Rheinmetall Ag · XETR:RHM
Rheinmetall — Q3 2012 Earnings Presentation
35 slides from Rheinmetall's earnings presentation, Nov 9, 2012
Slide 1: International Technology Group for Defence and Automotive
Q1-3 2012 I Düsseldorf, 9 November 2012 International Technology Group for Defence and Automotive © Rheinmetall 2012
Slide 2: Rheinmetall Group Key messages Q1-3 2012
Rheinmetall Group Rheinmetall Group Key messages Q1-3 2012 Sales increased by € 170 million Earnings declined: EBIT lowered by € 26 million to € 177 million, EPS on previous year’s level at € 3.06 Operating free cash flow € 36 million better than in Q1-3 2011 Outlook FY 2012 adjusted: • Sales expect
Slide 3: Rheinmetall Defence
RHEINMETALL DEFENCE © Rheinmetall 2012
Slide 4: Rheinmetall Defence Key messages
Rheinmetall Defence Rheinmetall Defence Key messages Strong order intake of € 1,578 million, 21% more than € 1,303 million in Q1-3 2011 Well-filled order pipeline confirms success of internationalization strategy Sales grew by 7% to € 1,470 million, with RMMV fully consolidated EBIT of € 79 million
Slide 5: Defence sales and earnings
Rheinmetall Defence Defence sales and earnings Order intake remains strong, earnings squeezed Defence Q1-3 Q1-3 Δ Q1-3 € million 2011 2012 (2012/2011) Order intake 1,303 1,578 + 275 + 21 % Order backlog 4,746 4,528 - 218 -5% Sales 1,370 1,470 + 100 +7% EBITDA 161 144 - 17 - 11 % EBIT 104 79 - 25 - 2
Slide 6: Defence cash flow
Rheinmetall Defence Defence cash flow Operating cash flow improved due to successful working capital program Defence Q1-3 Q1-3 Δ Q1-3 € million 2011 2012 (2012/2011) Net income 69 55 - 14 Amortization / depreciation 57 65 +8 Change in pension accruals -3 -8 -5 Cash flow 123 112 - 11 Changes in worki
Slide 7: Rheinmetall Defence Development of sales and earnings (H1)
Rheinmetall Defence Rheinmetall Defence Development of sales and earnings (H1) Sales bridge H1 2011 to H1 2012 € million -30 1,010 0 +136 904 0 EBIT bridge H1 2011 to H1 2012 € million +20 -9 62 -10 -7 56 H1 2011 One-offs Logistic Volume effect Product/project H1 2012 vehicles mix Q1-3 2012 © Rheinm
Slide 8: Rheinmetall Defence Development of sales and earnings (Q3)
Rheinmetall Defence Rheinmetall Defence Development of sales and earnings (Q3) Sales bridge Q3 2011 to Q3 2012 € million 466 +47 -43 0 460 -10 0 EBIT bridge Q3 2011 to Q3 2012 € million -1 42 +17 -13 -14 -8 23 Q3 2011 One-offs Deconsolidation Logistic Volume effect Product/project Q3 2012 airborne v
Slide 9: Rheinmetall Defence Development of sales and earnings (Q1-3)
Rheinmetall Defence Rheinmetall Defence Development of sales and earnings (Q1-3) Sales bridge Q1-3 2011 to Q1-3 2012 € million -73 1,470 +183 0 1,370 0 -10 EBIT bridge Q1-3 2011 to Q1-3 2012 € million -1 +37 -22 104 -24 -15 79 Q1-3 2011 One-offs Deconsolidation Logistic Volume Effect Product/project
Slide 10: Split of order intake by regions
Rheinmetall Defence Split of order intake by regions Order intake improved by 21 percent Order intake Q1-3 2011 vs. Q1-3 2012 € million +21% 1,578 Domestic orders still stable regarding Germany absolute numbers, but relatively losing 1,303 27% significance Germany 31% Europe* Asia and Middle East be
Slide 11: New orders
Rheinmetall Defence New orders Competitive products strengthen the order backlog Air defence systems and Participation in Canadian Weapon station components services for Asian customers wheeled vehicle program for US forces As indicated in Q2: Two orders Assembly and services for Electro-optical com
Slide 12: Expected order intake
Rheinmetall Defence Expected order intake Promising order pipeline for the near-term future Next step of the industrial Orders for weapon and Progress in Australian cooperation with Algeria ammunition wheeled vehicles tender Contract for 54 Fox vehicles signed Naval ammunition for a MENA Negotiation
Slide 13: Cost efficiency and structural optimization: Tracked Vehicles
Rheinmetall Defence Cost efficiency and structural optimization Focusing forces in the Tracked Vehicles business Tracked Vehicles Reduction of 60 workers in Kassel in 2013 and up to 90 in Kiel in 2014 Shift of employees from Kiel and Kassel to Unterlüß Significant reduction of leased workers Commonl
Slide 14: Cost efficiency: Adjusting headcount of Air Defence
Rheinmetall Defence Cost efficiency Adjusting headcount of the Air Defence business unit Air Defence Currently in negotiations with employees’ representatives Staff reduction by 80 employees to 700 Restructuring costs: around € 3 million Target: Cost savings of € 7 million per year from 2014 onwards
Slide 15: Cost efficiency: Wheeled Vehicles division
Rheinmetall Defence Cost efficiency Considering the changing markets in the Wheeled Vehicles division Wheeled Vehicles Significant change of the market environment: Decision in the South African military vehicle program postponed by five years Finalization of the Australian tender expected for 2013:
Slide 16: Rheinmetall Automotive
RHEINMETALL AUTOMOTIVE © Rheinmetall 2012
Slide 17: Rheinmetall Automotive Key messages
Rheinmetall Automotive Rheinmetall Automotive Key messages Again strong performance in Q1-3 2012: • Sales raised by 4% to € 1,805 million • EBIT unchanged with € 115 million Increased investment in Clean & Lean products as well as in further globalization (esp. China, India, Mexico): + € 31 million
Slide 18: Automotive sales and earnings
Rheinmetall Automotive Automotive sales and earnings Sales and earnings still at a remarkable level Automotive Q1-3 Q1-3 Δ Q1-3 € million 2011 2012 (2012/2011) Sales 1,735 1,805 + 70 +4% EBITDA 191 194 +3 +2% EBIT 115 115 +0 +0% EBIT margin (%) 6.6 6.4 - 0.2pp EBT 104 104 +0 +0% Capex 74 105 + 31 +
Slide 19: Automotive cash flow
Rheinmetall Automotive Automotive cash flow Slight increase of working capital due to growth Automotive Q1-3 Q1-3 Δ Q1-3 € million 2011 2012 (2012/2011) Net income 76 76 +0 Amortization / depreciation 76 79 +3 Change in pension accruals -5 -4 +1 Cash flow 147 151 +4 Changes in working capital and ot
Slide 20: LV production expected to grow further in the long term
Rheinmetall Automotive LV production expected to grow further in the long term Globally increasing, but regionwise with different dynamics Expected production of light vehicles by region in thousand units +20% CAGR: +4.6% 94,775 90,648 85,664 79,216 80,294 World +7% CAGR: +3.5% 38,797 40,677 Triad 3
Slide 21: Product portfolio corresponding to global market trends
Rheinmetall Automotive Product portfolio corresponding to global market trends Main reason for outperforming the Western European market Growth rate (quarter compared to previous year’s quarter) in % 60 World LV production Triad LV production Western Europe LV production 40 20 Sales Automotive 0 -20
Slide 22: Outperformance of the European market since mid of 2010
Rheinmetall Automotive Outperformance of the European market since the mid of 2010 Confirming the strategic focus of the product portfolio Difference in quarterly growth rate of LV production Western Europe and Sales Automotive +26.1pp +24.7pp +20.5pp +21.0pp +11.7pp +12.6pp +13.0pp +10.2pp +10.6pp
Slide 23: Dynamic markets: China
Rheinmetall Automotive Dynamic markets: China Sales and earnings still growing Sales Joint Ventures* € million EBIT Joint Ventures* € million +36% 298 +44% 219 22 16 Q1-3 2011 Q1-3 2012 Q1-3 2011 Q1-3 2012 Sales WFOEs** € million LV production China million units +9% +32% 8 6 11.426 12.401 Q1-3 2011
Slide 24: Dynamic markets: India
Rheinmetall Automotive Dynamic markets: India Strong revenues caused by both organic growth and strategic acquisition Sales KSPG India € million Key facts KSPG India Integration of Kirloskar Bearings – included in +207% the figures since Q4 2011 – completed 31 Employees: 602 (as of 09/30/2012) Kirlo
Slide 25: Group
GROUP © Rheinmetall 2012
Slide 26: Group sales and earnings (1)
Rheinmetall Group Group sales and earnings (1) Top-line growth, but weaker earnings Group Q1-3 Q1-3 Δ Q1-3 € million 2011 2012 (2012/2011) Sales 3,105 3,275 + 170 +5% EBITDA 336 321 - 15 -4% EBITDA margin (%) 10.8 9.8 - 1.0pp Amortization / depreciation 133 144 + 11 +8% EBIT 203 177 - 26 - 13 % EBIT
Slide 27: Group sales and earnings (2)
Rheinmetall Group Group sales and earnings (2) EPS on previous year’s level Group Q1-3 Q1-3 Δ Q1-3 € million 2011 2012 (2012/2011) EBT 161 136 - 25 - 15 % Taxes - 42 - 28 + 14 + 34 % Tax rate (%) 26 21 - 5pp Group net income 119 108 - 11 -9% Minority interests 2 -9 - 11 Group earnings (after minorit
Slide 28: Group cash flow
Rheinmetall Group Group cash flow Benefitting from strongly improved working capital in Defence Group Q1-3 Q1-3 Δ Q1-3 € million 2011 2012 (2012/2011) Group net income 119 108 - 11 Amortization / depreciation 133 144 + 11 Change in pension accruals -9 - 11 -2 Cash flow 243 241 -2 Changes in working
Slide 29: Rheinmetall Group Outlook 2012 adjusted
Rheinmetall Group Rheinmetall Group Outlook 2012 adjusted Sales EBIT € billion € million Original Updated Original Updated 2011 Outlook Outlook 2011 Outlook Outlook on previous Group 4.5 approx. 4.9 approx. 4.8 354 year’s level approx. 300 slightly below Defence 2.1 approx. 2.5 approx. 2.4 223 previ
Slide 30: Appendix
APPENDIX © Rheinmetall 2012
Slide 31: New divisional structure in Defence
New divisional structure in Defence Sales (FY 2011)*: € 2.2 billion Combat Systems Electronic Solutions Wheeled Vehicles € 1.1 billion* € 0.8 billion* € 0.3 billion* Combat Platforms Air Defence Systems Logistic Vehicles** Infantry Defence Electronics Tactical Vehicles Protection Systems Electro-opt
Slide 32: Key figures Defence by divisions
Key figures Defence by divisions Combat Systems Electronic Solutions Wheeled Vehicles +7% -2% -15% 1,470 +118% Sales 1,370 718 701 556 474 378 173 Q1-3 2011 Q1-3 2012 Q1-3 2011 Q1-3 2012 Q1-3 2011 Q1-3 2012 Q1-3 2011 Q1-3 2012 -24% -34% 0% EBIT 104 79 59 59 59 -38% 39 Q1-3 2011 Q1-3 2012 Q1-3 2011 Q
Slide 33: New divisional structure in Automotive
New divisional structure in Automotive Sales (FY 2011)*: € 2.4 billion Hardparts Mechatronics Motor Service € 1.1 billion* € 1.0 billion* € 0.3 billion* Pistons Pierburg International Aluminum Technology Pierburg Pump Technology Domestic Plain Bearings Large Bore Pistons * Inter-company sales not el
Slide 34: Key figures Automotive by divisions
Key figures Automotive by divisions Hardparts Mechatronics Motor Service +4% +3% +6% 1,735 1,805 +2% Sales 809 837 776 823 199 204 Q1-3 2011 Q1-3 2012 Q1-3 2011 Q1-3 2012 Q1-3 2011 Q1-3 2012 Q1-3 2011 Q1-3 2012 0% +13% -6% -12% EBIT 115 115 45 51 56 52 21 18 Q1-3 2011 Q1-3 2012 Q1-3 2011 Q1-3 2012 Q
Slide 35: Disclaimer
Disclaimer This presentation contains “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995 with respect to Rheinmetall’s financial condition, results of operations and businesses and certain of Rheinmetall’s plans and objectives. These forward-lo