Heckler & Koch fights for survival

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cyclone

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Not sure what to make of this... :yingyang:




Heckler & Koch fights for survival

July 6, 2018


According to the German Magazine Welt, Heckler & Koch are fighting for survival as their credit rating keeps falling. You can find the original source here, in German.

We at The Firearms Blog have repeatedly reported about all the orders that Heckler & Koch have received, and we’ll keep doing so. For instance, you can check one of many articles on the HK416F for France here.

Heckler & Koch have over 700 employees in their five sites in Germany, France, the UK and the USA. Their main product groups are pistols, sub-machine guns, assault rifles, precision rifles, machine guns and grenade launcher systems in 25 and 40 mm. Net sales in 2017 were 182 € millions, a little down from 2016’s 202 € millions.

However HK’s financial circumstances are unclear, and as the rating agency Moody’s switched HK’s rating from B3 to Caa1 they sink deeper and deeper.

Exactly how bad is the new credit rating? To give you an idea Iraq has the same credit rating. I double checked that, and it looks correct.

Yet Heckler & Koch remains in firm hands of its owners. Only about 0,03% of the outstanding 27,640,920 shares are trade-able on the Euronext stock exchange in Paris. It means that the main shareholders own 99.9699 % of the company.

And the stock owners might not be overly worried, as it seems like the stock price of “MLHK” has about doubled in the last year. Source HK Euronext. Bear in mind that is based on very low trade volumes.

HK’s General Meeting canceled and postponed

Another area of concern was that the Annual General Meeting of H & K AG was postponed. The reason was explained that due to the very high interest (“an unexpectedly high number of applications“) (Source HK IR) they, unfortunately, had to cancel and postpone the general meeting scheduled for 26.06.2018. This was done on a very short notice, and there’s not much to like about it.

The Management Board of H & K AG said they will convene the Annual General Meeting again. The invitation to the new The Annual General Meeting will be published in the General Press as well as on HK’s homepage, but that has yet to happen.

Whenever it takes place, it seems the General Meeting has all the right ingredients to become eventful as one part of the company seems to be flat out with large orders from France for a new service rifle (HK 416F) as well as possibly delivering the next service rifle to Germany after the G36.

The other part of the company seems in difficulty with making any profit out of the orders. Debt is another issue, perhaps the largest one. In 2017 HK fell into the loss zone and Q1 also showed a slight loss (unaudited) of 2.5 million Euro.

Moody’s sees a risk that Heckler & Koch no longer will meet the conditions for an EUR 130 million loan on the upcoming deadline. This means that shareholders would probably have to come to the rescue once again.

Late launch of the VP9SK pistol

Moody’s also reports a late launch of the VP9SK pistol in the US civilian market, which developed weaker than expected, while H&K invested in a plant in the US.

....

According to the latest information – (Cofisem – Last Update: 12 Jun 2018) – you can find the breakdown of HK’s production as well as markets.

“Heckler & Koch is specialized in manufacturing and marketing of small firearms intended for use by the armies, special operations forces, security forces and police. Net sales break down by the family of products and services as follows:

  • pistols (34%);
  • rifles (26%): assault rifles and sniper rifles;
  • Machine guns and sub-machine guns (23%);
  • other (16%): primarily training systems, 40 mm grenade launchers, sports weapons and design services.


Net sales break down geographically as follows: Germany (21.6%), United States (29.2%), France (16%), United Kingdom (8.1%) and other (25.1%).”

It will be interesting to see if the market share to France will increase in the future, as deliveries of the HK416F only just begun and will continue for many years on.
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Nah. As one of their most ardent fans I am aware of their stupidity coupled with the modern german populace attitude towards firearms H&k days may very well be numbered. If they get the us facility up and running and sell hard to their space magic to the very eager us civvie populace they just might be faring alright. Otherwise. They might just flounder.
 
They haven't innovated in more than 20 years, they're just playing catch up and are clinging onto their brand appeal. It can only go so far.
 
I can see how the writing is on the wall for that company...

- Home based government not very gun friendly (very Pro-UN)
- Announcement last year that they were no longer intending to sell to the reactional/hobbyist market, only commercial and civil and federal contracts
- competitors dealing from more firearm friendly nations
- etc
- etc

Kind of like the Canadian Firearms industry.
 
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Im sure its tough for all companies who are based in the EU and do not have large % of their production outside of the EU. If they make their procurement deadlines with the French Military that should atleast give them the chance to come out of it okay. As a fan-boy of many of their firearms I am hopeful that they come out of this and continue making firearms.
 
After how cozy HK's been with the criminal and dictator element (*stares pointedly at their providing build licenses and tech supporrt to Tehran's local-build MP5 line*) while flipping off the law-abiding gun owner for decades... Eff 'em. Go die in a sewage fire, HK. Because You Suck And We HATE You, just like you say about us.
 
Debt loading by the parent company is how HK, Colt and Remington got into where they are now. They were primed for exploitation because the government needs them so the others are inept enough to loan them more money than they should. And this saga will continue every year or two when their debt becomes due. The western Europe doesn't have many big small arms factories. Only HK, FN, Beretta and now CZ. By the recent offerings, really only HK can make anything decent. FN is still a machine gun company.

Not every company, like Colt Canada and Lithgrow, is essentially subsidized by the government, other than some other 2nd and 3rd word state arsenal.

And the comment that HK sold G3 and MP5 to Tehran. Well, the American sold F-14 Tomcats and Hawk SA batteries to Iran too before 1979.

That is why we pay 20K for a C6 while the American pays 7K.
 
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