Rheinmetall sales surge as the German arms manufacturer reports a 46% rise in quarterly revenue, reaching €2.3 billion. This strong growth was mainly driven by soaring global demand for defence systems, especially in Europe.
The firm’s defence division led the growth with a 73% rise in sales, hitting €1.8 billion. That means almost 80% of the company’s total sales came from its defence business.
Global Demand Powers Growth
Rheinmetall earned 70% of its revenue from global markets outside Germany. As some countries worry about rising threats, they are buying more weapons and military equipment. Europe, in particular, has increased its defence spending. This came after the United States temporarily paused aid to Ukraine, leading European nations to take on more responsibility.
Germany, Rheinmetall’s home country, also changed its debt policy to allow more public money to be spent on defence and infrastructure. This move gave investors more confidence in the future of German defence firms. As a result, Rheinmetall’s stock price rose 1.5% when markets opened, bringing its total gains for the year to 170%.
Company Sees Strong Growth Ahead
Rheinmetall’s management expects the good times to continue. In a market update on April 28, the firm said it believes sales will grow another 25% to 30% in 2025. That would be another big step forward for the company.
Leaders at Rheinmetall also raised their outlook for profit margins. They now expect a 15.5% operating margin in 2025, up from 15.2% this year. Executives added that if current conditions stay positive, they might boost their forecast again later in the year.
The company’s leadership pointed to strong government contracts and smart takeovers of other firms as the main reasons for their confidence. With military budgets growing across Europe and beyond, Rheinmetall sees a solid pipeline of future work.
Record Orders Signal More Growth
The latest figures also show that Rheinmetall’s business is not just growing now—it’s set to grow even more in the future. The company’s net income rose 70% in the last quarter, while earnings per share climbed to €1.92.
Operating income also saw a big jump. It rose 49% to €199 million. In particular, profits from the defence sector more than doubled to €206 million.
The company’s order tracker, Rheinmetall Nomination, reported a huge increase in incoming deals. New orders rose 181%, reaching €11 billion. A large part of that came from Germany’s special fund for defence, a program created in response to rising tensions in Eastern Europe.
Rheinmetall’s total order backlog reached €63 billion, a record high for the company. That number shows how much future work is already locked in.
Strong Results Across Key Divisions
The company saw strong results across most of its defence-related units. Sales of vehicle systems, which include military trucks and combat vehicles, rose 93% to €952 million.
Weapons and ammunition sales also hit a new record. The company brought in €599 million in that category, as more countries look to refill their stockpiles.
One of the biggest surprises came from Rheinmetall’s electronic solutions business. Orders in this unit soared to €10 billion—more than five times the total from the same time last year. These solutions include digital battle systems, radar equipment, and other smart tools for modern warfare.
Some Weakness in Automotive Segment
Despite all the good news, one part of the company did see a dip. Rheinmetall’s power systems division, which supplies engines and parts to carmakers, reported a 6.7% drop in sales. That unit brought in €505 million for the quarter.
Executives blamed weak demand from carmakers and delays in some large projects. Still, the company remains focused on growing its defence segments, which are now the clear driver of overall profits.
Big Picture: Europe’s Military Spending Boom
Rheinmetall’s strong results come at a time when many European countries are rethinking their defence budgets. Russia’s war in Ukraine has changed the way governments plan for national security.
Germany, for example, created a €100 billion special defence fund in 2022. Much of this fund is being used to modernize its armed forces. Rheinmetall is one of the biggest suppliers involved in that effort.
Other European countries like Poland, France, and the UK are also boosting military spending. Some are even joining forces to buy gear in bulk, which could benefit major manufacturers like Rheinmetall.
With record sales, profits, and future orders, Rheinmetall looks set to remain a key player in Europe’s growing defence market.