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Rheinmetall Lowers 2026 Sales Guidance After Germany Cancels Frigate Program

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Rheinmetall Lowers 2026 Sales Guidance After Germany Cancels Frigate Program

Rheinmetall (RHM.F) lowered its consolidated sales guidance for full-year 2026, citing primarily a negative impact of up to 300 million euros from Germany's cancellation of its F126 frigate program, according to a Thursday release.

The German defense company now expects consolidated sales for the 12 months ending Dec. 31 of between 13.7 billion euros and 14.2 billion euros, compared with the previous guidance range of 14 billion euros to 14.5 billion euros. The outlook for organic sales growth was unchanged at a range of 28% to 31%.

Shares of the company decreased over 2% in early morning trading before erasing losses by midday.

AlphaValue/Baader Europe was expecting the negative share-price reaction to the guidance cut, saying Rheinmetall's outlook change was in line with expectations and confirmed that no short-term mitigation is available. "The maintained margin and cash-conversion targets are supportive, but they leave little room for execution slippage," the research firm noted.

The guidance revision also came with the group's results for the six months ended June 30, where it reported growth in both earnings and sales to 233 million euros and 5.23 billion euros, respectively, from 214 million euros and 3.75 billion euros.

"We are maintaining our solid growth trajectory and continuing to improve profitability, partly through a significant expansion of our capacity. In the second quarter, we were even able to increase the operating result margin to 17.1% - a new high," said Chief Executive Officer Armin Papperger. For the full year, the company affirmed expectations for a 19% operating result margin, factoring in holding costs.

"Demand remains strong, and we continue to succeed in securing major orders both at home and abroad. At over 3, our book-to-bill ratio is remarkably high, also compared with our competitors," Papperger added.

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