Soaring Defense Orders Boom: Ukraine Conflict Sparks Rheinmetall's Potential €40 Billion Revenue
mountingorder backlog threatens to erase $40 billion in revenue
Get ready for some serious growth in the defense sector! Rheinmetall, a renowned German defense conglomerate, is floating on a wave of expanded Western defense spending. The company's CEO, Armin Papperger, sees a remarkable future for Rheinmetall, estimating potential revenues surging to an impressive €40 billion by 2030, up from approximately €10 billion in 2024[1]. Brace yourself for a production boom as the corporation plans to significantly ramp up manufacturing, even converting factories from its civilian division[1].
Rheinmetall is experiencing a growth spree the likes of which have never been seen before in the company[1]. Papperger declared that the company is on track to become a "global defense champion." In the first quarter of 2025, the company's profit after tax skyrocketed nearly double to €108 million, while revenue soared 46% to €2.3 billion[1]. Military sales skyrocketed by a staggering 73%, with orders reaching over €11 billion[3].
Rheinmetall has set ambitious targets, aiming for annual growth of at least 25-30%, with military sales expected to grow by 35-40%. The company also plans to boost its operating margin to around 15.5% (up from 15.2% in 2024)[1]. While current planned defense spending isn't yet included in these forecasts, Papperger hinted that the company would revise its predictions if the plans become more concrete[4].
Rutte Predicts Higher Defense Spending
The Russo-Ukrainian conflict has catalyzed a pivotal moment for the Western defense industry. The industry is currently crucial in fortifying our military forces. We're also witnessing an added boost in momentum, thanks to US President Donald Trump's policy promoting higher defense spending among NATO nations and a shift away from liberal democracies in Europe[4].
In a recent discussion with NATO Secretary-General Jens Stoltenberg, Papperger learned that NATO countries should aim to increase their defense spending to 3.5% of their respective GDP (up from the current target of 2%)[4]. Trump is known for his advocacy of even higher figures. Papperger anticipates an €300 billion order potential from planned increases in defense spending in Germany and the EU by 2030[4].
Satellite Production in Neuss Renewal
In light of the boom, Rheinmetall is considering adjusting some of its civilian production facilities, particularly those in the automotive industry, to accommodate the thriving military production sector. With the Neuss plant, which currently employs around 1,500 workers for civilian production, Rheinmetall has recently established a joint venture with Finnish ICEYE for satellite production[4]. As early as the second quarter of 2026, these spacecraft could be manufactured, among other places, at the Neuss plant. Rheinmetall could also purchase plants from automakers like Volkswagen if the conditions were favorable[4]. The conversion of factories from other companies is one avenue for further growth—as are acquisitions or collaborations[4]. Papperger expects the joint venture with ICEYE to generate annual sales of €1 billion[4].
Boosting Defense Rheinmetall Expands Facilities
In its newly announced joint venture with US giant Lockheed Martin for the production of missiles, Rheinmetall's anticipated sales are significantly higher—here, Papperger foresees whopping €5 billion in annual sales[2]. Together, Rheinmetall and its US partner plan to manufacture Advanced Tactical Missile Systems (ATACMS) or Hellfire missiles in Germany[4].
The one notable decline in the company's first-quarter revenue was in the civilian Power Systems division, which suffered a 7% drop in revenue to €505 million and a 70.4% reduction in operating earnings to €9 million[4]. If Rheinmetall can secure the right buyer, the corporation may divest this segment[2].
Sources:[1] ntv.de, als/rts[2] Rheinmetall AG company website[3] Rheinmetall 2022 Annual Report[4] Spiegel Online
- Rheinmetall
- German defense policy
- Defense spending
- Geopolitical tensions
- Satellite production
- Missile production
- NATO defense spending
- Ukraine conflict
- Arms trade
- Rheinmetall's CEO, Armin Papperger, envisions a future where the company could potentially generate €40 billion in revenue by 2030, driven by increased Western defense spending due to geopolitical tensions, such as the Ukraine conflict.
- In an effort to capitalize on this growth, Rheinmetall plans to significantly ramp up manufacturing, even converting factories from its civilian division, and has set ambitious targets, aiming for annual growth of at least 25-30%.
- The company is also considering adjusting some of its civilian production facilities, like the Neuss plant, to accommodate the thriving military production sector. With the Neuss plant's upcoming joint venture with Finnish ICEYE for satellite production, they are planning to manufacture spacecraft for use in the defense sector.
- Rheinmetall's growth strategy also includes partnerships with other defense industry giants, such as the recently announced joint venture with US giant Lockheed Martin for the production of missiles, which could generate €5 billion in annual sales.
- The focus on the defense sector has resulted in a decline in the revenue of Rheinmetall's civilian Power Systems division, and if the company secures a suitable buyer, they may choose to divest this segment.
