F126 cancellation hits Rheinmetall by €300 million
Rheinmetall’s Naval Systems Division Reports Strong Start Despite F126 Setback
Rheinmetall’s newly established Naval Systems division generated €334 million in revenue during its first four months of operation following the acquisition completed in February 2026. The division also reported a substantial order backlog of approximately €6.3 billion, highlighting strong demand for its naval capabilities.
The business focuses on maritime solutions including manned and unmanned surface vessels and has been reported as a standalone segment within Rheinmetall since the end of the first quarter of 2026. Current programmes include fleet support vessels, corvettes, naval fuel supply vessels, and patrol vessel projects for international customers.
Order intake reached €1.0 billion during the period, driven largely by a €920 million contract with the Romanian government to construct four naval vessels. Additional business came from ship repair activities and smaller maritime contracts.
At the end of June, the division’s order book stood at €6.255 billion. Operating profit reached €33 million, corresponding to a margin of 9.8%, reflecting a solid start for the new segment.
The service and maintenance business also contributed to performance, generating around €39 million in revenue. A significant share came from the ongoing refurbishment of the German Navy frigate Rheinland-Pfalz, demonstrating the importance of after-sales and lifecycle support services within the naval sector.
Despite the positive results, Rheinmetall has lowered its revenue outlook for 2026 following the cancellation of the F126 frigate programme. The company estimates the decision could reduce annual revenue by up to €300 million. As a result, Rheinmetall now expects group revenue of between €13.7 billion and €14.2 billion for the year, while maintaining its projected organic growth rate of 28-31%.
Looking ahead, Rheinmetall continues to pursue international naval opportunities. The company recently unveiled its new GMF140 frigate concept, a 140-metre warship designed for air defence, anti-submarine warfare, ballistic missile defence, and long-range precision strike missions. Initially targeted at North American procurement programmes, the design also reflects Rheinmetall’s broader ambition to expand its presence in global naval shipbuilding markets.
The early performance of Naval Systems demonstrates Rheinmetall’s growing role in maritime defence, combining vessel construction, maintenance services, and advanced naval platforms to support both domestic and international customers.
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