Rheinmetall, Germany’s largest arms manufacturer, reported a 46% year-on-year surge in sales to €2.3 billion during the first three months of the year, driven by a 73% increase in its defence business. The company also noted that 70% of its sales were generated abroad, with defence revenue rising to €1.8 billion.
The results highlighted soaring demand for defence systems and weapons in Europe following the suspension of US military aid in the Ukraine war. Shares in the German weapons maker rose by 1.5% at the market open, extending their gains to 170% so far this year. Germany’s historic debt reform, which aims to boost defence and infrastructure spending, has particularly contributed to the outperformance of European defence stocks.
Improved market potential
Rheinmetall confirmed its outlook for the 2025 financial year, forecasting sales growth of between 25% and 30%, as it expects the pace of business development to continue throughout the year. As stated in the ad hoc announcement on 28 April, the group said it may revise its annual guidance based on improving market conditions. The group expects an improvement in operating result margin of around 15.5%, including acquisitions in the fiscal year 2025, compared to 15.2% in 2024.
“This outlook does not yet take into account the improvement in market potential that is expected to arise in the markets that are particularly relevant for Rheinmetall in Europe, Germany and Ukraine as a result of the geopolitical developments in recent weeks. Rheinmetall will therefore make any necessary guidance adjustments as the respective requirements of defence customers become more specific over the course of the year.”
Armin Papperger, chair of the executive board of Rheinmetall AG, commented: “Rheinmetall is needed – customers are buying entire factories from us today. Europe must prepare itself for a new era in which we must oppose the threat to our liberal values with all our strength. Rheinmetall stands firmly by its responsibility in this epochal break.”
He added, “We must and will deliver. We are experiencing growth like never before in the Group and are getting closer to our goal of becoming a global defence champion. Future-oriented co-operations testify to this. We also have promising projects in the USA, the UK, Italy and Ukraine, and numerous major orders in the pipeline that will secure further sales growth in the coming years. We are also massively expanding our capacities with the construction of new plants and strategic acquisitions.”
Surging profit
Rheinmetall’s profit surged by 70%, resulting in earnings per share of €1.92. Its operating result rose by 49% to €199 million, while earnings from defence activities nearly doubled to €206 million.
Notably, a key metric for the company’s defence business—Rheinmetall Nomination, referring to incoming orders and framework agreements with customers—jumped 181% year-on-year to €11 billion in the first quarter. The group attributed the increase primarily to orders from Germany, stating, “primarily from the special fund for the German Armed Forces.”
Rheinmetall’s order backlog reached a new record of €63 billion at the end of the first quarter, driven by several major contracts. This included ongoing deals and backlog from framework agreements, as well as potential sales to civilian clients.
In other segments, sales in vehicle systems rose by 93% to €952 million, while weapons and ammunition revenue reached a new record of €599 million. Rheinmetall’s Nomination in electronic solutions more than quintupled year-on-year to €10 billion. However, sales in power systems declined by 6.7% to €505 million, due to the cyclical weakness of the automotive industry and the associated delays in project execution.
