Transforming Into a Global Defence Powerhouse: Rheinmetall (Germany) – 2024 Performance Review and Growth Outlook

Rheinmetall AG delivered record financial results in 2024, driven by surging demand amid Europe’s “Zeitenwende”, historic shift in security policy. Group sales jumped 36 percent to €9.75 billion, from €7.18 billion in 2023, reaching the company’s target of ~€10 billion. Operating profit soared 61 percent to €1.478 billion, raising the operating margin to 15.2 percent, up from 12.8 percent. In 2024, Rheinmetall achieved its all-time-high sales and profit.

Rheinmetall’s order backlog hit a new high of €55 billion, up 44 percent year-on-year, reflecting unprecedented order intake from rearming nations. Defence activities now account for ~80 percent of sales, as the company pivots further from its legacy automotive segments.

Key Metric (FY2024)	2024	2023	Change
Sales (Group)	€9,751 million	€7,176 million	+36%
Operating Result	€1,478 million	€918 million	+61%
Operating Margin	15.2%	12.8%	+2.4 pp
Order Backlog	€55.0 billion	€38.3 billion	+44%
Defence Share of Sales	~80%	~70%	–
Foreign Share of Sales	~70%	~76%	(German domestic up)

Strategically, Rheinmetall is investing aggressively to scale production and capture demand. Over 2023–2024 it has committed ~€8 billion into new plants, acquisitions, and securing supply chains. A major move was the acquisition of Spain’s Expal Systems in 2023, boosting Rheinmetall’s capacity in medium- and large-caliber munitions (20mm to 155mm) and adding production sites in Spain. The company also began repurposing some automotive facilities to production, reflecting its shift toward the security market. CEO Armin Papperger describes the current environment as “an era of rearmament” in Europe, bringing “growth prospects… never experienced before”. Rheinmetall sees itself evolving “from a European systems supplier to a global champion” amid this arms buildup. In short, 2024 saw Rheinmetall achieve all-time-high sales and profit, while positioning itself for continued expansion in 2025 (where another 25–30% sales growth is forecast).

Rheinmetall’s divisions all saw significant growth in 2024, fuelled by new orders from Germany, NATO allies, and support for Ukraine. Below is a breakdown of each division’s performance, including top products and strategic programs:

Vehicle Systems (Tracked & Wheeled Vehicles)

The Vehicle Systems division, which produces armoured wheeled and tracked military vehicles, achieved €3.79 billion in sales for 2024 – a 45 percent increase over 2023. Growth was propelled by high deliveries of military trucks and the ramp-up of new combat vehicle programs. Notably, Rheinmetall fulfilled large orders of “swap-body” logistic trucks for the German Bundeswehr and launched production on new tactical vehicles. Key programs included a €2.93 billion framework contract for unprotected transport trucks and the start of the “Heavy Weapon Carrier” Boxer 8×8 vehicle project, a €1.67 billion order, plus a related service contract. The Boxer, a modular 8×8 armoured vehicle, produced via the ARTEC joint venture, remains a top seller – with versions ranging from troop carriers to ambulance and weapons carriers being delivered to several European armies. Rheinmetall’s newest tracked platform, the Lynx KF41 infantry fighting vehicle, is also a strategic focus. Lynx production began for Hungary’s Zrínyi modernisation program, and Rheinmetall has been actively offering Lynx to export customers, namely Australia, the U.S. and Eastern Europe.

In 2024 the company successfully integrated Patria’s NEMO 120mm mortar turret on a Lynx variant, expanding its capabilities. This Lynx mortar variant, 24 units, will be delivered to Hungary under a Finnish-Hungarian partnership, underscoring Lynx’s adaptability and Rheinmetall’s Nordic collaborations. Overall, Vehicle Systems’ operating profit rose to €425 million, though the margin (11.2%) dipped slightly due to a higher mix of lower-margin truck contracts. Strategically important products in this division include the Boxer 8×8 AFV, Lynx KF41 IFV, the jointly produced Puma IFV for Germany, military logistics trucks, HX family, and specialised combat engineering vehicles – all in high demand as NATO militaries re-equip.

Weapon and Ammunition (Waffensysteme und Munition)

Rheinmetall’s Weapon & Ammunition division was the fastest-growing segment in 2024, with sales of €2.78 billion – up 58 percent from 2023. This unit produces ammunition of all calibres, weapons systems (artillery, tank guns, air cannons), and protection systems. Growth was driven by soaring demand from Germany, other NATO countries, and Ukraine for munitions. In particular, 155mm artillery shells and 120mm tank ammunition were top-selling products, as armies raced to replenish stocks. Rheinmetall recorded a massive multi-year framework agreement with the German government for artillery ammunition worth €7.1 billion – by far the largest munitions order in its history.

This new deal in 2024 expanded on two big 2023 German frameworks for tank ammo, €3.2 billion, and artillery ammo, €1.4 billion, that were already fully utilised due to wartime consumption.) The division also benefited from direct export orders: for example, Ukraine was supplied with additional munitions (+€609 million), aided by Rheinmetall’s newly acquired Spanish subsidiary Expal Munitions, which significantly boosted output. Expal’s integration expanded Rheinmetall’s portfolio to include 20mm cannon rounds for Marder IFVs, 35mm AA ammo for Gepard AA tanks, and other NATO-standard shells. Top products in 2024 included 155mm high-explosive shells, 120mm tank rounds, for Leopard 2 tanks, etc., 40mm grenade ammunition, and propellants/charges – all seeing unprecedented orders. The Weapon & Ammo division’s operating profit nearly doubled to €790 million, with an outstanding 28.4 percent margin, reflecting high volume throughput in its factories. Rheinmetall’s strategic initiatives here involve ramping up production capacity – e.g. aiming to produce 1.1 million artillery shells annually by 2027 – and investing in future munition technologies, programmable fuzes, detonating warheads, and improved penetration rounds, etc., to maintain its edge as Europe’s top ammo supplier.

Electronic Solutions (Defence Electronics)

The Electronic Solutions division – defence electronics, sensors, and air defence systems – also delivered robust growth, with €1.73 billion in sales. up 31 percent in 2024. A significant portion of this increase came from major German orders for ground-based air defence. Rheinmetall began delivering components for Germany’s new short-range air defence program, LVS NNbS – “Luftverteidigungssystem Nah- und Nächstbereichsschutz”, and received a contract to supply the Skyranger 30 mobile air-defence system to the German Army. The Skyranger 30 is a turret mounting a 30mm automatic cannon, and optionally missiles, designed to counter drones, aircraft, and cruise missiles at short range. Further sales of Rheinmetall’s Skynex air defence system, a static 35mm revolver cannon-based system with radar were made to other European customers in 2024 – reflecting heightened demand for counter-UAV defences. Beyond air defence, Electronic Solutions had notable programs supplying the German Bundeswehr with new combat helmets and headset systems and contributing to the Digitization of Land-Based Operations (DLBO) project, Rheinmetall is a key supplier for modernizing the Army’s battle management and communications. This division also provides fire-control electronics, sensors, simulation and training systems, and C4ISR solutions. Its order intake hit a record €5.07 billion in 2024, including not only air defence but also electronics for the new Boxer Heavy Weapon Carrier and other projects. Operating profit rose to €217 million with a margin of 12.6 percent, improving due to successful completion of high-margin projects. Strategically important products here include the Skyranger/Skynex air defence families, radar and electro-optic sensors, vehicle electronics, for tanks/IFVs, soldier systems, and training simulators – all of which Rheinmetall is leveraging as militaries upgrade their technological capabilities.

Other Divisions – Civilian “Power Systems”

Rheinmetall’s small civilian business, reorganized in 2024 as the Power Systems division, had a softer year. Power Systems combines former automotive units (Sensors & Actuators, and Materials & Trade) focusing on engines and emissions components for vehicles. Sales in 2024 were €2.04 billion, a slight -2 percent decline from 2023. Weakness in the global automotive market, especially combustion engine components, offset growth in new e-mobility projects. The division’s operating margin fell to 4.2 percent, well below the booming defence segments. While Rheinmetall’s strategic centre of gravity has shifted to defence, it still retains these automotive technologies – e.g. fuel pumps, valves, and electric drive components – and achieved record aftermarket sales in its automotive Trade unit in 2024. Notably, Rheinmetall is repurposing some automotive production lines for defence needs – for example, converting engine factories to produce military equipment. This reflects a broader strategy to ensure the company’s “Power Systems” expertise – engines, materials – can support defence growth – such as vehicle engines, auxiliary power units for military vehicles, etc. – in the coming years.

Next-generation Defence Products

Rheinmetall is actively developing next-generation defence products and technologies to capitalize on emerging trends. Some of the most promising future offerings:

• Autonomous Vehicles & Robotics: Rheinmetall is pioneering autonomous military systems for the future battlefield. In 2024 it unveiled the PATH Autonomous Kit, a modular suite that can convert ground vehicles into autonomous platforms. This kit excelled in the 2024 ELROB robotics competition, demonstrating convoy operations with unmanned trucks. To accelerate innovation, Rheinmetall is launching new Land Autonomy Centres of Excellence in Germany, the UK, and the Nordic region, building on its existing Canadian robotics center. The company’s vision is to lead in battlefield autonomy – from unmanned ground vehicles, like its Mission Master UGV, to autonomous logistics convoys. “Autonomy isn’t just the future of defence – it’s the key to unprecedented speed and agility on the battlefield,” notes the head of Rheinmetall’s autonomous program. This focus positions products like unmanned scout vehicles, robotic combat vehicles, and AI-driven logistics systems as a growth area.
• Next-Generation Combat Vehicles: Rheinmetall is heavily investing in new combat vehicle platforms beyond those currently in service. It is part of the Franco-German MGCS program (future main battle tank) and has also internally developed the KF51 “Panther” concept – a next-gen tank with a 130mm cannon and digital architecture (unveiled in 2022, now being refined for future needs). The company’s Lynx KF41 IFV is a centerpiece of its future portfolio; after initial success in Hungary, Rheinmetall is aggressively marketing Lynx globally. Notably, American Rheinmetall Vehicles (ARV) is competing in the U.S. Army’s Optionally Manned Fighting Vehicle (OMFV) program – the replacement for the Bradley IFV – offering a variant of the Lynx. In 2023, ARV was down-selected (along with one U.S. competitor) for the next phase of the OMFV/XM30 program, with a contract award expected around 2027. Success in this U.S. program could secure Rheinmetall a huge new market (~$45 billion potential), and the company is targeting $2 billion+ in U.S. revenues by 2027. To bolster its U.S. presence, Rheinmetall even acquired Michigan-based Loc Performance in late 2024, gaining a local manufacturing base for vehicle components. All told, Rheinmetall’s future armoured vehicles – from the Lynx IFV and its variants (mortar carrier, etc.) to the Panther tank and enhanced Boxer configurations – represent a strategic growth avenue, addressing the modernization cycles of NATO and allied armies.
• Advanced Air Defence and Anti-Drone Systems: With the proliferation of drones and rockets, Rheinmetall is innovating in air defence at multiple layers. Its current Skynex/Skyranger gun systems are being augmented with missiles and high-energy laser weapons. In 2024, Rheinmetall partnered with MBDA to integrate the SkyKnight/Saab “Camm” missiles onto Skyranger 30 turrets, creating a hybrid gun-missile anti-drone system. The company is also working with Lockheed Martin on rocket artillery and lasers: a June 2024 MoU with Lockheed aims to develop laser air-defence systems and jointly produce rocket artillery munitions in Europe. This could lead to Rheinmetall-built HIMARS rockets or similar guided MLRS rounds in Europe. Furthermore, Rheinmetall has demonstrated a 100 kW-class laser weapon prototype, suitable for naval or ground use, and is expected to field these systems in the coming years for short-range air defence (C-UAS and C-RAM roles). Counter-UAS (counter-drone) technology is a major thrust – Rheinmetall’s electronics unit is integrating radar, electro-optics, and jamming systems to detect and defeat drones, and even developing small “loitering munitions” in partnerships (e.g. it has worked with UAVision on HERO loitering drones). These innovations in air defence and counter-drone weaponry are seen as critical given lessons from Ukraine and Middle East conflicts, and Rheinmetall is positioning itself as a leader in European C-UAS solutions.
• High-Tech Ammunition & Armaments: On the munitions front, Rheinmetall is innovating to improve range, lethality, and precision. It has introduced new extended-range 155mm artillery shells, e.g. the RH-iden “Assegai” rounds, and is rumoured to be testing rocket-assisted projectiles that can reach 70–100 km for artillery. The company is also a key player in programmable airburst munitions, e.g. 30mm and 40mm airburst grenades to defeat drones and infantry, which many armies are adopting. In tank armament, Rheinmetall’s development of the 130mm smoothbore gun , with advanced APFSDS rounds, is a game-changer – expected to arm future tanks like the Panther or Franco-German MGCS, with 50 percent greater penetration than current 120mm rounds. The company is further known for its work on hypersonic projectiles and improved warhead materials. To ensure supply, Rheinmetall is expanding propellant production and even building ammunition factories for allies: under the EU’s ASAP program, it received over €130 million in grants to boost explosive and powder production in Germany, Hungary, Romania, and Spain. By 2026, Rheinmetall plans to produce 1.5 million propellant charges and 3,000 tonnes of RDX explosive per year – vital for advanced ammunition. These efforts will support not only traditional munitions but also new areas like precision-guided rockets, enhanced missiles, through its share in EuroSpike for anti-tank missiles, and naval ammunition. In summary, Rheinmetall’s forward-looking armaments portfolio – from smarter artillery shells to larger tank guns and laser defence – is set to keep it at the forefront of land warfare innovation.
• Digital Battlefield Solutions: Recognizing the importance of software and networking, Rheinmetall is also innovating in C4ISR. Its Electronics division is developing the “Glass Battlefield” concept for integrated situational awareness, and it’s a lead contractor for the German Army’s Infantryman of the Future system, providing soldier wearable computers, targeting optics, etc.. Rheinmetall’s simulation and training business is incorporating VR/AR for more effective troop training. Additionally, through joint ventures, like Rheinmetall Defence Electronics in Hungary and others, it’s working on embedded training systems and secure tactical communications. These digital solutions complement its hardware products, making Rheinmetall not just an arms supplier but a systems integrator for modern, networked forces.

In sum, Rheinmetall’s R&D and partnerships are focused on the themes of autonomy, air defence, next-gen firepower, and digitalization. These innovations – many in response to emerging threats like drones or to competitions like the U.S. OMFV – will likely drive the company’s growth beyond 2025, keeping its product lineup highly relevant.

Export Performance 2024 and 2025 Outlook by Region

Exports continue to dominate Rheinmetall’s business, as around 70 percent of 2024 sales came from outside Germany. While the German home market grew, Germany’s share rose to ~30% of sales amid a surge in Bundeswehr orders, international demand remains critical. Below is a breakdown of Rheinmetall’s 2024 sales by region and key export markets:

• Germany: ~30 percent of sales (approx. €2.9 billion) – Germany’s domestic orders spiked in 2024 thanks to the €100 billion special defence fund. Major programs for the Bundeswehr included new trucks, artillery ammo, air defence systems, and tank upgrades. This growth reduced the foreign share of Rheinmetall’s revenue compared to 2023, when Germany was ~24 percent. The company’s outlook for 2025 remains very positive as Germany removes budget caps (discussed in Section 6) and continues placing large orders.
• Rest of Europe: ~46.6% of sales (approx. €4.5 billion) – Other European countries collectively form Rheinmetall’s largest export region. Many NATO allies accelerated procurement in 2024. For example, Hungary is a major customer (Lynx IFVs, Leopard 2 tanks and other kit under its Zrínyi program), and the UK placed substantial orders via Rheinmetall BAE Systems Land (e.g. the Challenger 3 tank upgrade – new turrets with Rheinmetall 120mm L55 guns). Italy, France, and Spain also contributed – Spain through domestic orders now counted under Rheinmetall, Expal’s Spanish contracts for ammunition, and a share of Spain’s VCR Dragon vehicle program, and countries like Italy and Norway via joint procurement of munitions. Central/Eastern Europe saw particularly robust activity: e.g. Rheinmetall delivered refurbished Leopard 2A4 tanks and Marder IFVs to Czechia and Slovakia as part of “Ringtausch” exchange programs, to backfill equipment sent to Ukraine. Greece received upgraded Marder vehicles, in exchange for sending older BMPs to Ukraine, in a deal facilitated by Rheinmetall. By late 2024, Lithuania signed a landmark deal for 44 Leopard 2A8 tanksbreakingdefence.com, the Baltic’s first modern MBTs, which will be produced by KMW but feature Rheinmetall components, like the L55 gun and fire control – strengthening future European revenue. Also, countries such as the Netherlands, Estonia, and Denmark participated in Germany’s large 155mm ammunition framework contract, worth €8.5 billion, effectively pooling their orders through Rheinmetall. This pan-European approach to ammo procurement means Rheinmetall’s order book for Europe is extremely strong going forward. In summary, Europe (ex-Germany) remains Rheinmetall’s core export theatre, with key markets including the UK, Hungary, Netherlands, Italy, Scandinavia, and increasingly the Baltic/Eastern European states, all investing in armour, artillery, and air defence.
• Asia-Pacific: part of the combined Asia/Middle East ~9.6 percent of sales – The Asia-Pacific region is a growing market for Rheinmetall. A standout customer is Australia, where Rheinmetall has established a significant presence. Australia’s Land 400 program chose Rheinmetall’s Boxer 8×8 combat reconnaissance vehicle; deliveries of ~211 Boxers to the Australian Army are ongoing through Rheinmetall’s Brisbane facility. Australia is now among Rheinmetall’s top export clients. the company has built local production and R&D there, and there is potential for future orders (e.g. additional Boxers or logistics vehicles). In Asia, Rheinmetall has historically supplied naval guns and air cannons to countries like Indonesia, Malaysia, and Singapore. For instance, Indonesia operates Oerlikon Skyshield air  guns and has sourced ammunition production equipment from Rheinmetall Denel in the past. In South Korea and Japan, Rheinmetall’s involvement is more component-level – South Korea’s K2 tank and Japan’s Type 90 tank both use 120mm guns based on Rheinmetall’s design under license. An important development is Rheinmetall’s entry into India: after years of being locked out of India’s market, Rheinmetall in 2023 partnered with local firm SMPP to build an ammunition plant in India. By mid-2024 this new Indian JV factory was coming online, potentially producing a range of munitions for the Indian Army. This is a strategic foothold, as India aims to localize production. Other Asia-Pac countries like Japan, South Korea, Taiwan are also raising budgets – Rheinmetall sees opportunities in vehicle components, air systems (counter-drone guns, etc.), and ammunition co-production. While Asia-Pacific currently accounts for under 10 percent of sales, Rheinmetall’s leadership has stated they see “particular potential in markets outside Europe… in the Middle East and Asia-Pacific”. The outlook for 2025+ is increasing exports to Asia, especially if geopolitical tensions remain high.
• Middle East: part of the ~9.6 percent Asia/Mideast share – The Middle East has long been a market for Rheinmetall, though subject to German export controls. In the 2010s, Rheinmetall supplied Leopard 2 tanks and artillery (via consortium) to Qatar, and Fuchs armored vehicles to Algeria, North Africa. It also built a controversial ammunition factory in Abu Dhabi (UAE) and sold numerous ammunition production lines to Gulf states through its South African subsidiary RDM. In 2024, Middle Eastern demand focused on air and training systems. For example, in September 2024 Denmark’s order of Skyranger air, though Denmark is Nordic, this system’s appeal extends to Middle East clients who face drone threats. Gulf countries have expressed interest in Rheinmetall’s Skynex gun-based C-UAS systems after witnessing drone attacks on oil facilities – negotiations with the UAE and Saudi Arabia for such systems, and possibly lasers, have been reported. Additionally, Rheinmetall’s simulators and training arm, through a local JV “Rheinmetall Arabia Simulation & Training”, secured contracts in Saudi Arabia for military training systems. In Israel’s market, less than 1 percent of RHM sales historically, the 2023 war in Gaza heightened interest in ammunition resupply – Rheinmetall may indirectly benefit via European replenishments for Israel. Overall, Middle East sales in 2024 were likely modest due to cautious German export licensing, but future prospects are significant: regional rearmament – in Gulf states, Egypt, etc. – could translate into orders for air, armoured vehicles, e.g. potential Leopard 2 upgrades for existing users like Qatar, and munitions, if political approval is granted. Rheinmetall’s CEO noted that even the Middle East escalation in 2024 could drive additional demand for the company’s products.
• Americas: ~7.6 percent of sales (approx. €0.74 billion) – The Americas region is a smaller but strategic market for Rheinmetall. In North America, Canada has been a steady customer – the Canadian Army uses Rheinmetall’s 40mm air guns and bought logistics trucks (RMMV) in the past, and more recently Canada has been procuring ammunition (indirectly via joint NATO orders). The big prize, however, is the United States: while U.S. sales are currently limited (primarily vehicle parts and training simulators), Rheinmetall’s push into the U.S. market is gaining momentum. The company’s joint venture American Rheinmetall Munitions supplies the US with training ammo, and American Rheinmetall Vehicles’ progress in the Bradley replacement competition (OMFV) could lead to a multi-billion contract. Rheinmetall is also partnering with U.S. giants: e.g., working with Raytheon on missile and proposing a Lynx-based solution teamed with several U.S.  contractors. The U.S. Army’s purchase of XM1202 Spider 155mm rounds, a precision shell) and interest in 130mm tank gun tech are potential future avenues. Rheinmetall’s acquisition of Loc Performance (Michigan) in 2024 underscores its commitment to U.S. localization. In Latin America, Rheinmetall’s direct footprint is limited, but it has exported ammunition factory equipment to countries like Brazil and Argentina via RDM. Chile and Brazil operate Leopard tanks (with Rheinmetall guns) that might be upgraded, and Mexico has bought truck-mounted howitzers that use Rheinmetall ammo. While the Americas in 2024 were not a large revenue driver, the outlook for 2025 is improving – especially if American programs are won. Rheinmetall has publicly stated a goal of doubling its U.S. business in the next few years.
• Africa & Other: ~5.8 percent of sales – This likely includes Africa, Oceania (outside Australia), and any miscellaneous markets. In Africa, apart from North African states like Algeria or Egypt (who have bought German arms previously), Rheinmetall’s major presence is through Rheinmetall Denel Munition (RDM) in South Africa. RDM not only supplies the South African National Defence Force but also serves as an export hub to Africa, the Middle East, and Asia for ammunition. Many African countries have modest budgets, but some procure munitions or trucks. For instance, Morocco and Tunisia have received Rheinmetall 120mm tank ammo via U.S. FMS programs, for their M1 Abrams fleets. Oceania beyond Australia includes New Zealand, which has used some Rheinmetall simulation systems, and smaller Asia-Pacific islands, generally negligible for heavy arms. The “Other” category also covers any export that doesn’t fit the main regions. It is a small portion of revenue, and while not a strategic focus, Rheinmetall does serve these markets opportunistically, often through offset programs or licensed production.

Outlook for 2025: Rheinmetall expects continued export growth as global spending stays elevated. The company forecasts another ~25–30% rise in sales in 2025. Much of this will come from fulfilling its enormous backlog, especially the multi-national European orders and new deals in the pipeline (like the aforementioned tank sales to Lithuania, potential new orders from Asia, etc.). European rearmament funding (e.g. EU’s €500 million ASAP for ammo, and potentially an €8 billion European Defence Investment Programme) will further bolster export production. One indicator: by early 2025, Rheinmetall’s foreign share of sales may climb again as big export programs like Australia’s Boxers and Hungary’s Lynx deliveries ramp up. Moreover, any breakthrough in the U.S. market (OMFV) or a loosening of German export restrictions to Middle East could significantly boost the “Americas” or “MENA” shares. In summary, Rheinmetall’s export trajectory is strongly upward, with Europe remaining dominant, but Asia-Pacific and North America poised to claim larger slices in the coming years.

Focusing on the North

The Nordic and Baltic countries have become an area of particular engagement for Rheinmetall, through both direct sales and strategic partnerships. Below we highlight Rheinmetall’s activities in Northern Europe – including current deliveries, collaborative ventures, and future plans in these countries:

• Finland: As a newly joined NATO member, Finland is deepening ties with European suppliers. While Finland historically relies on its domestic industry, e.g. Patria, and Nordic partners, it has found complementary expertise in Rheinmetall. In 2024, Rheinmetall partnered with Finland’s Patria to integrate the Patria NEMO mortar system onto Rheinmetall’s Lynx KF41 IFV. Successful trials in Sept 2024 proved a Lynx equipped with a 120mm NEMO turret could fire accurately. Finland’s state-owned Patria signed an agreement in April 2025 to deliver at least 24 NEMO turrets for Hungarian Lynx vehicles – a deal that cements a Finnish–German partnership within a third country’s program. This collaboration not only supports Hungary but also shows potential for Finland to use Lynx or similar platforms in the future with its own weapon systems. Finland’s current armoured fleet includes Leopard 2A6 tanks (which use Rheinmetall’s 120mm gun and ammo) and CV90 IFVs; as these are upgraded, Rheinmetall stands to provide new 120mm KE ammunition and possibly components for Finland’s Leopard upgrades. Additionally, Rheinmetall’s electronics unit has supplied training simulators to Finland in the past, and there is discussion of Finland joining multinational ammo purchases (Finland observed the June 2024 155mm joint order but, owning part of Nammo, it has a foot in both camps). Going forward, Finland’s NATO interoperability efforts – such as adopting common air – could involve Rheinmetall, for example, if Finland were to consider the Skynex gun system to complement its missiles. Notably, Rheinmetall announced one of its new Land Autonomy Centres of Excellence will be in “the Nordics”; Finland, with its tech orientation and new NATO status, is a strong candidate to host this centre, which would bring Rheinmetall R&D presence into Finnish territory.
• Sweden: Sweden’s industry, e.g. Saab, BAE Hägglunds, is largely indigenous, yet Rheinmetall is playing a role in key Swedish programs. In late 2024, Sweden made a landmark decision to procure 44 new Leopard 2A8 tanks and upgrade 66 of its Strv 122 (Leopard 2A5) as part of a $1.5 billion deal. This contract, while signed with tank-maker KMW (KNDS), involves major Rheinmetall content: the Swedish Leopard 2A8 will be fitted with Rheinmetall’s L55 120mm smoothbore gun and a new Rheinmetall programmable ammo system. Upgrading Sweden’s existing Strv122s to A8 standard will likewise swap in Rheinmetall’s longer-barrel gun and modern fire controls. Thus, Rheinmetall stands to benefit substantially from Sweden’s biggest armour investment in decades. Moreover, Sweden’s plans to modernize CV90 IFVs and other systems may create sub-contract opportunities, Rheinmetall makes electronics and sights that could be retrofitted. Another area of cooperation is advanced materials and power systems: Sweden’s BAE is partnering with Rheinmetall on electric hybrid drive technology for combat vehicles, aligning with the Power Systems division’s push into military applications. On the R&D side, Sweden’s innovation culture complements Rheinmetall’s – e.g., Swedish and German firms are co-developing small UAVs and loitering munitions, Saab and Rheinmetall have discussed cooperation on drone, given Saab’s interest in that field. Importantly, Sweden and Germany have been coordinating on arms assistance to Ukraine, e.g., Swedish CV90s and German Marder IFVs operate together in Ukraine, and Rheinmetall has assisted with maintenance hubs for such equipment, one maintenance hub for Western armour was established in Lithuania with support from Germany and Sweden. As Sweden joins NATO formally, it’s likely to participate in joint procurement schemes where Rheinmetall is a key vendor, for instance, Sweden expressed interest in the European Sky Shield air initiative, where Rheinmetall’s systems could play a part). In summary, while Sweden has its own champions, Rheinmetall is increasingly woven into Swedish plans – particularly via the Leopard 2A8 tank deal which brings a new level of German-Swedish industrial cooperation.
• Norway: Norway has a longstanding relationship with Rheinmetall, especially through legacy acquisitions. Rheinmetall’s subsidiary in Norway, originally acquired as Simrad Optronics, has supplied remote weapon stations and laser rangefinders to the Norwegian Armed Forces for years. In terms of major systems, Norway in 2023 selected the Leopard 2A7 as its new main battle tank, opting to buy 54 Leopard 2A7 from Germany, with an option for 18 more, to replace older tanks. This decision – favouring Germany’s platform over South Korea’s K2 – means Rheinmetall will indirectly play a big role, each Leopard 2A7 comes with Rheinmetall’s 120mm L55 gun and likely Rheinmetall ammunition. The Norwegian Leopards are expected from 2026 onwards, and Rheinmetall will be involved in their through-life support – e.g. barrel replacements, spare parts, and future upgrades like 130mm if pursued. Norway is also an operator of Rheinmetall’s HX series military trucks, through a joint program with Sweden and Finland, the Nordic logistic vehicle initiative, using them for various support roles. In air, Norway relies on NASAMS (Kongsberg/Raytheon) for medium range, but for short-range air, Norway might look at systems like Skyranger or Skynex especially after Denmark’s choice – a Nordic neighbour selecting Skyranger could influence Norway. Additionally, Norway’s part-ownership of Nammo, the Nordic ammo maker, means it coordinates with Rheinmetall on ammunition matters; in fact, to meet NATO’s demand surge, Nammo and Rheinmetall are not so much competitors as both benefitting from huge orders, Norway did not join the Bundeswehr 155mm order, perhaps due to Nammo’s capacity, but it could still end up buying Rheinmetall ammo via NATO mechanisms if needed. On the high-tech front, Kongsberg and Rheinmetall have teamed up on some projects – for example, integrating Kongsberg’s Anti-Ship Missiles on German vessels – indicating a cooperative relationship in certain areas. Rheinmetall is also present in Norway’s F-35 maintenance training via simulation systems delivered to the Norwegian Air Force. Lastly, one of Rheinmetall’s new Autonomy Centers is slated for “the Nordics”, which could potentially be in Norway, given Norwegian ’s interest in robotics, exemplified by Kongsberg’s acquisition of drone-maker Milrem in Estonia. Overall, Norway’s current and planned dealings with Rheinmetall revolve mostly around armoured vehicles, Leopard tanks, and advanced munitions/tech collaborations, all underpinned by Norway’s increased spending as it aims for 2 percent of GDP on.
• Denmark: Denmark emerged in 2024 as a notable Rheinmetall customer with a focus on air . In September 2024, Denmark’s Ministry of Defence ordered 16 Rheinmetall Oerlikon Skyranger 30 turrets for mobile short-range air defence. This contract, valued in the low hundreds of millions of euros) will see Rheinmetall deliver the 30mm Skyranger gun systems, integrate them on Danish Army 8×8 vehicles (likely Piranha V APCs), and supply ammunition. Deliveries include prototypes by 2026 and full delivery in 2027–28. This is a significant win – Denmark chose Skyranger after evaluating solutions to counter the drone threat to its brigades. The Danish  Acquisition head noted it is “an essential part of making the brigade fully operational”. Rheinmetall’s Electronic Solutions CEO also highlighted Denmark as “another major NATO customer [that] now trusts our Skyranger 30”. Beyond air, Denmark cooperates with Germany and others on armaments: it joined Germany in a joint donation of Leopard 1A5 tanks to Ukraine,. refurbished by Rheinmetall in 2023, and it has signalled interest in the European Sky Shield initiative. Danish industry, e.g. Terma, might collaborate with Rheinmetall on parts of the Skyranger, like communications gear. Also, in 2023 Sweden and Denmark made a deal regarding CV90 infantry fighting vehicles – Denmark will receive 40 CV90s via Sweden, some for Ukraine, some for Denmark’s use. While that deal is primarily between BAE and the two nations, Rheinmetall could indirectly benefit by supplying ammo. 30mm cannon rounds for CV90, or future upgrades, Rheinmetall’s ADS active protection could be an add-on for CV90s. Another area: Denmark’s Navy uses Oerlikon Millennium 35mm guns on some ships, for which Rheinmetall provides support. Looking forward, Denmark’s budget boost may open opportunities for Rheinmetall in artillery, Denmark uses CAESAR howitzers – potential ammo sales, and simulation/training. Rheinmetall has strong offerings for army training that Denmark could use for its growing brigades. The Skyranger deal, however, is the headline – it makes Denmark a reference customer for Rheinmetall’s new air system in NATO Europe.
• Baltic States (Estonia, Latvia, Lithuania): The three Baltic countries, on NATO’s front line, have been ramping up spending and working closely with German industry, including Rheinmetall.
• Lithuania: Lithuania is making the biggest leap – as noted, it approved in late 2024 the purchase of 44 Leopard 2A8 tanks. This is a transformative acquisition for Lithuania, the largest in its history, and ties it closely to Germany. Rheinmetall will be a key supplier, the Leopard 2A8’s main armament and likely some sub-systems. Deliveries are aimed by 2030. Lithuania also previously acquired Boxer armoured vehicles, named “Vilkas”, via the ARTEC consortium, with 91 delivered by 2021 – those Boxers have Israeli turrets, but Rheinmetall as co-manufacturer supports their upkeep. In terms of industry partnership, Lithuania has benefitted from a German-led maintenance hub in Kaunas set up in mid-2022 to service Western equipment for Ukraine, like howitzers and IFVs; Rheinmetall technicians have been involved in these repair operations for systems it built or supplied parts for. Additionally, Lithuania is part of the 155mm joint ammunition order, along with Germany, Estonia, Denmark, etc., meaning its stockpiles will be filled by Rheinmetall in coming years. Lithuania’s interest in air saw it join the European Sky Shield initiative – if that yields purchases, Rheinmetall could supply Skynex guns or contribute to IRIS-T missile launchers. Lithuania is quickly becoming a major Rheinmetall client in the Baltics, with tanks, vehicles, and munitions linking its forces to Rheinmetall’s supply chain.
• Estonia: Estonia has worked through multi-nation frameworks to arm itself. It joined Germany’s 155mm ammo framework, as noted, to buy Rheinmetall shells, ensuring a reliable source to feed its Korean-built K9 Thunder howitzers. Estonia also received German donations, Dingo MRAP vehicles, etc., for which Rheinmetall provides spares. While Estonia’s own industry, e.g. Milrem Robotics, was acquired by Kongsberg, Rheinmetall has an eye on collaborating in areas like robotics and C-IED; for instance, Estonia has deployed a Rheinmetall-made route clearance system in Mali previously. In 2023, Estonia and Latvia signed a joint deal for ~3,000 military trucks with Scania/Volvo – Rheinmetall did not win that portion, as it was mainly Scandinavian vendors. However, Estonia is considering procuring mobile air and more anti-tank weapons, it could leverage Rheinmetall’s new offerings, like if it wants a counter-drone gun system, Skynex could be an option interoperable with Denmark’s Skyrangers. Estonia also operates CV90 IFVs which it bought second-hand, those use a 35mm Bushmaster cannon – Rheinmetall’s role there is limited, but any upgrades – armor add-ons, active protection – might involve Rheinmetall kits. Culturally, Estonia has been open to German kit – for example, it received ex-German FH70 howitzers via Finland. Looking forward, Estonia’s emphasis on ammunition stockpiling and air likely means more business for Rheinmetall, ammunition production technology or direct ammo sales and possibly ground-based air components.
• Latvia: Latvia has historically been the least equipped of the three but is now catching up. In 2023, Latvia, with Estonia, ordered a fleet of new trucks from Nordic suppliers, bypassing Rheinmetall’s RMMV trucks. However, Latvia has been focusing on air: it signed a joint framework with Estonia to procure the IRIS-T SLM medium-range SAM system from Diehl in 2023. While that is a German system, it’s mostly missile-based (so Rheinmetall’s role is minimal, except possibly supplying radars or guns for close protection in the future. Latvia also aims to acquire infantry fighting vehicles this decade. Initially it leaned towards CV90, common with neighbours, but lately it expressed interest in the ASCOD platform. Regardless of choice, Rheinmetall could contribute – if CV90, via ammunition or add-ons – if ASCOD from General Dynamics, perhaps via its RWS or smoke launchers. Latvia has a national ammunition facility project in cooperation with Estonia – if this proceeds, they might seek technical input from Rheinmetall, given its expertise in building ammo factories worldwide. In terms of current operations, Latvia hosts NATO’s Canadian-led battlegroup; Rheinmetall supplies those Canadian troops with vehicles (e.g. the group uses Canadian LAVs with Rheinmetall guns), indirectly giving Rheinmetall a maintenance role in Latvia. While Latvia’s direct contracts with Rheinmetall have been modest so far, the alignment of Baltic procurement with German equipment signals that Latvia too will likely integrate more Rheinmetall solutions, especially as it considers a possible purchase of Leopard 2 tanks like Lithuania in the longer term.

In all, Rheinmetall’s engagement in the Nordic-Baltic region is characterized by close partnership and support for these countries’ buildups. Joint development deals like the Patria NEMO mortar/Lynx, big-ticket sales like Denmark’s Skyranger or Lithuania’s Leopards, and cooperative frameworks for munitions have strengthened Rheinmetall’s ties in Northern Europe. The company is effectively integrating Nordic and Baltic forces into its logistical and technological network – whether by providing common platforms, like Leopard tanks and Boxers, or by establishing local presences, R&D centres, maintenance hubs. As the Nordic and Baltic states continue to modernize under the shadow of Russian aggression, Rheinmetall is poised to remain a key partner, supplying advanced equipment and know-how that enhance these countries’ capabilities while deepening NATO interoperability.

Profound Effect of the Ukraine War and New Policies

The Russian invasion of Ukraine, and the ensuing geopolitical shifts, has profoundly affected Rheinmetall’s business model and export trajectory. Several major factors come into play:

War in Ukraine – “Zeitenwende” Demand Surge: The war has directly triggered an “era of rearmament” in Europe, as described by CEO Armin Papperger. Allies’ rush to arm Ukraine and rebuild their own s created unprecedented demand for Rheinmetall’s products. The company’s 2024 results – 50% growth in  sales – are largely a result of this war-driven urgency. For example, Ukraine’s need for ammunition led to massive orders for artillery shells and tank ammo. Rheinmetall not only booked a record €8.5 billion German-led ammo contract, partly to supply Ukraine, but also received direct contracts funded by German military aid: e.g., a €142 million deal to supply 155mm shells to Kyiv and 180,000 rounds of 35mm anti-aircraft ammo for Ukraine’s Gepard systems, ordered in January 2025. Rheinmetall swiftly reopened and expanded production lines – such as its Unterlüß facility in Germany – to meet these needs. It also acquired Expal to add capacity, ensuring quicker delivery of desperately needed mortar, artillery, and tank rounds to Ukraine via Spain. Moreover, the war spurred vehicle demand: Ukraine received Leopard 2 tanks and Marder IFVs from Western stocks, and Rheinmetall is heavily involved in refurbishing and replacing these. In 2023–24, Rheinmetall overhauled dozens of old Leopard 1A5 tanks and supplied them to Ukraine, with funding from Germany/Denmark. It similarly refurbished Marders for Ukraine and Greece. Anticipating prolonged support, Rheinmetall formed joint ventures in Ukraine itself – notably agreeing with Ukroboronprom to build a 155mm ammunition plant in Ukraine, announced in February 2024 and planning local production of Fuchs armoured vehicles by late 2024. These moves mark a shift in Rheinmetall’s model: from simply exporting to conflict zones, historically restricted by policy, to establishing a local manufacturing presence in an active warzone, a bold step enabled by Western political support for Ukraine. The war has also validated certain Rheinmetall products – e.g. the effectiveness of tube artillery and air guns against drones, which has increased interest globally. In essence, the Ukraine war created a surge in orders that filled Rheinmetall’s factories to capacity, and beyond – prompting new factories, and it accelerated the company’s evolution into a more agile, fast-response supplier. Papperger noted that Rheinmetall “massively increased our capacities” and feels a “responsibility for the capability of Europe”. Financially, the war has set Rheinmetall on a trajectory of record growth and multi-year order visibility, as reflected in the €55 billion backlog. The challenge and opportunity will be to sustain this elevated output in a post-war environment, but in the near term 2025–2026, the ongoing conflict keeps driving business – especially if Ukraine’s partners continue support or if Ukraine requires post-war rearmament, Rheinmetall has already indicated willingness to help rebuild Ukraine’s  industry.

Germany’s New Policies (Spending Caps Removed, Procurement Reform): The German government’s policy shifts in response to Ukraine’s invasion have been a boon for Rheinmetall. First, Germany’s historic €100 billion special fund, announced in 2022, began translating into contracts in 2023–24 – many of which Rheinmetall has captured, e.g. the truck and ammunition frameworks, air systems, and so on. More structurally, in early 2025 Germany moved to exempt spending from its constitutional debt brake and effectively remove spending caps on investments. This came after the ruling coalition collapsed in November 2024 over budget disputes and a new consensus, including likely Chancellor-in-waiting Friedrich Merz, emerged to allow €1 trillion in borrowing for infrastructure over the coming years. By breaking this taboo, Germany signalled that budgets will remain high or even increase beyond the 2 percent of GDP NATO guideline. For Rheinmetall, this policy change means sustained domestic demand: large programs that were uncertain now have funding pathways, e.g. potentially expanding the Puma IFV fleet, heavy investment in air, a new artillery rocket force, et cetera. It also reduces bureaucratic hurdles – previously, every contract over €25 million required parliamentary approval, slowing procurement; now with broader political backing and funding, contracts can flow faster. Indeed, Papperger noted they are “well prepared” for Germany’s “Zeitenwende 2.0” and have invested in supply chains to handle the influx of orders. The removal of spending caps ensures that orders like the €7+ billion ammo deal or the upcoming tank acquisitions – Leopard 2A8 for Germany itself, or MGCS R&D – will not be constrained by annual budget limits. Another aspect is export policy easing: Germany, post-Ukraine invasion, has been more willing to approve arms exports to conflict zones, e.g. sending weapons to Ukraine, which was previously against policy. This de-facto shift – aligning ethics with realpolitik – could make it easier for Rheinmetall to export to other regions as well, since the stigma of strict German export controls has been somewhat reduced. For instance, if Germany can send tanks to Ukraine, it may also be more flexible in allowing sales to partners like Lithuania or Finland that intend to forward-deploy them. Overall, Germany’s policy pivot, no budget cap, pro stance across political parties, provides Rheinmetall a stable home market with a long-term growth outlook, which in turn underpins its ability to invest in export capacity.

EU Programs and Funding (e.g. ASAP): The European Union’s response to the war has included collective initiatives that directly benefit companies like Rheinmetall. One major program is the Act in Support of Ammunition Production (ASAP), approved in mid-2023. ASAP earmarks €500 million in EU funds to boost ammunition manufacturing in Europe. Rheinmetall was a prime beneficiary: it secured a significant share of ASAP grants – over €130 million in subsidies – to expand its 155mm shell production across four countries. These funds are helping Rheinmetall add new production lines for gunpowder in Germany and Hungary, for explosives in Spain, and for artillery shell assembly in Romania. In essence, the EU is paying Rheinmetall to increase capacity, which will strengthen the company’s ability to fulfil massive orders (national and export) faster. Additionally, the EU launched a joint procurement mechanism (EDIRPA/EDIP), encouraging member states to cooperate on arms purchases – the multinational 155mm ammo deal is a showcase of that, and more such joint orders, perhaps for missiles or vehicles, could follow. The European Commission also proposed mobilising up to €800 billion across the EU, and while that figure includes national spending, it indicates an environment of plentiful funding. For Rheinmetall, EU support not only brings in direct grants but also harmonises requirements across countries. For example, NATO/EU standardisation efforts mean many countries will buy the same munitions (155mm, etc.), which favours large producers like Rheinmetall who can achieve economies of scale. The war in Ukraine has also led the EU to consider streamlining acquisition rules, cutting red tape on cross-border exports within Europe. This could simplify Rheinmetall’s export licensing when selling to EU allies, effectively enlarging its “home market” to all of EU/NATO. Programs like PESCO (Permanent Structured Cooperation) and the European Defence Fund are funding collaborative R&D – Rheinmetall is involved in projects like a European Main Battle Tank demonstrator and EU drone systems under these frameworks. In summary, EU-level initiatives have injected capital, coordination, and political impetus into the European industry, reinforcing Rheinmetall’s growth. ASAP’s immediate impact was enabling Rheinmetall to aim for producing 1,000,000+ shells per year by 2027 to meet both European armies’ and Ukraine’s needs – something that would have been hard without EU subsidies. The company’s export trajectory is thus buoyed by not just national orders but supranational European backing.

US Foreign/Trade Policy Influence: The policies and posture of the United States also have multifaceted effects on Rheinmetall:

• Transatlantic Support vs. Uncertainty: The strong US support for Ukraine, around $40 billion in arms aid in 2022–24, complemented Europe’s efforts, indirectly benefiting Rheinmetall because US aid frees up European stocks, which then must be replenished, often via Rheinmetall. However, uncertainty in US politics – for instance, if a US administration were less committed to European security – has spurred Europe to invest more in its own. Papperger cited “ructions in U.S. policy”, like during the Trump era, as galvanising Europe to not rely solely on the US. NATO’s European members agreed to boost budgets partly out of fear that the US might pivot away; this fear factor has turned into real orders for European industry. Thus, paradoxically, any US signals of retrenchment can drive more business to Rheinmetall, as Europe aims for strategic autonomy. Conversely, a continued strong US-NATO stance also helps Rheinmetall, as the US pressures allies to meet spending targets. For example, talk of raising NATO’s spending target to 3 percent of GDP was floated – Rheinmetall estimated that even a shift to 2.5 percent could mean up to €400 billion in additional European procurement by 2030, of which Rheinmetall hopes to capture 20–25 percent. This indicates that US and NATO policy goals, like burden-sharing, directly shape Rheinmetall’s market size.
• “Buy American” and Localization: US trade policy generally favours American-made goods – Buy American Act, ITAR export controls. This means that for Rheinmetall to succeed in the US, it must localise production and partner with US firms. The company has adapted by establishing American Rheinmetall subsidiaries and teaming with giants like Raytheon, L3Harris, Textron, etc., on programs. The OMFV program explicitly required a significant US footprint, which Rheinmetall achieved by building a team in Michigan and buying Loc Performance. Similarly, for smaller sales like ammunition, Rheinmetall often works through its US branch in Pennsylvania to produce certain niche munitions domestically, to comply with US rules. This strategy is effectively transforming Rheinmetall’s business model into a more global one – no longer just exporting from Germany, but producing in-market. It’s doing the same in other US-aligned countries with local content requirements – e.g. building factories in Hungary, Australia, and potentially UK for next-gen tanks. Thus, US trade policies pushing localisation have made Rheinmetall invest abroad, which in the long run could increase its international revenue, with less dependency on German export licenses. On the flip side, stringent US export controls (ITAR) can restrict Rheinmetall if any US tech is in its products. This has led the company to seek “ITAR-free” solutions, for instance, marketing European-sourced electronics in its tanks to be able to sell to whoever it wants without US permission.
• US Market Opportunities and Competition: The US is also a competitor in global arms sales. For instance, Eastern European countries sometimes choose US equipment, like Poland buying M1 Abrams tanks and HIMARS instead of German Leopards or artillery. This competitive aspect pushes Rheinmetall to innovate and offer attractive alternatives – e.g. the Panther KF51 as a rival to future US tanks, or Skynex guns as a complement to US Patriot missiles. However, US foreign military financing often pairs US aid with allied procurement – in Ukraine’s case, the US financed some European equipment too. If US aid to other regions (Middle East, Asia) comes with mandates to buy American, Rheinmetall could lose out on potential deals. A clear example: if the US supplies Taiwan or Gulf states with everything they need, European systems have less room. But the war has shown a collaborative approach: the US focusing on high-end capabilities and allowing European industry to supply other needs, like European 155mm shells or Leopard tanks. In the short term, the alignment of US and European strategy in arming Ukraine has been beneficial to Rheinmetall – with the US even funding some Rheinmetall gear – e.g. the US contributed to a NATO fund that paid Rheinmetall for Leopard 1 tank refurbishment for Ukraine. In the long term, Rheinmetall aims to secure a strong position in the US, through OMFV and potentially offering its HX trucks or air radars to the US Army, which is looking to replace some systems. Achieving that $2 billion US revenue goal by 2027 would make the US one of Rheinmetall’s top “export” markets and reduce exposure to German/EU policy shifts.

Rheinmetall’s business model is becoming more global and agile, directly shaped by the Ukraine war and policy environment. The war acted as a catalyst for Rheinmetall to expand capacity, enter new markets., like Ukraine itself, and prove its products in combat, enhancing their appeal. German and EU policy shifts have unlocked funding and removed barriers, effectively supercharging Rheinmetall’s growth potential with political backing and financing instruments. Meanwhile, US policy – both supportive and protectionist – has pushed Rheinmetall to internationalize its operations, via partnerships and overseas subsidiaries, which could yield a more diversified and resilient business. The company is keenly aware of these influences: Papperger has spoken about the need to “be a reliable partner for governments” in this new era, emphasising Rheinmetall’s role as a pillar of European defence. With a wartime sense of urgency now permeating defence procurement, Rheinmetall’s challenge will be scaling up without overextending, and navigating any future political changes, e.g. if peace returns or if US/EU budgets eventually tighten. For now, though, the trend lines are all positive – Europe’s largest ammunition and ground systems supplier is transforming into a global defence powerhouse, fuelled by high demand, supportive policies, and strategic adaptability born of these tumultuous times.

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