Investor sentiment was clear on Tuesday: The delivery of battle tanks to Ukraine is a good signal for Rheinmetall, as it should result in follow-up orders for retrofitting from the various military forces, who now want to deliver more combat equipment to the country attacked by Russia.

The Rheinmetall share price temporarily rose to an all-time high of almost 230 euros on Wednesday, but later turned slightly into the red.

Compared to the time before the war broke out a year ago, the share price today is significantly more than double.

Jonas Jansen

Business correspondent in Düsseldorf.

  • Follow I follow

The Leopard 2 battle tank, which is currently being delivered, is not a pure Rheinmetall product at all, the brand belongs to the manufacturer Kraus-Maffei Wegmann (KMW), which in turn is a subsidiary of the Franco-German group KNDS.

Among other things, Rheinmetall supplies the main weapon and ammunition for the tank to the European military, which has purchased various main battle tank variants over the past decades.

Leopard tanks have yet to be reviewed

At Rheinmetall, however, there are still 22 of these Leopard 2 models from the A4 series in the yard, which are now to be made combat-ready again.

But that will last at least until next year.

Even for the best-preserved vehicles, the company needed up to seven months, now the others have to be completely dismantled and checked.

"Some of these tanks stood there for ten years with the hatch open, they were moldy on the inside," said Rheinmetall CEO Armin Papperger to Stern magazine.

In addition, there are 88 older Leopard 1 models.

How many of these main battle tanks could actually end up in Ukraine and what that could mean for new acquisitions is still completely open.

The 14 Leopard tanks that the federal government wants to deliver "in a first step" come from the Bundeswehr's stocks.

In recent months, Rheinmetall has also concluded contracts for a ring exchange for a total of 29 Leopard 2 tanks, they are going to Slovakia and the Czech Republic, but they have not all been delivered.

The government in Prague has already announced that they first need battle tanks themselves and do not want to pass them on.

Even ammunition orders have long runtimes

Above all, the question of what the deliveries for retrofitting and thus also the orders mean for the industry is explosive.

It is clear that more ammunition will be needed, the Düsseldorf-based M-Dax group is currently building more capacity, both in Germany and internationally.

A new ammunition plant is being built in Hungary, and the group wants to take over a competitor in Spain in order to increase its delivery capacity.

But that too has to be produced first: the Bundeswehr, for example, placed an order for Leopard 2 ammunition in 2020, which runs until 2028.

Rheinmetall has been cooperating with KMW for years on many projects, such as the Boxer wheeled armored vehicle or the Puma infantry fighting vehicle.

However, new Leopard 2 models are no longer being produced, there should actually be a joint European project for this, which, however, is running much less harmoniously: The joint main battle tank from Rheinmetall, KMW and Nexter called MGCS (Main Ground Combat System) should actually be in 2035 The year 2040 is now more likely. France also wants to use it to replace its Leclerc tanks, and the government is still considering whether to supply such tanks to Ukraine.

Rheinmetall advanced last summer with its own main battle tank called the Panther KF51.

The development of this new combat system takes 12 to 15 months, said Papperger, but there has not yet been a single order for it.

For Rheinmetall, an order for this would of course be more worthwhile than projects in which they have to share the order value.

You can see how long a rearmament takes with the Lynx tank, which Rheinmetall would like to sell to Australia.

So far, only Hungary has been a customer for the system comparable to the Puma. The order was placed in 2020, and the first of 209 infantry fighting vehicles was handed over to the armed forces in October.

Just because Rheinmetall is the largest German armaments manufacturer does not mean that orders will automatically flow: Poland, which wants to deliver 14 Leopard tanks to Ukraine, only ordered 1,000 main battle tanks in the summer.

Namely in South Korea, at Hyundai Rotem.