SOARING ARMS DEMAND DRIVES RHEINMETALL TO 46% SALES GROWTH IN Q1

DÜSSELDORF, GERMANY • German arms manufacturer Rheinmetall has reported record sales and profits in its first quarter, fueled by a significant surge in its defense sector. Driven by increased European orders amid geopolitical instability, the company is positioning itself as a global leader in the military industry.

Düsseldorf, Germany, May 08, 2025 – 1:09 PM CEST – Rheinmetall, Germany's largest arms manufacturer, recorded an extraordinary first quarter with a 46% increase in sales compared to the previous year.

Revenue reached €2.3 billion, largely due to a 73% growth in the defense segment, which alone generated €1.8 billion. Growing geopolitical instability, including the temporary suspension of U.S. aid to Ukraine, has fueled the demand for armaments in Europe, presenting a unique opportunity for Rheinmetall.

Furthermore, 70% of the company's total sales were generated abroad, confirming the group's international expansion. Rheinmetall shares gained 1.5% at market open, contributing to an overall 170% gain year-to-date. The impact of Germany's debt reform, which significantly increased investments in national defense, also played a crucial role.

Anticipated Growth of Up to 30%

Rheinmetall has reaffirmed its growth forecasts for the 2025 fiscal year, predicting a revenue expansion of between 25% and 30%. The operating margin, currently at 15.2%, is expected to climb to 15.5%, partly thanks to recent acquisitions.

The company emphasized that these forecasts do not yet include the potential increase in demand expected in key European markets, such as Germany and Ukraine, following recent political and military developments. Rheinmetall stated it would update its estimates as defense client needs become clearer.

Armin Papperger, Chairman of the Executive Board, stated: “Rheinmetall is needed: today our customers are asking us for entire factories. Europe must prepare for a new era in which it defends its liberal values decisively.”

Record Orders in Q1

The first quarter also saw significant growth in profitability. Net profit rose by 70%, with earnings per share reaching €1.92. Operating profit increased by 49%, reaching €199 million, while defense activities nearly doubled their earnings, climbing to €206 million.

A particularly relevant figure is Rheinmetall's "Nomination" – referring to new orders and framework agreements – which saw a 181% jump, reaching €11 billion. This growth was primarily driven by major contracts from the Bundeswehr (German Armed Forces), funded by the special fund for the armed forces.

At the end of the quarter, the order backlog reached an all-time high of €63 billion, including active contracts, backlogs, and potential sales in the civil sector.

Driving Sectors: Boom for Military Vehicles, Electronics, and Ammunition

The data reveals that growth isn't limited to conventional weapons. Sales of vehicle systems surged by 93%, reaching €952 million, while weapons and ammunition hit a new record of €599 million. Even more impressive was the performance of electronic solutions, whose revenue more than quintupled, surpassing €10 billion compared to the same period last year.

The only segment to decline was power systems, which saw a 6.7% contraction, stopping at €505 million, mainly due to cyclical weakness in the automotive industry.

Rheinmetall Towards Global Leadership in Defense

Rheinmetall is establishing itself as one of the global leaders in the defense industry, thanks to a combination of increasing demand, strategic investments, and presence in key international markets. With new facilities under construction, long-term industrial partnerships, and multi-billion-euro orders incoming, the German company is preparing for a future of further expansion.

2025 could mark a turning point for Rheinmetall, as it not only continues to grow numerically but also solidifies its role in Europe's security and defense.