German defence contractor Rheinmetall reported a 39% rise in first-half sales to €5.23 billion on Thursday, as surging demand for ammunition, armoured vehicles and air-defence systems translated into higher production and revenue.
Operating result rose 74% to €786 million, taking the group’s operating margin to 15.0% from 12.1% a year earlier. Second-quarter operating profit more than doubled to €562 million, with the margin reaching a record 17.1%.
Order intake reached €16.2 billion in the half, up 28% from €12.7 billion a year earlier, while Rheinmetall’s backlog rose 44% to €80.5 billion. The company said its order intake remained more than three times the value of first-half sales, underlining the scale of demand still flowing into the business. International sales accounted for 62% of the total, with Germany’s share rising to 38%.
Sales growth was broad-based across Rheinmetall’s core defence businesses. Vehicle Systems revenue rose 28% to €2.43 billion, while its Weapon and Ammunition division grew 33% to €1.76 billion, driven by an ammunition package for Hungary and artillery and medium-calibre ammunition for Ukraine. Air Defence sales rose 62% to €478 million as production of Skynex and Skyranger systems for European customers increased.
Rheinmetall’s newly acquired Naval Systems business generated €334 million in sales in its first four months with the group and booked €1 billion of new orders. The largest was a €920 million contract from Romania, financed through the EU’s SAFE programme, for two maritime patrol vessels and two diver intervention vessels.
Rheinmetall cut its full-year sales guidance to €13.7–14.2 billion from €14.0–14.5 billion after Germany cancelled the F126 frigate programme, which the company said would reduce naval sales by up to €300 million this year. It left its organic sales growth guidance at 28–31% and continued to target an operating margin of around 19%.
Operating free cash flow was negative €1.62 billion in the first half as the timing of advance payments shifted, while higher receivables, inventories and continued investment in production capacity also weighed on cash generation. Shares fell around 5.7% on the day of the results.
Chief Executive Armin Papperger said Rheinmetall remained on course to meet its annual targets, citing its strong order book and significant expansion of capacity as the company continues to increase production.
The results provide a further indication that Europe’s defence spending increase is moving beyond procurement announcements and large contract awards into production, with rising sales of ammunition, vehicles and air-defence systems at manufacturers such as Rheinmetall.
Other recent earnings include: BAE Systems, Leonardo, Hensoldt, Dassault Aviation, Safran and Airbus.
