Rheinmetall cuts its 2026 outlook as a Bundeswehr project and ammunition acceptances slip

Rheinmetall (Xetra: RHM) lowered its 2026 sales forecast to about €13.2 billion on November 5, saying a Bundeswehr project and ammunition acceptances will bring in less revenue this year, according to its nine-month statement. The cut follows nine months in which group sales rose 38%.

A forecast that moved in two steps

The company now expects sales of about €13.2 billion for 2026, instead of the €13.7 billion to €14.2 billion range it had given before, the statement says. That is €0.5 billion to €1.0 billion lower (computed), against sales of €9.935 billion in 2025. The forecast operating margin falls to about 18.5% from about 19%, which leaves it level with 2025.

Rheinmetall named two causes. One is a delay in Arminius, a project of the German armed forces that is in its final negotiation phase and, in the company's words, can only be ordered next year. The other is expected delays in the acceptance of production lots of artillery ammunition. Both, the company said, shift revenue out of 2026.

The nine months still show growth of 38%

Group sales for the first nine months rose 38% to €8.376 billion, from €6.057 billion a year earlier. Operating profit rose 68% to €1.339 billion, from €795 million, and the operating margin reached 16.0%, up from 13.1%.

Taken with the new forecast, the figures leave about €4.8 billion of sales for the final quarter (computed: €13.2 billion less €8.376 billion). The forecast is for the full year; the statement does not give a quarterly breakdown.

Order intake, which Rheinmetall reports as "Rheinmetall Nomination" and defines as classic orders plus the volume of newly concluded framework contracts, was €19.1 billion, 19% above last year's €16.0 billion. The backlog on September 30 was €78.0 billion.

Cash went into inventory

Operating free cash flow was minus €1.698 billion in the nine months, against minus €798 million a year earlier. The company ties the fall to inventory building: it said the decline derives from stock build-up and the higher working capital needed for the planned sales growth. The year-earlier period had been lifted by large customer advance payments.

Chief Executive Armin Papperger said in the statement: "Our growth course is solid and has lasting power" (translated from German). The statement was published in German; the English passages here are translations.

The year's revenue now rests on two signatures

Rheinmetall's quarter shows a company whose orders are arriving faster than its cash is. The nine-month figures show profit growing faster than sales, while operating free cash flow fell by €900 million. That is the pattern a company has when it buys materials ahead of deliveries, and the forecast cut shows how a single delayed contract moves a year's revenue.

We think the question for the rest of the year is timing rather than demand: the backlog of €78.0 billion is not in doubt, but the year's revenue depends on when the Arminius contract is signed and when ammunition lots are accepted. We expect cash flow to improve only if those acceptances and customer advance payments arrive, and we would watch the inventory line in the full-year report. If the order slips again, the same gap between profit and cash would persist into 2027.

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