Theon International — Positive developments

Theon International (AMS: THEON)

Last close As at 30/07/2025

EUR26.65

0.40 (1.52%)

Market capitalisation

EUR1,838m

More on this equity

Research: Industrials

Theon International — Positive developments

Theon reported a strong operational performance in H125. Perhaps more interesting are the order wins in new high-tech product categories such as Augmented Reality Modular Ecosystem of Devices (A.R.M.E.D.) and management’s commitment that, along with the platform-based activities being developed, it expects these activities to account for around 50% of revenue in the medium term. The Belgian expansion supports this initiative.

David Larkam

Written by

David Larkam

Analyst, Industrials

Aerospace and defence

H125 trading update and Belgian expansion

30 July 2025

Price €26.25
Market cap €1,936m

Net cash at 30 June 2025

€38.1m

Shares in issue

70.0m
Code THEON
Primary exchange AEX
Secondary exchange N/A
Price Performance
% 1m 3m 12m
Abs (9.2) 11.0 128.1
52-week high/low €35.0 €8.5

Business description

Theon International develops and manufactures customisable night vision and thermal imaging systems, primarily for military and security applications. These optoelectronic devices are developed for both man-portable and platform applications.

Next events

H1 report

2 September 2025

Q3 update

3 November 2025

Capital markets event

Q425

Analyst

David Larkam
+44 (0)20 3077 5700

Theon International is a research client of Edison Investment Research Limited

Note: PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Year end Revenue (€m) PBT (€m) EPS (EUc) DPS (EUc) P/E (x) Yield (%)
12/23 218.7 49.9 - 0.00 N/A
12/24 352.4 86.7 98.00 34.00 26.8 1.3
12/25e 420.0 105.2 114.00 39.90 23.0 1.5
12/26e 483.0 123.8 133.00 46.55 19.7 1.8

H125 results

Theon reported record H1 sales of €183.7m (+20.6%), adjusted EBIT of €47.4m (+24.4%) and an operating margin of 25.8%, up from 25.0% as the group benefited from strong top-line and positive operational leverage, assisted by positive operational management. EPS was €0.48 (+17%). Note that these increases are like-for-like but encompass a change in accounting policy to include the group’s share of profits from core equity-accounted investments in operating profit, a positive 3.3% contribution to H125 EBIT. Primarily, these include the Hensoldt JVs (see note 22 in the 2024 annual report for details). Capex increased by 31% to €6.7m, including capacity investment in Harder Digital. Net cash reduced from €41.7m at end December to €38.1m, primarily due to the payment of dividends.

Order intake

New orders, including A.R.M.E.D. products, were up 118% to €167.9m with a book-to-bill ratio of 0.9x before a further €100m of additional options. The soft backlog reached €622.2m +45% y-o-y, although down from the record €654m at year-end. Theon also recorded €378.2m in contractual options. The tender pipeline remains strong with new platform-based systems being developed, expanding Theon’s addressable market from €1bn at IPO in 2024 to €2.8bn by 2030, with expectations that these new activities will account for around 50% of sales by 2027.

Theon Belgium and Andres expansion

Theon is establishing a subsidiary and production facility in Belgium to leverage its A.R.M.E.D. capabilities and assist participation in EU/NATO programmes. It has also taken a 10% stake in Andres Industries, with which Theon has been working on multiple tenders, for €1.1m with an option to increase its stake to 24.99%.

Guidance and forecasts

There is no change to guidance, recently increased to the top end of the original €410–430m revenue expectation, mid-20% operating margins and capex of €20m. Encouragingly, Theon comments that it is currently in negotiations for ‘significant contracts’, after which it will provide guidance for FY26. Our forecasts and valuation are unchanged, but will be reviewed with the full H1 report due on 2 September.

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