Ready, Set, Grow: Rheinmetall's Sights on €40 Billion by 2030
ballooningorder inventory may imminently erase $40 billion from its value
Brace yourself for a boom in defense industry giants, as Rheinmetall, a German powerhouse, is racing towards a staggering €40 billion in revenue by 2030. This ambitious goal comes hot on the heels of record-breaking revenues and soaring defense spending worldwide.
Rheinmetall's CEO, Armin Papperger, envisions a rosy future for the Düsseldorf-based DAX company, with potential revenue touching €40 billion if everything falls into place. Starting from around €10 billion in 2024, the company anticipates a torrent of orders to supercharge production. To cater to this growth, Rheinmetall is even repurposing factories from its civilian division, with satellite production on its way to Neuss by 2026.
The company's Q1 figures showed more than a doubling of pre-tax profits to €108 million, and revenue up by 46% to €2.3 billion, with military business revenue surging by approximately 73%. The order intake soared past €11 billion, thanks mainly to orders from the German military. Rheinmetall remains bullish on its annual targets, predicting sales growth of 25-30%, military business growth of 35-40%, and a rise in operating margin to around 15.5%. These projections do not account for the unconfirmed potential defense spending increases.
Let's take a closer look at the factors fueling Rheinmetall's growth:
- Booming Defense Market: The Russian attack on Ukraine has catalyzed an overhaul of Western defense budgets, leading to a lengthy upcycle for the defense sector. This is expected to generate an order potential of up to €300 billion by 2030.
- Record Order Backlog: Rheinmetall's order backlog stands at a colossal €62.6–63 billion, guaranteeing sustained top-line expansion in the coming years.
- Expanded Global Presence: Rheinmetall's international reach—accounting for 70% of sales outside Germany—offers insulation against regional instability and access to burgeoning global defense budgets.
- Major Defense Programs: Key growth drivers include the German-French Main Ground Combat System (MGCS), a multibillion-euro tank program, and NATO's demand for ammunition and weapons.
- Margin Expansion and Mixed Portfolio: Rheinmetall enjoys high-margin segments like Weapons & Ammunition (expected 27–29% operating margin in 2025) and Electronic Solutions (projected 13–14% margin), contributing to overall growth.
- Cybersecurity and Electronic Solutions Growth: Orders in Electronic Solutions have surged, boosted by demands in areas like TaWAN and cybersecurity, further fortifying revenue and margin expansion.
As for the future, expect Rheinmetall to maintain double-digit sales growth through the end of the decade, propelled by a historic surge in defense spending, a monumental order backlog, and strategic advancements in high-margin segments. The company's trajectory is underpinned by both short-term rearmament trends and structural shifts in European and global defense priorities.
- Rheinmetall's community policy highlights its commitment to vocational training, as the company plans to train thousands of workers to meet the demands of its €40 billion revenue goal by 2030.
- In line with Rheinmetall's growth, the company's technology division has confirmed its investment in advanced satellite technology, aiming to create more jobs through vocational training programs.
- With the increasing GDP of various countries due to defense spending, Rheinmetall is poised to strengthen its position in the global market, providing extensive vocational training opportunities for its workers.
