The high demand for ammunition has given the defense company Rheinmetall a strong growth boost. In the first quarter of 2024, sales in the ammunition division increased by 70 percent to 362 million euros compared to the same period last year, the weapons manufacturer in Düsseldorf announced. According to the information, the order backlog in this division at the end of March was 1,141 million euros, almost twice as high as the year before. Rheinmetall produces ammunition for tanks, artillery and anti-aircraft guns, and a large part of the ammunition supplied went to Ukraine. With the acquisition of the Spanish ammunition manufacturer Expal, Rheinmetall strengthened itself in this business area and existing production areas were also expanded.
The outbreak of the Ukraine war in February 2022 boosted Rheinmetall’s business, and the stock market price has increased approximately fivefold since then. Germany’s largest arms company also benefited from additional funding from the federal government. According to its own estimates, Rheinmetall will receive around 30 billion step by step from a 100 billion euro special fund for the Bundeswehr – this is spread over a period of several years, which is common for defense contracts.
Support for Ukraine as the main reason
The armory also played a central role in Western support for Ukraine: on behalf of the federal government, for example, the company brought 80 Marder infantry fighting vehicles into shape and sent them east. “Another 40 Marder infantry fighting vehicles will be delivered between May and September 24,” said CEO Armin Papperger on Tuesday at the Dax group’s online general meeting. Rheinmetall also delivered other tanks, anti-aircraft defenses and, above all, urgently needed ammunition to Ukraine.
At the annual general meeting, Papperger was asked what the greatest success of the past year had been for him. “The greatest achievement for me was how much we were able to help Ukraine,” the manager replied. “These people are fighting with their blood for the freedom of Europe; we have been able to deliver a lot to Ukraine.”
The ammunition division in particular is growing
Rheinmetall achieved the strongest growth in the ammunition division. Other areas of the defense company with its 28,600 employees also developed positively. According to the company, total sales rose by 16 percent to 1.58 billion euros in the first quarter of 2024 compared to the same period last year, and the operating result shot up by 60 percent to 134 million euros. However, the share price fell slightly on the stock market on Tuesday as analysts had hoped for more. Despite this small setback, the level of Rheinmetall’s share price remains comparatively high.
Rheinmetall press release