Sparks - Theon International

Theon’s Q126 order intake of €70m was down 40% y-o-y, primarily due to seasonality and contract phasing, with accelerated order intake expected in the coming quarters supported by customers exercising options. The company added €40m of options in the quarter. Order intake year-to-date amounts to €102m  with a good mix of night vision goggles and new digital products. The soft backlog of €1.42bn was stable despite high growth in Q1 supported by the consolidation of Kappa Optronics. Revenues of €120.1m (+32% y-o-y) were a c 1% miss versus €121.7m consensus but adjusted EBIT of €30m (+26% y-o-y) was  c 4% better than the €28.9m consensus expected, with the adjusted EBIT margin of 25.0% little changed versus 25.3% in Q125. EPS of €0.69 was a significant improvement versus the €0.25 achieved in Q125, driven by the healthy operational performance and the appreciation of the 9.8% strategic stake in Exosens. As expected, Theon moved into a net debt position in Q1 following the completion of the acquisitions of a 9.8% equity interest in Exosens and 100% of Kappa Optronics taking net debt to €228m at the end of the quarter. Net debt/EBITDA rose to 1.8x, leaving the company with sufficient financial flexibility to support its investment plans.

For FY26, Theon is confident that it can maintain a book to bill above 1x and strong order backlog with longer-term framework agreements providing more visibility than it has had historically. FY26 and mid-term guidance remains unchanged. For FY26, Theon guides to revenue of €570–600m with a mid-20s adjusted EBIT margin. In the mid-term it continues to expect organic revenue growth above 15% pa and a mid-20s adjusted EBIT margin.