Rheinmetall sales up 8% as Naval Systems included first time

Rheinmetall has reported increased sales and earnings during the first quarter of its 2026 (Q1 FY26) fiscal year, with the recently integrated Naval Systems segment making its first contribution to the group’s results.

The group’s consolidated sales for the quarter reached €1.94bn, representing an increase of 8% compared to the same period last year.

Rheinmetall attributes part of last year’s figures to significant pull-forward effects from the second quarter of 2025.

The operating result grew by €33m, a 17% rise to €224m, and earnings per share from continuing operations increased to €2.18 from €1.78 for the same period in 2025.

The company said its total backlog rose to €73bn ($85bn) as of 31 March 2026, up 30.3% from €56bn a year earlier, which now includes Naval Systems’ €5.5bn order portfolio.

Naval Systems was incorporated into the group’s reporting structure following its transfer at the end of February, resulting in the quarterly figures reflecting only one month of its operations.

During this period, the division delivered €77m in sales, mainly from ongoing surface shipbuilding projects such as the German fleet service vessel (FDB424) and the Bulgarian Multi-Purpose Modular Patrol Vessel (MMPV 90).

Service sales from repair and refit activities, largely linked to the contract for the frigate “Rheinland-Pfalz”, stood at €20m.

The segment posted an operating result of €8m, with a margin of 10.1%.

Outside the naval segment, Vehicle Systems reported €985m in sales, up €32m, with a backlog of €25.85bn as of the end of March. The operating margin improved to 9.6%.

Weapon and Ammunition generated €601m in sales and a backlog of €25.76bn, marking 23% growth from the previous year.

Sales for Air Defence reached €192m, driven by the advancement in additional Skynex and Skyranger air defence systems projects for European customers.

The segment’s operating margin also grew to 15.6%.

Digital Systems, which provides digitalisation solutions for armed forces, infantry equipment, aviation systems and simulation, reported sales of €349m and an operating result margin of 5.2%.

Looking forward, Rheinmetall reaffirmed its sales and earnings target for 2026, maintaining an expected increase in consolidated sales to between €14bn and €14.5bn, compared to last year’s €9.94bn.

The company expects operating result margin of around 19%.

Armin Papperger, CEO of Rheinmetall AG, on the company’s performance: “We have further improved on the very successful prior-year quarter. For the second quarter of 2026 in particular, we expect stronger growth in sales and order intake, with large-volume orders in the naval business and in the vehicles business.”