Germany’s Rheinmetall saw its shares rise on Tuesday after outlining an ambitious long-term growth plan that envisions sales quintupling by the end of the decade, driven by heightened European defense spending and sustained demand for weapons systems amid geopolitical tensions and the war in Ukraine.
The bullish outlook, presented during the company’s capital markets day, reinforces Rheinmetall’s position as one of Europe’s most prominent beneficiaries of the continent’s accelerating military modernization cycle.
Rheinmetall shares rose as much as 4% during early trading and was 3.6% higher at €1,785 in Frankfurt at the time of writing.
The stock topped the German DAX index at a time when most components were in negative territory. Shares have already surged roughly 190% so far this year.
Strong sales forecast and margin expansion
Rheinmetall said it expects annual sales to reach approximately €50 billion ($58 billion) by 2030, a sharp increase from the €9.8 billion reported in 2024.
The projection marks the upper end of its previous guidance of €40 billion to €50 billion and includes the impact of mergers and acquisitions, though it excludes potential order wins in the United States.
The company also forecasts that its operating margin will rise to more than 20% by 2030, compared with 15.2% in 2024.
Its cash conversion rate, which reached 70.1% in 2024, is expected to remain above 50% by the end of the decade.
Chief Executive Armin Papperger described the growth outlook as “like a wonder world,” noting the company’s transformation in recent years as defense demand has accelerated across Europe.
Analysts reacted positively to the announcement.
Jefferies said Rheinmetall’s new 2030 sales outlook comes in about 30% ahead of consensus expectations, signaling strong upside potential relative to market forecasts.
Defense spending boom drives growth
Rheinmetall’s rapid expansion tracks closely with Europe’s intensifying defense posture following Russia’s full-scale invasion of Ukraine in 2022.
NATO allies earlier this year agreed to increase defense spending to 5% of GDP by 2035, up significantly from the prior 2% target, a shift that has accelerated procurement cycles and boosted order pipelines for major defense contractors.
Germany’s own expanding defense budget remains the single largest driver of Rheinmetall’s sales targets, Papperger said.
Other European nations, particularly in the Baltic region, are also ramping up spending as they respond to heightened security risks.
The company’s product portfolio aligns closely with NATO’s most urgent capability gaps, ranging from air defense and modern artillery systems to drones, electronic warfare solutions, and air transport.
Papperger highlighted substantial demand for air defense infrastructure, estimating that securing Germany’s eastern border alone would require an investment of roughly €24.6 billion.
Strategic reorganization and expansion initiatives
As part of its long-term strategy, Rheinmetall announced a reorganization of several business units, including the creation of a new naval division expected to generate €5 billion in sales by 2030.
Papperger said he hopes the new unit will be operational by January.
Rheinmetall also confirmed a direct investment in US-based drone software company Auterion, deepening a partnership formed in late 2024 to co-develop standardized software-based components for unmanned aerial systems.
The investment underscores the company’s intention to expand its technological capabilities in autonomous and digitally enabled defense solutions.
By 2030, Rheinmetall expects its vehicle systems segment to contribute €13 billion to €15 billion in revenue, while its weapons and ammunition division is projected to generate €14 billion to €16 billion.
Air defense revenues are forecast between €3 billion and €4 billion, and the company’s digital business, reflecting growing demand for software and networking technologies, should contribute €8 billion to €10 billion.
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