Rheinmetall hits record sales & profit in 2024, targets growth in 2025

Rheinmetall AG has reported record financial results for the fiscal year 2024, driven by strong demand in its defense sector. The German technology group achieved all-time highs in consolidated operating results and order backlog, reinforcing its position as a key player in the global defense industry.

Group sales for 2024 reached €9.75 billion, marking a 36% increase from €7.18 billion in 2023. The company's defense business accounted for approximately 80% of total sales, benefiting from increased military spending in Germany and other partner nations. In contrast, civilian business performance varied, with record sales in the Trade unit but a downturn in the automotive sector.

Key Financial Highlights:

• Order backlog surged to €55 billion, up from €38 billion in 2023.
• Consolidated operating profit climbed 61% to €1.48 billion.
• Operating margin improved to 15.2%, up from 12.8% the previous year.
• Earnings after taxes increased 38% to €808 million.
• Dividend per share proposed at €8.10, compared to €5.70 in 2023.
• Operating cash flow nearly tripled to €1.05 billion.

CEO Armin Papperger emphasized Rheinmetall's readiness to meet the evolving security landscape, citing significant investments of nearly €8 billion over the past two years in capacity expansion, acquisitions, and supply chain reinforcement. "With 50% sales growth in defense, Rheinmetall is transitioning from a European systems supplier to a global leader," Papperger stated.

Sector Performance:

• Vehicle Systems: Sales rose 45% to €3.79 billion, driven by military truck deliveries and tactical vehicle programs. Operating profit reached €425 million, with a margin of 11.2%.
• Weapon and Ammunition: Revenue soared 58% to €2.78 billion, fueled by heightened demand from NATO countries and Ukraine. Operating profit nearly doubled to €790 million, with a margin of 28.4%.
• Electronic Solutions: Sales climbed 31% to €1.73 billion, supported by contracts for air defense systems and digital battlefield solutions. Operating profit rose to €217 million, with a 12.6% margin.
• Power Systems: Sales declined 2% to €2.04 billion, impacted by weakness in the automotive market. The operating margin dropped to 4.2% from 6.4% in 2023.

Outlook for 2025: Rheinmetall expects continued strong sales growth of 25% to 30% in 2025, with defense revenue projected to rise between 35% and 40%. The company forecasts an improved operating margin of around 15.5%, supported by sustained demand for military equipment in Europe and Germany. Adjustments to forecasts may be made as geopolitical developments unfold and military procurement requirements become clearer.

With a robust order pipeline and strategic investments, Rheinmetall remains well-positioned to capitalize on the shifting defense landscape, reinforcing its role as a reliable defense partner for Germany and allied nations.