Growth spurt and extra orders
Rheinmetall benefits from the war in Ukraine
03/17/2022, 12:07 p.m
Against the background of increasing defense spending in Germany and other countries, the armaments group Rheinmetall is on a growth course. Because of Russia’s invasion of Ukraine, several EU countries have announced that they will increase their defense budgets.
Against the background of the Ukraine war, the German armaments group Rheinmetall is already expecting a strong increase in sales this year. So far, sales of military goods have been expected to increase by 10 percent in 2022 compared to the previous year. Now you go from 20 percent, said CEO Armin Papperger. From the special fund of 100 billion euros, which the federal government intends to provide for the upgrading of the Bundeswehr, Rheinmetall will already achieve initial sales this year. There are already “considerable inquiries” from Germany.
After the start of the Ukraine war, Rheinmetall offered the federal government a long-term product package worth 42 billion euros. It’s about tanks, ammunition, military trucks and other goods. Roughly speaking, Rheinmetall makes two-thirds of its sales with armaments, including air defense systems. The company also generates a third of its business as an automotive supplier.
Papperger also presented the annual figures of the group, which has been on a growth course for a long time and has so far mainly benefited from foreign orders. For example, Rheinmetall sold infantry fighting vehicles to Hungary. In 2021, group sales rose by 4.7 percent to 5.7 billion. The operating result (EBIT) rose by about half to 608 million euros. The net profit shot up from one million euros to 332 million euros. The Düsseldorf-based company has large production facilities for military goods in Unterlüß (Lower Saxony/2090 employees), Bremen (1910 employees), Kassel (1130) and Kiel (680). Rheinmetall has around 24,000 employees worldwide.