Rheinmetall (RHM) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales rose 49% year-over-year to EUR 2.234 billion, with operating result up 110% to EUR 270 million and margin at 12.1%.

• Record order intake reached EUR 11.443 billion (+180%), with backlog at EUR 48.6 billion (+62%).

• Workforce expanded by 3,573 employees, reflecting strong hiring and business growth.

• Strategic partnerships and contracts, including a major 155mm ammunition contract, MoU with Leonardo, and expanded Lockheed Martin cooperation, open significant long-term growth opportunities.

• Localization efforts in Ukraine and new product launches at Eurosatory 2024 further strengthen market position.

Financial highlights

• Sales increased by 49% to EUR 2.234 billion in Q2; operating margin rose to 12.1%.

• EPS improved to EUR 3.61, driven by higher operating results; adjusted EPS at EUR 3.08.

• Operating free cash flow improved to EUR 169 million in Q2, up EUR 306 million year-over-year.

• Net debt to EBITDA ratio at 1.02x; cash position near EUR 549 million; undrawn credit lines of EUR 1.2 billion.

• CapEx at EUR 169 million; FTEs increased by 16% to 3,573.

Outlook and guidance

• Full-year 2024 sales guidance is around EUR 10 billion, with operating margin expected at 14%-15%.

• Cash conversion rate projected at 40%, supported by strong customer down payments.

• High sales coverage (91%) and strong order book provide confidence for H2 2024.

• Management is optimistic about achieving and potentially exceeding 20% annual growth through 2026, with capacity expansions underway.

• Segment guidance: Vehicle Systems margin 12-13%, Weapon and Ammunition 25-26%, Electronic Solutions 12-13%, Power Systems around 7%.