The German defense group outlined the investment program during its second-quarter 2026 earnings call. Management said most of the projects remained on schedule.
Production is already rising at Rheinmetall’s F-35 site near Düsseldorf. Chief Financial Officer Klaus Neumann cited the ramp-up as a major driver of growth in Digital Systems.
The division’s sales increased 30% to €417 million. Neumann said the TAVARM program for the German Army also contributed to the increase.
Rheinmetall is investing further upstream in the ammunition supply chain. An RDX plant in Várpalota is expected to be ready in 2027, while new powder-blending capacity is being added in Switzerland.
The company is also building a propellant plant in Aschau. Chief Executive Armin Papperger said the site would begin production in the third quarter of 2027 and make up to 4,500 tons of triple-base powder.
Rocket manufacturing is expanding in Spain and Germany. Rheinmetall has a rocket plant in Burgos and expects its new rocket-motor facility in Unterlüß to be ready in the first quarter of 2027.
The group is moving into cruise-missile production through its partnership with Destinus. Initial production of the Ruta Block 2 and Kryla systems is planned around the end of 2026, followed by a dedicated factory in 2027.
Rheinmetall holds a majority interest in the venture. Papperger said the company would establish production lines and take responsibility for warheads and other manufacturing work.
The expansion also reaches drones and space systems. Rheinmetall expects its FV-014 drone line near Düsseldorf to be ready by the end of 2026.
The company is preparing to manufacture synthetic-aperture radar satellites at an industrial rate. Management plans capacity of one SAR satellite per week.
One part of the expansion is running behind schedule. Papperger said the “Ukrainian side” was the only missing element among the capacity projects discussed, but added that production elsewhere would limit the impact.
Rheinmetall expects capital spending to equal about 8% to 9% of sales in 2026. Management is seeking savings through purchasing and investment synergies without reducing planned output.
“We reduce CapEx at the moment, not because we reduce the factories,” Papperger said. He said production-line capacity remained in line with the company’s plans.
The industrial build-out is also tying up cash in materials. Rheinmetall received about €6.2 billion in supplies during the second quarter, contributing to operating free cash flow of negative €1.33 billion.
“We need these goods in our stocks, otherwise it’s impossible to grow,” Papperger said. The company is waiting for advance payments tied to major contracts in Germany and Romania.
Rheinmetall is adding workers alongside factories and equipment. Papperger said the group was hiring about 10,000 employees a year and had received more than 160,000 applications.
The expansion is already feeding through to the company’s results. Second-quarter sales rose almost 70% to €3.29 billion, while operating profit more than doubled to €562 million.
