Rheinmetall expects strong sales growth in 2025 thanks to geopolitical tensions
(MarketScreener with Reuters) - Rheinmetall, a major beneficiary of rising defense spending in Europe, said on Wednesday it expected sales to rise sharply in 2025, fueled by the war in Ukraine and the decoupling of the US and Europe.
German defense group Rheinmetall anticipates sales growth of 25% to 30% in 2025, and forecasts an improvement in operating profit, with a margin of 15.5%, slightly higher than the 15.2% achieved in 2024.
However, Rheinmetall pointed out that these forecasts did not yet incorporate the potential market increase resulting from recent geopolitical developments, and would be adjusted in line with customer demand.
Last week, European leaders reaffirmed their commitment to boosting military spending, at a time when Donald Trump's administration is challenging US commitments to Europe. The European Commission plans to mobilize up to 800 billion euros for defense, including 150 billion in the form of loans to national governments. To find out more about both the geopolitical situation and the European plan, we recommend this article.
In 2024, Rheinmetall recorded sales of 9.75 billion euros, slightly below the 9.99 billion expected by analysts at Vara Research.
Rheinmetall is one of a long list of European defense stocks that are experiencing strong momentum as a result of the global geopolitical situation.
Rheinmetall AG specializes in the design, manufacture and marketing of equipment, components and solutions for the military and civilian industries. Net sales break down by family of products as follows:
- vehicle systems (38.7%): multi-purpose wheeled and tracked vehicles (tactical military vehicles, support vehicles, logistics vehicles and special vehicles);
- weapon and ammunition systems (26%): automatic cannons for land, air and sea vehicles, smooth-bore weapons, artillery systems, smart projectiles, high-energy lasers, etc.;
- sensors, actuators and power systems (20.8%): actuators, exhaust gas recirculation systems, throttle valves, exhaust gas dampers for electric motors, solenoid valves, pumps, etc. used in thermal and fluid management applications in the mobility and industrial sectors;
- electronic solutions (13.5%): sensors and networking systems, cyberspace protection solutions, air defense systems, radar systems, technical documentation solutions, integrated electronic systems, drones and automated ground robots, training and simulation solutions;
- other (1%).
Net sales are distributed geographically as follows: Germany (30.4%), Europe (46.6%), Asia and Middle East (9.6%), Americas (7.6%) and other (5.8%).
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