Rheinmetall: Operational Result Jumps 33%, Margin Reaches 18.5%
In 2025, the German defense giant recorded a 29% increase in its revenue to 9.9 billion euros, but it is the progression of the operational result that is more impressive. With a 33% increase, the group not only accelerates faster than its sales but also improves its margin to 18.5%, signaling a fundamental operational transformation that feeds a particularly ambitious guidance for 2026.
Impressive Sales and Operational Results
Rheinmetall recorded sales of 9.935 billion euros in 2025, up by 2.22 billion euros from 7.715 billion in 2024. This 29% increase reflects the sustained demand for military equipment in Europe. However, the most remarkable element lies in the progression of the operational result, which stood at 1.841 billion euros, surpassing the previous level of 1.389 billion by 33%. The gross operational result (EBIT) reached 1.684 billion euros. This acceleration of profit relative to sales reveals a structural improvement in profitability. The group's operational margin strengthened to 18.5%, from 18.0% the previous year, confirming that the group captures more value with each euro generated.
Major Transformation and Strategic Refocus
This performance is part of a major transformation. Rheinmetall decided to divest its automotive activities to fully focus on defense. This decision to exit civilian activities allows the group to concentrate its resources and cost structure on higher-margin sectors. Working capital also benefited, with an operating cash flow of 1.218 billion euros, up 15% from 1.056 billion in 2024. The order book exploded to 63.8 billion euros, up by 36%, with 38% now coming from Germany (compared to 34% the previous year), reflecting the intensity of German investments in defense. The acquisition of the NVL shipyard and expansion into the space sector demonstrate a strategy of vertical integration that should support future margins.
Ambitious Outlook for 2026
For 2026, Rheinmetall anticipates further acceleration, with revenue growth of 40 to 45%, bringing sales to between 14.0 and 14.5 billion euros. The operational margin is expected to reach about 19%, or 50 basis points above the 2025 level. This trajectory is based on the consolidation of the three existing divisions (Vehicle Systems, Weapon and Ammunition, Electronic Solutions) and the creation of three new segments (Air Defence, Digital Systems, Naval Systems). The proposed dividend of 11.50 euros per share, up 42% from 8.10 euros in 2024, reflects the management's confidence. However, this guidance assumes flawless execution and sustained demand. For investors, the challenge remains: if the group achieves its goals, it will have transformed its business model in three years; if it stumbles over logistical or industrial challenges inherent to this growth, the margin could undergo significant compression.
