Theon International: Sales Up 40.4% in Third Quarter, 2026 Targets Confirmed
The defense optronics group confirmed its annual targets on November 9, 2026, after a third quarter marked by a 40.4% increase in its sales.
Order intake remains below billings over nine months. The group is counting on an acceleration in the fourth quarter to balance the two over the fiscal year.
Adjusted EBIT Margin of 26.2% and Medium-Term Target Raised
In the third quarter of 2026 alone, Theon International generated revenue of €134.1 million, compared with €95.5 million a year earlier. Adjusted EBIT grew faster, rising 59.5% to €35.1 million from €22.0 million.
The adjusted EBIT margin for the quarter thus gained 3.1 points, reaching 26.2% compared with 23.1% in the third quarter of 2025. Over nine months, it also improved, to 26.2% from 24.8%, a level the group places slightly above its annual target.
Cumulative figures at the end of September show revenue of €382.8 million, up 37.1%, adjusted EBITDA of €107.3 million (+48.4%) and adjusted EBIT of €100.2 million (+44.4%). According to the company, the margin was preserved despite the launch of new products and investments made across the group.
Diversification is reflected in the business mix: sales outside night vision accounted for 17.6% of revenue over nine months, compared with 7.1% a year earlier, with a growing contribution from Kappa. The group confirmed its 2026 targets, which were raised when the half-year report was published in September.
These targets cover revenue of approximately €600 million, at the top of the previous range, and a benchmark adjusted EBIT margin of 26%. In the medium term, Theon now aims for organic revenue growth of more than 20% per year, compared with more than 15% previously.
The group attributes this increase to its commercial momentum, better visibility on its revenues and a market broadened by its product range. Its other medium-term targets include an adjusted EBIT margin above 26%, capital expenditure of about 4% of revenue and a distribution of 20% to 30% of net income.
Orders Lag Sales Growth, Net Debt Rises
Order intake reached €285.2 million over nine months, up 22.5% year on year. This growth remains lower than that of revenue (+37.1%), which brings the book-to-bill ratio to 0.74.
Theon targets a ratio of about 1 for the fiscal year, relying on an acceleration in orders in the fourth quarter, which it says is consistent with the seasonality of the sector. In the meantime, the soft backlog has fallen 5.4% since the end of June, to €1,377.0 million from €1,455.9 million.
Options attached to this backlog are almost stable, at €897.0 million compared with €902.0 million (-0.6%). On the balance sheet side, net debt rose 5.6% over the quarter, to €251.1 million at September 30 from €237.8 million at June 30.
Financial leverage, measured as net debt relative to adjusted EBITDA for the last twelve months, nevertheless fell from 1.7 to 1.6 times. Adjusted EBITDA therefore grew faster than debt.
Working capital requirements absorbed 42.7% of revenue, compared with 43.4% a year earlier; the group attributes this high level mainly to inventories built up ahead of the fourth quarter.
Capital expenditure reached €18.1 million over nine months (+44.1%), and the cash conversion rate improved slightly, to 83.2% from 82.7%.
For 2026 as a whole, Theon has lowered its capex forecast to about €25 million, from about €30 million, due to a postponement of investments, the balance of which is deferred to 2027. According to the company, its key projects remain on schedule, including the new Athens site dedicated to ISR products, expected in the second quarter of 2027.
Merio Acquisition Completed, Purchase of HGH Expected by End of 2026
On the acquisitions front, Theon completed the acquisition of an 80% stake in Merio and recorded a first order of about €5 million for its drone solutions. The purchase of HGH, still subject to authorizations, remains scheduled for the end of the fourth quarter of 2026.
To finance this transaction, the group obtained in September a syndicated credit facility of up to €325 million. In the third quarter, it also increased its stake in Harder Digital from 60% to 65% and committed an additional €15 million of capital, as the tubes of this company are already being used in recent orders.
After the end of the period, Theon announced on October 20, 2026 night vision contracts of about €45 million with two European NATO member states, subject to final approvals from the authorities, with deliveries expected as early as 2026.
The founder and chief executive officer, Christian Hadjiminas, stated: “We anticipate a solid end to 2026, with momentum that will continue into early 2027.” The chief financial officer, Dimitris Parthenis, will comment on these figures on November 18, 2026 during an online presentation open to investors.
