French underwater drones maker Exail hopes to cash in on defence spending

(Reuters) - French high-tech industrial group Exail Technologies on Tuesday forecast double-digit percent revenue growth for this year, driven by higher defence spending by European governments.

Exail is the latest small defence tech supplier propelled by prospects of a military ramp-up in Europe as the region rearms amid Russia's war in Ukraine and fears of waning U.S. protection.

The company, which makes underwater drones and navigation equipment among others, said that defence spending in Europe could potentially double by 2030 to more than 200 billion euros ($216.36 billion) and that it was well suited to benefit from it.

Its revenue rose 16% to 373 million euros in 2024, with current core earnings (EBITDA) growing 13% to 74 million euros.

Exail earlier this year said it had won an order from "a leading navy" to supply a drone system. It said on Tuesday the order was worth several hundred million euros and would drive its backlog to more than 1 billion euros, from 708 million at the end of 2024.

The company's Paris-listed shares have gained almost 80% since it won the contract, and were trading more than 7% higher at 1242 GMT on Tuesday.

Last week, Exail said its stock would move from the Industrial sub-sector to the Defence one within the benchmark used by pan-European exchange group Euronext.

Other companies that have reported an increase in defence contracts and flagged expansion plans include engine maker Steyr Motors and night vision supplier Exosens, while drone maker Parrot said on Friday it would seek to capitalize on defence spending.

($1 = 0.9244 euros)

(Reporting by Alessandro Parodi in Gdansk, editing by Milla Nissi)