caliber ammunition and the top global producer of small-caliber rounds. The firm sells to governments and companies in over 70 countries. About half its sales go to NATO countries, with a big chunk to Ukraine in recent years.

CSG traces its roots back through companies like Excalibur Army for land systems, Tatra Trucks for heavy vehicles, and MSM Group for ammunition. In 2024, it bought The Kinetic Group in the US, which boosted its small arms ammo production to world-leading levels. That year, 78% of revenue came from defense work, plus 11% more from ammo.

The company has supplied Ukraine heavily since Russia's 2022 invasion. Sales there made up 41% of revenue that year and 23% in 2023. In 2024 alone, CSG sent one million artillery shells, some made in-house and others through Czech government efforts. Before the war, Ukraine used Tatra chassis for systems like the Bohdana howitzer and Neptune missiles.

CSG also partners with firms like General Dynamics for vehicles and Nexter Systems for ground gear. It trains pilots, including Afghan ones with Raytheon, and runs Black Hawk helicopters as the only private European operator. Its work spans land, air, and related fields, with over 1,000 experts in defense alone.

Key Details

The IPO came amid a boom in European defense spending. CSG aimed for a €30 billion valuation before the listing. Its order book hit €14 billion by late September, up 69% from the year before. Nine-month revenue reached €4.5 billion, with a 24% operating margin that tops many peers.

CSG expects its main market in Europe and the UK to grow over 10% a year through 2030. This ties into higher defense budgets from NATO and European governments facing global tensions. The STOXX Europe Targeted Defence Index, which tracks defense sales, has risen almost five times in three years and sits near records.

Company Operations

CSG's defense arm groups firms from the Czech Republic, Slovakia, and beyond. Excalibur Army builds military equipment. Tatra Defence makes wheeled armored vehicles. MSM Group handles ammo development and service. ZVS Holding covers all ammo types. VOP Nováky manages ammo lifecycles. FM Granada produces large-caliber rounds and missiles.

Other units include Vývoj Martin for towers and containers, 14. Oktobar for components, and MSM North America to tap the US market. In aerospace, Eldis Pardubice does radars, Retia builds security systems, and CS Soft handles air traffic control.

The firm keeps investing in its companies and core areas. It exports worldwide, with long-term deals to NATO partners. Production happens at 39 sites, focusing on vehicles, weapons, ammo, and tech for armed forces.

"The group stands to benefit from an accelerating trend of global defense spending," said CSG Chairman Michal Strnad. "We believe an IPO of CSG would elevate the profile of the group within the international investment community."

What This Means

This listing gives CSG fresh cash to grow. The €3.8 billion raised opens doors for more factories, new tech, and bigger market reach. Investors see promise in defense as governments spend more on security. CSG's strong backlog and margins signal steady demand ahead.

For Europe, the IPO boosts strategic independence. Capital markets now fund key defense makers directly. CSG's role as a top ammo supplier helps NATO stock up fast. Its Ukraine deliveries show reliability in crises.

The 31% share pop reflects hot interest. Trading on Euronext puts CSG alongside global names, drawing funds from varied sources. This could spark more defense firms to list, feeding the spending wave.

CSG plans to use proceeds for portfolio growth and business expansion. Its mix of land systems, ammo, and aerospace fits buyer needs. With factories worldwide, it cuts supply risks and meets rising orders.

The debut marks a shift for family-owned CSG, now public. Chairman Strnad took over in 2016 after the name change from Excalibur Group. The firm supplied Iraq against ISIS in 2015, building its rep.

Broader effects touch jobs and tech. Over 14,000 employees gain from stability. Investments in unmanned systems, missiles, and radars push innovation. Partners like Raytheon and General Dynamics may deepen ties.

Markets watch how CSG performs post-IPO. Its edge in ammo and vehicles positions it well. As defense budgets climb, the firm eyes a bigger slice of a market set to expand sharply.