- German protection contractor Rheinmetall’s inventory worth has skyrocketed greater than 1,000% since Russia invaded Ukraine in 2022. Because the EU plans a €800 billion enhance in protection spending, Rheinmetall expects development to stay sturdy.
German protection contractor Rheinmetall sees unprecedented beneficial properties forward as Europe embarks on a large army buildup, even after reporting already-strong development.
Headquartered in Düsseldorf, Germany, the corporate reported 2024 complete income of €9.8 billion on Wednesday, up 36% from 2023. The protection enterprise led the corporate’s gross sales development final yr, surging 50% to €7.6 billion. Moreover, the backlog elevated 44% to €55 billion a brand new file excessive.
Final yr’s development was helped by Europe’s continued army assist for Ukraine. Since Russia invaded Ukraine in 2022, Rheinmetall’s inventory worth has climbed greater than 1,000%.
In the meantime, the European Union just lately introduced plans to extend its protection spending by €800 billion ($867 billion) as historic US allies search to take extra duty for his or her safety.
“An period of rearmament has begun in Europe that can demand rather a lot from all of us,” CEO Armin Papperger stated in a assertion. “Nevertheless, it additionally brings us at Rheinmetall development prospects for the approaching years that we’ve got by no means skilled earlier than.”
For this yr, Rheinmetall expects complete gross sales to extend 25%-30% and protection gross sales to climb 35%-40%. Whereas these numbers would fall in need of 2024’s, precise gross sales by the tip of the yr might develop into even larger.
Rheinmetall famous in its report the outlook doesn’t take note of “geopolitical developments in current weeks,” saying updates to its forecasts might come later as necessities of its army clients develop into clearer.
“With a 50% gross sales development within the defence enterprise, Rheinmetall is on its approach from being a European techniques provider to a world champion,” Papperger stated.
Lately, the European chief in munition manufacturing invested practically €8 billion in new manufacturing services, acquisitions, and supply-chain safety. In January, Rheinmetall introduced it acquired a majority share in a Bavarian software program developer that makes a speciality of digitizing warfare.
Along with manufacturing missiles and bombs, Rheinmetall additionally makes tanks, air-defense techniques, and autonomous floor automobiles. Most notably, it produces the Panther KF51 important battle tank. A significant provider to Ukraine, Rheinmetall has vegetation within the war-torn nation together with Lithuania, Hungary, and Romania.
Moreover, the corporate appears to proceed its development in Germany and is reportedly concerned about a Volkswagen plant in Osnabrük.
On Wednesday, Papperger stated the ability can be “very appropriate” for the corporate’s growth plans and can be extra reasonably priced than constructing a manufacturing facility from the bottom up.
Papperger cautioned that whereas there was no idea for Rheinmetall to maneuver onto Volkswagen’s turf, issues might nonetheless transfer rapidly.
“One factor is obvious: earlier than I’ll construct a brand new tank manufacturing facility in Germany, we’ll after all check out it,” he stated.
This story was initially featured on Fortune.com
