Rheinmetall Ag · XETR:RHM

Rheinmetall — Investor Presentation (September 2014)

57 slides from Rheinmetall's investor presentation, September 2014

Slide 1: Rheinmetall AG Corporate Presentation September 2014
R H E I N M E TA L L A G T H E T EC H N O LO GY G RO U P FO R S EC U R I T Y A N D M O B I L I T Y Corporate Presentation | September 2014 © RHEINMETALL AG 2014
Slide 2: The Technology Group for Security and Mobility
Rheinmetall Group The Technology Group for Security and Mobility Addressing the basic needs and megatrends in Defence and Automotive Sales: € 4.6 billion Employees: 21,100 Sales: € 2.2 billion Sales: € 2.5 billion Employees: 9,200 Employees: 11,700 Basic need Conflicts motivated by ethnical and reli
Slide 3: H1 2014 at a glance
Rheinmetall Group H1 2014 at a glance ― Introductory remark: Accounting adjustments due to the new Castings JV (IFRS 5 Discontinued Operations) and due to IFRS 11 (Joint Arrangements) ― Sales increased by 8% to € 2,131 million (+ 11% adjusted for FX effects) ― Operational earnings improved by € 4 mi
Slide 4: H1 2014 in detail
Rheinmetall Group H1 2014 in detail Continuing operations H1 2013 H1 2014 ∆ H1 2014/ in € million H1 2013 Order intake 2,394 2,289 - 105 Order backlog 5,737 6,548 + 811 Sales 1,975 2,131 + 156 Operational earnings (EBIT before special items) 28 32 +4 Special items (one-offs, restructuring costs) - 4
Slide 5: Cash flow statement
Rheinmetall Group Cash flow statement Free cash flow from operations significantly lower than previous year Continuing and discontinued operations H1 2013 H1 2014 ∆ H1 2014/ in € million H1 2013 Net income - 45 -6 + 39 Amortization / depreciation 100 100 +0 Change in pension accruals -8 -2 +6 Cash f
Slide 6: Mid-term strategy program Rheinmetall 2015
Rheinmetall Group Mid-term strategy program “Rheinmetall 2015” First successful steps in 2013 ― Defence: Order intake of € 2.4 billion from non-European customers Internationalization ― Automotive: Expansion of operations in China (sales +32%), Mexico (sales +38%) and the Czech Republic (sales +14%)
Slide 7: All planned measures in implementation
Rheinmetall Group All planned measures in implementation Costs Costs Total reduction Expected Full annual 2012 2013 of employees savings savings until 2016 2014 from 2015 Combat Systems (esp. Tracked Vehicles) 17 15 240 Electronic Solutions (esp. Air Defence Zurich) 3 14 130 Wheeled Vehicles (esp. L
Slide 8: Restructuring program on track
Rheinmetall Group Restructuring program on track Actual H1 2014 Group headcount reported (as of December 31, 2012) 21,767 Planned until 2016 76% - 1,160 Change in headcount due to restructuring - 878 New recruitment due to growth in sales + 216 -621 Change in headcount due to acquisitions/divestment
Slide 9: Finance: Sound equity ratio
Rheinmetall Group Finance Sound equity ratio Equity (at year-end) in € million Rheinmetall – own shares (at year-end) in % Equity ratio in % 1,546 1,465 1,355 1,339 4.8 1,134 3.9 3.5 3.4 3.3 32% 30% 30% 30% 28% 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 © RH E I NMETAL L A G | S E P TEM BER 2
Slide 10: Solid balance sheet: credit facilities and low financial debt
Rheinmetall Group Solid balance sheet High cash credit facilities and low financial debt Cash credit facilities (as of December 31, 2013) Net financial debt (at year-end) in € million in € million Net gearing in % ∼1,400 Bilateral bank facilities ∼400 (up to 1 year) 138 130 Syndicated loan (due 98 D
Slide 11: Solid balance sheet: pension liabilities reduced
Rheinmetall Group Solid balance sheet Pension liabilities reduced, current expenses almost stable Pension liabilities and discount rate* Domestic pension payments in € million in € million resp. in % 6.00 5.50 919 5.25 5.25 891 729 677 35 610 33 32 577 3.25 31 31 31 3.25 2008 2009 2010 2011 2012 201
Slide 12: Capex and R&D at a high level
Rheinmetall Group Capex and R&D at a high level Investments in future products and orders on a high level Capex* in € million resp. in % of sales R&D (self-funded) in € million 238 230 226 208 212 207 205 198 189 145 5.1% 4.7% 4.6% 4.4% 4.2% 41 38 35 39 29 2009 2010 2011 2012 2013 2009 2010 2011 201
Slide 13: Quarterly development
Rheinmetall Group Quarterly development Sales in € million Operational earnings in € million 50 52 66 53 59 4 1 1 1 -1 1,460 153 1,100 1,054 1,031 981 892 42 112 32 0 471 414 481 30 429 45 38 44 46 47 -5 2 -4 -4 -3 -10 583 617 619 -5 552 568 -42 -4 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q2 2013 Q3
Slide 15: The divisional structure of Defence
Rheinmetall Defence The divisional structure of Defence Broad range of technologically leading products Defence: € 2.2 billion Combat Systems Electronic Solutions Wheeled Vehicles € 1.0 billion € 0.7 billion € 0.5 billion Combat Platforms Air Defence & Naval Systems Logistic Vehicles Weapon & Muniti
Slide 16: Land systems industry in Europe
Rheinmetall Defence Land systems industry in Europe Sales 2013 in € million 2,155 787 762 710 700 640 250 150 75 Rheinmetall Nexter KMW Patria* General Iveco DV Renault TD Mercedes- Scania Defence Dynamics + Panhard Benz European + Acmat Military Land Systems Vehicles * Including Nammo Source: Annua
Slide 17: Looking at the markets: defence spending by region
Rheinmetall Defence Looking at the markets Shift of budget growth from traditional to emerging markets Defence spending by region in US$ billion Europe 2013 2014 2015 2016 293 286 282 283 USA 2013 2014 2015 2016 MENA* 586 581 566 547 2013 2014 2015 2016 118 127 131 134 Asia/Pacific 2013 2014 2015 20
Slide 18: Defence: H1 2014 at a glance
Rheinmetall Defence H1 2014 at a glance ― Strong order intake of € 1,074 million, slightly lower than previous year’s H1 which contained the Qatar order of € 475 million ― Sales increased by 7% to € 895 million (+ 9% adjusted for FX effects) ― Operational earnings still not satisfying, reflecting 
Slide 19: Defence: H1 2014 in detail
Rheinmetall Defence H1 2014 in detail in € million H1 2013 H1 2014 ∆ H1 2014/ H1 2013 Order intake 1,282 1,074 - 208 Order backlog 5,383 6,174 + 791 Sales 834 895 + 61 Operational earnings (EBIT before special items) - 48 - 52 -4 Special items (one-offs, restructuring costs) - 26 -2 + 24 EBIT (repor
Slide 20: Key figures Defence by division
Rheinmetall Defence Key figures Defence by division (operational before special items) Combat Systems Electronic Solutions Wheeled Vehicles +61 +4 +21 834 895 +39 Sales 358 362 305 326 244 205 H1 2013 H1 2014 H1 2013 H1 2014 H1 2013 H1 2014 H1 2013 H1 2014 -4 -4 -4 +7 EBIT 0 before -27 -4 -22 -15 -4
Slide 21: Sales and earnings by division
Rheinmetall Defence Sales and earnings by division Growth in sales, but unfavorable product mix effects Sales Defence in € million Operational earnings Defence in € million +61 -4 895 1 834 Reasons for earnings development 362 -27 Combat Systems 358 -31 ― Ramp-up of low-margin projects ― Lower sales
Slide 22: Defence: Quarterly development
Rheinmetall Defence Quarterly development Sales Defence in € million Operational earnings Defence in € million 892 112 73 462 34 471 481 429 414 210 220 7 13 207 265 142 1 4 1 -4 -8 -3 -1 -9 -4 -5 -5 152 -5 -4 -30 -10 -1 176 140 174 217 -1 107 117 114 130 -10 -1 -22 -35 -52 -16 -21 -42 Q2 2013 Q3 20
Slide 23: Order backlog
Rheinmetall Defence Order backlog Backbone for top line growth in the medium term Order backlog as of June 2014… in € million …turning into sales in € million +15% 6,174 ~ 2 bn 1,615 5,383 1,360 1,180 06/2013 06/2014 H2 2014e 2015e 2016e 2017ff. e Expected sales covered by booked orders © RH E I NME
Slide 24: High order backlog of more than € 6 billion
Rheinmetall Defence High order backlog of more than € 6 billion Strong backbone for future sales Combat Systems Electronic Solutions W h e e l e d Ve h i c l e s ― Puma: volume > € 1 billion ― Air Defence equipment for Asian ― Military trucks for Australia ― Tank howitzers, Leopard 2 customers and B
Slide 25: Weapon and ammunition business
Rheinmetall Defence Weapon and ammunition business Despite a weak market order intake gap was reduced Sales weapon and ammunition business (as of June 30, 2014) in € million 700 682 675 665 650 643 580 580 [Order intake gap] [320] (as of January 1, 2014) 531 [290] [140] 300 220 Order intake gap 75 (
Slide 26: Rheinmetall 2015: Extension of systems and service business
Rheinmetall Defence “Rheinmetall 2015” Extension of systems- and service business Components Sales split Systems ― Turrets and weapon stations ― Tracked vehicles ― Weapon and munition ― Wheeled vehicles ― Active and passive protection ― Simulation and training ― Propellants 35-45% 40-50% ― Air defen
Slide 27: Path to improved profitability in Defence
Rheinmetall Defence Mid-term strategy program “Rheinmetall 2015” Path to improved profitability in Defence Growth by products Internationalization Cost efficiency and innovation ― Several ammunition ― Revenues in the weapon ― Cost savings of the orders were acquired in and ammunition running program
Slide 29: The divisional structure of Automotive
Rheinmetall Automotive The divisional structure of Automotive Focused on the attractive segment of powertrain technology Automotive: € 2.5 billion Hardparts Mechatronics Aftermarket € 1.1 billion € 1.2 billion € 0.3 billion Pistons Pierburg International Large-bore pistons Pierburg Pump Technology N
Slide 30: Looking at the markets: light vehicle production
Rheinmetall Automotive Looking at the markets Continuing production in China, slight increase in Europe and the US Light vehicle production by region in million units Western Europe China 2013 2014 2015 2016 13.7 14.1 14.4 14.7 2013 2014 2015 2016 19.4 21.2 23.1 24.7 USA 2013 2014 2015 2016 India Ja
Slide 31: Megatrend Protection of the environment
Rheinmetall Automotive Megatrend “Protection of the environment” Regulations as decisive growth driver for Automotive CO 2 limit g/km Global automotive CO 2 EU 130 75 Downsizing/ component market* Turbocharging CAGR USA 178 102 4.9 % Lightweight Design China 160 112 Fuel 5.7 % consumptio n 2012 2025
Slide 32: Megatrend eco-friendly driving
Rheinmetall Automotive Megatrend eco-friendly driving Essential contributions from Rheinmetall Automotive Hardparts Mechatronics Exhaust-gas recirculation Downsizing Exhaust-gas mass flow sensors Turbo- charging Pistons Pumps (oil/water/vacuum) Lightweight Design Bearings Recirculating water pumps (
Slide 33: Sales share of green technology products
Rheinmetall Automotive Megatrend “Protection of the environment” Sales share of green technology products will increase to 60% Sales share 2013 Expected sales share 2016 Products for Products for emission control and emission control and fuel consumption fuel consumption 60% 40% 51% 49% Other produc
Slide 34: Products for alternative propulsion
Rheinmetall Automotive Megatrend “Protection of the environment” Automotive products and solutions for alternative propulsion Hybrid drive Electrical drive Fuel cell Potential contribution of Rheinmetall Automotive for new engine concepts: − Components for reducing emissions − Range extenders − Cool
Slide 35: Automotive: H1 2014 at a glance
Rheinmetall Automotive H1 2014 at a glance ― Sales up by 8% to € 1,236 million (+ 12% adjusted for FX effects), whereas global market grew by 3.5% ― Headcount reduced by 2% to 10,967 employees ― Operational earnings improved by 22% to € 93 million with an operational margin of 7.5%, compared to 6.7%
Slide 36: Automotive: Quarterly development
Rheinmetall Automotive Quarterly development Sales Automotive in € million Operational earnings Automotive in € million 50 52 66 53 59 4 1 1 1 -1 617 619 46 47 583 568 45 44 552 238 235 12 38 16 17 227 13 218 222 14 22 22 25 25 302 296 332 333 285 17 10 7 70 67 65 67 68 6 7 6 1 1 2 -16 -18 -15 -20 -
Slide 37: Automotive: H1 2014 in detail
Rheinmetall Automotive H1 2014 in detail Continuing operations H1 2013 H1 2014 ∆ H1 2014/ in € million H1 2013 Sales 1,141 1,236 + 95 Operational earnings (EBIT before special items) 76 93 + 17 Special items (one-offs, restructuring costs) - 21 0 + 21 EBIT (reported) 55 93 + 38 Employees 11,219 10,9
Slide 38: Long-term partnership with HASCO
Rheinmetall Automotive Long-term partnership with HASCO* New joint venture for commonly developing the castings business Existing 50/50 JVs with HASCO* Pistons (KSSP) Castings (KPSNC) Pumps (PHP) Rheinmetall Automotive 50% 1997 2001 2013 Castings (ATAG) JV sales (100%) in € million +21% 50% 412 HASC
Slide 39: Internationalization: sales and earnings in China
Rheinmetall Automotive Internationalization Strong increase of sales and earnings in China expected Sales in € million EBIT in € million x2.5 x2.5 WFOEs WFOEs 29 13 JVs* JVs* 8 6 499 0 39 388 0 31 258 298 22 15 -1 -5 2010 2011 2012 2013 2016e 2010 2011 2012 2013 2016e * Rheinmetall Automotive owns 5
Slide 40: Pro forma calculation: growth in China
Rheinmetall Automotive Pro forma calculation Strong growth in China Sales Automotive in € million Operational earnings Automotive in € million Reported Incl. 100% China JVs Incl. at-equity result Incl. 100% China JVs +7% +17% 2,957 +15% 183 +4% 2,757 499 160 156 39 2,369 2,458 388 139 16 31 14 2,369
Slide 41: Sales by region and customer
Rheinmetall Automotive Sales growth due to European and American markets Automotive benefits from balanced customer base Sales by region in € million Sales by customer in % +4% Non-LV business: 30% 2,458 2,369 Trucks/Others VW/Porsche/Audi Germany Germany Ships/ 13% 16% 549 576 Power plants/ MIR** 6
Slide 42: Strong growth in non-LV business
Rheinmetall Automotive Strong growth in non-LV business Sales of truck business doubled within 5 years Sales Automotive and non-LV sales in € million Non-LV sales and truck business sales in € million 2,458 2,369 CAGR 2,313 +13% 740 705 714 1,982 578 448 1,522 CAGR 705 714 740 +19% 578 448 204 200 2
Slide 43: Key figures Automotive by division
Rheinmetall Automotive Key figures Automotive by division (operational before special items) Continuing operations Hardparts Mechatronics Aftermarket +95 +25 +75 1,236 -1 Sales 665 1,141 448 473 590 136 135 H1 2013 H1 2014 H1 2013 H1 2014 H1 2013 H1 2014 H1 2013 H1 2014 +17 EBIT +12 +11 before 93 -2
Slide 44: Sales and earnings by division
Rheinmetall Automotive Sales and earnings by division Growth in sales and better operational performance Sales Automotive in € million Operational earnings Automotive in € million +95 +17 1,236 93 1,141 Reasons for earnings development 76 33 473 448 Hardparts 22 Higher sales and improved operational
Slide 45: Increasing sales due to growing European markets
Rheinmetall Automotive Increasing sales due to growing European markets Especially Europe-based Mechatronics benefits from market development Sales by region in € million Divisional sales share* in % +95 1,141 1,236 1,236 100% 1,141 266 39% 38% Hardparts 246 69% 72% 623 546 52% 54% Mechatronics 105
Slide 46: Sales by region and by division
Rheinmetall Automotive Sales by region and by division Reflecting strong development of European markets Sales Mechatronics in € million Sales Hardparts in € million Sales Aftermarket in € million +69 639 +26 570 463 148 437 126 93 93 -1 56% 84% 55% 135 134 82% 146 167 391 24 25 339 65% 67% 49 53 65
Slide 47: Internationalization: headcount in low-cost countries
Rheinmetall Automotive Internationalization Headcount in low-cost countries continuously increases Split of headcount by high cost- and low-cost countries in FTE* resp. % 12,400 11,699 11,744 10,875 Low-cost 20% countries 40% 35% 30% High-cost 80% countries 70% 65% 60% 2005 ….. 2010 ….. 2013 ….. …..
Slide 48: Rheinmetall 2015: Automotive product portfolio
Rheinmetall Automotive “Rheinmetall 2015” Automotive well-positioned with large product portfolio Mechatronics Sales split 2013* Hardparts ― Exhaust gas recirculation ― LV- and truck pistons ― Solenoid valves ― Large-bore pistons ― Actuators ― Bearings ― Water-, oil- and vacuum pumps 45% 44% ― Conti
Slide 49: Path to improved profitability in Automotive
Rheinmetall Automotive Mid-term strategy program “Rheinmetall 2015” Path to improved profitability in Automotive Growth by products Internationalization Cost efficiency and innovation ― Expanding business ― Realization of growth ― Rightsizing of European activities in growth potential driven by capa
Slide 51: Market environment of the two segments
Rheinmetall Group Market environment of the two segments D e fe n c e Automotive ― Shrinking budgets in traditional ― Global growth in LV production (+ 3%) markets, strong growth potential in ― Strong growth in large markets China emerging markets (+ 9%) and North America (+ 5%) ― Beginning public d
Slide 52: Outlook 2014 updated
Rheinmetall Group Due to cancellation of export permit and formation of new Castings JV Outlook 2014 updated € billion Sales Operational earnings original updated original updated Group 4.8 - 4.9 4.6 - 4.7 230 - 250 200 - 220 External effect: German govt. cancelled Defence 2.3 2.3 85 - 95 65 - 75 ex
Slide 53: Mid-term targets out of Rheinmetall 2015
Rheinmetall Group Mid-term targets out of “Rheinmetall 2015” Margin targets Assumptions and drivers  Recovery of ammunition markets Defence 7 - 9%  Savings effects out of restructuring  Improvement of project management  Recovery of European car production and strong growth in China Automotive 8
Slide 55: Group report
Rheinmetall Group Group report Consolidated income statement Consolidated balance statement in € million 2009 2010 2011 2012* 2013 in € million 2009 2010 2011 2012* 2013 Sales 3,420 3,989 4,454 4,704 4,613 Total assets 3,835 4,460 4,832 4,899 4,857 EBITDA 180 464 538 490 324 Total equity 1,134 1,355
Slide 56: Segment report
Rheinmetall Group Segment report in € million 2009 2010 2011 2012* 2013 Sales 1,898 2,007 2,141 2,335 2,155 Order intake 3,153 1,977 1,831 2,933 3,339 Order backlog (Dec. 31) 4,590 4,772 4,541 4,987 6,050 Rheinmetall EBITDA 263 297 303 262 96 Defence Operational earnings 215 226 211 145 60 EBIT 215
Slide 57: Disclaimer
Rheinmetall Group 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

Rheinmetall — Investor Presentation (September 2014) on 6ix

Rheinmetall — Investor Presentation (September 2014)

Slide 1: Rheinmetall AG Corporate Presentation September 2014

Slide 2: The Technology Group for Security and Mobility

Slide 3: H1 2014 at a glance

Slide 4: H1 2014 in detail

Slide 5: Cash flow statement

Slide 6: Mid-term strategy program Rheinmetall 2015

Slide 7: All planned measures in implementation

Slide 8: Restructuring program on track

Slide 9: Finance: Sound equity ratio

Slide 10: Solid balance sheet: credit facilities and low financial debt

Slide 11: Solid balance sheet: pension liabilities reduced

Slide 12: Capex and R&D at a high level

Slide 13: Quarterly development

Slide 14: Rheinmetall Defence

Slide 15: The divisional structure of Defence

Slide 16: Land systems industry in Europe

Slide 17: Looking at the markets: defence spending by region

Slide 18: Defence: H1 2014 at a glance

Slide 19: Defence: H1 2014 in detail

Slide 20: Key figures Defence by division

Slide 21: Sales and earnings by division

Slide 22: Defence: Quarterly development

Slide 23: Order backlog

Slide 24: High order backlog of more than € 6 billion

Slide 25: Weapon and ammunition business

Slide 26: Rheinmetall 2015: Extension of systems and service business

Slide 27: Path to improved profitability in Defence

Slide 28: Rheinmetall Automotive

Slide 29: The divisional structure of Automotive

Slide 30: Looking at the markets: light vehicle production

Slide 31: Megatrend Protection of the environment

Slide 32: Megatrend eco-friendly driving

Slide 33: Sales share of green technology products

Slide 34: Products for alternative propulsion

Slide 35: Automotive: H1 2014 at a glance

Slide 36: Automotive: Quarterly development

Slide 37: Automotive: H1 2014 in detail

Slide 38: Long-term partnership with HASCO

Slide 39: Internationalization: sales and earnings in China

Slide 40: Pro forma calculation: growth in China

Slide 41: Sales by region and customer

Slide 42: Strong growth in non-LV business

Slide 43: Key figures Automotive by division

Slide 44: Sales and earnings by division

Slide 45: Increasing sales due to growing European markets

Slide 46: Sales by region and by division

Slide 47: Internationalization: headcount in low-cost countries

Slide 48: Rheinmetall 2015: Automotive product portfolio

Slide 49: Path to improved profitability in Automotive

Slide 50: Outlook

Slide 51: Market environment of the two segments

Slide 52: Outlook 2014 updated

Slide 53: Mid-term targets out of Rheinmetall 2015

Slide 54: Annex

Slide 55: Group report

Slide 56: Segment report

Slide 57: Disclaimer