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German arms giant Rheinmetall plans to return more than half a billion euros to shareholders this year as investors reap the rewards of surging European defence spending.
The Düsseldorf-based maker of tanks and artillery proposed a dividend payment of €11.50 per share as it announced booming sales and profits for 2025.
The figure, which amounts to a total payout of €528mn, is up from €8.10 the previous year and compares with a payout of just €2 per share in 2021, before Vladimir Putin’s full-blown invasion of Ukraine led to large-scale rearmament in Europe.
The company, which is expanding beyond its traditional realm of defence and weaponry into shipbuilding and space technology, is one of the biggest corporate winners from the war in Ukraine. Its share price has risen almost 20-fold since the start of the conflict.
The company said on Wednesday that the tense global security situation “underpins the promising position of the group” as it announced sales of €9.9bn in 2025, up from €7.7bn the previous year.
Operating profits rose 33 per cent to €1.8bn, indicating a profit margin of 18.5 per cent.
Rheinmetall said that 2025 was characterised by strong and rising demand as European countries, led by Germany, invest hundreds of billions of euros in their armed forces. The spending surge comes amid Nato fears of Russian aggression as well as an increasing desire to reduce dependence on the US.
The company won €7.8bn in orders for vehicle systems last year, including for Boxer infantry fighting vehicles and the Leopard 2 tank, which is produced by Franco-German group KNDS but has a gun barrel made by Rheinmetall.
Rheinmetall said that business with Germany was becoming an “increasingly important” share of its business, with the share of total sales generated from the EU’s largest nation rising 4 percentage points to 38 per cent.
It said that sales were forecast to increase at least 40 per cent this year to about €14bn as rising national defence budgets translate into orders.
The company’s order backlog — a key measure of future income for defence contractors — reached a new high of almost €64bn.