CSG shares plunge more than 20 percent as Czech arms giant cuts margin outlook

Shares in Czech defense group Czechoslovak Group plunged more than 20 percent in Amsterdam on Wednesday after the company cut its full-year operating margin forecast.

The stock touched €10.35, its lowest price since trading began in January at €25 a share. Shortly before 2 p.m., it was trading just below €10.80, down more than 19 percent on the day.

The sell-off came despite higher revenue and a record order backlog, as investors focused on how much profit the company could generate from its sales.

CSG reported revenue of €4.76 billion, approximately CZK 115.9 billion, for the first nine months of 2026, up 6.1 percent year on year. Earnings before interest, taxes, depreciation and amortization, or EBITDA, rose to €1.2 billion.

However, the company lowered its expected full-year operating margin to approximately 21 percent from its previous forecast of 24 to 25 percent.

It attributed the revision partly to lower prices for standard-range ammunition as demand shifts toward longer-range products.

During the third quarter, CSG accelerated sales of standard-range ammunition at lower market prices. Profitability was also affected by a larger contribution from its land systems division, which generates lower margins than its ammunition business.

The group maintained its full-year revenue forecast of €7.4 billion to €7.6 billion.

For shareholders, the distinction matters: the company still expects the same sales range, but now anticipates retaining a smaller share as operating profit.

J&T investment company portfolio manager Štěpán Hájek said the reaction reflected doubts about CSG’s forecasts.

“The market is not punishing CSG today for one weaker quarter, but for a loss of confidence in its projections,” he told ČTK.

Hájek noted that the group’s order backlog had reached a record €18 billion. The problem, he argued, was therefore profitability rather than a lack of demand.

“It is still a healthy company with a margin above 20 percent, but the story for shareholders is different from the one they bought in January,” he said.

XTB analyst Tomáš Maxa described broader investor sentiment toward defense stocks as skeptical, with markets reacting sharply to signs of slowing growth.

He considered Wednesday’s sell-off excessive and the company’s valuation attractive over the longer term. That was his assessment, rather than an indication that the shares would recover.

CSG shares climbed as high as €35.50 shortly after their January debut. Wednesday’s intraday low was approximately 59 percent below the listing price and 71 percent below that peak.

The group is controlled by businessman Michal Strnad, whose wealth Euro magazine estimated at CZK 470 billion in August.