Düsseldorf - The share price has risen by more than 2000 percent since 2020, but CEO Papperger believes there are still opportunities ahead. Even if there were peace in Ukraine, the EU member states would still rearm massively out of concern for Putin.
Although Rheinmetall's share price has risen by around 2,400 percent since 2020, CEO Armin Papperger sees room for improvement. "We believe that we still have considerable potential," he said at the virtual Annual General Meeting on Tuesday. Although the Management Board hopes that there will be a ceasefire or peace in Ukraine, it can be assumed that even then the EU countries and comparable states will place a very high volume of orders for weapons systems. He rejected the proposal by the shareholders' association DSW to split the share, which is listed at a price of almost 1,600 euros, into several shares so that small shareholders could get in more easily: "We are not currently looking at a share split. However, banks do offer the option of buying only parts of a share.
The shareholder representatives praised the development of the company and the share price. "The development is sensational," said Andreas Massek from the Schutzgemeinschaft der Kleinaktionäre (SdK). "We are looking at an impressive increase in turnover, margin and stock market value," said Roland Klose from the Deutsche Schutzvereinigung für Wertpaierbesitz (DSW). He praised the fact that Papperger had organized the Group in such a way that it could also ensure "short-term delivery readiness for the necessary defence investments".
In his presentation, the CEO showed how great future growth from defense projects can be, while also saying that Rheinmetall might sell the civilian division. However, the plants that are being converted for the production of military equipment, such as in Berlin or one in Neuss for future reconnaissance satellites, would not be sold. With regard to the other plants, he says: "We will do everything in our power to give our employees a good future."
For the military sector, the CEO explained exactly why he expects huge growth. If the European NATO states spend 3.5 percent of their economic output on defense in the future, as is often discussed, 700 to 1000 billion euros would be spent on armaments across Europe each year. "On this basis, we see a potential for Rheinmetall of between 300 and 400 billion euros by 2030," he said. Last year, Rheinmetall generated sales of 9.8 billion euros; the target for 2027 is around 20 billion euros, with an operating margin of 18 percent. In 2024, it was already a very good figure at 15.2 percent.
Papperger made it clear that the Group serves politics: "Security is not everything, but without security, everything is nothing." Many experts feared that Russia could launch a new attack in five to eight years' time. Russia wants to have around 1.5 million active soldiers by 2029, more than all NATO states in the EU (around 1.3 million). Papperger added: "According to its own figures, Russia currently produces 1,500 battle tanks every year - as many as the five strongest NATO nations have together. In 2029, four years from now, the European NATO states must be in a position to fend off a possible Russian attack on NATO territory."
Barbara Happe from the umbrella organization of critical shareholders asked whether it was a good thing that Rheinmetall cooperates a lot with Hungary, even though Hungarian Prime Minister Orban has a certain closeness to Putin and is putting the brakes on aid to Ukraine. The Executive Board, however, pointed out that Hungary was a member of both NATO and the EU.
Those familiar with the Group suspect that Rheinmetall has launched relatively important projects with Hungary because a number of other NATO countries such as the UK and France each have a very strong defense industry of their own - so Hungary was and is all the more open to projects. Rheinmetall, in turn, was particularly pleased with the partner.
However, Armin Papperger is now in the process of establishing a number of other collaborations and foreign activities, including in Italy and the USA. "We are one of the fastest growing defense companies in the world and are on our way to becoming a global champion. With an investment volume of around eight billion euros in the last two years, we have driven this process forward," said Papperger.
(rky / gw)
