Rudolph Angler Rheinmetall, Germany’s leading ammunition manufacturer, has reported impressive first-quarter results, marking a 46% increase in sales, reaching €2.3 billion. The company saw substantial growth in its defence sector, which soared by 73%, contributing €1.8 billion to the total. About 70% of Rheinmetall’s sales came from international markets, demonstrating the strong global demand for its products. The company’s growth was driven by rising European defence spending and significant orders from the German military. As a result, Rheinmetall’s shares saw a 1.5% increase at market opening, extending its impressive 170% year-to-date growth. This surge in performance comes amid Germany’s new debt reform, which is boosting investments in defence and infrastructure.
Profits Soar on Back of German Military Orders
Rheinmetall’s profitability also experienced a major boost, with profits rising 70%. The company reported earnings per share of €1.92. Its operating income rose by 49%, totaling €199 million. The defence sector was the standout performer, nearly doubling its earnings to €206 million during the same period. This growth was fueled by a dramatic rise in incoming defence orders, particularly those related to Germany’s special Bundeswehr fund. Rheinmetall’s order book expanded significantly, increasing 181% to €11 billion, with a total backlog now reaching a record €63 billion.
Strong Outlook Amid Expanding Product Segments
Looking ahead, Rheinmetall remains optimistic about its future prospects. The company has reaffirmed its forecast for 2025, expecting sales to grow between 25% and 30%. This estimate may be revised upward if current market trends continue to improve. Rheinmetall is also targeting an operating margin of around 15.5%, slightly up from 15.2% in 2024. The company’s various product segments have shown robust performance, with vehicle systems revenue increasing by 93% to €952 million. Ammunition and weapons sales also hit a new high, reaching €599 million. Furthermore, the company saw a fivefold increase in orders for electronic solutions, which now stand at €10 billion. However, sales in power systems declined by 6.7% to €505 million, a result of delays and challenges in the automotive market.
Driving Forces Behind Rheinmetall’s Growth
Rheinmetall’s remarkable growth is largely attributed to strategic contracts and expanding global demand for defence products. The surge in orders from Germany’s armed forces has played a significant role, with the company benefiting from increased military spending driven by both geopolitical tensions and Germany’s shift in defence policy. The company’s success in expanding its product lines, such as its vehicle systems and ammunition, reflects its ability to adapt to changing market demands, including the growing focus on electronic solutions and advanced military technology.
With a robust order backlog and a strong sales forecast for 2025, Rheinmetall’s position in the global defence industry appears solid. The company’s strategic focus on innovation, particularly in defence and electronic solutions, positions it well to continue benefiting from the surge in military spending, particularly in Europe. As Rheinmetall maintains its strong growth trajectory, the company is poised to play a significant role in the future of global defence manufacturing.