Rheinmetall’s €73bn Order Mountain Can’t Mask a Rocky Start to 2026

Rheinmetall's Q1 revenue misses forecasts due to delivery delays and a Spanish factory accident, despite record orders and an on-target profit margin; cash flow plunges to -€285m.

A record-breaking order book and a profit margin that hit the bullseye should have been cause for celebration at Rheinmetall. Instead, the Düsseldorf-based defence group finds itself fielding questions about delayed deliveries, a Spanish factory mishap, and a cash flow that has turned deep red.

The company’s preliminary first-quarter numbers, released on Monday, tell a story of two halves. Revenue came in at €1.94bn, up nearly 8% year-on-year but well short of the €2.3bn analysts had pencilled in. The shortfall stems largely from shipment delays on military trucks and in the weapons and ammunition division, compounded by an accident at the group’s plant in Murcia, Spain, that temporarily crimped production capacity.

On the profitability front, however, the picture was far cleaner. Operating profit climbed 17% to €224m, delivering a margin of 11.6% — exactly in line with market forecasts. A more favourable product mix helped underpin the result, even as top-line growth disappointed.

The real headline-grabber sits further down the balance sheet. Rheinmetall’s order backlog swelled to a record €73bn by the end of March, a 31% jump from the same period last year. That figure got a boost from a €4.9bn nomination and the inclusion of new reporting segments — Air Defence and Naval Systems — which the group folded into its structure from January. The naval business, a relatively new addition for Rheinmetall, is now feeding directly into the backlog calculation.

But for all the order-book bravado, the cash position tells a more sobering tale. Free cash flow from operations came in at minus €285m for the quarter, dragged down by heavy investment in capacity expansion and working capital tied to rising sales volumes. Customer prepayments, meanwhile, remained subdued, offering little relief to the liquidity squeeze.

Management insists the logjam will clear in the second quarter. Production in Murcia has resumed, and the company expects to deliver pre-built trucks to German clients as planned. The full-year forecast remains unchanged: revenue of €14bn to €14.5bn, representing growth of 40% to 45%, with an operating margin of roughly 19%.

Investors, however, are taking a wait-and-see approach. The stock closed Monday at €1,370, barely above its 12-month low and down more than 14% since the start of the year. The gap to the 200-day moving average has widened to 18%, while the relative strength index sits above 76 — a reading that typically signals overbought conditions, a curious label for a stock trading near its trough.

Analysts remain broadly bullish, with the consensus price target still hovering above €2,000. But the market’s patience is wearing thin. The full quarterly report is due on 7 May, when investors will be looking for hard evidence that deliveries are accelerating and that the working capital drain is easing. Until then, Rheinmetall’s record order book remains a promise — not a payout.