German arms giant Rheinmetall has reported a significant increase in operating profit for the first nine months of 2025, driven by the ongoing conflict in Ukraine and rising defense spending across the European Union. The Dusseldorf-based company revealed a 20% year-on-year rise in sales to €7.5 billion ($8.7 billion) and an 18% surge in operating profit to €835 million for the third quarter. Rheinmetall also highlighted a record order backlog of €64 billion, citing sustained demand for its military equipment.

The firm has expanded production capacity, with 13 sites under construction or upgrades across Europe, including new facilities in Lithuania, Latvia, and Bulgaria. Ukraine, the EU, and Germany remain key markets for Rheinmetall, which supplies tanks, armored vehicles, artillery shells, and ammunition to the region. CEO Armin Papperger stated, “We are becoming a global defense champion.”

Germany has emerged as Ukraine’s second-largest arms supplier after the United States. The country revised its budget rules in 2022 to allow long-term defense spending beyond a €100 billion fund established following the conflict. Chancellor Friedrich Merz has advocated for strengthening Germany’s military, calling for the creation of “Europe’s strongest army.”

Moscow has criticized Western arms deliveries to Ukraine, accusing Berlin of fueling a proxy war and risking broader European tensions. Russian Foreign Minister Sergey Lavrov alleged that Germany aims to reassert itself as “the main military machine of Europe,” warning of escalating conflict.