Financial report for Q3 2026 – Record growth and a high level of profitability
- Sales in the first nine months up 38% to €8.4 billion
- Operating result of €1,339 million at a new record high –
an increase of €544 million or 69% - Operating result margin increased from 13.1% to 16.0%
- Rheinmetall Nomination significantly higher than last year at €19.1 billion
- Operating free cash flow at €‑1,698 million –
due to build-up of inventories to support the targeted sales growth - Delays in projects have led to an adjustment of the annual guidance
Düsseldorf-based Rheinmetall AG is concluding the fiscal year 2026 with unprecedented growth in both sales and profits. Over the first nine months, the group has seen a revenue increase of over one-third, greatly enhancing its profitability. The defense technology group’s order backlog is robust.
This growth is primarily supported by soaring defense budgets across various nations, which continues to drive demand, resulting in increased production across the five operational segments of the Group. However, despite this favorable quarterly performance, the annual sales guidance for 2026 must be adjusted due to project delays. Specifically, holdups related to the German Armed Forces’ Arminius project, currently in the final negotiation stages and set for commissioning next year, alongside delays in lot acceptance tests for artillery ammunition, have prompted this adjustment.
Rheinmetall now anticipates consolidated sales to reach approximately €13.2 billion for the fiscal year 2026, with an expected operating result margin of around 18.5%.
Armin Papperger, CEO of Rheinmetall AG, stated: “We are experiencing substantial growth accompanied by high profitability, establishing us as a global leader in our sector. Strong order levels provide the foundation for long-term capacity expansion, as evidenced by our recent commencement of production in new facilities in the United Kingdom and Albacete, Spain. Remarkably, an empty production hall in Telford, UK, was transformed into a fully operational gun barrel facility in just eight months. We maintain high operational standards, ensuring our growth trajectory is both steady and sustainable, while also preserving and creating thousands of jobs in Germany and our partner countries.”
“Demand remains robust, and we consistently secure significant contracts for our innovative systems, both domestically and internationally,” Papperger added. “In the naval sector, we are actively working to secure new orders both in Germany and overseas.”
Financial Overview: Record sales growth of 38% and an operating result increase of 68%
For the first nine months of the 2026 fiscal year, Rheinmetall reported a year-on-year sales increase of €2,318 million, or 38%, reaching €8,376 million (compared to €6,057 million the previous year). The percentage of sales generated in Germany climbed to 41.3%, up three percentage points from the same period last year, while the international share represented 58.7%.
The operating result reached an all-time high of €1,339 million—an increase of 68% compared to last year’s €795 million, which signifies a growth of €544 million. This surge in operating results outpaced sales increases, primarily due to heightened sales volumes, pushing the operating result margin up to 16.0% from 13.1%.
Basic earnings per share from continuing operations rose from €7.83 to €14.44 within the first nine months of the current financial year.
Operating free cash flow saw a significant decline year-on-year, dropping by €900 million to €‑1,698 million (previous year: €‑798 million), largely due to customer advance payments in the prior year and the current buildup of inventories to support expected sales growth.
Rheinmetall Nomination reached €19.1 billion, up 19% from the previous year’s €16.0 billion, comprising traditional order intake alongside the volume from new framework agreements.
As of 30 September 2026, Rheinmetall’s backlog grew significantly to €78.0 billion, up from €56.7 billion in the previous year. This backlog includes both traditional orders and signed framework agreements.
Vehicle Systems: Notable Growth in Rheinmetall Nomination
In the Vehicle Systems segment, focusing on wheeled and tracked tactical vehicles along with logistics vehicles, sales rose by €662 million, or 20%, year-on-year, totaling €3,898 million after the first nine months of the fiscal year 2026. This growth is largely attributed to increased sales of wheeled and tracked vehicles and military trucks for German and European clients.
During this nine-month period, Rheinmetall Nomination in this segment surged fourfold compared to the previous year, climbing to €7,907 million from €1,945 million, marking a remarkable increase of €5,962 million. This surge is attributed to an expanded contract for the Puma infantry fighting vehicle with a second batch order of an additional 200 units and an order for 298 Lynx infantry fighting vehicles for Romania through the European SAFE program. As of 30 September 2026, the backlog for this segment stands at €28,664 million, up significantly by 45% or €8,951 million compared to the previous year’s figure.
The operating result improved from €347 million in the prior year to €466 million, driven by higher sales and an enhanced product mix in the logistics vehicle category, while the operating margin rose from 10.7% to 12.0%.
Weapon and Ammunition: Significant Investments for Capacity Expansion
In the Weapon and Ammunition segment, sales reached €2,705 million in the first nine months of the 2026 fiscal year, a 34% increase from €2,014 million last year. Major sales contributors included an ammunition supply contract for Hungary and various artillery and medium-calibre ammunition for Ukraine and other European nations.
Rheinmetall Nomination stands at €4,542 million, which is 6% lower than the previous year’s figure of €4,811 million. Key contracts gained include medium-calibre ammunition for Romania, a modular camp for the German Armed Forces stationed in Lithuania, and tank ammunition agreements for Poland, in addition to artillery projectiles and weapon systems for Germany and several Eastern European countries. The backlog for this segment reached €25,557 million by the end of the third quarter, up by €2,326 million or 10% from the previous year’s level.
The operating result totalled €634 million, showing a considerable improvement over the previous year’s €440 million, attributed to the significant increase in sales volume. Consequently, the operating result margin increased to 23.4% from 21.9% previous year. This segment also continued to invest heavily, with capital investments totaling €338 million, surpassing last year’s €284 million, focusing on capacity expansion projects in various locations, including new facilities for gun barrel production in the UK and Lithuania, alongside expanding powder production at Nitrochemie Aschau.
Air Defence: Noteworthy Growth in Rheinmetall Nomination
The Air Defence segment, which specializes in ground-based air defense systems and drone defense technology, saw its sales increase by €283 million, totaling €731 million after nine months of the 2026 fiscal year, a substantial growth of 63%. This robust sales growth primarily results from advancements in the Skynex and Skyranger air defense systems for European clients, alongside ammunition deliveries to international clients.
Rheinmetall Nomination surged fivefold compared to the prior year, reaching €1,734 million versus €322 million last year, largely fueled by orders for additional Skyranger and Skynex systems from both a European and an international customer. The backlog for this segment reached €4,099 million by 30 September 2026, showcasing an impressive year-on-year increase of 81%.
With the boost in sales, the operating result more than doubled, climbing from €59 million the previous year to €135 million by the end of September 2026. As a result, the operating result margin improved to 18.5% from 13.2% last year.
Digital Systems: Backlog Growth of Over 39%
The Digital Systems segment, covering the digital transformation of armed forces and satellite technology, saw a sales rise of €297 million, reaching €1,328 million (previous year: €1,031 million), an increase of 29%. This growth primarily stems from the TaWAN and D-LBO digitalization projects and the ramp-up of short-range defense initiatives.
The Rheinmetall Nomination in this segment was recorded at €4,899 million, a decline of €5,072 million or 51% from the previous year, which had benefitted from significant orders. Over the first three quarters of 2026, Digital Systems secured a billion-euro framework agreement for loitering munition systems and orders for reconnaissance vehicles for the German armed forces. Additionally, as part of an international consortium, Digital Systems gained an order to digitalize the combat training for the British armed forces. By 30 September 2026, the Rheinmetall backlog reached €20,396 million, marking a substantial increase of 39% from the previous year’s figure.
By September 2026, operating results climbed to €118 million, up from €69 million in the prior year, with the operating result margin standing at 8.9% compared to 6.7% last year.
Naval Systems: Continuing Momentum in Rheinmetall Nomination
For the first time, Naval Systems was reported as a separate segment following its acquisition at the end of February 2026. Over the first seven months post-acquisition, Naval Systems generated sales of €679 million, driven largely by ongoing shipbuilding programs, including the construction of intelligence vessels (FDB424), Braunschweig-class corvettes (K130), and replenishment oilers (MBV707). Additionally, service sales have yielded €96 million in ongoing repairs of the frigates “Rheinland-Pfalz” and “Bayern.”
Rheinmetall recorded naval system order intakes of €1,161 million, with a notable contribution of €920 million from a Romanian government project financed by the European SAFE program to construct four naval vessels. The backlog for Naval Systems stood at €3,896 million as of 30 September 2026.
Operating results in this segment totaled €71 million, reflecting an operating result margin of 10.5%.
Outlook: Adjusted Annual Guidance
Rheinmetall has revised its annual guidance for 2026 due to project delays, particularly highlighting the German Armed Forces’ Arminius project, which is nearing the end of negotiations but will not commence until next year, alongside delays in lot acceptance tests for artillery ammunition.
The company now forecasts consolidated sales of around €13.2 billion instead of the previously anticipated range of €13.7–14.2 billion, with last year’s sales at €9,935 million. Despite this adjustment, Rheinmetall remains confident in achieving an improved operating result for the year 2026, maintaining a steady operating result margin of around 18.5%, unchanged from the previous year’s margin of 18.5% but revised from an earlier projection of approximately 19%.
