Russia's war of aggression in Ukraine provided the German armaments group Rheinmetall with the greatest upswing and record figures in the company's history. Group CEO Armin Papperger spoke of a "game changer" when presenting the balance sheet, i.e. a turning point. He believes tensions between Ukraine and Russia will continue for many years to come, even if there is peace. Kiev will rely on Western armaments technology in the future. Rheinmetall is ready for this.
Papperger does not anticipate the use of nuclear weapons in the current war, but does anticipate a huge need for ammunition from Ukraine and from western NATO suppliers. Rheinmetall is the largest ammunition house in the world and is now faced with the task of replenishing the ammunition stocks, which have fallen to a record low internationally.
Papperger literally: "Ukraine's statement that we need a million rounds of artillery is correct and that will be the case for many years to come, because Ukraine's depots are empty." Rheinmetall is able to supply 50 percent of Ukraine's requirements .
The Rheinmetall boss assumes that the stock of battle tanks and howitzers that were delivered to Ukraine will be reordered. So the new construction of Leopard tanks is to be expected. "We have a return to conventional warfare," Papperger said.
Against the background of the 100 billion special budget for the Bundeswehr, the group is now facing an unprecedented surge in orders. The order backlog, which climbed to 26.6 billion euros last year, is likely to rise to over 30 billion euros this year.
Papperger assumes that a large part of the orders from the 100 billion special budget of the Bundeswehr will be awarded this year, at least in planning. With the new Defense Minister Boris Pistorius (SPD), there is now new impetus. With Pistorius, "a minister with handshake quality" is in office.
The terms record and capacity expansion ran like a red thread through the balance sheet press conference. Rheinmetall speaks of “record” in 16 places in the annual report alone. From Monday, the group will also be promoted to the top stock exchange league, the DAX40. In addition to the increase in the share price, the shareholders should benefit from an increased dividend from EUR 3.30 to EUR 4.30. In the forecasts for the current year, 25 to 30 percent more sales are expected in each of the major divisions.
Papperger had already announced that group sales would practically double in two years to around twelve billion euros, including the newly acquired Spanish ammunition manufacturer Expal. For this year, even without the effect of the acquisition of Expal, an increase in sales of up to 7.6 billion euros is expected. In the ammunition sector alone, sales are expected to climb to between three and 3.5 billion euros by 2025.
Rheinmetall can also show an unprecedented increase in earnings for the past year. The operating result improved by 27 percent to 754 million euros. At EUR 535 million, consolidated profit was even 61 percent higher than in the previous year.
In the group as a whole, operating profit rose to 754 million euros and the margin to 11.8 percent. This means that Rheinmetall is already very close to the margins of the large US armaments companies. Above all, the large weapons and ammunition division ensured the jump in profits. The operating return there was almost 21 percent.
Papperger gave a few more details about the plans to build a new tank plant in Ukraine and the production of center fuselage sections for the US F-35 fighter jet. The tank plant in the Ukraine would be rented by Rheinmetall and could also produce the Lynx infantry fighting vehicle in addition to the Panther main battle tank.
However, the final decision has not yet been made by Ukraine. Ammunition production in Ukraine is also conceivable. But there is no discussion about that yet. Papperger expects sales of around one billion from Rheinmetall's entry into combat aircraft construction. The plant, for which a location is currently being sought, could employ up to 500 people.
The Rheinmetall boss does not want to see the group as just an armaments supplier. There is also a civilian business, for example as a supplier for car manufacturers. The Düsseldorf group also produces components for home heat pumps. Also a future market, says Papperger.
"Everything on shares" is the daily stock exchange shot from the WELT business editorial team. Every morning from 7 a.m. with our financial journalists. For stock market experts and beginners. Subscribe to the podcast on Spotify, Apple Podcast, Amazon Music and Deezer. Or directly via RSS feed.