Rheinmetall (RHM) Q1 2026 earnings summary

Executive summary

• Q1 2026 sales grew 8% year-over-year to €1,938 million, driven by strong defense demand and recent acquisitions, though some deliveries were deferred to Q2.

• Operating result increased by 17% to €224 million, with margin rising to 11.6%.

• Backlog surged 31% to €73 billion, supported by strong order intake, especially in Naval Systems and air defense, with a Q1 book-to-bill ratio above 2x.

• Integration of Naval Systems (NVL) began, contributing to backlog and sales, with further expansion planned.

• Civilian business classified as discontinued operations since December 2025, focusing the group on military segments.

Financial highlights

• Sales rose to €1,938 million, up 8% year-over-year; €200 million in trucks and €100 million in powder deliveries shifted to Q2.

• Operating result up 17% to €224 million (11.6% margin); net income from continuing operations was €111 million.

• Operating free cash flow was negative €285 million due to inventory build-up for future deliveries.

• CapEx at 10% of sales, focused on capacity expansion, expected to remain high in 2026 before declining.

• Adjusted basic EPS from continuing operations rose to €2.18 from €1.78.

Outlook and guidance

• Q2 2026 expected to show over 50% sales growth year-over-year due to deferred deliveries.

• Full-year 2026 sales guidance reaffirmed at €14–14.5 billion, with operational margin targeted at 18.5–19%.

• Backend-loaded sales development anticipated, with strong acceleration in Q2 and H2 2026.

• Cash conversion rate expected above 40% for 2026.

• Backlog could reach €135 billion by year-end if current trends continue.