By Miranda Murray and Matthias Inverardi
BERLIN (Reuters) -Rheinmetall, a major beneficiary of Europe’s renewed push to invest in defence, said on Wednesday it expects significant sales growth in 2025 and promised to update guidance after recent geopolitical developments are taken into account.
The German defence company expects sales to grow by 25% to 30% in 2025 as a result of the Russian invasion of Ukraine and the decoupling of the United States from Europe, it said.
At the same time, Europe’s top ammunition maker anticipates an improvement in the operating result and an operating margin of around 15.5%, slightly above the 2024 level of 15.2%.
However, it said the outlook did not take into account “improvement in market potential that is expected to arise in the markets that are particularly relevant” and said it would make adjustments as customer needs become more specific.
Rheinmetall said it expected to update guidance soon.
“An era of rearmament has begun in Europe that will demand a lot from all of us. However, it also brings us at Rheinmetall growth prospects for the coming years that we have never experienced before,” said CEO Armin Papperger in a statement.
Rheinmetall will propose a dividend of 8.10 euros per share for 2024, compared with 5.70 euros the year before, it said.
Last week, European leaders backed plans to spend more on defence and continue to stand by Ukraine in a world upended by President Donald Trump’s reversal of U.S. policies.
The European Commission wants to mobilise up to 800 billion euros ($863 billion) for European defence, including a plan to borrow up to 150 billion euros to lend to national governments.
For 2024, the company reported group sales of 9.75 billion euros, a rise of 36% on the year, but below the 9.99 billion in a company-provided estimate by analysts polled by Vara Research.
While the defence business, which accounted for 80% of sales, was on the rise, civilian business offered a mixed picture, with products for carmakers in particular on the decline.
Rheinmetall said last month it intended to repurpose two of its automotive plants in Germany to mostly make defence equipment.
($1 = 0.9174 euros)
(Reporting by Miranda Murray and Matthias Inverardi, Editing by Rachel More and Tomasz Janowski)
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