26-03-2025
Germany's Renk forecasts 2025 growth backed by 5 billion euro order book
March 26 (Reuters) - German tank gearbox maker Renk ( opens new tab expects its strong order backlog to support growth in 2025, even when excluding a potential boost from increased defence spending, it said on Wednesday.
The Augsburg-based company, which at the end of January reported preliminary full-year revenue in line with its guidance, said its order backlog was 5 billion euros ($5.39 billion) at the end of 2024.
Make sense of the latest ESG trends affecting companies and governments with the Reuters Sustainable Switch newsletter. Sign up here.
It forecast revenue of 1.3 billion euros for the year, in line with analysts' mean estimate in an LSEG poll and above last year's figure of 1.1 billion euros.
Like Rheinmetall ( opens new tab two weeks ago, Renk also said the outlook did not take into account any further market potential from increased defence spending in the European Union.
A changed stance in Washington towards European defence and talks of historical investment in the EU have been boosting stocks in the sector, with Europe's benchmark defence and aerospace index (.SXPARO), opens new tab gaining more than 30% so far this year.
"I think the mid-term guidance will be more and more framed as cautious with some upside," said Christian Reindl, a portfolio manager at Union Investment which holds shares in Renk. The company maintained its target of 2 billion euros in revenue by 2028.
It also sees adjusted operating earnings of between 210 million and 235 million euros in 2025, while analysts polled by Vara were expecting 225 million euros on average.
"My assumption is that they progress better on the efficiencies of their production facilities in Germany and the U.S. and there might be some upside on the operating profit throughout the year," Reindl told Reuters.
Renk's shares, which were included in Germany's mid-cap equities index (.MDAXI), opens new tab earlier this month after doubling in value since January, fell 1% in early trading.
($1 = 0.9272 euros)
