Good morning, everyone. This is Jacques Esser from the Investor Relations Department of TKMS. Also on behalf of the entire Investor Relations team, I wish you a very warm welcome to our quarterly earnings presentation for our first quarter 2025-2026. With me in the room are Oliver Burkhard, our CEO, and Paul Glaser, our CFO, and we appreciate you joining us today to our Q1 reporting event. Our CEO, Oliver Burkhard, will start with an overview of this quarter's key highlights and recent developments shaping our market, and then our CFO, Paul Glaser, will walk you through the detailed financial results and share our outlook for the year ahead. Finally, and before I hand over, please allow me some housekeeping remarks. All the documents from today's earnings release and for this conference call are available on our Investor Relations website.
The call will be recorded, and the replay will be available shortly after this call. After the presentation, we will open the floor for questions for analysts and institutional investors. When asking a question, please state your name and institution so everyone in the room and on the webcast can follow. And to ensure that everyone has the opportunity to participate, please limit yourself to two questions at the beginning. And with that, I would like to hand over to you, Oliver.
Thank you, Jacques. Also, warm welcome from my side. Hope you're doing well, ladies and gentlemen. I can assure you we are doing well because it has been a truly eventful quarter, marked by, firstly, the inclusion of the MDAX just a few months after the spin-off and our successful stock market debut. This meant another, I think, for us really important milestone. Secondly, we recorded additional order intakes, bringing our order backlog again to a new record. And thirdly, we delivered two of the so-called legacy submarine projects to our customers within that quarter, while production, as you know, of the newest 212CD type submarines is further ramping up.
Lastly, we just announced that last week we signed a prime contract to provide the German Navy with a bridge solution due to the F-126 delay based on our MEKO A200 type frigate, but I will have some news on that later on in the presentations. Well, with that being said, I will now walk you through the major sector trends in the last quarter. First of all, a lot is going on. Geopolitical no-slow is once again, let's say, the driver for our structural demand for European naval capabilities. In the last couple of weeks, there were further geopolitical developments highlighting the demand for our products. In Germany, the defense sector, as you can see on the chart, is further on rapidly transforming, marked by sharply higher budgets and extensive modernization programs across all service branches.
If I would sum it up, I would always say it's about more and different, and we are exactly with our offer in our products and services fitting to that. In Canada, the entry into the EU-wide defense procurement program called SAFE, I think, creates a fresh market opportunity and reinforces interoperability among NATO navies, further amplifying the demand for TKMS-built ships. I think it's a good signal that Canada joined the SAFE program also for our ongoing campaign in Canada. Within the NATO, Germany and its allies will have an increasing need for ships in the year ahead. Therefore, capacity expansion, for example, the one we currently discuss in relation to our non-binding bid for German Naval Yards Kiel, our neighbors here in Kiel, are also for us under consideration, but not a must-have for us. We always state that, and it's true.
We would like to, but we don't have to. And lastly, in emerging theaters like the Arctic, as the Greenland debate, and I mean it was coming up and it's going a bit down now again, but it showed there's also a need for further support in naval capacities. So let's take a closer look at the TKMS performance in Q1. As you already have seen, and we have released it this morning, I think a solid, really solid quarterly performance, and again with a record order backlog. And looking at the order backlog, we recorded another increase up to EUR 18.7 billion. This is by end of December, representing a 13% year-on-year growth and long-term revenue visibility, to always state, and I think is a big advantage of our business.
Revenue was stable in a year-over-year comparison with EUR 545 million being impacted by the usual volatility and revenue shifts of our project-based business model, which sometimes maybe not fits into the view of a quarterly analysis, but I think you are aware of that, and I don't have to mention that explicitly. Adjusted EBIT was flat as well as in a year-over-year comparison, resulting in a slightly improved 4.8% margin coming from 4.7%, so improvement also on this side, but this is something Paul will elaborate later. And last but not least, the free cash flow reached a positive EUR 33 million. In the previous year, Q1, the free cash flow was extraordinarily strong, as you know, driven by large prepayments concerned to the linked with the contract of Germany. We have one in December 2024.
So overall, I think these financial results highlight a solid quarter, positioning the group well for the quarters to come. Let's have a look at our three main, let's say, strategic areas, which is, of course, operations. If you have an order book of EUR 18.7 billion, it's for sure that this is your main task, second, technology, and third, customers. On the operations side, you may recognize that we are signing a lot of MOUs with Canadian firms to support the production of 212CD submarines. It's, of course, linked to that campaign we are running there. We made also strong progress for the ramp-up of our Wismar shipyard, which is, of course, important for us because a lot of the growth will be covered by them, with around 400 employees, meanwhile, working there as of January. Looking at the technology side, we also made progress.
We further moved forward in our innovation agenda to position ourselves well for the future of naval warfare and to bring our innovations to the market. Let me give you some examples from the past quarter. First of all, we conducted successful test firings of our anti-torpedo torpedo. You may know it under the name SeaSpider. We also successfully tested our AI-enabled sonar reconnaissance on unmanned underwater vehicles. And lastly, experiments of simulative tactical mission autonomy for the Future Combat Surface System were also successful. And if we look at what we have achieved in terms of customer contracts on the right side of the slide, there were also significant achievements made. Firstly, the Parliament of Norway approved the purchase of two additional 212CD submarines, but signing was in January, so it's not anymore in the Q1, but we already have it.
Furthermore, we successfully continued to execute our legacy order book by the delivery in that quarter of two submarines in November and closely after our December quarter in January. At Atlas, we recorded, and this is very nice to see, we recorded a record order, again a record, for heavyweight torpedoes, this time for the 212CD submarines ordered by Germany and Norway. And just a couple of days ago, a primary contract was signed with the German government for the bridge solution of the F-126 based on our MEKO A200 frigate design. So with this, let's have a look at our order book as it stands in December 2025 on the left side, EUR 18.7, gives us, again, revenue visibility for many years to come. In Q1, our order backlog increased mainly to the just-mentioned heavyweight torpedoes ordered by Germany and Norway.
We also received an order by the Norwegian Parliament for two additional submarines of a 212CD. It's not included there. This order came after the close of the quarter. It will, however, be reflected in the order backlog for the next quarter. Nevertheless, I mean, you are all able to. If you do the math, this, of course, means that as of today, our order backlog has overrun the EUR 20 billion mark. Looking at our campaign pipeline, you see they are well-filled. In India, just recently returned from India on Sunday, our submarine project, as you know, TKMS is the only remaining bidder and remains in active negotiations, let's say, on final with the customer. In the Canadian submarine patrol submarine program, TKMS is competing against one other bidder. A decision is still expected in 2026. We're going now on Surface vessels.
In Germany's F-127 Frigate Program II, TKMS is the only remaining bidder. Further, as already mentioned, a preliminary contract was signed from TKMS and Germany for a bridge solution for F-126, which is rumored to be delayed up to four years, based on a MEKO A200 for at least four ships. This preliminary agreement enables the start of central preparation measures. This is good for us, so we don't have to pay it. This enables on-time delivery by 2029, so much earlier than, let's say, compared to the delay, provided the actual construction contract is concluded in a timely manner. That was my part, let's say, for the beginning. With that, I will hand over to Paul, Paul Glaser, who will take you through our financials in more detail. Please, Paul.
Perfect. Thank you very much, Oliver. Also, a very warm welcome from my side. I'm going to guide you through our financial update for the first quarter. Of course, we're going to speak about our updated outlook with regards to the running fiscal year 2025-2026. But before we deep dive, let me give some overarching comment. I think we see a very solid start here in the Q1 figures. We are very well on track throughout all our segments and also to achieving our financial targets. I think this really confirms that we are well-positioned not only to continue our trajectory of profitable growth and margin improvement, but that you also can see that this is fueled and supported by a strong order backlog.
Oliver just mentioned the additional two units for Norway that we signed end of January and also the disciplined execution that we see throughout all segments. So let's shed some light on our numbers for the Q1. As you see, order intake in comparison to the previous quarter is down. This is simply due to the fact that we had a large booking of the optional boats for the German submarine in last year. And you're going to see next quarter already the two additional submarine units for Norway. But if we translate the roughly EUR 900 million to the book-to-bill ratio, that's a factor of 1.7. So booking more than we had in sales. So it really shows our strong pipeline here of well-regarded products. And it was mainly driven by a record torpedo contract at the Atlas unit.
When speaking about our revenue development, this was broadly stable with EUR 545 million. Please note that some revenues were held back by shifts in the programs, which naturally occur on a quarter-to-quarter basis. This is very common in our project structure. Those who are studying us for a longer term, you also see that naturally our second half, so third and fourth quarter, are the more stronger ones. It's a development overall that we've did foresee and it's not surprising us. The overall revenue development, and we see this in the segments, though, was very disciplined in execution, especially when we speak about the existing order backlog and also of the legacy orders, mainly in the submarine unit. When speaking about the EBIT, this was broadly stable with a slight increase of 0.1 percentage points to 4.8 percentage points.
Let me make here some very important remarks. So as I said, firstly, the first quarter is usually our lowest margin quarter and also below the full year average. And secondly, the EBIT was impacted in the previous year by one-off gains in a low double-digit amount, so meaning that our underlying year-over-year performance was actually quite positive. And I'm going to come back to this later in my slides. And lastly, I think what's important for you to also reflect is that we had some higher R&D expenses as we want to drive our product pipeline and also drive the growth of the business, but also some minor costs with regards to the spinoff that took place by the end of October last year. So now let's take a closer look to our segments. I'm going to start with submarines.
As we announced during our last call, also focusing on the EBIT performance of the submarine segment. So when speaking about submarines, of course, you see that there is a decline in the order intake. This is mentioned or mainly driven by the fact that we did not have a huge order intake. And previous year, we had the four 212CD submarines. So this is going to look different than in Q2, where we have the order intake of the two units for Germany. So very different picture than if we go for the Q2 release. Revenue was down to EUR 231 million. And as mentioned, this is actually quite common in our business. First, we had some revenue shifts. But second, also, we had a prepayment of revenue shifts from the service business to the Q4 of last year.
So this is fully in range of what we expected and also seen with regards to the project progress. Now, when we look into the EBIT numbers, you see here a small decline to EUR -4 million. There are actually three effects that we have to factor in here. First one, and I think this is good news, Oliver told you, we now have over 400 people on site in Wismar. So we had some ramp-up costs here that, of course, are affecting the main party, the submarine segment. So this actually is progressing as we plan. And also in the next and upcoming quarters, we're going to see more and more activity in Wismar there. So this is going to reduce over time.
And second, we are also spending more on R&D and also in some of our sales campaigns to drive the product pipeline, also driving the growth of the business, not only speaking about Canada but also India as major campaigns that the teams are currently running for. So please also know that we had also two major milestones with regards to the legacy contracts. As I always stated, especially the submarines segment needs to go through washing out the old orders from the P&L and replacing them with our high-margin orders. This is taking place. We delivered one submarine for the Turkish Navy and now in January, also another submarine for a customer. However, it's confidential to say the name. But those are two legacy boats that we got out of our books, which is very, very positive from that side.
Again, let me say something about that topic of comparing a Q1 2024-2025 to Q1 2025-2026. So the Q1 normally is not representative of the long-term trajectory of the segment, especially for submarines. And on the contrary, we really see and continue to expect a strong improvement of the profitability of the submarine segments. As I said, as legacy contracts are being delivered and new contracts with higher margins are now gradually more and more being executed. And of course, this is not only to drive revenues upwards but also EBIT contribution and is also linked to the cost-to-cost accounting method with the following quarter. So meaning the more costs we can book to our accounts, especially from our suppliers, the higher the new margin profiles are going to have an impact in our relative EBIT contribution of the submarine program. We still have 26 submarines now here in our segment.
I know this will give us multi-year revenue visibility. It's a very, very solid foundation for profitable growth to come and also very, very good visibility with regards to incremental margin increase of the submarine program. Now let's have a look into the Surface vessels unit, which also showed quite good performance. If we can go back one slide, please. Yeah, very good performance with regards to Q1. As you know, in the last quarter, 2024-2025, we booked the icebreaking research vessel New Polar Star. We did not see huge activities in Q1 for Surface vessels. However, we now have the bridging solution for the F-126 in place. The MEKO A200 order or pre-order, as it's called, will be in our book in Q2. Also on order intake dynamics, a more robust Q2 here that lays ahead of us.
What's very significant for us to state here, and you look into revenue, we have an increase of 38% to EUR 174 million. This is really and states the strong execution of our order book, especially in the Brazilian program, the Tamandaré project, where we now started sea trials of the first frigate, and it was successfully concluded. Again, we ramped up a shipyard with over 800 employees there, successfully executing a complex program brought from Europe. I think this really states how disciplined and how well-managed this segment is here. The same now holds true for our Polar Star research vessel, concluding the designs here, also starting with regards to the first procurement activities. We are going to see increasing revenues from Polar Star also in the later half of this fiscal year, then also sustaining and improving overall profitability of the segment.
The EBIT thus was slightly down by EUR 1 million. While the margin declined by 3.5 percentage points to 7.1%, here you have to consider that we had a significant positive currency effect in the prior year. This related to our Brazilian business. Last year, the Brazilian real gained roughly 11% versus the euro during the first quarter. So there was a positive currency effect with regards to that in the mid to high single-digit range. This year, however, we had no currency effect. So if you factor that out, I think it becomes quite clear that the underlying EBIT performance was very, very solid, despite also having some more administrative costs and selling expenses with regards to the running campaigns that we see here in the segment.
So I would like to shed some light to our Rising Star, the Atlas Elektronik segment that did very, very well with regards to the Q1. So overall order intake with over EUR 1.2 billion was mainly driven by the record order for heavyweight torpedoes for the 212CD submarines. There were also additional order intake from Atlas for the submarine segment. So taking that question first, if you consolidate the numbers, you come to the EUR 900 million. We have intergroup orders, of course, here in the segment, mainly with regards to the 212CD program I just mentioned. But also there was a very nice contract signed for our mine-hunting sonars for the German Navy very early in the first quarter. So overall, very robust order intake performance here of the Atlas segment.
You see that here in revenues, we have a strong increase of over 30% to now to EUR 185 million. This was driven through all major business lines of Atlas Elektronik. In particular, there was a lot of demand and a lot of progress for the mine countermeasures for our program here in the Ukraine. But furthermore, also the other business lines supported that growth. I think that really underpins the strong operational performance, not only with regards to spare parts, but also in product support activities and repair services. This also led to the fact that we have more than doubled our EBIT here within the segment of Atlas Elektronik, now over EUR 20 million, EUR 22 million, to be very precise. All units of Atlas Elektronik contributed to that growth. We had a very strong, very efficient capacity management on board here with the management team.
It's a very, very well-managed firm here. And lastly, and also strategic foresight helped us. We are, of course, investing our own money with regards to R&D, but we are also sourcing from the available funds, especially here the EDF funding. So we had also some contributions from the R&D side. So overall, I think Atlas confirms that we not only see strong growth in top line, but also growth, incremental growth in margins and technological leadership. And this makes it a key driver of our profitability here in Q1 for TKMS. So now having covered all segments, I would like to give you some more details inside. As I said in the beginning of my presentation with regards to our EBIT bridge, I said margin slightly increased to 4.8%. Adjusted EBIT remained stable at EUR 26 million. And there were, of course, various drivers across our three segments.
Let me summarize again. Submarines, among others, driven by the RISMA ramp-up mainly and some timing effects showed EUR 3 million lower year-over-year. Surface Vessels, the stated currency effect is main driver, only EUR 1 million year-over-year decline despite the large revenue increase. And then Atlas Elektronik, significant increase with EUR 12 million throughout all business lines. Lastly, there was a negative contribution of minus EUR 8 million in our group in consolidation business lines. So this year-over-year decline was mainly driven by a positive effect from revaluation of a provision last year, which did not reoccur this year. So if you factor that out, the pure operational performance of our segments was up compared to previous year. So quite strong, strong message. Finally, considering that we also had some special effects, I think it was really a good start with regards to Q1.
So now let's have a brief look into our balance sheet and also CapEx. Again, we have a very strong balance sheet here. We have high cash generation. And of course, our cash generation is supported by our business model and the very prudent capital management that we see. Our net working capital remained negative at EUR -1.3 billion. So very stable compared to the Q1 figures. This reflects, of course, substantial advance payments linked to new orders in our segments in submarines and Surface Vessels over the last quarters. And as a reminder, it's the fuel of funding our growth and of funding our operations with the minimal reliance on external financing. I always say that we have a very low capital employed in our project business, sometimes even very, very negative net working capitals, as you can see here. So overall, very high capital efficiency from TKMS again.
So net CapEx increased, that's good news because we are progressing with our ramp-up with regards to Wismar compared to previous year, seeing more activities there, modernization. The pressure hull production line activities are ramping up. So that's very important. Again, it's funded by prepayments by the customer. So we're not taking that out of our own pockets. So ensuring really that cash impact and liquidity impact remains limited throughout the CapEx. And our net financial position remains very exceptionally strong. We still have more net cash, more than EUR 1 billion here on our accounts. Our liquidity thus declined roughly by EUR 250 million in the last quarter. As you know, we went to the stock market on the 20th of October. So there were some, yeah, closing activities of the transaction.
This mainly reflects the acquisition of some of the assets from TKAG that were part of the spin-off perimeter and the context of that transaction. Now, with this reorganization, the company restructuring has been fully concluded. So despite that cash outflow and this one-time cash outflow, we will maintain a very high liquidity of almost EUR 1.5 billion. So summarizing it, we have negative working capital. We have growth-oriented CapEx, especially for Wismar, and a debt-free capital structure. So I think combined with growing earnings, this provides an excellent foundation for being a highly cash-generative operation. So let's look into our free cash flow next. And as you know, project-related business is always driven by prepayments, about when milestones payments are achieved and when they are booked into our accounts. This is very common for a project-based business model like ours.
So in Q1, we generated an operating cash flow of roughly EUR 58 million. This compares to EUR 940 million in the previous quarter. And please recall that the previous year, we received a significant prepayment in relation with the four 212CD submarines of Germany. And in contrast, during Q1, we only had smaller prepayments. So this is nothing out of the ordinary. And in the same time, increasing our CapEx to EUR 24 million, leaving us with a free cash flow, a positive in the territory at EUR 33 million. So this really demonstrates that even without larger down payments, we are a highly cash-generative business. And I think that's the key differentiator within the defense industry, having those overpaid project lifecycles and project milestones as we walk and work through our order backlog. So this brings me to my final slide today, the outlook.
So before we come to the 2025-2026 guidance, let me first fully state and fully confirm here all of our midterm financial guidance. I'm not going to read all of them out to you. However, our target for midterm sales guidance of CAGR 10%, of course, with back-ended growth acceleration remains. Also, we are targeting our EBIT margin of more than 7% based on the same drivers as I've laid out during the Capital Markets Day last year. And same holds true for CapEx, net debt, and also our rolling three-year cash flow guidance, as well as for our dividend payout ratio at 30%-50% of consolidated net income attributed to TKMS shareholders. So when looking into 2025-2026 guidance, we give you now a more updated and partly more precise view today.
So we upgraded our revenue guidance, and we are expecting now a growth of 2%-5%, which is up from the previous range from -1% to 2%. This is due to better project performance, more performance in the Atlas segment, also the A200 frigates that are here now on the horizon. And second, we are targeting now a margin to grow above 6% and feel very comfortable with the current consensus of 6.3% here. So with this, we expect to really continue our progress towards the midterm targets, which we hereby, again, reaffirm. This concludes the presentation from myself and from Oliver. And happy to hand over to Jacques again. Thank you.
Thank you, Paul. Thank you, Oliver. And with that, we are at the end of our presentation. Thank you so far. And now we are ready for your questions.
When asking a question, please state your name and institution so everyone can follow. Please remember additionally to unmute yourself. Now, first question comes from Sriram. Sriram?
Hey, can you hear me? Yes, we can hear you very well. Thanks. Wonderful. Thank you. Thank you for the opportunity to ask questions. So a couple of questions from my end. First one, we understand that TKMS has now made an official bid for GNYK. Can you provide us more details on where we stand on the entire deal? What's the timeline we are looking at in terms of completing that and such details around that?
That would be my first question. Second, this is regarding the segmental details. Now, with the change in the reporting structure, we understand that the gross margin is now being discontinued. So would it be possible for you to give a bit more color on the segmental margin for the full year? I think when you say that you are planning to achieve more than 6% margin, can you give us a bit more color on the segmental level also? That would be really helpful. Thank you.
Okay. Sriram, thank you for your questions. I'll take the first one. I think Paul will take the second. I mean, he has no choice now, so he will take the second. First, regarding German Naval Yards Kiel. As you know, we laid a non-binding offer by the end of December. We had some talks almost before Christmas. And then in January, there was the time when they proved it. And we are in a constant dialogue with them.
As far as I can say from a timeline, we want to know in quarter one of the calendar year whether we step into a broader due diligence or we step out of that process. So it's non-binding. For us, it has a lot of operational advantages. It is, but not something we must have. If so, and if there's an opportunity and it fits on both sides, we will find out in quarter one. Again, we are in constant talks with them, but not yet have reached a stage where we say we are, I don't know, exclusive or in a due diligence, so. But I want to see that in quarter one. And if not, then we're stepping out, and we'll see how it goes for them. I think they need somebody who helped them a bit on one side.
And on the other side, it will fit to our still rising demand after our products and services. So therefore, it would be a good opportunity to have more space in Kiel.
Good. Yeah. Thank you, Sriram, for your question with regards to gross margin. So I can give you the actuals from our Q1 gross margin. We there improved. So previous year, Q1 2024-25 was 15.2%. And now Q1 actual is 17%, so 17.5%. So this also reaffirms what I said, that operational performance has been very, very solid throughout all segments. At the moment, we are not giving any guidance with regards to a gross margin as our also guidance framework has been focused on the EBIT development. So the above seven midterm and now the above six for the running fiscal year.
Okay. Sriram? Good. All right. Then let's have a look. The next question.
As a short remark, if you have a question, please state your name and institution and raise your hand, of course. The next one is from Carlos. Carlos. Carlos, I think you have to unmute yourself.
Hi, guys. This is Carlos from Bank of America. Thanks for taking my questions. So a couple of questions about Atlas. So look, exceptional top-line growth this quarter. So any call in terms of how to think about top-line growth in the next three quarters? And then second question about profitability. I think the 1Q25 to 1Q26 comparison is like for light. You don't have any one-off in Atlas. So I mean, the margin expansion has been quite substantial. So could you please elaborate a little bit on the drivers of profitability and how to think about Atlas margins going forwards? Thank you.
Can I take the first one again? Well, in general, Carlos, thanks for your question. In general, as you know, we are striving for prudent margin-oriented growth. This is for sure the right way to deliver you, the investors, let's say, a track record which is attractive. When it comes to Atlas, we have, let's say, smaller pieces compared to submarines and frigates. So the business is more dynamic. For them this year, and especially when it comes to these heavyweight torpedoes and this order in Q1 that was extraordinary, just coming from a world where 5 to, I don't know, 10-ish per year were ordered, we are in a complete new dimension. It's a lot confidential, though I can't tell you. But you can see it in the figure how deep the impact in Q1 for Atlas was. I don't think we will see that every quarter.
I don't see that year-over-year that we are doubling in that speed. But what we see is that, of course, let's say, the average growth rates, and we stated that also in our investor roadshows, is higher than it compared to platforms like submarines or surface. So you can expect a steeper growth, let's say, on one side, but we will not see it like for like as we did it in Q1. But anyhow, what is interesting is, and I think I tried to figure that out in my general remarks, it is about more, and it's about different products. And when it comes to differentiations, then Atlas is, let's say, our number one because the submarine has a lot, beginning with the structure and so on, a lot which is quite comparable if you look at further models, previous models, compared to further.
In Atlas, there has to be something done which is, let's say, unique because when it comes to multi-domain operation, when it comes to more autonomous vehicles above and below the waterline, then they have the expertise really because coming out of that sonar business and understanding that physics and water are a bit different compared to air. For us, we're still happy to have Atlas under our roof. It's a brilliant, let's say, addition to that what we have on the platform side, but we will not double it every year. That's obviously not what we're planning for because, again, prudent margin-oriented growth, giving good visibility, stable earnings, stable cash flows, is that what we're aiming for. Growth has its limitations sometimes, whether it's capacity, but also when it comes to technology.
I think especially on the technology side, we have a big advantage compared to others. And you will see that because our strategy to launch more and more products on that side has become more, let's say, clear, has become faster than it was ever in the past because of the demand of more and different. Maybe that helps a bit for you to see where we stand there. And the other one, would you take it, Paul?
Yeah, sure. Thank you, Carlos, for your question with regards to profitability. I think your question was, "Okay, can I assume the same trajectory now with growing profitabilities across all quarters for the segment?" At least that's what I would recall from your question. So there will be always minor fluctuations. But of course, the growth part that Oliver described also will hold true for the margin.
Yeah, we will not give guidance on the segments to be very precise here. But you always need to factor in that it depends on the composition of the revenue that Atlas has in a specific quarter. And these can differentiate. So if you have a composition very strong from export-oriented orders, as with Ukraine, as we have seen in Q1, that might differ in Q2 where we maybe have a more public pricing law-based revenue from Germany. So there will be always minor fluctuations. But the overall trend midterm of the Atlas is, as Oliver stated, a very strong growth, both, yeah, not only on top line, but then, of course, closing the gaps to competitors like Thales, like Saab. This is our expectations of the Atlas segment.
Very clear. Thank you. Thank you.
So as a short reminder, if you have a question, please first raise your hand, and then we are able to open the line for you. And the next one comes from Yan from ODDO. Yes. Yeah. Okay.
So Yan Derocles from ODDO BHF. Maybe two quick ones on contracts. The first one on the MEKO A200 for Germany. Can you come back on these contracts recently signed? I understand that this is just a, I would say, a preliminary contract. So when are you expecting for the full contract, and what kind of cash profile can we anticipate on this very specific contract? And maybe a follow-up on this one. If you are signing the deal with German Naval Yards Kiel, what might be the role of this new shipyard for the MEKO A200?
If I may add another one on Canada, we've seen, I would say, a large Korean delegation in Canada in recent days. So what is your feeling today on this campaign? Are you still on a 50/50 probability to win this program?
Okay. Thank you, Yan. Let's start with the MEKO A200. You asked, "When do I expect the full contract?" We do have a pre-contract because we began already, let's say, the production of those boats to ensure that those ships—I'm sorry—those ships will be ready by end of 2029. This is our task. This is what we offered, and this is what they took. When do we expect a full date for that full contract, let's say, within the first half of this year? So it's within the first six months, I expect a full contract.
I expect another pre-contract, maybe only some weeks from now, just to enlarge the volume, what we have so far done for them to be on time because this came in a speed we have never seen before. Because of that unfortunate delay of the F-126 up to 48 months, there is a capability gap here in Germany when it comes to what ships do the German Navy has. We had an offer for them just to jump into that gap. So we were quite, let's say, brave to offer that. And honestly, they were quite brave to say, "Well, yes, we take it." Also, we do not know whether F-126 will have a good or a bad outcome because they're still, let's say, evaluating whether this is a contract they follow or this is a contract they stop.
So I think we did the right thing, and we showed our flexibility on that one in a way you have never seen before. We will build them in Bremerhaven, which is also a good thing because it's not, let's say, our capacity which goes out because we want to have it open for several contracts. Of course, I cannot, but you know that Jan gave you a cash profile on that. But given the fact that such a ship is around EUR 750 million to EUR 1 billion, so it's quite good to see maybe an incoming, surprisingly, let's say, and of another minimum 4 ships in our order book. What will be the role of the GNYK? I think you have to understand that every one of our customers has more budget but not any more time. So it's complete contradiction to that what we had before.
They all had time but no money. Now they all have money but no time. Especially when it comes to operational advantages in our submarine production, and you know Kiel is only submarine production. We do not have Surface Vessel production here. It is sometimes disappointing for potential customers if I tell them the timeline because the timeline is due to that capacity I have. I don't want to disappoint them. I want to sell our design, and it is really highly recommended by a lot of other navies, which are, by the way, not yet into the fleets of submarines. So they do not have submarines. They tend to have. Of course, they're seeking for the best product, and they're asking us. I tell them a delivery date which is quite far away from today, then they got disappointed and maybe shop somewhere else.
So it could open, let's say, and this is the real possibilities for further business because you have to understand that what we have sold in our order book already, this is covered by Kiel and, of course, by Wismar, which is our ship for growth, as I may say that. And this is fine. But I think there is still, and as we see it, more demand also on autonomous vehicles, larger ones, and submarines which could be covered then if we would be the owner of the German Naval Yards here in Kiel. Third question, Canada. Well, honestly, I don't think that the size of a delegation is important for anything. But of course, we do know that the Koreans are doing all in. But honestly, we are also doing that. And this is a debate which has shifted over the last months in two ways.
First of all, it accelerated enormously when Carney took over as Prime Minister. He really forced his administration to be faster than ever, let's say, and coming from a timeline where 2028 would have been the decision, now we're in the midst of 2026. They want to see a decision. So a lot speeding up in the process. And the second thing is we do not talk so much about the quality and the capability of the several boats. We're only talking about what's in for Canada beyond submarines.
So that is something you recognize, and the Germans and the Norwegians, because we are together there, we also made progress, and we also have delegations, and we have also met a lot of, let's say, collaboration office to the Canadians where we see indeed from Europe to Canada a lot more potential than maybe from South Korea to Canada can be delivered. We have to understand the Canadians. I was there in that first week when the big neighbor, south of them, got upset and started debates about tariffs and all that stuff. They were really shocked. They are shocked and maybe in fear that they are losing traction and that their economy falls in pieces after maybe more escalation of this conflict would occur. So they're seeking for new partners. This is completely okay. They're using this big contractor.
I mean, we're talking up to 12 submarines. They're using this big contract just to get more advantages for them or maybe more connection and more, let's say, glue on a German-European-Canadian relationship as they had in the past. And as I mentioned earlier, that they joined the SAFE program, which is only for the European Union, but Canada was allowed to join, is for me also a clear signal that they are on the way to a decision. And there are always rumors about it. Can be split it? Can the Koreans do half of it and we do half of it? That doesn't make sense from an interoperability reason, but I don't want to go in details on that. I think we will see by the midst of this year a decision for this program.
And I do see us in a good position, and we have speeded up our process in a way I have never seen before. When it comes to collaboration to, for example, our government, the Norwegian government, just recently spoke with them in Oslo when we signed the two submarines. By the end of January, we have another round of meetings coming up during Munich and the week after. There's a lot going on. So I see us in a good position. And honestly, I do believe, and I mean, you can call me biased, okay? We do also have the better product. But we also have to show that, let's say, the economic value out of that is a bigger one for Canada than it is with Koreans.
Very clear. Thank you.
Perfect. Yeah. Thank you very much.
And now we are running a bit out of time, but I think it's almost good. So with that, I would like to close the call for today with that. Thanks again to everyone outside for being interested and for joining our today's conference call. If there are more questions or any questions left, the entire Investor Relations team is available for you. And we look forward to staying in touch with you. And with that, I would like to conclude the call for today. Thank you very much, and bye-bye.