Rheinmetall (RHM) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales grew 40% year-over-year to €2.5 billion, with operating result up over 50% to €302 million and margin at 12.3%, driven by strong vehicle systems and major defense contracts.

• Backlog reached a record €51.9 billion, up 41% year-over-year, with order intake exceeding €6 billion and major nominations totaling €21 billion.

• Strategic alliances and joint ventures, including with Leonardo, Honeywell, and MBDA, and acquisitions like Loc Performance, underpin long-term growth.

• Guidance for full-year 2024: sales around €10 billion, operational margin ~15%, and operational free cash flow between €700 million and over €1 billion.

• Group structure reorganized, with Power Systems formed from Sensors & Actuators and Materials & Trade as of January 2024.

Financial highlights

• Q3 2024 sales: €2.5 billion (+40% YoY); operating result: €302 million (+50% YoY); operating margin: 12.3%.

• Earnings per share increased by 30% year-over-year to €3.11.

• Operating free cash flow in Q3: €118 million, up €221 million sequentially and €527 million year-over-year.

• CapEx accelerated to €182 million in Q3, representing 7.4% of sales.

• Cash position near €474–500 million; undrawn credit lines of €1.3 billion; net debt/EBITDA below 1.

Outlook and guidance

• Full-year 2024 sales expected around €10 billion, with operational margin ~15%.

• Defense EBITDA margin expected near 18%; civilian business underperforming but overcompensated by defense.

• Operational free cash flow guidance raised to €700 million–€1 billion, depending on timing of cash receipts.

• Cash conversion rate targeted at or above 40%.

• High sales coverage (>95%) and strong Q4 inventory position underpin confidence in meeting guidance.