DÜSSELDORF (dpa-AFX) - Germany's largest defense contractor Rheinmetall expects to grow even faster this year due to increased demand as a result of the Ukraine war. "With our products, we want to participate in rising budgets for military capabilities," company CEO Armin Papperger said in Düsseldorf on Thursday. "With our technologies, we want to ensure that security - the basis for our life in peace and freedom - can be protected."

In the current year, the soon-to-be Dax-listed company, which also operates as an automotive supplier, expects sales of between 7.4 and 7.6 billion euros. That would be an increase of 15 to more than 18 percent. Last year, sales increased by 13 percent to 6.4 billion.

The Group is targeting an increase in the margin based on operating profit to 12 percent. With this margin target, Rheinmetall meets the expectations of experts surveyed by Bloomberg. In terms of sales, the analysts have so far been aiming for a somewhat stronger increase. However, analyst David Perry of bank JPMorgan pointed out in an initial reaction that the outlook did not include the acquisition of Spanish ammunition manufacturer Expal. Estimates for 2023 are therefore likely to rise once the acquisition is completed.

Just a few days ago, Papperger had also once again called on European governments in an interview with the Bloomberg news agency, referring to the discussion about Ukraine's ammunition needs in the fight against Russia. "I need orders. Without orders, I produce nothing," the manager said. But also, "A shortage of ammunition will not be because of the industry."

The stock, which has risen sharply in recent months, initially fell more sharply this Thursday, but then recovered somewhat. In the afternoon, the share price was still down 1.76 percent at 240.40 euros. This extended its recent setback somewhat, after reaching a record high of just over 262 euros in the second week of March. Since Russia's invasion of Ukraine, the shares have benefited massively from the resulting increases in the defense budgets of Western countries. Before Russia's invasion of Ukraine, Rheinmetall shares had cost just under 100 euros.

As a result, Rheinmetall's stock market value has now risen to around €10.5 billion. In view of the strong share price performance, the company is moving up to the Dax and will be in the top German stock market league from March 20.

2022 operating margin increased by 1.3 percentage points to 11.8 percent. Rheinmetall had already presented key data at the beginning of January, stating that the margin had risen to at least 11.5 percent last year. On the bottom line, the Group earned €469 million, 61 percent more than in 2021. Shareholders are to receive a dividend increased by one to €4.30.

At 469 million euros, the Group's bottom line in 2022 was 61 percent higher than in 2021, and shareholders are to receive a dividend increased by one euro to 4.30 euros.

The weapons and ammunition business accounted for almost 1.5 billion euros in sales last year. Order intake there more than doubled to just under 3.0 billion euros. "This development clearly reflects the increased demand that has arisen in the ammunition sector among the armed forces of many countries in Europe and outside the continent," Rheinmetall reported.

In this context, the company highlighted a multi-year order worth €848 million for the supply of various types of ammunition to the Hungarian armed forces. Business with the German armed forces had increased to an order volume of €380 million. At 306 million euros (up 40 percent), the weapons and ammunition sector accounted for the largest share of operating profit in 2022, which totaled 754 million euros.

Papperger reiterated his company's offer to build a tank factory in Ukraine to produce the Panther type. Construction of the factory by Ukraine would take 12 to 14 months, he said.

Rheinmetall or a joint venture between Rheinmetall and the Ukrainian government would lease this factory. Subsequent production of the tank would take another few months. "There, by the time this thing is ready, we're then in late '24." The plant would be protected by Rheinmetall air defense systems.

The manager stressed that there was no decision to build either on the Ukrainian or the German side. "We assume that this decision will probably be made in the next two months," he said. Asked if Rheinmetall had plans for a Panther factory in another country, Papperger replied, "Yes, we are in a position to produce the Panther in Hungary." He did not provide further details.

Rheinmetall had unveiled the Panther model only last year at an arms fair in France. Papperger said Thursday that it would be ready for series production in the next 15 months. The company employed an average of 24,800 people last year, about 1,100 more than the previous year. Papperger expects to add another 3000 this year./tob/zb/DP/mis