Rheinmetall scales down 2026 sales outlook on scrapped frigate programme
By Miranda Murray and Matthias Inverardi
Rheinmetall's Revised Sales Outlook and Strategic Developments
Sales Forecast Adjustment Following Frigate Programme Cancellation
BERLIN, Aug 6 (Reuters) - German defence company Rheinmetall lowered its 2026 sales outlook on Thursday after the German government cancelled a delayed frigate programme that the company had been widely expected to win.
Rheinmetall now expects sales in the range of €13.7 billion to €14.2 billion, down from €14.0 billion to €14.5 billion previously, based on a €300 million hit to its naval division.
It left its other targets unchanged and said it remained on track for record growth.
Recent Financial Performance
The company had reported a nearly 70% jump in second-quarter sales to about €3.3 billion, with all business segments contributing to the rise, in an unscheduled release last month.
Shares were down 4% in pre-market indications after the results.
Strategic Ambitions and Setbacks
Expansion in the Naval Sector
DENTED AMBITIONS
Rheinmetall has seen its fortunes soar with Europe's renewed interest in building up its defences after Russia invaded Ukraine in February 2022, with Europe's largest ammunition maker targeting annual sales of up to €50 billion by 2030.
Acquisitions and Growth Plans
The company last year bought the warship division of German shipbuilder Luerssen as part of its ambitions to become a bigger player in the naval sector.
It has also been eyeing an acquisition of German Naval Yards Kiel and promised to reach a final decision within weeks after a rival bidder withdrew from the process last month.
Impact of Frigate Programme Cancellation
Rheinmetall's upward momentum was tempered in June when the German government scrapped a delayed frigate programme for which Rheinmetall had been widely expected to secure the contract.
Future Outlook
"In the naval business, too, we are looking to the future and are working hard to fulfil our current maritime orders as a reliable partner with a high level of expertise, and to secure new ones on the international stage as well," said Chief Executive Armin Papperger on Thursday.
(Reporting by Miranda Murray, Editing by Linda Pasquini and Louise Heavens)