Fewer gun stores in 2023
Heckler&Koch optimistic despite slump in profits
November 27, 2023, 5:51 p.m
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Losses and lawsuits worth millions result in high debts for the weapons manufacturer Heckler&Koch. Then comes 2022, a lucky year for the company. Business is booming so much that debts can be successfully reduced. But what is the forecast for 2023?
After years of strong growth, the weapons manufacturer Heckler & Koch (HK) has suffered a setback. As the company in Oberndorf am Neckar announced, sales in the first nine months of this year were only 215.4 million euros, 4.5 percent lower than in the same period last year. The operating result fell by 39.1 percent to 32.4 million euros.
Chief Financial Officer Andreas Schnautz justified the development with negative currency effects and generally high comparative values - 2022 was the best financial year in the company’s history, which was also due to the successful reduction of debt. The US market was booming. In 2023, however, demand for pistols weakened somewhat. Overall, we are at the same level as in 2021, HK said.
However, the manufacturer of assault rifles, machine guns, pistols and grenade launchers has to make compromises even in this comparison: Back then, the operating profit was slightly higher – meaning the business was more profitable than it is now. Manager Schnautz pointed out a special effect: If you exclude research and development depreciation, the operating result so far would be higher than in 2021. The CFO expects an increase in sales for the fourth quarter of 2023. “We are very solidly positioned and are still going strong.”
Optimism through large orders
He also emphasized the positive prospect of regular income from large contracts: HK is equipping the French army with assault rifles, with deliveries taking place gradually year after year. The same applies to the Bundeswehr, in 2025 HK wants to deliver the first large batch of a total of 120,000 assault rifles as the successor to the G36 used so far. Delivery extends over seven years.
The largest German manufacturer of handguns has around 1,100 employees. Customers include authorities – military and police – as well as civilians; the US market is particularly important here. Competitors include Beretta from Italy, FN Herstal from Belgium, the Czech CZ Group including its American subsidiary Colt and the US manufacturer Smith & Wesson.