Germany’s Rheinmetall reported blockbuster preliminary Q1 results

The defence and automotive group’s sales leapt 46% to €2.31 billion in Q1, well above consensus forecasts (~€1.95 billion). Operating profit (EBIT) jumped 49% to €199 million, likewise beating estimates. Rheinmetall credited its defence division as the engine of growth – wartime orders for ammunition, weapons and military vehicles are flowing at an unprecedented pace. The company’s statement bluntly noted the increase is “mainly attributable to the defence business”. Off the back of these results, Rheinmetall confirmed its full-year outlook but hinted it might upgrade forecasts later, citing “possible improvements in market potential, especially in Europe, Germany and Ukraine”. In other words, management sees further upside if European governments accelerate procurement (for example, joint EU ammo orders) or if support for Ukraine intensifies, requiring more equipment. Rheinmetall’s shares have been on a tear for months and these results vindicate the optimism. Analysts note that Rheinmetall is effectively operating at war-time tempo – it has ramped up factory output to replenish Western stockpiles and supply Ukraine, and even acquired new facilities (e.g. an ammo plant in Hungary) to expand capacity. A key challenge ahead will be managing supply chain constraints to deliver on its €30+ billion order backlog. But for now, the Q1 beat underscores that Europe’s defence spending surge is translating directly into revenue and profit for firms like Rheinmetall, making it one of the clearest corporate winners of the geopolitical tensions. The company’s intention to possibly revise guidance upward later this year reflects confidence that this super-cycle is still in its early innings.

Sources

Rheinmetall's first-quarter sales beat expectations, boosted by defence business