German arms manufacturer Rheinmetall said on Thursday it expects record sales and increased profitability this year, as the war in Ukraine drives up defence spending in the NATO bloc, in a trend set to buoy the company for years to come.

Rheinmetall expects to crack the 10-billion-euro ($10.93 billion) mark in sales for the first time in 2024, according to a company forecast that also foresees an operating profit margin of 14-15%, up from 12.8% in 2023.

"A new decade of security policy has begun," Chief Executive Armin Papperger said as the group presented its results for 2023, the first full year of the Ukraine war.

Consolidated sales rose in 2023 by 12% to just under 7.2 billion, with strong growth posted in the vehicle systems and weapon and ammunition divisions.

However, sales fell short of the company's own target of a range of 7.4 billion to 7.6 billion euros.

Germany, Kyiv's biggest military supporter in Europe, announced a turning point after Russia's invasion of Ukraine in February 2022, with a 100-billion-euro special defence fund created to modernise the Bundeswehr.

($1 = 0.9147 euros) (Reporting by Rachel More Editing by Miranda Murray)