The armaments company Heckler & Koch made more profit than before by selling assault rifles and other weapons. After the first three quarters there is a net profit of 17.1 million euros, almost a third more than in the same period of the previous year. The so-called operating result (EBIT) rose by seven percent to 34.4 million euros. Sales only increased by one percent to 210 million euros, as the company from Oberndorf, southwest of Stuttgart, announced on Monday.
Heckler & Koch has had financially difficult times. In 2017 and 2018, the company was deeply in the red, but with new management and investments by the owners, the turnaround was achieved. Work processes have been improved and new machines have been purchased. These measures introduced in 2019 paid off, says CFO Björn Krönert. “We are on a good growth path.”
Money brought in this year, for example, deliveries of assault rifles to the French and Norwegian armies. The US Army received precision rifles from HK. The British Army, in turn, had older assault rifles modernized by technicians from the company.
Looking ahead to 2022, the CFO said the market was expected to remain strong. “We will continue to develop and look to the future with optimism.” The numbers from ongoing business are positive, but the mountain of debt remains high at EUR 240.6 million in loans. “We are in good refinancing talks,” said Krönert. Around two thirds of the total, 160 million euros, are held by major shareholders – the interest rate is therefore relatively low here and the donors have a long-term commitment to the company.
The order books are full, but Heckler & Koch has still not been able to secure a prestigious major order. The Bundeswehr is to receive 120,000 new assault rifles, the standard assault rifle of the German army has been made by Heckler & Koch for six decades. In the lengthy procurement process, things are currently looking good for the Black Forests, but competitor CG Haenel from Thuringia appealed. In March, the Düsseldorf Higher Regional Court could decide that Haenel will definitely be left out – then HK would probably be certain of the major order.
Heckler & Koch has 1050 employees, 950 of whom work at its headquarters in Oberndorf. Due to the difficult financial situation of the company at the time, the workforce agreed to unpaid overtime of 2.5 hours per week in 2019. But that’s history: a restructuring collective agreement expired this summer, and the workforce has been paid normally again since then.