Rheinmetall Ag · XETR:RHM
Rheinmetall — Q1 2018 Earnings Presentation
30 slides from Rheinmetall's earnings presentation, May 4, 2018
Slide 1: Slower start to the year – FY guidance confirmed
Slower start to the year – FY guidance confirmed Conference Call Q1 2018 Düsseldorf, 4. May 2018
Slide 2: 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
Slide 3: Q1 2018 Group Highlights
Q1 2018 Group Highlights Steady margin in a slower quarter – guidance confirmed Order Entry Sales Operating Margin EPS +39.5% €1.6bn vs PY €1.3bn -6.6% vs PY 3.7% stable €0.55 stable Q1 with good order entry lifts order backlog to > €7bn again Decline of sales by -6.6% (FX-adjusted -3.7%) to €1.260m
Slide 4: Steady margin in a quarter dampened by FX
Steady margin in a quarter dampened by FX Sales Operating result in €m in €m Operating margin in % -6.6% -6.0% 1,349 50 -36 -2 1,260 47 -53 -1 3.7% 3.7% Q1 2017 FX Operational Q1 2018 Q1 2017 FX Operational Q1 2018 IFRS 15/16 effects on sales and operating result are negligible! © Rheinmetall AG / C
Slide 5: Defence working capital build-up impacts OFCF
Defence working capital build-up impacts OFCF Operating Free Cash Flow Earnings per share Headcount in €m in € in FTE +2.5% -44.2% 0.56 0.55 21,610 22,153 -199 -287 Q1 2017 Q1 2018 31.12.2017 31.03.2018 Q1 2017 Q1 2018 © Rheinmetall AG / Conference Call Q1 2018 5
Slide 6: Balance sheet stands strong
Balance sheet stands strong Net debt Equity ratio in EUR million in % of total assets IFRS 16 IFRS 15/16 Restated for leasing Restated for effect effect liabilities and leasing liabilities €155 m Cost to obtain contract 230 31.6% 31.0% 30.4% 29.3% 75 unadjusted unadjusted -182 -219 31.03.2017 31.12.
Slide 7: Automotive Highlights
Automotive Highlights Maintaining high level of profitable growth Quarterly sales and margin development Comments on quarterly performance 737 728 684 712 751 Sales grew by 1.9% (FX-adjusted +4.8%) to €751m largely driven by non-LV-markets (Trucks +16% vs LV -0.7%) 9.2 8.8 8.6 Operating result impro
Slide 8: Margin expansion in all Divisions
Margin expansion in all Divisions Sales Automotive Operating result Automotive Mechatronics in €m in €m Slow LV-Diesel business and growth in % (FX adjusted) Margin adverse FX overcompensated by +1.9% +4.8% good demand for emission (+4.8%) 737 751 62 65 8.6% reduction and fuel efficiency products Co
Slide 9: Growth impacted by FX headwinds
Growth impacted by FX headwinds Regional sales development Automotive Regional Automotive sales growth Q1 2018 in €m in % (IHS April 2018) 1.9% 751 Germany -4.3 737 1.3 LV production 0.5% 5.1% 0.6% 2.0 5.6% Europe (excl. DE) Automotive sales 1.2 7.2% 9.4% NAFTA -2.6 Automotive sales 3.1% 3.2% -6.8 F
Slide 10: China: Start up cost and FX headwinds
China Start up cost and FX headwinds Sales in €m -1.4% Total sales of our Chinese activities grew 4.5% FX 252 12 249 adjusted while Chinese LV production contracted by - 15 3.3% in Q1 Serie 218 218 JV Sales grew organically 5.6% to €218, completely off-set by adverse FX effects 34 31 Q1 2017 FX oper
Slide 11: Q1 2018 Highlights: Defence
Q1 2018 Highlights: Defence Slower start to the year with comforting high order entry Quarterly sales and margin development Comments on quarterly performance Promising news flow on Boxer, especially Land 400 (Australia) 1,011 731 Order entry more than doubled to €857m 612 682 11.3 6.7 509 Lower sal
Slide 12: Catch-up of low Q1 during the course of the year anticipated
Catch-up of low Q1 during the course of the year anticipated Sales Defence Operating result Defence in €m Weapon and Ammunition in €m PY included two high margin orders -16.8% -3.0 Customer-induced delivery shifts 612 Missing export approvals Electronic Solutions 191 509 11.0 +10.0 Different time pa
Slide 13: Good order entry and further increase of order backlog
Good order entry and further increase of order backlog Order intake by division Order backlog profile in €m in €m per 31/03/2018 857 +5.3% +119% 6.740 ~2,500 ~2,200 ~2,000 6.402 617 391 207 Weapon and Ammunition 120 Electronic Solutions 116 Vehicle Systems 137 Consolidation 83 -15 -17 31/03/2017 31/
Slide 14: The Boxer - crystallizing a success story
Q1 2018 Highlights: Defence The Boxer - crystallizing a success story In execution In preparation 403 vehicles 200 vehicles 88 vehicles 211 vehicles 48 vehicles ~500 vehicles (negotiations) (intention) (intention) D NL LT AUS SLO GB 2021 2020 2023 2019 2026 2018 2021 2013 2018 2011 2020 © Rheinmetal
Slide 15: Q2 forecast
Q2 forecast Automotive Defence Positive market environment continues Flat sales development in Q2 expected Q2 growth above Q1 But: Q2 18 growth of >10% compared to PY sales Positive margin leverage expected adjusted for ammunition trading contract Persisting FX headwinds Higher value creation in Q2
Slide 16: FY Guidance
FY Guidance High sales growth and earnings improvement targeted Sales Operating margin 2017 2018e 2017 2018e Growth y/y in % Growth y/y in % in % in % Group 5.2 8-9 6.8 ~ 7.0 Automotive 7.7 3-4 8.7 ~ 8.5 (IHS 2.1%) (IHS 1.9%) Defence 3.1 12 - 14 5.7 6.0 - 6.5 Defence with pronounced seasonality! IHS
Slide 17: Next events and IR contacts
Next events and IR contacts Events 2018 IR Contacts Franz-Bernd Reich Conference Deutsche Bank Berlin 6-7 June Head of IR Eurosatory Investor Meeting Paris 13 June Tel: +49-211 473-4718 Email: franz-bernd.reich@rheinmetall.com Dirk Winkels Senior Investor Relations Manager Tel: +49-211 473-4749 AGM
Slide 18: APPENDIX
APPENDIX © Rheinmetall AG / Conference Call Q1 2018 18
Slide 19: Select key data: outlook 2018
Appendix Select key data: outlook 2018 Rheinmetall Group In % of sales Automotive Defence Holding cost ~€30m (PY: €23m) Capex ~5.5 - 6.0% ~3.5 - 4.5% Tax rate <30% (PY: 27%) D&A ~5.5% ~3 - 3.5% Interest expense On previous year level R&D ~5 - 5.5% ~2 - 2.5% CTA funding €40m in Q1 2018 © Rheinmetall
Slide 20: Quarterly development Group
Appendix Quarterly development Group Sales Operational results in €m in €m 1,722 169 1,459 1,349 1,366 1,260 1,011 114 731 97 612 682 509 84 24 46 50 47 737 728 684 712 751 62 67 63 65 57 -1 -10 -7 -6 -8 -13 -2 -5 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Defenc
Slide 21: Free Cash Flow summary Group
Appendix Free Cash Flow summary Group Q1 Q2 Q3 Q4 Q1 Δ Q1 in €m 2017 2017 2017 2017 2018 '17/'18 Group Net Income 28 51 43 130 27 -1 Amortization / depreciation 57 55 59 70 64 7 Change in pension accruals -34 -3 1 -8 -42 -8 Cash Flow 51 103 103 192 49 -2 Changes in working capital and other items -2
Slide 22: Quarterly development Automotive
Appendix Quarterly development Automotive Sales by division Operational results by division in €m in €m 737 751 728 67 684 712 63 65 62 57 425 407 429 382 407 47 44 43 46 40 249 251 232 236 254 17 16 13 18 14 83 93 95 87 92 7 9 9 8 8 -20 -23 -25 -18 -24 -5 -5 -5 -5 -5 Q1 2017 Q2 2017 Q3 2017 Q4 2017
Slide 23: Free Cash flow summary Automotive
Appendix Free Cash flow summary Automotive Q1 Q2 Q3 Q4 Q1 Δ Q1 in €m 2017 2017 2017 2017 2018 '17/'18 Net income 46 50 25 44 45 -1 Amortization / depreciation 32 32 37 39 36 4 Change in pension accruals - - - - -20 - Cash Flow 78 82 62 83 61 3 Changes in working capital and other items -172 20 61 68
Slide 24: Quarterly development Defence
Appendix Quarterly development Defence Sales by division Operational earnings by division in €m in €m 114 1,011 46 77 431 731 682 612 28 19 248 24 305 509 191 247 12 139 138 165 6 141 25 126 14 13 11 423 0 350 337 370 1 -1 -1 -1 297 -4 -7 -7 -19 -67 -52 -101 -90 -53 -10 -1 Q1 2017 Q2 2017 Q3 2017 Q4
Slide 25: Free Cash flow summary Defence
Appendix Free Cash flow summary Defence Q1 Q2 Q3 Q4 Q1 Δ Q1 in €m 2017 2017 2017 2017 2018 '17/'18 Net income -16 8 32 76 -21 -6 Amortization / depreciation 24 22 21 29 26 2 Change in pension accruals -3 -6 2 -2 -2 1 Cash Flow 5 24 55 103 3 -3 Changes in working capital and other items -61 -38 -88 3
Slide 26: Income statement Group
Appendix Income statement Group In €m In €m Income Statement Q1 2017 Q1 2018 Δ Q1 2017 Q1 2018 Δ Sales 1,349 1,260 -89 67 120 53 Total operating performance 1,416 1,380 -36 Net operating income (EBIT) 50 47 -3 Net interest income - 12 - 10 2 Other operating income 27 33 6 Earnings before tax (EBT) 3
Slide 27: Cash flow statement Group
Appendix Cash flow statement Group In €m Cash Flow Statement Q1 2017 Q1 2018 Δ Q1 2017 Q1 2018 Δ Net Income 28 27 -1 Dividends paid out by Rheinmetall AG 0 0 0 Amortization, depreciation and impairment 57 64 7 Other profit distributions -5 -2 3 Dotation of CTA -30 -40 -10 Sale of treasury shares 0 0
Slide 28: Balance Sheet Group
Appendix Balance Sheet Group Balance Sheet In €m 31.12.'17 01.01.'18 31.03.'18 Δ 31.12.'17 01.01.'18 31.03.'18 Δ Non-current assets 2,712 2,940 2,931 -9 Equity 1,955 1,950 1,968 17 Intangible assets 729 729 770 41 Share capital 112 112 112 0 Usage rights 155 163 8 Additional paid-in capital 540 540
Slide 29: Glossary
Appendix Glossary bn billions Operating FCF Operating free cash flow (OFCF) bp basis points Op. margin Operating margin CAGR compounded average growth rate P&L Profit & Loss Account CTA Contractual trust agreement %p percentage points D&A Depreciation & Amortization PY Previous year E Expected ROCE
Slide 30: © Rheinmetall AG / Conference Call Q1 2018
© Rheinmetall AG / Conference Call Q1 2018 30