Rheinmetall: The true dimension of the billion-dollar ammunition order | EUROtoday

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The true dimension of Rheinmetall’s billion-dollar ammunition contract

DIE WELT photo shoot 2016
The headquarters of the defense company in Düsseldorf The headquarters of the defense company in Düsseldorf

The headquarters of the protection firm in Düsseldorf

Quelle: image alliance/NurPhoto/Ying Tang

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Rheinmetall has introduced the most important order in its current firm historical past. It is a German military framework contract price 8.5 billion gross for artillery ammunition. The firm hopes that this may result in new agency orders.

FFor Rheinmetall boss Armin Papperger, his extraordinarily bold company targets are coming true step-by-step. The protection firm has simply introduced the most important order within the firm's current historical past: a framework settlement with the German military for the acquisition of 155 millimeter artillery ammunition price as much as 8.5 billion euros gross. This ammunition is fired, for instance, within the Panzerhaubitze 2000, which was additionally delivered to Ukraine.

Order secures capability utilization of the brand new Unterlüß ammunition plant

According to Rheinmetall, the contract will present safety for the capability utilization of its ammunition plant in Unterlüß, which is at present being expanded. However, the ammunition has not but been firmly ordered on this enormous quantity. The primary deliveries are to be made to the German military, which can then go among the provides on to Ukraine. The Netherlands, Estonia and Denmark would additionally profit from the order.

A Rheinmetall spokesman explains that the brand new framework contract represents an extension of the framework settlement price round 1.3 billion euros introduced in July final yr.

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It is actually useful for the DAX40-listed group if the best attainable variety of potential orders is talked about. For the primary quarter of 2024 alone, Rheinmetall reported a rise within the order backlog of virtually 43 p.c. This amounted to 40.2 billion euros. A brand new document. However, this determine represents a mix of agency orders, agency framework agreements (body backlog) and anticipated framework agreements (nominated backlog).

Framework agreements could possibly be known as up in full

Given the comparatively empty ammunition depots of the German military, the rise in protection spending and the aim of warfare readiness – as Federal Defense Minister Boris Pistorius (SPD) put it – Rheinmetall is assuming that the framework agreements with the German military will probably be totally utilized. Framework agreements will change into agency orders after which gross sales and earnings.

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In a primary step, the expanded framework settlement introduced now will see the decision for projectiles price 880 million euros, that are to be delivered subsequent yr. Further elevated calls are anticipated within the coming years, based on Rheinmetall. Ammunition manufacturing is without doubt one of the enterprise areas with the best returns for the Düsseldorf-based protection firm.

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For the present 2024 fiscal yr, Rheinmetall has predicted a rise in gross sales from 7.2 to round ten billion euros. The working margin within the weapons/ammunition phase is anticipated to enhance from 23 to 25 to 26 p.c. Analysts estimate that Rheinmetall will obtain orders of 30 to 40 billion euros this yr.

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As a Rheinmetall spokesman defined, the not too long ago introduced ammunition framework settlement “does not change the company's forecasts.” The undeniable fact that Rheinmetall had anticipated this framework settlement is evident from a quote from CEO Armin Papperger: “The federal government is keeping its word,” he mentioned of the brand new contract. It will make sure that the brand new Unterlüß plant is totally utilized. Chancellor Olaf Scholz assured this throughout his go to to the groundbreaking ceremony for the plant growth in February 2024.

https://www.welt.de/wirtschaft/article252136642/Rheinmetall-Die-wahre-Dimension-des-Munitions-Milliardenauftrags.html