DroneShied Ltd (ASX: DRO) has started manufacturing counter-drone armaments in the European Union under contract, marking a significant expansion for the company into a key market, it said on Wednesday.
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Growing market
The company said there was strong momentum in the European market following the ReArm Europe Plan/Readiness 2030 initiative, "accelerating the need for mature, scalable, and sovereign counter-UAS capability".
The company added:
Under a new collaboration with an experienced and established manufacturer, production of European-made counter-UAS systems is now underway, with delivery scheduled for mid-2026. The contract manufacturer will carry out full turnkey assembly and component manufacturing, including PCB assembly, precision machining, cable and wire harness assembly, and associated assembly and testing labour. As part of this collaboration, DroneShield has established and will continue to grow a primarily EU-based supply chain, making this the Company's only production line currently outside of Australia.
DroneShield said the European manufacturing capability would enable it to bid more competitively for European contracts, "which increasingly prioritises sovereign capability, regional production, and resilient supply chains''.
The company said it could now meet contract expectations at scale with reduced lead times.
DroneShield Chief Executive Oleg Vornik said regarding the development:
Europe is undergoing a profound shift in counter-UAS preparedness. By establishing dedicated manufacturing in the EU, DroneShield is contributing to Europe's sovereign capability while continuing to deliver rapidly and reliably for our European customers. The ReArm Europe Plan / Readiness 2030 initiative has highlighted the importance of localised, scalable production, and this new production line positions us to meet that demand.
Mr Vornik said DroneShield expected to grow its total annual production capacity from about $500 million in 2025 to an expected $2.4 billion by the end of 2026.
He added:
This uplift supports rising operational demand across Europe, and reinforces DroneShield's commitment to strengthening industrial bases and diversifying global supply chains, as militaries, law enforcement and critical infrastructure operators expand and modernise counter-UAS capabilities.
DroneShield recently reported full-year revenue of $216.5 million, up 276% from the previous year, and net profit of $3.5 million, up 367%.
The company also announced in late February that it had won $21.7 million in Western military contracts with an unnamed buyer.
The company said at the time:
The contracts are for the supply of dismounted counter-drone systems, spare kits, and software subscriptions. All items are readily available from existing inventories and it is expected delivery will be made in Q1 2026, with payment expected in Q2 2026.
DroneShield shares were steady at $4.02 on Wednesday morning.
