The weapons manufacturer, Heckler & Koch, is currently profiting due to its impressive order volume.
Heckler & Koch is operating seamlessly. The German company renowned for producing assault rifles and handguns is reporting impressive half-year results and has secured a new contract to supply sniper rifles to a German special unit. However, there's a slight hiccup.
Amidst the Ukraine conflict, Heckler & Koch's order book is bustling. The weapons manufacturer reported a significant 38.7% increase in orders worth 197.8 million euros in the first half of the year, as announced in Oberndorf, Black Forest.
These orders usually span multiple years, indicating a positive outlook for the future of Heckler & Koch, a company that manufactures assault rifles, machine guns, grenade launchers, and handguns. This week, the company also secured an order for up to 500 sniper rifles for Germany's Kommando Spezialkräfte (KSK).
Revenue also saw a boost, reaching 171.4 million euros, a 14% increase from the first half of 2024. Weapons were delivered to various countries including Spain, Latvia, Norway, Japan, and Germany's Armed Forces. The main competitors for Heckler & Koch are Beretta (Italy), CZ with its US subsidiary Colt (Czech Republic), and FN (Belgium).
"We're a mirror of the global security situation, the demand for our products is sky-high right now," stated CEO Jens Bodo Koch, confirming that Heckler & Koch would continue supplying NATO states, European countries, and Germany's security partners - "essentially, forces fighting for peace, freedom, and security." Heckler & Koch's weapons are also in use in Ukraine, supplied by European armies to the country under attack by Russia.
Profitability dip
The only operational drawback was a dip in Heckler & Koch's profitability: The operating result (Ebit) dropped by nearly 11% to 23.2 million euros. CEO Jens Bodo Koch attributed this to an increase in "system business." In this context, Heckler & Koch sells not just the weapon but also additional accessories such as suppressors and laser-light modules. These accessories are sourced from other companies and then resold, which is less profitable compared to in-house production.
For the full year 2024, CEO Jens Bodo Koch forecasts the operating result to remain at the same level as the previous year. In European NATO countries where military and police use handguns, Heckler & Koch estimates its market share to be approximately two-thirds. In the United States, the largest weapons market globally, Heckler & Koch plays a minor role, but it has recently seen success, such as supplying weapons to the Texas Rangers.
Despite the dip in profitability due to increased system business, Heckler & Koch continues to thrive, securing a new contract to supply up to 500 sniper rifles from Heckler & Koch's renowned Heckler and Koch range. Furthermore, the company's primary competitor, Beretta, has also encountered difficulties, leading some European countries to consider alternative suppliers like Heckler and Koch for their weapon needs.
