Sparks - Theon International

Theon announced a trading update after the close on 27 July 2026, delivering a robust set of results for Q226, with revenues  of €128.6m  (€92.9m) up 38% and EBIT up 44% to €35.1m (€24.3m) equating to an adjusted EBIT margin of 27.3%, up 110bp y-o-y. Q2 saw continued strong demand for night vision solutions and the group continued to build traction across intelligence, surveillance and reconnaissance (ISR) solutions (formerly the platforms business) with the announced HGH acquisition marking Theon’s entry into counter-drone systems.  H1 revenues were up 35% to €248.7m (€183.7m) with adjusted EBIT up 37% to €65.1m (€47.4m) equating to an adjusted EBIT margin of 26.2%, up 40bps y-o-y. Cash conversion of c 83% was slightly lower than the 86% in H125 but remains at a good level. Net debt remained broadly stable in Q226 at €234m (Q1 €228m) with net debt/EBITDA of 1.7x before the recently announced acquisition of an 80% stake in Merio and the acquisition of HGH for c €300m, which the company expects to complete by the end of Q326 and beginning of 2027 respectively.

H1 order intake increased by 38.5% to €232.5m in H126 (€167.9m), reflecting continued demand across Theon’s products and taking the soft backlog to €1.46bn. This  represents 2.4x forwards-looking coverage based on the top end of Theon’s guidance range and provides visibility of future growth supported by Theon’s exposure to multi-year procurement programmes, framework agreements and high customer retention.

Theon continues to benefit from resilient demand fundamentals, providing confidence in the achievement of its unchanged FY26 guidance. The company continues to expect FY26 revenues of €570–600m with mid-term organic growth of 15% or more and an adjusted EBIT margin in the mid-twenties for both time periods. The company guide for FY26 capex of €30m with c 4% of sales mid-term and dividends at 20–30% of net income with the FY25 dividend representing  30% of net income. Further acceleration of activity and order intake is expected in the second half of the year, in line with the sector’s typical seasonality and Theon’s historical business pattern and supported by what the company describes as a robust pipeline, new products and opportunities across geographies, which also expand Theon’s addressable market. Theon will publish its HY26 report on Monday, 7 September 2026, after market close. A webcast for analysts and investors will be hosted on Tuesday, 8 September 2026, with registration details published nearer the time. For more about Theon see Theon International — The optics look good (17 July 2026).