Germany’s defense sector is growing as increasing geopolitical tensions have led to a surge in orders. The value of German military exports hit 13.2 billion euros ($15.5 billion) last year, according to preliminary figures — more than double 2020’s 5.82 billion euros . Defense stocks in the country have skyrocketed over the past year as the government passed a historic fiscal package expected to boost defense and infrastructure spending even further. Shares of Germany’s largest defense company Rheinmetall , for instance, are up more than 260% over the last 12 months, while Hensoldt’s are 168% higher. RHMB-FF .GDAXI 1Y mountain Rheinmetall vs. Dax So, where — exactly — are the record orders going? Country breakdown According to the German government’s most recent export log , 80% of arms exports were to “close partner countries” during the first quarter of 2025. These include nations within the EU and beyond, including Japan, Switzerland, Australia, New Zealand, South Korea, Singapore and Ukraine. The remaining 20% of exports were to “other third countries.” Germany’s Federal Ministry for Economic Affairs does not name these, but told CNBC that Qatar and Israel are major players in this category. Think tank SIPRI notes that between 2020-2024, Germany was the world’s fifth-largest exporter of major arms. Its three largest markets over the period were Ukraine (19%), Egypt (19%) and Israel (11%). SIPRI also reveals the types of major arms sold by German companies: over the past five years, 41% were ships, followed by armoured vehicles at 16%, missiles at 11%, and engines at 9.5%. Here’s a look at some of Germany’s biggest defense companies by market cap — and where their exports go. Rheinmetall Rheinmetall, which specializes in weapons, ammunition and armored vehicles, is Germany’s largest defense company and is deeply embedded in the European defense system. According to the company’s 2024 annual report , just over a third of its sales were domestic, with the rest of Europe accounting for 46.6%, Asia and the Middle East accounting for 9.6% of sales, the Americas 7.7%, and other regions (“above all Australia”) 5.8%. MTU Aero Engines MTU Aero Engines , which creates engines for civil and military aircraft, saw a more-than 13% jump in revenue in its military division in 2024. A main source of sales was EJ200 engines that power the Eurofighter Jet, used by European, Kuwaiti, Omani, and Saudi air forces . In a geographical breakdown of MTU’s 2024 revenues, which include civil and military, North America accounted for 70% of sales. In second place was Germany, then Asia and the rest of Europe. MTU’s military business is mostly focused on Germany and Europe, a company spokesperson told CNBC. Hensoldt Hensoldt went public in 2020 after spinning off from Airbus. A specialist in electronic defense and sensor technology, the CEO said in his annual shareholder letter that the company continues to see strong demand amid the war in Ukraine, crises in the Middle East and threat from China. “The demand is globally increasing, but with a very high increase from Germany and Europe”, Hensoldt’s CFO Christian Ladurner told CNBC earlier this year. Breaking down Hensoldt’s 2024 revenue , 87.8% came from Europe, 3.7% from the Middle East, 3.5% from APAC, 2.6% from North America and 2.2% from Africa. Renk Augsburg-based Renk creates gearboxes for military vehicles, including tanks and naval vessels. The company says it supplies equipment to over 70 land forces around the world, including the EU, NATO, South Korea, India, and Israel and others. It also supplies the marines of over 40 naval forces. In its 2024 annual report , total revenue came in at 1.14 billion euros. Germany accounted for 27% of sales, the U.S. 20% and South Korea 11%. Thyssenkrupp Marine Systems (TKMS) Industrial conglomerate Thyssenkrupp is Germany’s largest steel producer, and its subsidiary ThyssenKrupp Marine Systems is a major player in defense. Just under 30% of TKMS sales in the first half of this financial year were to Germany, Austria, Switzerland and Liechtenstein, while a similar amount went to the rest of Western Europe. South America accounted for 18%, and the Middle East and Africa, 15%. Political controversy Germany’s growing role in the global arms trade has not been devoid of controversy, however. Politicians have raised concerns over the country’s exports to Israel given allegations of human rights abuses in Gaza. Germany has historically been a staunch supporter of Israel given Germany’s role in the Holocaust. In May , Germany’s Foreign Minister Johann Wadephul appeared open to the idea of reviewing weapons exports to Israel, although he told CNBC at the recent NATO summit that arms sales to Israel will continue. German companies exporting to Israel include TKMS, which built the Israeli Navy’s Sa’ar 6 frigates , and Renk and MTU , which supply parts for Israeli Merkava tanks. German exports to Ukraine have also been a source of controversy. Since Russia’s’ full-scale invasion of Ukraine in 2022, Germany has been among Ukraine’s biggest military backers . Backlash has come from both extremes of the political spectrum, however. The far-left BSW has called for a halt to German military support of Ukraine , for example, while Beatrix Von Storch, deputy leader of the far-right AfD told CNBC she wants Germany to “stop delivering weapons, stop fueling the war.”
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