Rheinmetall (RHM) Q3 2025 earnings summary

Executive summary

• Q3 2025 sales rose 13% year-over-year to €2.78 billion, with defense sales up 17% to €2.3 billion, now 83% of group sales.

• Backlog increased 23% year-over-year to €63.8 billion, driven by major orders and framework agreements, especially in Electronic Solutions and Weapon and Ammunition segments.

• Operating result increased 19% to €360 million, with group margin at 12.9% and defense margin at 15.7%.

• Major innovations and capacity expansions included new artillery and ammunition plants across Europe and a €100 million investment in a UK gun facility.

• Strategic moves included the acquisition of Lürssen’s naval business, a 40:60 satellite JV with Isar Aerospace, and partnerships with Leonardo, Reliance, and ICEYE.

Financial highlights

• Group sales grew 13% year-over-year in Q3 2025 to €2,780 million; operating result reached €360 million (+19% YoY); operating margin at 12.9%.

• Defense sales: €2,306 million (+17% YoY); defense margin at 15.7%.

• Net income for Q3: €204 million; basic EPS from continuing operations: €3.34.

• Operating free cash flow for the first nine months: €-813 million, mainly due to inventory buildup and lower prepayments.

• Equity ratio improved to 32.9%; net debt to EBITDA at 0.97; net financial position: €-1,873 million.

Outlook and guidance

• Defense sales expected to grow 35–40% for the full year; civilian business may shrink slightly.

• Operating margin guidance at 15.5%, with positive cash conversion expected if down payments are received as planned.

• Order intake potential for Q4 and early 2026 includes major contracts in vehicles, ammunition, and electronics, with total backlog expected to reach around €80 billion.

• Long-term sales potential of €40–50 billion by 2030, with growth backloaded to 2028–2030.

• Cash conversion rate for the group expected to exceed 40%.