Defense Industry
Rheinmetall cuts its 2026 outlook again as the large Boxer “Arminius” order slips
Rheinmetall lowered its 2026 sales forecast to about €13.2 billion because the large German Boxer “Arminius” order is no longer expected to be signed this year, even as third-quarter sales rose 32%.
Rheinmetall has cut its 2026 forecasts for the second time in a few months, as the large German order for Boxer armoured vehicles under the code name “Arminius” is no longer expected to be signed before the year ends. The Düsseldorf-based group said on the evening of Wednesday, November 4, that it now expects sales of about €13.2 billion, against the €13.7 billion to €14.2 billion range it had projected until now. The new target falls short even of the lowest of the 22 analyst estimates compiled by Vara Research on October 15.
The target for the operating profit margin was also reduced, to about 18.5% from about 19%. Rheinmetall attributes the revision to the “possible delay in the award of the Arminius project, as the order is no longer expected to be booked within 2026”. Revenue and advance payments tied to the programme are shifted to next year, and no new award timetable has been announced.
Ammunition, drones and cash flow
In the same statement the company reports unfavourable developments in projects in its weapons and ammunition division, while deliveries of artillery ammunition lots will probably also slip to 2027. In addition, not all revenue opportunities from newer activities, such as the cooperation with the Dutch drone company Destinus, are expected to materialise within 2026.
Rheinmetall still forecasts positive operating free cash flow for 2026 but dropped its target for a cash conversion rate above 40%. Chief Executive Armin Papperger had said in August that the group expected a 30% advance payment from Arminius, above €3 billion, and that its share of the initial order could reach about €12.4 billion. The programme is expected to be among Germany’s largest procurement efforts and covers a large number of Boxers for the Bundeswehr. The Boxer is built by a consortium of Rheinmetall and the Franco-German KNDS, and has also been ordered by the British army.
A strong third quarter
The cut came with preliminary third-quarter figures that were positive. Sales rose 32% to €3.15 billion from €2.31 billion a year earlier, while operating profit climbed 62% to €553 million. The operating margin reached 17.5% from 14.8%, and new orders in the quarter reached €2.89 billion. The full quarterly report was scheduled for Thursday, November 5.
The year has already brought difficulties for Rheinmetall. In June the German government cancelled the order for the next-generation F126 frigates, a programme the group had been expected to take over, and the group estimated losses of about €300 million. At the same time the company continues its expansion in shipbuilding, as shown by the agreement to buy the Mangalia shipyard in Romania for €138 million.