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Rheinmetall expects both sales and profit margins to keep growing this year, as the German defence contractor declared itself a winner amid the “changing threat situation in Europe”.
The world’s largest maker of artillery ammunition on Thursday said 2024 sales were expected to reach a record €10bn, compared with €7.2bn the previous year. Operating margins were likely to reach 14 to 15 per cent, the company said, up from 12.8 per cent in 2023.
“A new decade in security policy has begun,” said chief executive Armin Papperger. “It is very important to us to do all we can to help Ukraine in its fight for survival,” he added.
Papperger has emerged as one of the loudest voices in the European defence industry that — after decades of having been largely shunned by investors because of ethical concerns — is now booming amid growing political fear over Europe’s borders.
The Düsseldorf-based company last year completed the takeover of its Spanish rival Expal, cementing its position as the most important provider of 155mm shells, which are in high demand from Ukraine’s military as it fights the Russian invasion.
In 2023, Rheinmetall’s sales grew 12 per cent to a record €7.2bn — slightly lower than expected, which the company said was due to some of its deliveries having been postponed into 2024. Profits after tax rose 9 per cent to €586mn.
Rheinmetall’s strong growth makes it an outlier in the wider German industrial landscape, which has suffered following the energy crisis unleashed by the loss of cheap Russian gas.
The group said that its civilian business, which includes car parts and baggage handlers for airports, recorded only “slight” revenue growth last year, adding that sales grew “primarily in business with military customers”.
Aside from ammunition — for which Rheinmetall last year signed multiyear contracts with the Bundeswehr worth €4.6bn as well as with Ukraine for €1.7bn — the company also sold combat vehicles, military trucks and drones.
The war in Ukraine in 2022 prompted German chancellor Olaf Scholz to announce a Zeitenwende — a turning point in history — that meant Europe’s largest economy would abandon its decades-long pacifist policy in the wake of the second world war and rebuild its military powers.
Germany’s defence minister Boris Pistorius has repeatedly called on the country’s once slumbering defence industry to rapidly build capacity — something that Rheinmetall and other mainly private companies such as Krauss-Maffei Wegmann and the maker of the Taurus missile system, MBDA Deutschland, have argued can only be done following concrete orders.
In February, Rheinmetall started building a new munitions factory in Lower Saxony. On Thursday, the company said it had a record order backlog worth €38.3bn.
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