Rheinmetall (ETR:RHM) used its full-year/Q4 2025 investor and analyst recap call to reiterate previously disclosed expectations for 2025 and provide additional detail around its early indications for 2026, including a step-up in anticipated German order activity and the impact of upcoming portfolio and consolidation changes.
Portfolio and reporting changes
Management emphasized that the recap call did not include new information, but it reminded investors of reporting changes stemming from portfolio actions. The company said it expects to disclose only the defense business for 2025, with the automotive business reported as a discontinued business, and asked investors to adjust expectations accordingly.
2025 outlook reaffirmed for defense
Rheinmetall reiterated the expectation it previously released via an ad hoc statement on December 18. For 2025, it expects the defense business to grow in a range of 30% to 35% with an operating margin in a range of 18.5% to 19%.
The company also described cash flow in 2025 as “really good,” attributing strength to customer prepayments received toward the end of the quarter. Management reiterated that it has communicated cash conversion would be “significantly above 50%,” referencing its rolling forecast methodology.
2026 early indications: revenue, margin, consolidation, and NVL contribution
Management described its 2026 commentary as a first indication rather than full guidance, noting it has not yet provided complete consolidation-line disclosure. Operationally, the company expects defense business sales of roughly €15 billion to €16 billion in 2026, including NVL, and referenced a consolidation effect discussed at its Capital Market Day of about 12%, meaning reported revenue would be lower than the operational figure.
For 2026 profitability, Rheinmetall cited an operating margin range of 18% to 20%, stating this is a “net figure.” It also said cash conversion is expected to remain “very, very high,” supported by the order profile expected in 2026.
On NVL specifically, management reiterated that because it expects to consolidate only 10 months in 2026 and because the F126 program is “a little bit delayed,” it has indicated NVL sales in 2026 of €1.3 billion to €1.5 billion. It added that the expectation is for NVL to be paid out of existing cash facilities during the quarter.
German orders in focus: Boxer, naval programs, and broader pipeline
Management repeatedly highlighted what it sees as a major pickup in contracting activity from Germany, stating that the German customer is “starting to sign the contracts over the next couple of quarters,” including major land and naval orders. Rheinmetall said it expects €67 billion of German orders over the next four quarters, financed by Germany’s new financial facility.
Among the largest items discussed was the “Arminius” Boxer program. Rheinmetall described it as a two-phase structure:
- €12.5 billion fixed contract for Boxer vehicles to be executed through 2030
- An additional option/frame agreement for 2030–2035 of €25 billion
Management later clarified that €37 billion will be booked in 2026. It also said the contract covers multiple platform types, describing them qualitatively as infantry fighting vehicles, air-defense vehicles, special-purpose vehicles (including engineering and mine-clearing variants), without disclosing quantities by platform.
Rheinmetall said it is working with KMW on “dedicated lines” to increase output and efficiency versus a more complicated historical split, with the goal of having capacities ready by 2027 to execute orders through the rest of the decade. It added that planned increases in automation—such as in welding and painting—support customer advance payments. Management said advance payments could be “significant,” citing potential up to 30% on the first €12.5 billion fixed portion, contributing to what it described as a “very cash positive situation.”
In naval, management referenced additional potential orders for F126 and F127 totaling about €12 billion to €13 billion. Asked about reports regarding a TKMS pre-contract for a MEKO solution, management said it views F126 as necessary because Germany requires dedicated mine-hunting capabilities in the North Atlantic and Baltics. It characterized MEKO as an interim solution if F126 deliveries would be too late, and said there is “room for all three variants” (F126, F127, and MEKO).
International orders, ammunition expansion, and segment detail
Beyond Germany, Rheinmetall said international orders could be supported by new “safe financing facilities from Brussels,” citing Romania and Italy as initial examples with expected contracts tied to land vehicles. It referenced expected new Lynx and Panther contracts from Italy totaling roughly €10 billion, while stating Romania would be a broader package including Lynx but without further details. The company also said it expects about €3 billion from Ukraine over the next quarters.
Overall, management said 2026 order intake is expected to be at a similar level or higher than what was achieved at the end of last year. It described an adjusted figure (excluding civil business) “close to around €70 billion,” and said it expects “more around €80 billion” of order intake for 2026. Including 2026 sales, it expects backlog at the end of 2026 to be around €135 billion.
On ammunition, Rheinmetall said it expects significant growth in 2026 as capacity investments in South Africa, Spain, and Germany (Unterlüß plant) ramp. It reiterated an expectation for the ammunition business to grow from about €3.5 billion to around €5 billion in 2026 and described it as its most profitable business. The company also said its Murcia facility will be up and running in 2026 and that permits are in place, while noting it previously cited up to €200 million of impact in Q3 related to issues including customer acceptance changes.
Rheinmetall also provided a high-level breakdown of the €15–€16 billion 2026 operational revenue indication, reflecting a revised reporting structure that separates “electronic solutions” into air defense and digital systems and includes NVL. It described the mix as:
- Ammunition: about €5 billion
- Vehicle systems: up to about €6 billion
- Digital systems: around €2 billion
- Air defense: around €1 billion
- Naval (NVL): up to about €1.5 billion
Management said it ended 2025 net debt free, but declined to quantify free cash flow in absolute terms. It also said it has made “good progress” on the disposal of the automotive business and expects results “latest early Q2 of 2026.”
About Rheinmetall (ETR:RHM)
Rheinmetall AG provides mobility and security technologies worldwide. The company operates in five segments: Vehicle Systems, Weapon and Ammunition, Electronic Solutions, Sensors and Actuators, and Materials and Trade. The Vehicle Systems segment offers combat, logistics, support, and special vehicles, including armored tracked vehicles, CBRN protection systems, artillery, turret systems, and wheeled logistics and tactical vehicles. The Weapon and Ammunition segment provides firepower and protection solutions, such as weapons and munition, protection systems, propellants and international projects and services.
