Rheinmetall expects flood of orders to help deliver targets

By Miranda Murray and Matthias Inverardi

BERLIN (Reuters) -German arms manufacturer Rheinmetall is on track to achieve its full-year sales target, it said on Thursday, with its CEO confident a flood of orders will come through the first half of next year after delays dented third-quarter results.

"The foundations have now been laid for a strong fourth quarter," said CEO Armin Papperger, with major orders now expected from the German army after delays due to the formation of a new government and late passage of the federal budget.

One of the main beneficiaries of a boost in European defence spending, Rheinmetall reported a 20% rise in consolidated sales for the first nine months of 2025 and expects a strong final quarter to help it achieve an annual growth target of 25-30%. 

BUOYED BY ORDER BACKLOG

Quarterly sales were 2.78 billion euros ($3.24 billion), slightly below expectations of 2.82 billion euros in a poll of analysts provided by the company.

Rheinmetall, which wants to be a global champion, expects continued demand from European governments motivated by Russia's war in Ukraine and has been working with countries across the continent to build factories and boost production.

The company's cooperation with U.S. giant Lockheed Martin is also going well, and it has talked to other U.S. firms like Honeywell and Raytheon about similar partnerships, Papperger said on an analysts' call.  

Order intake declined slightly owing to the delayed order placements by the German government, which makes up about a third of orders.

However, the backlog grew to about 64 billion euros by the end of September and is expected to hit 80 billion by year-end.

Papperger told Reuters this week that the company was in the final stages of negotiating a multibillion-euro supply contract in the ammunition sector alone. 

The company's shares were little changed on Thursday.

Jefferies analysts said the results were a relief because they did not lead to a feared reduction in guidance, while Berenberg said the focus was now on Rheinmetall's Capital Markets Day later this month.

Papperger, who has ambitions for Rheinmetall "on land, at sea, in the air and even in space," promised to give updates on its naval business ambitions at the CMD following its acquisition of German warship maker NVL.

"There is a huge opportunity, and we want to give you in detail then the opportunities that we have," he told analysts.

($1 = 0.8575 euros)

(Reporting by Matthias Inverardi and Miranda Murray. Editing by David Goodman and Mark Potter)