German defence giant Rheinmetall has reported a 38% increase in net profit for 2024, as rising geopolitical tensions drive European nations to boost military spending.

The company’s operating profit surged by 61%, reaching a record €1.48 billion, while total revenue rose 36% to €9.8 billion—slightly below its earlier forecast of €10 billion. The bulk of this growth came from Rheinmetall’s defence division, where sales climbed 50%, now accounting for 80% of total revenue.

The company expects “major high-volume orders from military customers”, ensuring strong demand for years to come.

Strong Growth and Rising Orders

Rheinmetall’s earnings after taxes increased to €808 million, while its order backlog hit a record €55 billion, up 44% from the previous year.

The firm’s operating margin climbed to 15.2%, with its defence unit reaching an even higher 19%. To reward investors, Rheinmetall’s board has proposed a dividend of €8.10 per share, up from €5.70 last year.

These strong results boosted Rheinmetall’s Frankfurt-listed shares by over 7% around 1 p.m. CET on Wednesday.

Geopolitical Tensions Drive Defence Boom

Rheinmetall has positioned itself as “Ukraine’s most important defence industry partner”, supplying weapons and military equipment to counter Russia’s invasion.

As concerns grow over Europe’s security, especially amid warnings that former U.S. President Donald Trump could reduce American military support for NATO, EU countries are rapidly expanding their defence budgets.

In response, Rheinmetall has significantly expanded its production capacity. “We have massively increased our capacities already and will continue to do so,” said CEO Armin Papperger.

He noted that the company has invested nearly €8 billion in the past two years to build new plants, acquire businesses, and secure supply chains.

Looking Ahead: More Growth Expected

For 2025, Rheinmetall forecasts another 25%-30% increase in group-level sales, with its defence business expected to grow by 35%-40%.

The company’s global customer base includes the armed forces of Germany, the UK, the U.S., and Australia.

“With a 50% sales growth in the defence business, Rheinmetall is on its way from being a European systems supplier to a global champion,” Papperger stated.

As Europe continues to ramp up military spending, Rheinmetall is set to remain one of the biggest beneficiaries of the evolving security landscape.

Global stock markets remained volatile on Tuesday as investors responded to escalating trade tensions and economic uncertainty following recent remarks by US President Donald Trump. Concerns over potential tariffs and economic slowdown have sent Asian, European, and US markets into a downturn, with tech stocks and major indices experiencing sharp losses.

European Markets Open Mixed Amid Tariff Concerns

European markets opened with mixed performances on Tuesday, as investors assessed the potential impact of Trump’s tariff policies on global trade and company earnings.

• FTSE 100 (UK) dipped 0.10% in early trading.
• DAX (Germany) rose 0.6%, while CAC 40 (France) gained 0.4%.
• The pan-European STOXX 600 fell 0.2%, reflecting broader market unease.

Market analysts suggest that Trump’s comments about a “period of transition” have raised fears of an economic slowdown, leading investors to adjust their expectations and pricing strategies.

“Trump’s willingness to endure short-term economic pain for long-term structural gains is being priced into the markets. Investors can no longer assume his policies will always favor stock market performance,” said Kyle Chapman, an FX analyst at Ballinger Group.

Asian Markets See Extended Sell-Off

Asian markets followed Wall Street’s lead, with stock indices experiencing losses overnight amid growing fears of a prolonged US-China trade war.

• Nikkei 225 (Japan) dropped 0.6% to its lowest level in six months, though it recovered from an earlier 2% decline.
• Shanghai Composite (China) rose 0.4%, buoyed by government measures aimed at stabilizing the slowing economy.
• Hang Seng (Hong Kong) remained flat at 23,782.14.
• S&P/ASX 200 (Australia) declined 0.9%, while Kospi (South Korea) fell 1.2%.

According to IG analysts, the global market sell-off is being exacerbated by recession fears linked to Trump’s tariff rhetoric.

Wall Street Suffers Steep Decline

The US markets closed sharply lower on Monday, with tech stocks leading the downturn.

• Nasdaq Composite plummeted 4%, marking its biggest single-day loss since 2022 and wiping out $1.1 trillion (€710 billion) in market value.
• S&P 500 declined 2.7%.
• Dow Jones Industrial Average fell 2.1%.

Goldman Sachs also cut its US growth forecast for 2025, revising expectations from 2.4% to 1.7%, adding to investor concerns.

The “Magnificent Seven” tech stocks—including Apple, Microsoft, and Tesla—were among the hardest hit, as analysts warned that higher tariffs could erode profit margins and slow earnings growth.

“Markets are now facing weaker earnings prospects, alongside the added cost burden created by tariffs,” said Kyle Rodd, a senior analyst at Compital.com Australia.

Commodities and Currency Markets React

• Oil Prices:
  • US crude oil rose 0.42% to $66.31 per barrel.
  • Brent crude climbed 0.3% to $69.50 per barrel.
• Gold Prices:
  • Gold increased 0.5% to $2,900.4 (€2,661.6) per ounce, hovering near record highs.
• Currency Markets:
  • EUR/USD pair rose 0.6%.
  • EUR/GBP edged up 0.2%.

Corporate Earnings Updates

Volkswagen shares gained 1.6% on Tuesday morning after the company released its full-year 2024 earnings, despite reporting a 15% drop in annual profits. The German automaker remains optimistic about revenue growth in 2025.

Other major earnings reports expected today include Lego, Persimmon, and Leonardo.

Outlook: Volatility Expected to Continue

With global trade uncertainty, inflation concerns, and weaker growth forecasts, analysts anticipate that market volatility will persist in the coming weeks. Investors will closely watch further developments in US trade policy, corporate earnings reports, and central bank moves for clues on economic stability.