Security joins the DAX

SecurityEconomy

Security joins the DAX

15. August 2023 - from Till Kerhoff

Rheinmetall has begun a new chapter in its history now that, after 27 years on the MDAX, the Düsseldorf-based technology group has advanced to the DAX, Germany’s benchmark index. This historic step forward is a testament to the dramatic change in Rheinmetall’s role since the turning point represented by the Ukraine war.

Opening Bell Event

To mark special occasions, listed companies can ring the stock exchange bell to open trading. The ceremony takes place in the trading room of the Frankfurt Stock Exchange.

On March 20, 2023, Rheinmetall finally officially joined the benchmark index of the German stock exchange. The founding member of the MDAX replaced dialysis specialist Fresenius Medical Care via the fast entry process. The group made a good start to its first day as a DAX-listed company, with the Rheinmetall share price up 5.4% at almost EUR 250 at the close of trading. “We’re absolutely thrilled to have joined the DAX today,” said CEO Armin Papperger at the opening bell ceremony at the Frankfurt Stock Exchange. “We regard this step up to the top tier as recognition for our development as a company over 130 years and of the services that we are providing in the present day. This accomplishment would not have been possible without the confidence of our investors and the outstanding performance of our employees. We owe them our thanks.”

The Executive Board of Rheinmetall AG signs the guestbook at the Frankfurt Stock Exchange. Foreground: CEO Armin Papperger; immediately behind him: CFO Dagmar Steinert and Peter Sebastian Krause, Executive Board member for Human Resources. (Image: Deutsche Börse AG / Martin Joppen)

Forecast Calls For Growth

The impressive performance of the share price is evidence of exciting prospects for Rheinmetall. Given the change in the security policy situation, analysts consider the group to be in a good position to play an important role in the imminent increase in defence capabilities in Germany and partner countries. These expectations are underpinned by the 2% target for NATO member states and the special fund set up by the German government for re-equipping the Bundeswehr. For the 2025 fiscal year, the group is targeting a sales volume of EUR 11 billion to EUR 12 billion based on its strong growth prospects.

A lot is happening at Rheinmetall right now. With a new ammunition factory in Hungary and its strategic acquisition of Expal Systems, Spain’s biggest ammunition manufacturer, the company is increasing its in-house production capacity significantly as it makes its debut on the DAX. Rheinmetall is also pulling out all the stops to set up a military maintenance and logistics center in Romania, a NATO partner country. This service hub is to be used to inspect and provide logistical services for western combat systems used in Ukraine to make sure that they are ready for operational deployment.

A Record Year In 2022

Rheinmetall posted record figures last year as well. The technology group presented its report for the 2022 fiscal year on March 16, 2023, boasting sales of EUR 6.41 billion and an operating result (EBIT before special items) of EUR 754 million. The group’s operating margin rose to 11.8%, up from 10.5% the previous year. Rheinmetall’s order backlog also hit a new high, amounting to EUR 26.6 billion at the close of the fiscal year. A dividend of EUR 4.30 per share was paid out to shareholders for the 2022 fiscal year.

A Turning Point For Rheinmetall

Rheinmetall has been receiving a lot of public attention away from the financial markets as well. Perceptions and opinions of the security industry across society are currently undergoing a dramatic transformation in a manner that is symptomatic of the changing geopolitical situation. Aspects of military hardware are becoming topics of conversation for a concerned public again for the first time in a very long while. Arms exports to Ukraine are not only tolerated but actively demanded. As a result of this, the defence industry is being acknowledged by broad sections of the population as a vital instrument in ensuring that Europe is secure and capable of defending itself.

In CEO Armin Papperger’s opinion, Rheinmetall AG has already been in that position for some time. “With our activities in the military sector, we regard ourselves as part of the German and European security apparatus. As a company, we are more conscious than ever of our special responsibility to society to make our contribution. Our skills and expertise allow us to play a role in protecting the people and defending the liberal democratic order. We intend to live up to that responsibility by continuing to be a capable and dependable partner to the Bundeswehr and the armed forces of our allies.”

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The oldest listed stock on the current DAX

1889

On April 13, 1889, Rheinische Metallwaaren- und Maschinenfabrik Aktiengesellschaft was founded by Hoerder Bergwerks- und Hüttenverein, a mining and steel company. The original capital was 700,000 marks.

1890

The first Rheinmetall annual general meeting took place in Düsseldorf on November 11, 1890. The company has held regular AGMs ever since, interrupted only by the Second World War and the post-war period. They have been held in Berlin since 1938, with a virtual meeting introduced in 2020.

1894

Rheinmetall common stock was first listed on the stock exchange on November 14, 1894, making it the oldest listed stock among current DAX members.

1903

Preferred stock was approved for official trading in Berlin for the first time on March 31, 1903. The first official share price was 78.1% of par value. By the end of the year, the price had risen to 91%.

1909

Fried. Krupp AG became the largest shareholder of Rheinmetall, holding 40% of capital stock in 1909.

1925

The German Reich became the majority shareholder with a stake of approximately 52%. Krupp gradually reduced its holding in Rheinmetall over subsequent years.

1936

On January 1, 1936, Rheinische Metallwaaren- und Maschinenfabrik Aktiengesellschaft became Rheinmetall-Borsig AG.

1951

The first post-war annual general meeting resulted in a decision to convert the capital from 75 million Reichsmarks to 15 million Deutsche Marks.

1955

The new Rheinmetall-Borsig AG stock, listed in German marks, was approved for trading and listing on the stock exchanges in Berlin, Düsseldorf and Frankfurt am Main on September 29, 1955.

1956

On June 23, 1956, the Röchling family acquired the majority stake in Rheinmetall-Borsig AG that had previously been held by Bank der Deutschen Luftfahrt AG i. L. for a price of DM 17,685,850. On November 20, the company changed its name to Rheinmetall Berlin AG (Rheinmetall AG since 1996).

1960

On April 7, 1960, the annual general meeting approved an increase in capital to DM 25 million. The Rheinmetall share price reached an all-time high of 510% of par value. New share certificates bearing the name Rheinmetall Berlin AG were issued for the first time. Previously, Rheinmetall-Borsig certificates had simply been stamped with the new name. Rheinmetall also paid a dividend again for the first time since 1944, at 6%.

1966

On August 4, 1966, the annual general meeting approved the payment of a 12% dividend for the first time, with the figure rising to 14% in 1969.

1984

Another capital increase, this time to DM 135 million, took place in September 1984. Rheinmetall Group staff had the chance to purchase employee shares in Rheinmetall Berlin AG for the first time.

1996

The MDAX share index was launched on January 19, 1996. Rheinmetall Berlin AG common stock was listed from day one. Rheinmetall remained the only stock to be listed on the index without interruption from then until March 19, 2023.

1998/99

Rheinmetall Group shares were traded in Deutsche Marks for the last time on December 30, 1998. Rheinmetall AG common stock closed at DM 43.00 and preferred stock at DM 31.30. From January 4, 1999, onward, the shares were listed in euros. The common stock opened at EUR 21.45 and preferred stock at EUR 17.00.

2000

On June 26, 2000, the common and preferred stock were converted from par-value shares to no-par-value shares and from Deutsche Marks to euros. Rheinmetall set up a dedicated Investor Relations department for the first time on August 1, 2000.

2003

On February 13, 2003, the share price of the preferred stock fell to a low of EUR 9.65.

2004

On November 23, 2004, the Röchling family of shareholders announced that they would be divesting themselves of their Rheinmetall stock. The day before, Rheinmetall preferred stock had reached a new all-time high of EUR 39.99.

2005

On May 10, 2005, it was decided at the annual general meeting to merge the common and preferred stocks. This involved the 18 million no-par-value shares without voting rights being converted to common stock (previously also amounting to 18 million). The preferred stock was traded for the final time on June 24, 2005.

2008

Starting on April 3, 2008, Rheinmetall issued employee shares for the third time in its history. The “Mein Stück Rheinmetall” [“My piece of Rheinmetall”] campaign allowed the 10,000 or so employees across the 31 sites in Germany to purchase large quantities of shares on favorable terms.

2022

Following Russia’s invasion of Ukraine, the Rheinmetall share price surpassed the EUR 200 mark for the first time in its history on March 28, 2022.

2023

On March 20, 2023, Rheinmetall stock was promoted to the DAX, the top German share index. Currently, 43,558,850 shares of Rheinmetall AG have been issued and the market capitalization is EUR 10.97 billion (July 14, 2023).

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