Slide 1: Technologies for Security and Mobility: Conference Call Fiscal Year 2015
R H E I N M E TA L L A G TECHNOLOGIES FOR SECURITY AND MOBILITY Conference Call Fiscal Year 2015 Düsseldorf | 17 March 2016 © RHEINMETALL AG 2016
Slide 2: New headquarter: Rheinmetall Wings Düsseldorf
Rheinmetall Group New headquarter: „Rheinmetall Wings“ Düsseldorf © RHEINMETALL AG 2016 | FY 2015 REPORT | 17 March 2016 2
Slide 3: Review 2015: Strong sales and earnings growth
Rheinmetall Group Review 2015 Strong sales and earnings growth Rheinmetall Group: targets achieved, Sales for the first time above EUR 5 billion Automotive: Record sales and earnings Defence: Turnaround accomplished, order flow underpins strong market position Restructuring phase 2013 - 2015
Slide 4: Fiscal year 2015 in detail: Strong incremental sales
Rheinmetall Group Fiscal year 2015 in detail Strong incremental sales, moderate increase of headcount Sales in EUR million Order backlog in EUR million Headcount in full-time equivalents +3% -1% 20,166 20,676 6,932 6,867 +11% 5,183 4,688 2014 2015 2014 2015 2014 2015 © RHEINMETALL AG 2016 | FY 2015
Slide 5: Fiscal year 2015 in detail: Earnings boosted by turnaround in Defence
Rheinmetall Group Fiscal year 2015 in detail Earnings boosted by turnaround in Defence EBITDA in EUR million Operational earnings / EBIT in EUR million EBT in EUR million Operational margin / EBIT margin in % 490 287 287 299 221 160 102 3.4% 2.2% 5.5% 5.5% 22 2014 2015 2014 2015 2014 2015 © RHEINMET
Slide 6: Fiscal year 2015 in detail: Increased dividend proposal of EUR 1.10
Rheinmetall Group Fiscal year 2015 in detail Increased dividend proposal of EUR 1.10 Net income in EUR million Earnings per share in EUR Dividend per share in EUR Payout ratio in % 160 3.88 1.10* 21 0.47 0.30 28% 64% 2014 2015 2014 2015 2014 2015 * Proposal to the Annual General Meeting © RHEINMETAL
Slide 7: Fiscal year 2015 in detail: Net financial debt lowered
Rheinmetall Group Fiscal year 2015 in detail Net financial debt lowered by capital increase and improved earnings Equity in EUR million Net financial debt in EUR million Net debt/EBITDA-ratio Equity ratio in % of total assets 1,562 1,197 330 1,1 27% 23% 81 0,2 2014 2015 2014 2015 2014 2015 © RHEINME
Slide 8: Fiscal year 2015 in detail: Positive free cash flow
Rheinmetall Group Fiscal year 2015 in detail Positive free cash flow by improved earnings and working capital 2014 in EUR million 2015 in EUR million 206 -310 160 205 -284 21 -27 29 Net Depr./ Capex Working Free cash income ∆Pensions (Cash-out) capital/ flow from -182 others operations -124 Net Depr
Slide 9: Rheinmetall Automotive
Rheinmetall Automotive © RHEINMETALL AG 2016 | FY 2015 REPORT | 17 March 2016 9
Slide 10: Review 2015: A strong year for Automotive
Rheinmetall Automotive Review 2015 A strong year for Automotive Dynamic sales growth by 6%, clearly above market growth of 1% EBIT margin of 8.3% representing an all-time high Main contribution to sales growth by Mechatronics division (+10%) China: Solid sales growth, despite a less dynamic
Slide 11: Top- and bottom line growth: Strong contribution from Mechatronics
Rheinmetall Automotive Top- and bottom line growth Strong sales and earnings contribution from Mechatronics Sales Automotive in EUR million Operational earnings Automotive in EUR million 216 2,592 2,448 184 REASONS FOR EARNINGS DEVELOPMENT Mechatronics 118 - Strong profitable growth 1,450 96 1,322 H
Slide 12: Automotive: Organic growth, main strategic drivers
Rheinmetall Automotive Organic growth Main strategic drivers AUTOMOTIVE O R G A N I C G R O W T H Market growth More content Higher value of products Light Vehicles (LV) Increasing number of Innovative solutions with Globally rising production Rheinmetall products per higher price level, driven by c
Slide 13: Growth driver Market growth: Global demand for light vehicles
Rheinmetall Automotive Growth driver “Market growth” Ongoing increase of global demand for light vehicles Forecast global light vehicle (LV) production in million units 120 112 110 2 − Light vehicles remain on 100 89 21 growth path 90 0,3 2014-2015: 1% 2 80 2015-2025 (CAGR): 3% 70 − Combustion engin
Slide 14: Growth driver Market growth: China continuing growth
Rheinmetall Automotive Growth driver “Market growth” China: Continuing growth, but with lower rates LV production in million units Sales in EUR million CAGR +4% 2x CAGR Market 30.0 26.8 1.500 23.6 24.9 22.6 20.0 1.000 871 681 JVs 10.0 500 785 Headcount: 2.081 628 53 86 WFOEs 0 Locations: 11 plants 0
Slide 15: Growth driver Market growth: India
Rheinmetall Automotive Growth driver “Market growth” India: Well prepared to take advantage of increasing demand for mobility LV production in million units Sales in EUR million CAGR +10% CAGR >25% 100 6.0 5.1 3.8 4.1 4.0 3.6 50 39 Headcount: 509 30 2.0 Locations: 3 plants 0 0 20% stake in Shriram 2
Slide 16: Growth driver Non-LV business: Truck engine production
Rheinmetall Automotive Growth driver “Non-LV business” Truck engine production heading towards a growth phase Forecast truck engine production in million units Rheinmetall Automotive sales of non-LV and truck business in EUR million 5.0 CAGR 2010-2015 +7% 4.0 802 827 CAGR 2010-2015 -2% 4.0 735 0.2 7
Slide 17: Growth driver More content per car: Trend to hybrid vehicles
Rheinmetall Automotive Growth driver “More content per car/hybridization” Trend to hybrid vehicles expected to accelerate Forecast production of hybrid vehicles* in million units 25 21.5 − Stricter emission regulations 20 increase attractiveness of 5.9 alternative energy concepts 15 − Hybrid powertr
Slide 18: More content per car: Traditional product portfolio
Rheinmetall Automotive Growth driver “More content per car” Trend of hybridization opens potential for more Rheinmetall products The traditional product portfolio for combustion engines … Actuators Engine bearings Solenoid valves Electric throttle bodies Pistons Mechanical coolant pumps Engine block
Slide 19: More content per car: Products for hybrid engines
Rheinmetall Automotive Growth driver “More content per car” Trend of hybridization opens potential for more Rheinmetall products … will be enlarged by products for hybrid engines. Actuators Engine bearings Solenoid valves Electric throttle bodies Electrical coolant valve Pistons Structural Mechanica
Slide 20: Higher value of products: Electrification and downsizing
Rheinmetall Automotive Growth driver “Higher value of products” Electrification and downsizing require more sophisticated products Coolant pump Exhaust gas recirculation Valve, cooler, bypass Mechanical Electrical EUR 9-15 >6x EUR 55-85 Valve EUR 20-25 >3x and bypass actuator EUR 70-90 Oil pump Pist
Slide 21: Strategic target: Engine neutrality
Rheinmetall Automotive Growth drivers “More content per car” and “Higher value of products” Strategic target: Engine neutrality Product Portfolio Gasoline Diesel Hybrid E-drive Divisions Mechatronics Technological developments in line with customer requirements (e.g., electric and/or varia
Slide 22: Rheinmetall Defence
Rheinmetall Defence © RHEINMETALL AG 2016 | FY 2015 REPORT | 17 March 2016 22
Slide 23: Review on 2015: Turnaround of Rheinmetall Defence successful
Rheinmetall Defence Review on 2015 Turnaround of Rheinmetall Defence successful Encouraging order flow leads to a stable book-to-bill ratio above one Sales pushed by 16% to €2.6 billion Strong turnaround due to growing organic sales, successfully finalized restructuring program and improving p
Slide 24: The new Vehicle Systems Division
Rheinmetall Defence Rheinmetall Defence The new Vehicle Systems Division – a competitive international supplier Leading European supplier of military vehicle systems with expected sales of €1.4 billion (in 2016) and a strong order backlog of €4.0 billion (end of 2015) Sole provider of the comple
Slide 25: Turnaround of the operational performance
Rheinmetall Defence Turnaround of the operational performance Return to profitability by operational improvements and no further one-offs Sales Defence in EUR million Operational earnings Defence in EUR million REASONS FOR EARNINGS DEVELOPMENT 90 2,591 Combat Systems ― Order execution boosts sales 2
Slide 26: Defence: Organic growth, main strategic drivers
Rheinmetall Defence Organic growth Main strategic drivers DEFENCE O R G A N I C G R O W T H High order potential High order backlog New markets in German home market Secures solid future Approaching new markets growth of Rheinmetall with local partners and Global market growth Defence in mid-term wi
Slide 27: Growth driver High order potential Germany
Rheinmetall Defence Growth driver “High order potential Germany” A number of projects targeted by Rheinmetall Fox Leopard 2 Marder Upgrade order (2016) Upgrade order for 104 tanks Lifetime extension Potential ~€200 mill. Potential up to €200 mill. Potential ~€75 million Additional 6x6-vehicles Mid t
Slide 28: Growth driver Global markets: The Defence macro picture is changing
Rheinmetall Defence Growth driver: Global markets The Defence macro picture is changing GERMANY Intention to return to fully RUSSIA equipped forces Huge armed forces modernization Necessity to spend EUR 130 billion program launched in spite of lower USA for armament up to 2030 growth rates of
Slide 29: Growth driver High order backlog
Rheinmetall Defence Growth driver “High order backlog” Increased order backlog leads to improved visibility of mid-term sales Order intake by region in EUR million Order backlog… …turning into sales in EUR million 1,977 2,694 +35% Rest of 6,422 the World 16% 23% 43% 4,772 ~2,400 Asia/MENA 27% 55% ~2
Slide 30: Growth driver New markets: Local industrial partnerships
Rheinmetall Defence Growth driver “New markets” Expanding local footprint by individual industrial partnerships POLAND TURKEY — Cooperation with the Polish defence industry ― Rheinmetall Turk as a local entity is a for a major Leopard modernization program, designated partner of joint ventures with
Slide 31: Growth driver New products: Technologies ready for market launch
Rheinmetall Defence Growth driver “New products” New technologies and products ready for market launch M B T M O D E R N I Z AT I O N / N E W C A L I B E R NEW CONCEPT MGCS* — Digital turret core system — MGCS concept for new main battle tank started — New high-pressure 120mm cannon, — Currently in
Slide 32: Rheinmetall Group
Rheinmetall Group © RHEINMETALL AG 2016 | FY 2015 REPORT | 17 March 2016 32
Slide 33: Short-term perspective: Outlook fiscal year 2016
Rheinmetall Group Short-term perspective Outlook fiscal year 2016 Sales in € billion Operational margin 2015 2016 2015 2016 Group 5.2 ~ 5.5 5.5% ~ 6% Defence 2.6 ~ 2.8 3.5% 4.5-5% Automotive 2.6 ~ 2.7 8.3% ~ 8% Assumptions ― Key large-scale projects in Defence to be realized as scheduled, no signifi
Slide 34: Mid-term perspective: Looking ahead
Rheinmetall Group Mid-term perspective Looking ahead: Markets and Rheinmetall Markets with good mid-term perspectives: Global growth in Defence and Automotive MARKET SALES OPERATIONAL CAGR 2015-2018e MARGIN AUTOMOTIVE 2.8% ~ 4-5% ~ 8% DEFENCE 1.1% ~ 8% ~ 6-7% Changing markets Sustainable growth of
Slide 35: Appendix: Rheinmetall Group
Appendix: Rheinmetall Group © RHEINMETALL AG 2016 | FY 2015 REPORT | 17 March 2016 35
Slide 36: Key figures: Group
Appendix: Rheinmetall Group Key figures: Group in EUR million 2011 2012 2013 2014 2015 Balance sheet Total assets 4,832 4,899 4,866 5,271 5,730 Shareholder‘s equity 1,546 1,465 1,339 1,197 1,562 Equity ratio (in %) 32.0 29.9 27.5 22.7 27.3 Pension liabilities 729 919 891 1,121 1,128 Net financial de
Slide 37: Key figures: Segments 2011 – 2015
Appendix: Rheinmetall Group Key figures: Segments 2011 – 2015 AUTOMOTIVE DEFENCE 2011 2012 2013 2014 2015 in EUR million 2011 2012 2013 2014 2015 2,357 2,378 2,270 2,466 2,621 Order intake 1,831 2,933 3,339 2,812 2,693 409 418 392 416 445 Order backlog (Dec. 31) 4,541 4,987 6,050 6,516 6,422 2,313 2
Slide 38: Cash credit facilities and net financial debt
Appendix: Rheinmetall Group Cash credit facilities and net financial debt Cash credit facilities Net financial debt Net financial debt (at year-end) in EUR million (as of Dec. 31, 2015) (at quarter end) Net gearing* in % in EUR million in EUR million ~1,580 Bilateral 330 ~400 bank facilities Syndica
Slide 39: Fiscal year 2015: survey
Appendix: Rheinmetall Group Fiscal year 2015: survey in EUR million 2014 2015 ∆ 2015/2014 Sales 4,688 5,183 + 495 + 11% Operational earnings 160 287 + 127 + 79% Special items: one-offs, restructuring costs - 58 0 + 58 EBIT (reported) 102 287 + 185 + 181% EBT 22 221 + 199 + 905% Group net income* 21
Slide 40: Quarterly development
Appendix: Rheinmetall Group Quarterly development Sales in EUR million Operational earnings in EUR million 1,601 147 1,473 121 1,221 1,173 1,164 101 966 856 75 509 545 57 61 547 22 1 16 55 59 50 52 45 617 664 676 617 635 1 -3 -5 -6 -28 -5 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q4 2014 Q1 2015 Q2 20
Slide 41: Research & development, capex, depreciation & amortization
Appendix: Rheinmetall Group Research & development, capex, depreciation & amortization R&D in EUR million Capex in EUR million D&A in EUR million 310 19* 269 24* 239 203 197 214 291 215 245 6.0% 190 5.7% 4.2% 4.6% 4.1% 3.9% 24 24 thereof capitalized 2014 2015 2014 2015 2014 2015 * Subsidies for tool
Slide 42: Cash flow statement
Appendix: Rheinmetall Group Cash flow statement Continuing operations Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 ∆ Q4 2015/ in EUR million Q4 2014 Group net income 41 5 29 30 96 +55 Amortization / depreciation 59 49 50 49 55 -4 Change in pension accruals -2 0 1 0 2 +4 Cash flow 98 54 80 79 153 +55 Chan
Slide 43: The divisional structure of Automotive
Appendix: Rheinmetall Automotive The divisional structure of Automotive Focused on the attractive segment of powertrain technology RHEINMETALL AUTOMOTIVE EUR 2.6 billion Hardparts Mechatronics Aftermarket Pistons Emission Systems International Large-bore pistons Solenoid Valves National Bearings Com
Slide 44: Fiscal year 2015: survey
Appendix: Rheinmetall Automotive Fiscal year 2015: survey Continuing operations 2014 2015 ∆ 2015/2014 in EUR million Sales 2,448 2,592 + 144 + 6% Operational earnings 184 216 + 32 + 17% Special items: one-offs, restructuring costs 0 0 ±0 ± 0% EBIT (reported) 184 216 + 32 + 17% Employees (Dec 31) 10,
Slide 45: Key figures by division
Appendix: Rheinmetall Automotive Key figures by division Continuing operations Mechatronics Hardparts Aftermarket +6% +10% +2% 2,592 +6% Sales 1,322 1,450 2,448 934 952 269 285 2014 2015 2014 2015 2014 2015 2014 2015 +17% +23% Opera- +1% 216 +4% tional 96 118 72 73 earnings 184 26 27 2014 2015 2014
Slide 46: Quarterly development
Appendix: Rheinmetall Automotive Quarterly development Sales Automotive in EUR million Operational earnings Automotive in EUR million 664 676 59 635 55 617 617 52 45 50 248 19 242 225 20 229 237 14 20 21 31 34 27 375 376 366 340 333 26 22 7 74 74 7 7 7 6 67 69 68 2 0 -3 -1 -19 -22 -22 -27 -24 -5 Q4
Slide 47: Cash flow statement
Appendix: Rheinmetall Automotive Cash flow statement Continuing operations 2014 2015 ∆ 2015/2014 in EUR million Group net income 131 161 +30 Amortization / depreciation 121 116 -5 Change in pension accruals -1 -2 -1 Cash flow 251 275 + 24 Changes in working capital and other items - 21 +7 +28 Net ca
Slide 48: Research & development, capex, depreciation & amortization
Appendix: Rheinmetall Automotive Research & development, capex, depreciation & amortization R&D in EUR million Capex in EUR million D&A in EUR million 182 186 19* 24* 167 7.2% 116 7.0% 111 149 6.4% 4.5% 6.1% 4.5% 158 167 158 140 thereof capitalized 9 9 2014 2015 2014 2015 2014 2015 * Subsidies for t
Slide 49: Sales by customers and by regions
Appendix: Rheinmetall Automotive Sales by customers and by regions Sales by customer in % Sales by region in EUR million Market Growth** Sales growth in % in % Non-LV business: 33% 2,592 2,448 Trucks/Others VW/Porsche/Audi 528 523 +1% +2% Ships/ 12% 17% Power plants/ MIR* Ford 7% 14% 1,238 1,191 +4%
Slide 50: Automotive in China
Appendix: Rheinmetall Automotive Automotive in China 50/50 joint ventures Wholly Foreign-Owned Enterprises JV subsidiary with HASCO (SAIC group) (100% Rheinmetall Automotive) Castings (ATAG) Pistons (KSSP) Castings (KPSNC) Pumps (PHP) Aftermarket Pierburg Large-bore pistons Pumps (PMP Ch.) 2014 1997
Slide 51: Automotive in India
Appendix: Rheinmetall Automotive Automotive in India Subsidiaries in India (100% Ownership) Shareholding in India (20%) Pierburg Pierburg Pumps Bearings Shriram Pistons & Rings Ltd. 1997 2001 2012 2008 EGR valves Mechanical oil Bearings Light vehicle pistons EGR valves (Com. Diesel) pumps Bushings T
Slide 52: New divisional structure of Defence
Appendix: Rheinmetall Defence New divisional structure of Defence Transfer of Combat Platforms RHEINMETALL DEFENCE EUR 2.6 billion Vehicle Systems Electronic Solutions Weapon & Munition Previously: Wheeled Vehicles Previously: Combat Systems Logistic Vehicles Air Defence & Naval Systems Weapon & Mun
Slide 53: Fiscal year 2015: survey
Appendix: Rheinmetall Defence Fiscal year 2015: survey 2014 2015 ∆ 2015/ 2014 in EUR million Order intake 2,812 2,693 - 119 - 4% Order backlog (Dec 31) 6,516 6,422 - 94 - 1% Sales 2,240 2,591 + 351 + 16% Operational earnings -9 90 + 99 Special items: one-offs, restructuring costs - 58 0 + 58 EBIT (r
Slide 54: Key figures Defence by division
Appendix: Rheinmetall Defence Key figures Defence by division Combat Systems Electronic Solutions Wheeled Vehicles +351 +41% +8% -10% Sales 2,240 2,591 1,382 977 705 759 667 600 2014 2015 2014 2015 2014 2015 2014 2015 +99 +88 +25 Opera- 90 88 26 -2 tional -9 0 1 -9 -11 earnings 2014 2015 2014 2015 2
Slide 55: Quarterly development
Appendix: Rheinmetall Defence Quarterly development Sales Defence in EUR million Operational earnings Defence in EUR million 966 101 75 856 82 52 16 553 419 16 571 17 545 13 509 1 9 14 278 312 10 4 239 3 239 0 1 271 -6 -15 0 -11 -11 159 155 174 -2 245 211 -8 137 138 114 -3 -47 -26 -26 -29 -69 -28 Q4
Slide 56: Cash flow statement
Appendix: Rheinmetall Defence Cash flow statement Continuing operations 2014 2015 ∆ 2015/2014 in EUR million Group net income - 72 32 +104 Amortization / depreciation 85 85 0 Change in pension accruals 0 8 +8 Cash flow 13 125 + 112 Changes in working capital and other items - 69 - 67 +2 Net cash use
Slide 57: Research & development, capex, depreciation & amortization
Appendix: Rheinmetall Defence Research & development, capex, depreciation & amortization R&D in EUR million Capex in EUR million D&A in EUR million 96 85 85 3.7% 76 72 3.8% 3.3% 65 3.4% 2.8% 2.9% 57 50 15 15 thereof capitalized 2014 2015 2014 2015 2014 2015 * Subsidies for tooling costs © RHEINMETAL
Slide 58: 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