Rheinmetall plans to hand out more than €350mn to shareholders, as Germany’s largest weapons contractor reported record orders and profits amid a European scramble to boost defence spending.
The Düsseldorf-based company on Wednesday revealed plans to raise its dividend 42 per cent to €8.10 per share, after operating profits soared 61 per cent to €1.5bn last year. Operating margins in its defence business rose to 19 per cent.
“An era of rearmament in Europe has begun,” Rheinmetall’s chief executive Armin Papperger said. “At Rheinmetall, it also brings us growth prospects for the coming years that we have never experienced before.”
The maker of Nato-standard 155mm munitions has been one of the biggest beneficiaries of Russia’s invasion of Ukraine, as investors have set aside long-held ethical concerns over arms stocks. Since the war began, the company’s share price has surged more than tenfold. Rheinmetall stock rose 1 per cent in morning trading on Wednesday.
Rheinmetall on Wednesday said that roughly 30 per cent of its sales, which last year reached €9.8bn, went to the German Bundeswehr — a figure that is only likely to grow if chancellor-in-waiting Friedrich Merz succeeds with his plan to rip up the country’s strict debt rules to allow unlimited borrowing for defence spending.
On Wednesday, the company said it expected sales to increase by up to 30 per cent this year, adding that this would also “improve” operating profit.
However, it noted that its outlook had not yet taken into account the likely “improvement in market potential . . . due to geopolitical developments in recent weeks”.
Transatlantic relations have in recent weeks taken an extraordinary turn, as US President Donald Trump has wavered in his support of Ukraine and its European allies, prompting renewed commitments for military spend across the continent.
“Rheinmetall will adjust its forecast as the respective needs of military customers become increasingly clear over the course of the year,” the company said, as it added that its order backlog had reached a record of €55bn.
