Best opening quarter
Guns from Heckler & Koch are in demand worldwide
May 6, 2022, 6:45 p.m
The German arms manufacturer Heckler & Koch reports the best first quarter in the company’s entire history. Although increases in orders due to the Ukraine war have not yet arrived in the balance sheet, Russia’s neighbors are increasingly ordering equipment.
The armaments company Heckler & Koch reports booming business. In the first quarter of 2022, sales grew by more than a fifth to 77.5 million euros compared to the same period last year, the company announced in Oberndorf in Baden-Württemberg. The net profit more than doubled from 3.3 million to 8.1 million euros. “As far as we can look back, it was the best quarter at the start of the year in the company’s history,” said CFO Björn Krönert. He cited a generally high demand for weapons and more efficient work processes as reasons for the positive figures.
H&K makes assault rifles, machine guns, grenade launchers and pistols. The company had 1,086 employees at the end of March, 58 more than a year earlier. There are 950 employees at the main plant in Oberndorf, the rest are employed at an assembly plant in the USA and sales companies abroad. Competitors include CG Haenel from Thuringia, Sig Sauer from the USA, FN Herstal from Belgium, Beretta from Italy and CZG from the Czech Republic.
The consequences of the Ukraine war are not yet included in the quarterly figures – so there was no country that ordered weapons at short notice in response to the Russian attack in Oberndorf and received them in March. Such additional business, which H&K does not talk about in detail, would not affect sales until autumn at the earliest due to production and delivery times.
Growing demand since Crimea annexation
Company boss Jens Bodo Koch said that demand from neighboring countries to Russia had increased since the annexation of Crimea in 2014 – this already high demand is now likely to increase even further. “States on NATO’s eastern flank are stockpiling or renewing their weapons stocks – investing in equipment to ensure defense capability.” For reasons of confidentiality, the manager did not want to say which orders were added in the first quarter of the year. However, it is known that H&K has delivered assault rifles to Norway, Lithuania and Latvia in the past, for example – these are framework agreements that can be reordered.
According to the information, the business with rifles and pistols that are sold to private individuals in the USA continues to develop robustly. For the year as a whole, CEO Koch expects the result to be the same as or slightly higher than 2021. “The start of the year included special effects, so the numbers cannot be quadrupled to get the figures for the year as a whole.” Some deliveries were postponed from the end of 2021 to the beginning of 2022 – so significantly more money came into the till in this quarter than initially expected.
The most important customer is the Bundeswehr. Heckler & Koch could soon be awarded a major order from the federal government for 120,000 assault rifles, the tendering process for which was initiated in 2017. The competitor CG Haenel still wants to prevent this in court, but has a difficult time here.