German defense contractor Rheinmetall has revised its 2026 sales forecast downward, now expecting revenues between €13.7 billion and €14.2 billion. This adjustment, a reduction of €300 million from its previous outlook of €14.0 billion to €14.5 billion, is directly attributed to the cancellation of the F126 frigate program by the German government. Despite this setback, the company stated that it remains on track for record growth and left its other financial targets unchanged, including an operating result margin of around 19% for the 2026 fiscal year and unchanged organic sales growth targets of 28% to 31%.
The impact of the F126 frigate program's cancellation, which was announced at the end of June 2026, primarily affects Rheinmetall's naval division. The project, initially estimated at approximately €10 billion for the purchase of six anti-submarine frigates, was widely expected to be secured by Rheinmetall. This decision led to a significant intraday decline in Rheinmetall's shares, dropping as much as 19% in June 2026, marking their biggest fall since April 2025.
Despite the reduced sales outlook for 2026 due to the frigate program, Rheinmetall reported strong performance in the first half of the year. Consolidated sales reached €5.2 billion, a 39% year-on-year increase, with the consolidated operating result climbing by 74% to €786 million, achieving an operating result margin of 15.0%. The Naval Systems division, even after the cancellation, generated €334 million in sales in the four months following its takeover in late February 2026, primarily from ongoing ship newbuild programs and repair services.
