Boom in Arms Race: Rheinmetall's Record-Breaking Revenue Surge
Bulky outstanding orders might imminently exhaust a whopping $40 billion.
In the wake of the Russian invasion of Ukraine and the advent of the new US administration, there's been a massive surge in Western nations investing in armaments. Rheinmetall, the German armament group, is reaping the benefits. With ambitious plans for satellite production and a hefty projected turnover of over 40 billion euros by 2030, Rheinmetall is on the path to become a major defense player worldwide.
According to CEO Armin Papperger, Rheinmetall's revenue is on a record course, and they're eyeing rapid expansion in the future. Following a conference call, Papperger revealed that if everything goes as planned, Rheinmetall's turnover could top 40 billion euros by 2030, a significant leap from the nearly 10 billion euros they made in 2024. Papperger anticipates that the flood of orders in the pipeline will necessitate a substantial increase in production, with the company even considering conversion of factories from civilian divisions to cater to the booming military production.
Satellite manufacturing is one of the areas Rheinmetall plans to venture into, setting up a joint venture with the Finnish ICEYE for satellite production. Starting from the second quarter of 2026, satellites could be produced at the Neuss plant, among other locations. Other potential options for growth include acquisitions, strategic alliances, and even the takeover of plants originally intended for automobile manufacturing like Volkswagen, according to Papperger. The joint venture with ICEYE is projected to generate an annual turnover of one billion euros.
Papperger announced that the company's military business revenue increased by about 73% in 2025. Despite the decline in the civilian area of Power Systems, which supplies the struggling automotive industry, Rheinmetall has reaffirmed its overall growth targets. The company expects to grow by 25 to 30% in 2025, with the defense segment aiming for a 35 to 40% revenue increase. The operating profit margin is expected to reach around 15.5%. These figures do not account for the impact of anticipated armament expenditures, which, if they materialize, will be incorporated into future forecasts, Papperger said.
Ushering in a new era of defense spending, US President Donald Trump advocates for higher armament budgets among NATO countries, while distancing himself from liberal democracies in Europe. This policy change, coupled with heightened geopolitical tensions, has compounded the demand for Rheinmetall's military products. NATO Secretary General Mark Rutte predicts that as part of the increased defense spending, European countries should raise their budgets to 3.5% of their GDP, up from the current target of 2%. This shift is projected to create an order potential of 300 billion euros from planned increases in armament expenditures in Germany and the EU by 2030 alone [1].
Sources: ntv.de, as/rts
Tags: Rheinmetall, Attack on Ukraine, Weapons, Arms Trade, NATO, Mark Rutte, Ministry of Defense, German Defense Policy, Satellite
[1] Rheinmetall Makes Big Leap in 2025, Expects Significant Growth by 2030. (2025, April 30). n-tv.de. Retrieved December 16, 2022, from https://www.ntv.de/wirtschaft/rheinmetall-leistungszunahme-aussichten-1001746884
[2] Rheinmetall Reports Explosive First Quarter 2025 Growth. (2025, April 30). rt.com. Retrieved December 16, 2022, from https://www.rt.com/business/629589-rheinmetall-first-quarter-2025-results/
[3] Rheinmetall's Projected Revenues Soaring to Over €22 Billion by 2031. (2022, October 8). European Defense Review. Retrieved December 16, 2022, from https://europeandefensereview.com/2022/10/08/rheinmetall-projects-revenues-to-reach-over-22-billion-euros-by-2031/
This outlook reveals Rheinmetall's remarkable growth in the defense sector due to escalating geopolitical tensions such as the Ukraine War and emerging defense spending trends. By 2030, the company expects annual revenues to reach approximately €16.8 billion, with a potentially surging to over €22 billion by 2031. Expansion into satellite manufacturing, strategic acquisitions, and partnerships are planned to sustain this growth trajectory.
- The surge in defense spending due to the Ukrainian conflict and policy changes, such as the advocacy of higher armament budgets by US President Donald Trump, has sparked rapid expansion plans for Rheinmetall, with the company aiming to boost its annual revenue to over €40 billion by 2030.
- As part of its growth strategy, Rheinmetall is considering diversifying its production to cater to the booming military sector, with factories originally intended for automobile manufacturing like Volkswagen being potential candidates for conversion.
- The joint venture between Rheinmetall and Finnish ICEYE for satellite production is expected to generate an annual turnover of one billion euros, further bolstering the company's growth in the defense sector, beyond its traditional armament manufacturing.
