🛡️ Quarterly results of European armourer below estimates, but outlook remains strong!
German armour, ammunition and military systems manufacturer Rheinmetall $RHM.DE has published Q2 results that fell short of market expectations, with sales of €2.43bn (vs. estimated 2.53 billion). and operating profit was EUR 276 million. (estimated EUR 283 million).

The shares react by falling by more than 5%!

The reason for this is the delay in the awarding of defence contracts by the German army. However, according to the company, these orders will arrive in the second half of the year, allowing management to confirm its full-year outlook.

🔍 Key points:
Backlog of orders rose to €63.2bn 63.6 billion (last year: 48.6 billion).

Germany plans defence spending of EUR 380 billion 380 billion in the years 2025-2029, a Rheinmetall will be one of the main players.

Investment in a new plant in Weeze, Germany (production of parts for the F-35) and the loss-making civilian segment have weighed on margins.

The company is considering divesting the division Power Systemswhich serves the civilian industry, and is currently in talks with several buyers.

CEO Papperger: "Our commitments are full and we will continue to grow. Rheinmetall has the potential to become a global leader in defence."

🧠 The future of the company
In terms of fundamentals , Rheinmetall's story continues to be one of growth. The company has:
Strong backlog of orders

Strategic position in the geopolitical context

Direct exposure to European rearmament

Ambition to become a key player within NATO

The short-term disappointment with the numbers is more about bad timing than a problem in the business. Orders from the German government are guaranteed to come, it's just a question of when, not if.

What do you think of Rheinmetall?