700,000 bullets: Rheinmetall produces ten times more bullets than before the war. First loss for Adidas since 1992

Whether it concerns tanks, artillery or large-caliber ammunition: Rheinmetall plays an important role in the arms trade. The company now presents figures showing that turnover continues to rise strongly.

Germany’s largest arms company Rheinmetall is about to increase its production of artillery ammunition tenfold. Before the war in Ukraine, around 70,000 bullets were sold annually, but demand has now increased enormously, CEO Armin Papperger said on Thursday in Düsseldorf and added, in view of the intended production capacities at the end of 2024: “We are in the order of magnitude 700,000 shots.” This cannot remain the case: with a new production facility in Unterlüss in Lower Saxony and two planned factories in Ukraine and Lithuania, this number is expected to rise to 1.1 million in 2027.

Regarding the weak demand for the 155-millimeter projectiles before the war, he said: “No one filled magazines because it was believed at the time that artillery ammunition could not be used very effectively because there were nuclear weapons.” This assumption was outdated by the war in Ukraine. “Fortunately, no one uses nuclear weapons.”

A lot of ammunition goes to Ukraine

Rheinmetall claims to be the largest manufacturer of artillery ammunition in the Western world; its competitors include the Norwegian company Nammo. Ukraine currently urgently needs artillery ammunition to defend itself against the Russian aggressor. Kiev also relies on Rheinmetall. When asked about the delivery volume for Ukraine, Papperger said: “Several hundred thousand shots of Rheinmetall are going to Ukraine.” He did not become more specific.

Rheinmetall is likely to announce another major order from the federal government in the large-caliber ammunition sector soon. “The Federal Republic of Germany wants to give Rheinmetall a framework contract for 2.2 million artillery shells,” the manager said. A period of ten years is planned for delivery.

Rheinmetall sells tanks, artillery, anti-aircraft, military trucks and ammunition. The administrative headquarters are in Düsseldorf and the largest factory is in Unterlüss, Lower Saxony. The group employs approximately 23,000 people.

Shining years

Paperger presented annual figures for 2023, which were positive. Turnover increased by 12 percent to around 7.2 billion euros, while net profit rose by nine percent to 0.6 billion euros. This year, Rheinmetall is aiming for a turnover “in the order of 10 billion euros” – that would be an increase of around 40 percent. Papperger is convinced that growth will continue after that. “Whether it is five, seven or eight years, I see the potential for us to achieve a turnover of 20 billion euros.”

How good the prospects are for the gunsmith is also evident from the order book, which shot up from 26.6 billion euros to 38.3 billion euros within a year, making it higher than ever before in the company’s history.

The Rheinmetall boss justified the positive outlook with a changed attitude in politics, which now believes that “we have to do a lot because there is too much uncertainty in the world”. As examples of this, he mentioned not only the war in Ukraine, but also the conflict in Gaza and the Houthi attacks on the Red Sea.

According to him, this makes it clear that Western democracies need to be more defensive and therefore invest more money in their defense. The figures were well received on the stock market, the share price rose sharply and reached a record level. A newspaper is now worth more than four times as much as it was before the outbreak of war in Ukraine.

Industry criticism of politics

In response to Russia’s war of aggression, the German federal government launched a special fund of 100 billion euros in 2022 to modernize the Bundeswehr and fill warehouses. Rheinmetall benefited from this pot of money. But the mood in the industry is different: While Papperger is full of praise for the federal government, other company representatives are dissatisfied.

The head of tank equipment manufacturer Renk, Susanne Wiegand, recently told Handelsblatt that Germany orders relatively little. “This has nothing to do with a return to the full equipment of the Bundeswehr,” Wiegand said. Other industry representatives make similar statements.

Papperger does not want to go along with such criticism from the industry. Last year the Bundeswehr received orders worth more than 10 billion euros and this year there will probably be more, he said. Unlike other defense companies, Rheinmetall has the right product portfolio. “If I have no anti-aircraft systems, if I have no ammunition and if, for example, I only build transmissions, then I am dependent on the purchase of these tanks,” said the Rheinmetall boss. (sda/awp/dpa/lyn)