Augsburg, May 4, 2026, 19:06 CEST
RENK Group heads into its May 6 first-quarter statement with market expectations for about €585 million in new orders, but the sharper test is whether the German defence supplier can turn record demand into cash. Börse Global, citing mwb research, said analysts expect the quarter’s order intake to come in well above the company’s run-rate targets.
That matters now because Germany is pushing more money into defence at a pace not seen for years. Berlin last week approved key 2027 budget targets that would lift core defence spending to €105.8 billion from €82.7 billion in 2026, with total defence outlays including special funds and Ukraine support set at €144.9 billion, or 3.1% of gross domestic product.
The spending wave gives RENK a large tailwind. It also leaves less room for weak execution, especially after a rally in European defence names began to lose heat this spring as investors questioned valuations and the mix of future weapons demand.
RENK ended 2025 with record revenue of €1.37 billion, adjusted EBIT of €230 million, order intake of €1.57 billion and a backlog of €6.68 billion. Chief Executive Alexander Sagel said the company’s focus on defence technologies was “paying off,” while RENK guided for 2026 revenue above €1.5 billion and adjusted EBIT of €255 million to €285 million. Renk
The soft spot is free cash flow — cash left after operating needs and investment. RENK’s own figures show free cash flow of €67 million in 2025, net working capital of €345 million and net debt of €391 million; at its capital markets day, the company set a medium-term ambition for cash conversion of around 80%, meaning a larger share of earnings should become cash.
Sagel has presented the problem as timing rather than lost demand. Reuters reported in March that some naval and research-and-development programmes had slipped into 2026, quoting him as saying, “these programmes are not lost”; export curbs also weighed on fourth-quarter business, including deliveries linked to Israel. Reuters
RENK is also putting more production weight outside Germany. In February, the company said it would invest $70 million in capital expenditure and $80 million in research and development in Michigan from 2024 to 2030, creating up to 270 jobs, with Sagel reaffirming RENK’s role as a “trusted supplier to the U.S. military and allied forces.” Renk
The shareholder picture shows the divide around the stock. A regulatory notice showed Wellington Management crossed the 5% threshold on March 27 and held 5.09% of voting rights, while Shortregister data sourced from the Bundesanzeiger showed active disclosed short positions of 3.67% of RENK shares as of May 4, including 2.38% held by AQR Capital Management.
Some analysts remain constructive. MarketScreener, citing dpa-AFX Analyser, said JPMorgan’s David H. Perry kept a Buy rating on RENK on April 29 with a €75 target price, while the same page showed the shares closed on Xetra at €54.40 on Monday, up 0.8%.
The comparison with peers is not clean, but it is useful. Rheinmetall, the larger German defence contractor, signed a framework agreement worth billions of euros to supply the German army with FV-014 drones, with deliveries due to begin in the first half of 2027, giving investors another marker as they weigh heavy-vehicle demand against faster-growing drone and air-defence work.
The risk is that orders keep arriving but cash stays slow. If delayed advance payments do not land, export rules tighten again, or customers shift more spending toward drones and electronic systems, RENK’s backlog may not be enough on its own; Hargreaves Lansdown analyst Aarin Chiekrie told Reuters that higher defence budgets had already been priced into global defence stocks, leaving the sector exposed when growth expectations run too far ahead.
That leaves Wednesday’s statement as a cash-flow release as much as an order update. Management is due in Frankfurt for a Berenberg roadshow the next day, giving investors little time to decide whether the €585 million order story is matched by better working capital and clearer collections.
