Rheinmetall Q1 Financial Results: Düsseldorf, Germany – Rheinmetall AG (RHM.DE) today reported a stellar first quarter for 2025, with group sales rocketing 46% to €2.3 billion, largely propelled by an unprecedented surge in its defence business. The Düsseldorf-based technology and defence giant saw its operating result in the defence sector almost double, underscoring the profound impact of heightened geopolitical tensions and increased military spending globally.
The company’s dynamic growth trajectory shows no signs of slowing. Group operating result climbed a significant 49% year-on-year to €199 million from €134 million in Q1 2024. The operating result margin for the group also improved, reaching 8.7%. This robust performance was overwhelmingly driven by the defence segment, which saw sales leap by an astounding 73% to €1.795 billion, up from €1.038 billion in the prior-year period. Consequently, the operating result for Rheinmetall’s defence activities soared 96% to €206 million, a substantial jump from €105 million a year earlier.
In stark contrast, the Group’s civilian business, primarily housed under Power Systems, experienced a continued downturn, with sales figures lagging behind the previous year due to persistent weakness in its core markets, particularly the automotive sector.
Rheinmetall CUAS System.
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Investors also cheered a massive 181% explosion in Rheinmetall Nomination – the company’s measure of order intake including the volume of newly concluded framework agreements – which reached €11 billion in the first three months of 2025, compared to €4 billion in Q1 2024. This surge has pushed the Rheinmetall Backlog to a new all-time high of €63 billion, up from €40 billion a year ago, providing strong visibility for future revenue.
Further bolstering its financial health, operating free cash flow saw a remarkable improvement, swinging to a positive €266 million from a negative €187 million in the same period last year. This €454 million positive turnaround was primarily attributed to increased customer advance payments, notably from the TaWAN contract with the German Armed Forces, enhancing the company’s financial flexibility. Basic earnings per share from continuing operations also reflected the strong quarter, improving to €1.92 from €1.13.
Armin Papperger, Chairman, Rheinmetall.
Armin Papperger, Chair of the Executive Board of Rheinmetall AG, commented on the exceptional performance: “Rheinmetall is needed – customers are buying entire factories from us today. Europe must prepare itself for a new era in which we must oppose the threat to our liberal values with all our strength. Rheinmetall stands firmly by its responsibility in this epochal break.”
He added, “We are experiencing growth like never before in the Group and are getting closer to our goal of becoming a global defence champion. Future-oriented cooperations testify to this… We are also massively expanding our capacities with the construction of new plants and strategic acquisitions.”
Defence Segments Power Growth
A closer look at the divisions reveals the defence segments as the undisputed growth engines:
Vehicle Systems: Sales nearly doubled, increasing by 93% to €952 million, largely due to deliveries of swap body trucks for the German military and the ramp-up of tactical vehicle programs. The acquisition of Loc Performance in late 2024 contributed €116 million to this growth. The operating margin in this segment improved to 8.5% from 7.7%.
Weapon and Ammunition: This division achieved record sales of €599 million, a 66% increase, driven by higher ammunition deliveries, including artillery ammunition for NATO countries and Ukraine, and increased sales of tank ammunition.
The operating result here more than doubled to €116 million, and the operating margin saw a significant leap from 14.7% to an impressive 19.3%, benefiting from increased sales volume and leverage.
Electronic Solutions: Sales grew by 49% to €427 million, fueled by orders for intercom sets, air defence systems like Skyranger and Skynex for European customers, and digitalization solutions. The standout here was the Rheinmetall Nomination, which more than quintupled to €10 billion, thanks to major framework orders for communication and soldier systems for the German military. The operating margin edged up to 6.3%.
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Rheinmetall displays unmanned systems at XPONENTIAL Europe.
Civilian Business Faces Headwinds
The Power Systems division, catering to civilian markets, saw sales decline to €505 million from €541 million. Booked business also fell significantly due to ongoing weakness in the automotive industry and project delays. The operating result for this segment dropped sharply by 70% to €9 million, with the margin contracting to 1.8% from 5.8%.
Outlook Confirmed with Upside Potential
Despite the mixed divisional performance, the strength of the defence business allows Rheinmetall to confirm its annual forecast for 2025. The company anticipates group sales growth of 25% to 30% over the previous year’s €9.751 billion and an operating result margin of around 15.5% for the group, including acquisitions and holding costs.
Importantly, Rheinmetall management, as indicated in an ad hoc announcement on April 28, 2025, sees “further upside potential.” The current guidance does not yet fully factor in the anticipated increase in demand stemming from the latest geopolitical developments. The company stated it will make necessary guidance adjustments as defence customer requirements become more specific throughout the year.
Papperger remains optimistic, stating, “We must and will deliver… We also have promising projects in the USA, the UK, Italy or Ukraine and numerous major orders in the pipeline that will secure further sales growth in the coming years.”
As nations worldwide reassess their defence postures, Rheinmetall’s Q1 results position it as a key beneficiary of a new, sustained era of increased military investment.
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