Rheinmetall, Germany’s largest arms producer, reported a 46% year-on-year surge in gross sales to €2.3 billion throughout the first three months of the yr, pushed by a 73% enhance in its defence enterprise. The corporate additionally famous that 70% of its gross sales had been generated overseas, with defence income rising to €1.8 billion.
The outcomes highlighted hovering demand for defence techniques and weapons in Europe following the suspension of US army help within the Ukraine conflict. Shares within the German weapons maker rose by 1.5% on the market open, extending their positive aspects to 170% to this point this yr. Germany’s historic debt reform, which goals to spice up defence and infrastructure spending, has significantly contributed to the outperformance of European defence shares.
Improved market potential
Rheinmetall confirmed its outlook for the 2025 monetary yr, forecasting gross sales development of between 25% and 30%, because it expects the tempo of enterprise improvement to proceed all year long. As acknowledged within the advert hoc announcement on 28 April, the group stated it could revise its annual steerage based mostly on bettering market circumstances. The group expects an enchancment in working end result margin of round 15.5%, together with acquisitions within the fiscal yr 2025, in comparison with 15.2% in 2024.
“This outlook doesn’t but keep in mind the advance in market potential that’s anticipated to come up within the markets which might be significantly related for Rheinmetall in Europe, Germany and Ukraine because of the geopolitical developments in current weeks. Rheinmetall will due to this fact make any obligatory steerage changes because the respective necessities of defence prospects change into extra particular over the course of the yr.”
Armin Papperger, chair of the chief board of Rheinmetall AG, commented: “Rheinmetall is required – prospects are shopping for complete factories from us right this moment. Europe should put together itself for a brand new period wherein we should oppose the menace to our liberal values with all our power. Rheinmetall stands firmly by its duty on this epochal break.”
He added, “We should and can ship. We’re experiencing development like by no means earlier than within the Group and are getting nearer to our objective of changing into a world defence champion. Future-oriented co-operations testify to this. We even have promising tasks within the USA, the UK, Italy and Ukraine, and quite a few main orders within the pipeline that may safe additional gross sales development within the coming years. We’re additionally massively increasing our capacities with the development of latest vegetation and strategic acquisitions.”
Surging revenue
Rheinmetall’s revenue surged by 70%, leading to earnings per share of €1.92. Its working end result rose by 49% to €199 million, whereas earnings from defence actions practically doubled to €206 million.
Notably, a key metric for the corporate’s defence enterprise—Rheinmetall Nomination, referring to incoming orders and framework agreements with prospects—jumped 181% year-on-year to €11 billion within the first quarter. The group attributed the rise primarily to orders from Germany, stating, “primarily from the particular fund for the German Armed Forces.”
Rheinmetall’s order backlog reached a brand new document of €63 billion on the finish of the primary quarter, pushed by a number of main contracts. This included ongoing offers and backlog from framework agreements, in addition to potential gross sales to civilian shoppers.
In different segments, gross sales in automobile techniques rose by 93% to €952 million, whereas weapons and ammunition income reached a brand new document of €599 million. Rheinmetall’s Nomination in digital options greater than quintupled year-on-year to €10 billion. Nevertheless, gross sales in energy techniques declined by 6.7% to €505 million, as a result of cyclical weak spot of the automotive business and the related delays in mission execution.