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German arms firm Rheinmetall seizes on European 'era of rearmament' / Photo: Axel Heimken - AFP/File
NYSE - LSE
German arms firm Rheinmetall seizes on European 'era of rearmament'
German arms manufacturer Rheinmetall said Wednesday moves by European capitals to up their defences and reduce their reliance on the United States were an unprecedented growth opportunity for the group.
"An era of rearmament has begun in Europe that will demand a lot from all of us," Rheinmetall CEO Armin Papperger said in a statement, as the group published its annual results.
The development opened up "growth prospects for the coming years that we have never experienced before", said Papperger.
The return of President Donald Trump to the White House has shaken confidence in Washington's long-standing commitment to European security and spurred governments on the continent to promise increased defence spending.
Russia's full-scale invasion of Ukraine in 2022 had already given new impetus to the European defence sector, from which Rheinmetall was among the beneficiaries.
The group on Wednesday said its overall sales rose to 9.8 billion euros ($10.7 billion) in 2024 from 7.2 billion euros the previous year, a 36-percent increase.
In its defence business alone, growth was stronger with revenues climbing 50 percent on a year.
The result showed Rheinmetall was "on its way from being a European systems supplier to a global champion", Papperger said.
Correspondingly, the group's operating profit reached a record 1.5 billion euros in 2024, up 61 percent on the previous year.
Rheinmetall said it expected the momentum to continue this year. The group predicted total revenue growth, covering its civilian activities, to sit between 25 and 30 percent in 2025.
The tank manufacturer further estimated defence sales to grow between 35 and 40 percent this year but said the forecast did not "take into account the improvement in market potential... as a result of the geopolitical developments in recent weeks".
Rheinmetall said it would adjust its forecasts as its military clients pinned down their defence requirements.
In Germany, the country's likely next chancellor Friedrich Merz has urged Europe to develop independence from the United States in defence and looked to up Berlin's military efforts.
Together with his prospective coalition partners the Social Democrats, conservative leader Merz has proposed to largely exempt defence from Germany's strict constitutional spending limits.
The changes, if passed, could see Germany spend tens of billions of euros more on defence annually as it looks to remedy years of underinvestment.
(R.White--TAG)
