German defense firm Renk CEO says Iran war could drive ‘increasing demand’ in the Middle East

The chief executive of German defense firm Renk said the escalating war in the Middle East could boost its business in the region.

“The current crisis in the Middle East, the Iran war, this might lead overall, and this is really a gut feeling, to overall increasing demand for defense capabilities in this region,” CEO Alexander Sagel said Thursday on a call with analysts.

A day earlier, Sagel said the company received its first orders … for prototypes for a new Infantry Fighting Vehicle (IFV) from “a Gulf state,” which should be developed in the next two to three years. “It’s a kind of indication,” he added.

The Gulf states have been in the firing line of the war, facing Iranian ballistic missiles that have targeted U.S. bases on their territory, as well as energy facilities, civilian infrastructure and cities.

Renk reported fourth-quarter and full-year earnings before the bell on Thursday. While the earnings covered a period before the war in the Middle East, analysts had questions about Iran.

“I think this conflict could drive further defense spendings, not only on air and not only on ammunition, and not only on air defense systems, but also on ground-based,” Sagel said. 

Renk specializes in military drivetrain technology, including IFVs, and many larger defense firms count Renk as one of their suppliers.

The German mid-cap defense firm reported full-year revenue that grew 19.8% year-on-year, with adjusted earnings before interest and tax expanding 21.7%. 

Order intake was up 9% over the year, and the order backlog came in at a record high of 6.68 billion euros, compared with 2024′s 4.96 billion euros.

Guidance for this year, however, came in below consensus, and shares in the Frankfurt-listed company were down over 4% in midday trading. The company sees 2026 revenue of at least 1.5 billion euros, about 3% below consensus at the low point.

Renk shares have almost tripled in price since their initial public offering in February 2024. 

European defense stocks have rallied amid heightened geopolitical tensions and the war in Ukraine, which prompted European governments to raise spending on defense. Larger peer Rheinmetall is due to report earnings next week.

Renk’s largest and most important unit, Vehicle Mobility Solution, drove the 2025 growth, with profitability up nearly 28%.

Its Marine & Industry unit also posted double-digit growth on both the top and bottom line, and CEO Sagel sees an opportunity for the naval unit to benefit from U.S. President Donald Trump’s push for expanded U.S. defense budgets, noting the lower-than-historical number of U.S. vessels. 

“If you see the geopolitics in, especially in Asia, or when you see the number of vessels to aircraft carriers striking groups now in the Middle East, they need to build up and to ramp up through frigates, destroyers, and whatever,” said Sagel.