FRANKFURT, Germany (Reuters) – For Armin Papperger, there are weeks when it’s a little everyday on Sunday.
On Tuesday, the chairman of the board of directors of Rheinmetall revised upwards the medium-term sales prospects of the German defense giant, counting on the fallout from the explosion of military budgets due to the war in Ukraine.
The following day, the German government’s decision to deliver Leopard 2 combat tanks, built jointly by Rheinmetall and Krauss-Maffei Wegmann (KMW), to Kyiv sent the company’s stock to a high of 134 years old.
The manufacturer of tanks, ammunition and other military equipment is now valued at nearly 10 billion euros, a value multiplied by 2.5 over one year, which could open the door to the DAX, the flagship index of the Frankfurt Stock Exchange.
For Armin Papperger, 59, Russia’s invasion of Ukraine has not only opened up new opportunities for Rheinmetall, it has also caused a change in perception in a country traditionally critical of Germany’s role in military conflicts.
“Before, we were insulted and sometimes even threatened. Today, people tell me and write to me: ‘Thank God you are here,'” the boss of the arms giant told German magazine Stern this week. .
If he has long seemed to resist pressure from his allies on the delivery of Leopard tanks to Ukraine, Chancellor Olaf Scholz himself has the ambition to return his country to the forefront of the international scene, a ” change of era” (“Zeitenwende”) which he theorized before the Bundestag on February 27, 2022, shortly after the start of the war in Ukraine.
Germany must therefore shed the “bad conscience” that has haunted it since the end of the Second World War – its “historical responsibility”, in the words of the Russian ambassador in Berlin after the green light for deliveries of Leopard tanks.
TRANSLATING BUDGETS INTO ORDERS
“I think about what weapons can do,” says Armin Papperger, who joined Rheinmetall in 1990 and has run the company for a decade. “But I’m also thinking about what can happen when you don’t have weapons. You can see that right now in Ukraine.”
Rheinmetall, which is also a major supplier to the automotive sector, employs more than 25,000 people worldwide. Apart from the Leopard, the company builds the Puma and Marder infantry fighting vehicles and participates in the Franco-German future tank project (MGCS) with KMW and Nexter.
The German giant, which has so far supplied Ukraine with anti-aircraft and anti-drone defense systems, said it was able to deliver up to 139 Leopard tanks, including 51 in its modernized version. Twenty-nine Leopard 2A4s could be delivered by April or May, he said.
Berlin has so far agreed to take 14 of these tanks from German army stocks.
Stifel Equity Research analysts expect Leopard sales to earn Rheinmetall between 300 and 350 million euros this year and next, to which will be added ammunition deliveries estimated at 32 million euros per year. month.
For these sales to materialize, however, Armin Papperger this week called on the government of Olaf Scholz to quickly translate into orders the exceptional budget of 100 billion euros that he presented last year to modernize the German army.
“The whole of German industry is ready,” he said during a conference.
(Report by Christoph Steitz, French version Tangi Salaün, edited by Blandine Hénault)
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