CSG: Q1 26 preview - soft start

Research evidence excerpt

CSG: Q1 26 preview - soft start

Deutsche Bank

Research

Rating Company Date

Buy CSG 14 May 2026

Results

Europe

Cyprus

Reuters Bloomberg Exchange Ticker Price at 13 May 2026 (EUR) 15.95

CSG.AS CSG NA AEX CSG

Price Target 34.00

Aerospace & Defence

52-week range 33.01 - 15.66

Q1 26 preview - soft start

Valuation & Risks

Sriram Krishnan, CFA

CSG is due to report its first quarterly results (Q1 26) as a listed company on May

Research Analyst

20th. This comes on the back of a short seller's report raising several concerns on +44-20-7541-0983

fundamental business model and corporate governance at CSG. The underlying

financial performance should have a seasonally soft start in Q1 and FY26 Christophe Menard

guidance is likely to be reiterated too. But focus is likely to be on further

+33-1-4495-9315

clarifications from CSG to address concerns raised by the short seller's report.

Q1 is typically the weakest quarter

As with most defence companies, Q1 is expected to be seasonally the weakest

quarter for CSG. Also group reported numbers for Q1 25 should be restated

following some corporate realignment done during IPO. Nevertheless, Q1 26 group

revenues is expected to grow c.10% yoy to c. €1.5bn and EBIT likely to reach €350m,

implying an EBIT margin of slightly over 23%. Large ammunition and Land systems

growth should continue at a steady pace. The weakness at US civil oriented Ammo

+ business is likely to persist in Q1, as corrective measures are being implemented

on pricing and inventory management. FCF generation should be modest c. €20m,

implying a cash conversion of just <10%, driven by slightly lower working capital

needs yoy during Q1 but should increase in Q2 and Q3, before it eases again in Q4.

We expect the FY26 and mid-term guidance to be reiterated at this stage.