Rheinmetall sales surge 36% in 2024, as company forecasts ‘major’ military order boom

German arms maker Rheinmetall on Wednesday said it expects 2025 sales to jump by 25-30% this year, amid expectations of “major high-volume orders from military customers” that could gain a further boost from a recent change in tack in European defense policy.

The company reported a 36% jump in consolidated sales in 2024, with sales in the defense business up 50%. Defense sales are expected to grow by 35% to 40% this year, Rheinmetall said.

Last year’s sales boom helped push Rheinmetall’s operating profit to a record high, up 61% to 1.48 billion euros ($1.61 billion). Operating margin for the year stood at 15.2%, up from 12.8% in 2023.

By the end of last year, Rheinmetall said its order backlog had also reached a record high of 55 billion euros. It said it expected “major high-volume orders from military customers” in the coming years.

The company said its current outlook did not factor in recent geopolitical developments relating to the war in Ukraine and European defense spending, but added that it would adjust its forecasts “as the respective requirements of military customers become more specific over the course of the year.”

“Given the dramatically changed security policy situation, the Group sees itself in a promising position to play a significant role in the upcoming increase in defense capability with security-related products in Germany and partner countries,” the company said in its earnings release.

Rheinmetall describes itself as Ukraine’s “most important defense industry partner in the fight against Russian aggression,”  after delivering military goods and logistical support to the country.

The company is also a supplier to various other nations’ armed forces, including those of the U.K., Australia, the U.S. and Germany.

Rheinmetall CEO Armin Papperger said in a statement accompanying the company’s earnings report on Wednesday that the business was “facing the challenges of Zeitenwende 2.0” — a reference to potential fiscal policy reforms under Germany’s incoming government to allow greater defense spending.

“We have massively increased our capacities already and will continue to do so,” he said. “Over the past two years, we have invested nearly 8 billion [euros] to build new plants, make acquisitions and secure supply chains. We are aware of our responsibility for the security of our country and for the defence capability of Europe.

“With a 50% sales growth in the defence business, Rheinmetall is on its way from being a European systems supplier to a global champion,” Papperger added.

Rheinmetall’s Frankfurt-listed shares have risen nearly 88.3% since the beginning of the year, as broader European defense stocks have soared amid the prospect of a defense splurge by regional governments.

The company’s stock ended the trading session 9.6% higher.

The European leaders push to bolster regional defense capabilities comes as U.S. President Donald Trump is pressuring European NATO allies to funnel more money into security spending, while uncertainty persists over how much support Ukraine can expect from the new White House administration.

Rheinmetall has been singled out by a number of analysts as a stock to watch as the European defense story develops. Earlier this month, JPMorgan raised its target price for the company to 1,200 euros ($1,308) from 800 euros.