Düsseldorf-based Rheinmetall AG significantly increased both sales and profits in 2025 as it expanded its defence business, fuelled by growing military spending in Europe.
However, the company failed to meet the elevated expectations of investors and analysts when it released its full-year earnings on Wednesday.
Shares in Rheinmetall fell by over 7% in Frankfurt by around 17:00 CET following the announcement.
The defence group reported consolidated sales of €9.9bn for 2025, a 29% increase compared with the previous year. Operating profit also reached a record €1.84bn, rising 33% year on year.
Rheinmetall said it would propose a dividend of €11.50 per share, up from €8.10 in the previous year.
“The tense security situation underpins the promising position of the Group, whose products are playing an increasingly important role in strengthening defence capabilities in Germany and its partner countries,” the company said in a statement.
Rheinmetall forecast 40-45% sales growth in 2026, with revenue expected to hit €14-14.5bn.
The company cited conflicts including the war in Ukraine and Middle East tensions as drivers of demand for missiles and drones.
Its order backlog hit a record €63.8bn — up from €46.9bn a year earlier — and the company expects that figure to more than double to around €135bn by year-end.
According to Rheinmetall, the 2025 financial year continued to be shaped by growing demand linked to the military build-up across Europe.
Business with the German armed forces accounted for 38% of total sales, up four percentage points year on year, while international business made up the remaining 62%.
Despite the strong demand outlook, some analysts have raised concerns about whether Rheinmetall will be able to expand production quickly enough to deliver on its rapidly growing order book.
“The world is changing rapidly, and Rheinmetall is well prepared,” said chief executive Armin Papperger.
