Kontron AG secures strategically important major order
The Kontron AG has concluded a multi-year major contract in the high three-digit million range with the French state railway SNCF for the Future Railway Mobile Communication System (FRMCS). This contract is of great strategic importance as it solidifies Kontron’s position as a key infrastructure partner in the next-generation railway communication sector in Europe.
Transition to the 5G-based standard
The order includes support for the transition of the mobile communication system from GSM-R (Global System for Mobile Communication – Railway) to the new 5G-based standard FRMCS. Kontron ensures the ongoing operation of a robust core network and utilizes an AI-supported knowledge database to facilitate the transition until the full implementation of the system is achieved.
Long-term partnership and expansion
This long-term collaboration with SNCF has been ongoing since 2003 and has now been extended for over another decade. The contract underscores Kontron’s role as a reliable technology partner in the European rail transport market.
Market reactions and strategic implications
The announcement led to a share price decline of about 4.09% on XETRA the following day, which may reflect short-term profit-taking. However, analysts view the order positively; due to improved earnings quality and clearer strategic direction, the price target has recently been raised from 35.00 EUR to 37.00 EUR, and a buy rating has been confirmed. Additionally, the sale of a subsidiary (JUMPtec) in parallel with the order announcement significantly strengthens Kontron’s balance sheet through an inflow of over 100 million EUR and a positive EBITDA effect in the second quarter of 2025.
Overall, this major order not only sustainably strengthens the market position of Kontron AG in the promising field of railway communication but is also likely to provide positive impetus for stock development in the medium term.