Heckler & Koch fights for survival

Eric B
by Eric B

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.

YouTube: Heckler & Koch, No Compromise.
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.

Photo above: HK416K in action (Photo Norwegian Defense Jakob Østheim)

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.

Taking iin from what I read on various Heckler & Koch user groups on social media, the delivery time for some of their civilian semi-automatic rifles are around

TFB’s Pete reviewed the VP9 SK here. Pete liked the Trigger, Function and Appearance of the VP9 SK.

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.

Some other Heckler & Koch related articles:
Eric B
Eric B

Ex-Arctic Ranger. Competitive practical shooter and hunter with a European focus. Always ready to increase my collection of modern semi-automatics, optics, thermals and suppressors. TCCC Certified. Occasionaly seen in a 6x6 Bug Out Vehicle, always with a big smile.

More by Eric B

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2 of 176 comments
  • 45clive 45clive on Jul 10, 2018

    The only pistol I've had literally blow up in my hands. Better engineering than the Beretta, though. Instead of getting a slide through the head the mag blew out and the frame shattered.

  • Dhanoya Dhanoya on Jul 11, 2018

    This is what they get for not being civilian friendly. Still these punks dont want to release a civilian MP7