German Defence Giant Rheinmetall AG Posts Strong Sales Growth, Record Order Backlog and Forecasts Major Expansion in 2026.
Rheinmetall AG.
Düsseldorf, 11 March 2026: German defence technology group Rheinmetall AG reported a record operating result in fiscal year 2025, driven by rising global defence spending and strong demand for military equipment across Europe and allied nations.
The Düsseldorf-based company announced that consolidated sales rose 29% year-on-year to €9.94 billion, compared with €7.72 billion in 2024. The group’s operating profit climbed 33% to €1.84 billion, up from €1.39 billion a year earlier, pushing the operating margin to 18.5%.
The company’s order backlog surged to a new record of €63.8 billion, a 36% increase compared with €46.9 billion in the previous year, underscoring sustained demand for military equipment amid Europe’s ongoing defence buildup.
Strong Demand Driven by European Security Environment
Rheinmetall said the 2025 fiscal year was marked by rising military demand in Europe, particularly as countries accelerate defence modernisation in response to geopolitical tensions.
Business with the Bundeswehr—Germany’s armed forces—has become increasingly significant. The share of Rheinmetall’s revenue generated in Germany rose to 38% of total sales, up from 34% in the previous year, while international business accounted for the remaining 62%.
Armin Papperger, Chairman, Rheinmetall.
Chief Executive Officer Armin Papperger said the company is well positioned to benefit from increased defence spending.“The world is changing rapidly, and Rheinmetall is well prepared. We are needed when it comes to increasing the defence capabilities of Germany and Europe and creating an effective deterrence,” Papperger said.
Strategic Shift to Full Defence Focus
Rheinmetall is accelerating its transformation into a pure defence technology group by discontinuing its automotive activities, which are currently up for sale.
The company said the move allows it to focus entirely on defence systems, while expanding through acquisitions and partnerships across multiple military domains.
Following the acquisition of shipbuilder NVL Group, Rheinmetall has extended its capabilities beyond land and air platforms to include naval and space sectors. The group now positions itself as a cross-domain defence systems provider, covering vehicles, ammunition, ships, digital systems, drones and satellite technologies.
Papperger described the move as a key milestone in the company’s long-term strategy.
“The development into a cross-domain technology company in the defence sector is paying off already today,” he said.
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Major Growth Across Key Defence Segments
Rheinmetall’s core divisions all posted significant growth during 2025.
Vehicle Systems, responsible for military wheeled and tracked vehicles, generated €4.99 billion in sales, a 32% increase compared with €3.79 billion in 2024. Growth was driven by programmes such as deliveries of Boxer armoured vehicles and tactical truck systems.
The division’s operating profit rose to €583 million, with margins improving to 11.7%.
In the Weapons and Ammunition segment, sales climbed 27% to €3.53 billion, supported by strong demand from Germany, NATO allies and Ukraine. Operating profit in this division rose by about 31% to €1.04 billion, with margins improving to 29% due to higher production volumes and improved product mix.
The Electronic Solutions segment recorded the fastest expansion, with sales rising 45% to €2.50 billion. The growth was supported by large orders related to digitalisation programmes for the Bundeswehr as well as deliveries of Skyranger and Skynex air defence systems for European customers.
Operating profit in this segment jumped 68% to €366 million, pushing the margin up to 14.6%.
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Record Order Pipeline
The company’s massive €63.8 billion backlog includes confirmed orders and long-term framework agreements, giving Rheinmetall strong visibility over future revenue.
Large orders include programmes related to Boxer infantry fighting vehicles, Leopard 2 A8 tanks, tactical trucks, artillery ammunition and advanced digital soldier systems.
Dividend Increase for Shareholders
Reflecting the strong financial performance, Rheinmetall’s management will propose a dividend of €11.50 per share at the company’s annual general meeting scheduled for May 12, 2026. The payout would represent a significant increase from €8.10 per share distributed the previous year.
The proposed dividend corresponds to a payout ratio of about 45.5% of earnings.
Strong Growth Forecast for 2026
Looking ahead, Rheinmetall expects another year of rapid expansion in 2026 as global defence budgets continue to rise.
The company forecasts group sales growth of 40–45%, which would push revenues to between €14 billion and €14.5 billion. At the same time, the company expects its operating margin to increase to around 19%.
As part of its organisational restructuring from January 2026, Rheinmetall has also introduced new operating divisions including Air Defence, Digital Systems and Naval Systems, alongside its existing land systems and ammunition businesses.
The company believes this structure will enable it to capture growth opportunities in future military technologies such as digitalisation, drone systems and satellite-based capabilities, while continuing to supply traditional platforms like vehicles, artillery and ammunition.
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