However, this is not enough for investors - Rheinmetall shares, listed on the Dax benchmark index, fell by more than five percent to 1,569 euros by midday. Analysts had expected, among other things, an earnings margin of 19.6 percent for 2026. The targets appeared more realistic - but at the same time too "soft," Jefferies analysts criticized.
"The tense security situation underscores the group's promising position," Rheinmetall further stated. The group achieved a 29 percent increase in sales to around 9.9 billion euros in 2025. The operating result (Ebit before special effects) rose by 33 percent to 1.84 billion euros. The high-margin business with weapons and ammunition - where Rheinmetall is a leader in Europe - was the main contributor. The order backlog reached a new record of 63.8 (previous year: 46.9) billion euros. Shareholders are to receive a significantly increased dividend of 11.50 (2024: 8.10) euros per share for 2025.
According to a Vara survey, analysts had on average expected sales of 10.1 billion euros and an Ebit margin of 19 percent for the past year. The experts saw the dividend at 10.54 euros. For 2026, they expect sales of 14.1 billion euros and a margin of 19.6 percent.
AMMUNITION AND MISSILES NEEDED DUE TO THE IRAN WAR
Following the Russian invasion of Ukraine, the Western defense industry is urgently needed to strengthen the armed forces. However, ammunition and missiles are also urgently required in view of the Iran war. Rheinmetall recently announced that it would expand missile production as quickly as possible.
Management only set new medium-term targets in November. The group wants to quintuple its sales to around 50 billion euros by 2030 compared to 2024, thanks in part to its new naval division. The operating margin is then expected to be over 20 percent, up from 15.2 percent in 2024. In contrast, Rheinmetall wants to say goodbye to its civilian business with the automotive industry. However, the transaction could be delayed. Instead of the first quarter as previously announced, it might only be finalized in the second or third quarter, Papperger said. Through the separation, Rheinmetall wants to focus purely on the military business.
Papperger had ordered a new structure for Rheinmetall with five divisions in order to handle the growth. This includes combat vehicles, ammunition, air defense, digital, and naval. With new factories in Europe, Rheinmetall wants to drive up ammunition production. The Düsseldorf company is also relying on acquisitions and alliances with other defense companies to cope with the boom. For example, Rheinmetall wants to create a new satellite system for the Bundeswehr, comparable to Elon Musk's Starlink, together with Bremen-based OHB. Airbus could also participate in the billion-euro project. "If Airbus can build part of the satellites, I believe that will speed up the program enormously," said the Rheinmetall boss.
Rheinmetall had also grown through the acquisition of the naval division of the Lürssen shipyard (NVL). Here, Papperger could now also throw his hat into the ring at German Naval Yards Kiel (GNYK) and compete with the Thyssenkrupp defense subsidiary TKMS. "German Naval Yards Kiel could be a topic for us," he said. Thyssenkrupp is also a topic for the Düsseldorf company when it comes to job creation. For example, the group is hiring "plenty of employees" from the struggling steel division.
(Report by Matthias Inverardi and Miranda Murray, edited by Ralf Banser. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
