Rheinmetall (OTCPK:RNMB.F) Update / briefing Transcript

Summary of Rheinmetall Investor and Analyst Recap Call (February 04, 2026) Company Overview - Company: Rheinmetall (OTCPK:RNMB.F) - Industry: Defense and Automotive Key Points Financial Performance and Expectations - 2025 Defense Business Growth: Expected growth in the defense business is projected to be between 30%-35%, with margins anticipated in the range of 18.5%-19% [2][4] - 2026 Revenue Projections: The defense business is expected to generate revenues of EUR 15-16 billion, including the NVL business, with a cash conversion rate anticipated to be very high due to significant orders [3][4] - Order Intake for 2026: Total order intake is expected to be around EUR 80 billion, with EUR 67 billion coming from German orders over the next four quarters [6][7][12] Major Contracts and Orders - Boxer Contract: The largest contract signed is the EUR 12.5 billion fixed contract for Boxers, to be executed by 2030, with an option for an additional EUR 25 billion from 2030-2035 [5][12] - Naval Contracts: Anticipated orders for naval business (F126 and F127) are expected to total around EUR 12-13 billion [5][6] - Ukrainian Orders: An additional EUR 3 billion is expected from Ukrainian customers over the next quarters [7] Cash Flow and Financial Health - Cash Flow: Cash flow has been strong due to customer prepayments, with expectations of being net debt-free by the end of 2025 and continuing a positive cash environment into 2026 [3][8][41] - Advance Payments: The Boxer contract allows for advance payments of up to 30% on the first EUR 12.5 billion, contributing to a strong cash position [8][12] Operational Insights - Ammunition Business Growth: The ammunition segment is expected to grow significantly, with revenues projected to increase from EUR 3.5 billion to around EUR 5 billion in 2026 [27][70] - Production Capacity: The company is enhancing production capacity in various locations, including South Africa, Spain, and Germany, to meet growing demand [27][33] Strategic Outlook - Long-term Orders: The company anticipates that Germany will place around EUR 500 billion in orders over the next 10-15 years, with EUR 67 billion expected in 2026 alone [12][13] - Framework Contracts: The expectation is to convert existing framework contracts into fixed contracts, which will not increase the total backlog in 2026 but will fulfill existing commitments [60][63] Additional Notes - Operational Efficiency: Rheinmetall is focusing on increasing efficiency by dedicating production lines between KMW and Rheinmetall [15] - Future Contracts: The company is preparing for additional contracts that will support its growth trajectory, particularly in the ammunition sector [60][63] This summary encapsulates the key insights and projections discussed during the investor and analyst recap call, highlighting Rheinmetall's strategic direction and financial expectations for the upcoming years.