Steyr Motors reported 2025 prelims, confirming the step-up in growth, in line with the guidance:
Q4 25 sales grew 20% yoy to € 14.1m (eNuW: €14.1m), sequentially increasing the rate vs. +15% yoy in 9M 25. On a FY basis, sales grew 16% yoy to € 48.5m, with civil sales up c.22% yoy and defence-related sales up c.13% yoy. Q4 EBIT increased 30% yoy to € 1.8m, below our expectations due to one-off costs (e.g. M&A-related), and remained flat on an adjusted basis at € 3m (eNuW: € 2.8m). On a FY basis, the adj. margin thus arrived at 14.4%, a 9.8pp yoy decline due to ramp-up costs as well as the postponement of high-margin engineering orders e.g., related to the K2 MBT.
Looking into 2026e, the guidance targets sales of € 75-95m, reflecting a growth acceleration to 55-96% yoy. It is seen to be driven by backlog conversion (c.€ 45m covered) as well as additional expected framework contracts, incl. a potential new Leopard 2 related agreement, and appears to include M&A. Our sales estimate sits at € 71m organically (+46% yoy), seemingly rather conservative at this point in light of the news momentum, although delays in defence procurements or frame contract call-offs remain possible. The EBIT margin is targeted at >15% (eNuW: 15.5%), reflecting an increase of >0.5pp yoy, thanks to operating leverage.
Breaking into Singapore's defence ecosystem: we expect ST Engineering (c.€ 21bn market cap) to be the unnamed customer that has awarded Steyr Motors the contract to design and supply its 4-cylinder engine to a new future-oriented all-terrain vehicle concept (eNuW: similar to modernised HumVee). Typically, such projects start with an initial small engineering revenue contribution (eNuW: € 0.5m in 2026, high margin). The resulting tailor-made concept of a high-power density engine is also what usually makes Steyr Motors the long-term single-source supplier, supporting visibility. Beyond an expected total order intake of € 20m by 2030e, the selection of Steyr Motors as the engine supplier provides a tangible proof point that Steyr's proposition resonates with further international tier-1 platform primes.
Intensified collaboration with Tryson to tackle the civilian China potential: Steyr has signed a five year framework agreement with Tryson securing a binding minimum of >750 engines through 2030 (€ >30m sales). Units are manufactured in Austria and exported to China, supporting near-term visibility without relying on a local ramp. In parallel, Steyr has set up a JV with Tryson to enable staged localisation. The JV is designed as a capex-light growth lever to unlock incremental business beyond the secured minimum volume.
In sum, the investment case remains more than a pure defence budget beta. It is about platform penetration and internationalisation on the back of Steyr Motors unique high power density, mission critical diesel engine. BUY, PT € 59, based on DCF.
ISIN: AT0000A3FW25
