Hensoldt is navigating a paradox. The German defence sensor specialist has never had more work on its books, yet its share price is languishing near 52-week lows, caught between a Chinese export ban and the growing pains of its own expansion.
On the one hand, the order backlog swelled to €8.833 billion by the end of 2025, a jump of roughly a third year-on-year. New orders surged 62% over the same period, pushing the book-to-bill ratio to 1.9x — a clear signal that demand is far outstripping what the factory floor can deliver. Revenue, by contrast, rose only 9.7% to €2.455 billion.
On the other, Beijing’s decision to place Hensoldt on an export control list has spooked investors. The Chinese Ministry of Commerce accused the company of engaging in business with Taiwan and violating national security interests, a claim Hensoldt rejects. The ban covers so-called dual-use goods — components that can be used for both civilian and military purposes — and prohibits third parties from re-exporting Chinese-origin items to the listed firms. Given China’s stronghold on certain semiconductors and rare earths, the move has direct implications for Hensoldt’s supply chain.
The market reacted swiftly. Hensoldt shares closed at €73.32 on Friday, down nearly 6% on the day and more than 10% for the week. That leaves the stock roughly 36% below its 52-week high of €115.10, and nursing a year-to-date loss of just over 4%.
Mitigation measures are already in place
Hensoldt’s management is not waiting for the dust to settle. Chief Financial Officer Christian Ladurner told the annual press conference that the company holds germanium inventories sufficient to last until the end of 2028. At the same time, Hensoldt is working with the Fraunhofer Institute on an in-house crystal-growing project in Oberkochen, with a target of achieving greater independence by the end of 2027.
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For gallium nitride components — critical to radar systems such as Skyranger and IRIS-T — a multi-year agreement with United Monolithic Semiconductors secures around 900,000 units through to 2030. These steps reduce some of the single-source dependency risk, though the company has not confirmed whether all potential vulnerabilities are now covered.
A billion-euro bet on capacity
To close the gap between orders and output, Hensoldt is ploughing roughly €1 billion into capacity expansion through 2027, mostly at German sites. A new radar production facility is part of the plan. The company intends to hire 1,600 new staff this year alone, and has teamed up with technology group Voith to attract specialists in systems engineering and electrical engineering.
But the ramp-up comes with its own costs. A company-wide SAP implementation is expected to weigh on margins for years, according to Barclays, and is already putting near-term pressure on profitability. For 2026, Hensoldt is targeting revenue of around €2.75 billion and an adjusted EBITDA margin between 18.5% and 19%.
Key dates ahead
Investors will get their first look at how the Chinese restrictions are affecting operations on 6 May, when Hensoldt reports first-quarter results for 2026. That will be followed by the annual general meeting in Munich on 22 May, where shareholders will vote on a proposed dividend of €0.55 per share — a 10% increase from the prior year.
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