Slide 1: International Technology Group for Defence and Automotive
Analysts Conference I Düsseldorf, 21 March 2012 International Technology Group for Defence and Automotive © Rheinmetall 2012
Slide 2: Rheinmetall Group: Highlights 2011
Rheinmetall Group Rheinmetall Group: Highlights 2011 Rheinmetall shows new record earnings Double digit sales growth in the Group Group earnings achieve historically highest amount Dividend increase to € 1.80 per share proposed Successful renewal of syndicated loan facilities over € 500 million for
Slide 3: Both divisions contribute to excellent performance
Rheinmetall Group Both divisions contribute to excellent performance Sales Group € million Sales Defence € million Sales Automotive € million +12% 4,454 3,989 +17% +7% 2,313 2,141 2,007 1,982 2010 2011 2010 2011 2010 2011 © Rheinmetall 2012 3
Slide 4: Earnings improve with even higher rates than sales
Rheinmetall Group Earnings improve with even higher rates than sales EBITDA € million EBIT € million EBT € million Net income € million Margin % of sales Margin % of sales Margin % of sales Margin % of sales +16% 538 464 +19% +29% 354 297 295 +29% 229 225 12.1 11.6 174 7.9 6.6 7.4 5.7 5.1 4.4 2010 2
Slide 5: Earnings per share improved by 31%; dividend increase to € 1.80
Rheinmetall Group Earnings per share improved by 31% Dividend increase to € 1.80 per share Earnings per share in € Dividend per share in € 5.55 4.15 4.09 4.23 1.80 1.50 1.30 1.30 0.30 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 -1.60 -1.60 © Rheinmetall 2012 5
Slide 6: Operative free cash flow clearly improved
Rheinmetall Group Operative free cash flow clearly improved 2010 € million 2011 € million 177 197 170 186 225 174 112 197 93 -39 Net Depr. Capex Working Operative income ∆Pensions Capital free Net Depr. Capex Working Operative increase cash flow income ∆Pensions Capital free increase cash flow © Rhe
Slide 7: Solid development of equity and net financial debt
Rheinmetall Group Solid development of equity and net financial debt Equity € million Net financial debt € million Equity ratio % Net gearing %* 1,546 1,355 1,080 1,134 236 1,059 205 32% 31% 30% 30% 30% 130 22% 19% 76 6% 8% -4% 2010 -44 2010 2011 2007 2008 2009 2011 2007 2008 2009 * Net debt in % of
Slide 8: Rheinmetall Defence
Rheinmetall Defence GF ercnerau
Slide 9: Rheinmetall Defence: Highlights 2011
Rheinmetall Defence Rheinmetall Defence: Highlights 2011 Success on new international markets Defence grows by 7%, thereof organically by 3% EBIT margin for the fourth time in a row above 10% Successful entry into new markets: Russia and Algeria Acquisitions of small but very innovative high-tech co
Slide 10: Defence sales increased to a new peak
Rheinmetall Defence Defence sales increased to a new peak Sales € million Order intake € million Order backlog € million -5% 4,772 4,541 +7% 2,141 -7% 2,007 1,977 1,831 2010 2011 2010 2011 2010 2011 © Rheinmetall 2012 10
Slide 11: Successful strategy of internationalization outside of Europe
Rheinmetall Defence Successful strategy of internationalization outside of Europe Sales 2011 compared to 2006 € million Increase/decrease by region € million 2,141 +696 475 1,445 259 2006 2011 -38 Germany Europe Rest of (w/o Germany) the World © Rheinmetall 2012 11
Slide 12: Almost three quarters of order intake from abroad
Rheinmetall Defence Almost three quarters of order intake from abroad Sales 2011 by region % Order intake 2011 by region % Rest of the World Rest of the World North and North and 3% South America 3% South America 12% 14% Germany 28% Germany 37% Asia/MENA* 19% 2011 2011 25% Asia/MENA* 30% 29% Europe
Slide 13: Earnings figures on previous year's level
Rheinmetall Defence ´s level Earnings figures on previous year´ EBITDA € million EBIT € million EBT € million Margin % of sales Margin % of sales Margin % of sales +2% 297 303 0% -5% 234 207 207 223 14.8 14.1 11.6 10.4 10.3 9.7 2010 2011 2010 2011 2010 2011 © Rheinmetall 2012 13
Slide 14: Survey on one-offs
Rheinmetall Defence Survey on one-offs Defence FY 2010 FY 2011 Δ (2011/2010) € million EBIT 234 223 - 11 - 4.7% Amortizations purchase price allocations 8 17 Changes in the scope of consolidation (badwill) -8 - 11 Project costs 15 11 Hedge earnings -5 - EBIT before one-offs 244 240 -4 - 1.6% © Rhein
Slide 15: Successful entry into new international markets
Rheinmetall Defence Successful entry into new international markets Industrial cooperation Combat Training Center Military logistic vehicles with Algeria for Russia for Australia Delivery of 54 vehicles Contract for one Combat Training Selection as preferred bidder (> € 150 million) from 2013 on Cen
Slide 16: Rheinmetall MAN Military Vehicles (RMMV)
Rheinmetall Defence Rheinmetall MAN Military Vehicles (RMMV) Full consolidation by Rheinmetall from 2012 on Rheinmetall MAN 51% 49% RMMV Military know-how: Protection Automotive know-how: Mobility May 2010: Combination of development and marketing activities (400 employees) January 2012: Integration
Slide 17: Unmanned aereal vehicles joint venture
Rheinmetall Defence Unmanned aereal vehicles Contract on joint venture with Cassidian signed Rheinmetall EADS Cassidian 49% Joint 51% Venture Consolidation of national capabilities Formation of a supplier offering the full spectrum of unmanned aereal vehicles Strengthening of the international compe
Slide 18: Outlook Defence
Outlook Defence v RHEINMETALL
Slide 19: Global defence budgets will continue to grow, but differently by regions
Rheinmetall Defence Global defence budgets will continue to grow, but differently by regions Expected global defence spending and procurement 2011-2015 US$ billion +8% 1,685 1,712 1,588 1,609 1,635 1,241 1,281 1,298 Other 1,221 1,237 +13% Procurement 367 372 394 404 414 2011 2012e 2013e 2014e 2015e
Slide 20: Budget cuts in the US and Europe, strong growth in other regions
Rheinmetall Defence Budget cuts in the US and in many European countries… …but strong growth in other strategically important regions Change in defence spending 2015 vs. 2011 Canada + 4% Russia + 29% Turkey + 20% South Korea + 13% USA - 14% Algeria + 20% UAE + 23% Saudi Arabia + 27% India Singapore
Slide 21: German defence budget will remain almost stable until 2015
Rheinmetall Defence German defence budget will remain almost stable until 2015 German defence budget 2011-2015 € billion Selected programs and projects 2012 -3.5% Introduction of the globally unique 31.5 31.9 31.4 31.0 C-RAM system MANTIS 30.4 Start of production and delivery of “Future Soldier Syst
Slide 22: Important issues on the agenda 2012
Rheinmetall Defence Important issues on the agenda 2012 Safeguarding the high order backlog of more than € 4.5 billion as a basis for growth and high visibility of sales in the upcoming years International marketing of the innovative key products, which are at the beginning of the life cycles: Puma,
Slide 23: Rheinmetall Automotive
Rheinmetall Automotive vf RHEINMETALL
Slide 24: Rheinmetall Automotive: Highlights 2011
Rheinmetall Automotive Rheinmetall Automotive: Highlights 2011 New record figures for sales and earnings Sales increase clearly exceeds growth of international automobile production EBIT margin increased from 4.1% to 6.5% Joint ventures in China with remarkable sales and earnings growth Market posit
Slide 25: Automotive grows stronger than the markets
Rheinmetall Automotive Automotive grows stronger than the markets LV production million units +3% +1% 72.6 75.1 38.7 35.6 66.1 35.1 58.0 28.6 World Triad* 2008 2009 2010 2011 2008 2009 2010 2011 +4% +17% € million 15.4 14.2 14.8 2,313 12.6 2,055 1,982 1,522 Western Sales Europe Automotive 2008 2009
Slide 26: Sales at a new peak based on a well-balanced customer structure
Rheinmetall Automotive Sales at a new peak based on a well-balanced customer structure Sales 2011 € million Sales by customer +17% 2,313 Others VW/Porsche/Audi 1,982 Ships/ Power plants/ Ford MIR* 2011 PSA After market Renault/ Daimler Nissan GM Fiat 2010 2011 BMW * Marine, Industry, Recreation © Rh
Slide 27: Strong sales growth in all regions with production sites
Rheinmetall Automotive Strong sales growth in all regions with production sites Sales growth in regions with own production sites 2011 compared to 2010 in % Eastern Europe: + 51% Western Europe: + 16% North America: + 17% China JV*: + 16% Asia: + 15% Brazil + 12% * Rheinmetall Automotive owns 50% of
Slide 28: Cost-conscious build-up of capacities particularly in emerging countries
Rheinmetall Automotive Cost-conscious build-up of capacities particularly in emerging countries Total employees Domestic employees Employees by % of total employees high cost*/ low cost** countries % of total employees +7% 33.3% 30.0% 46.2% 43.2% 23.8% 23.5% 10,816 11,548 4,993 4,992 High Low High L
Slide 29: Earning power lifted to a new level
Rheinmetall Automotive Earning power lifted to a new level EBITDA € million EBIT € million EBT € million Margin % of sales Margin % of sales Margin % of sales +39% 254 +86% +114% 183 151 135 11.0 9.2 81 63 6.5 5.8 4.1 3.1 2010 2011 2010 2011 2010 2011 © Rheinmetall 2012 29
Slide 30: Growth drivers: Tightened emission regulations
Rheinmetall Automotive Growth drivers: Tightened emission regulations EGR valve EGR cooler Double EGR cooler high/low pressure EURO 4 EURO 5 EURO 6 Truck business expected to follow 2005 2010 2015 •EGR valve •EGR cooler modules Emerging countries expected to follow with a lag of 5 to 10 years •Back
Slide 31: Growth drivers: Reduction of fuel consumption and CO2 emissions
Rheinmetall Automotive Growth drivers: Reduction of fuel consumption and CO2 emissions Downsizing/Turbocharging Hybridization Powertrain technology content per mid-size gasoline vehicle in € +36% 3,000 2,200 2010 2020e Ring carrier pistons Electric water pumps Source: Roland Berger (2010/2011) High-
Slide 32: Dynamic markets: China
Rheinmetall Automotive Dynamic markets: China Expansion of the strong JV-business and wholly owned subsidiaries Sales Joint Ventures* € million LV production China thousand units +16% 15,511 16,026 298 +3% 258 2010 2011 Source: IHS Automotive (March 2012) 2010 2011 Two established 50/50 JVs with SAI
Slide 33: Dynamic markets: India
Rheinmetall Automotive Dynamic markets: India Acquisition of bearings business and set-up of own production Sales KSPG Automotive India € million LV production India thousand units +100% 3,164 3,501 18 +11% 9 2010 2011 Source: IHS Automotive (March 2012) 2010 2011 Acquisition of Kirloskar Bearings b
Slide 34: Growth strategy in the high-margin non-LV business
Rheinmetall Automotive Growth strategy in the high-margin non-LV business Risk diversification and increase of profitability Non-LV sales 2011 compared to 2010 € million Truck business +17% 2,313 1,982 30% Non-LV Industrials 70% LV After market 2010 2011 © Rheinmetall 2012 34
Slide 35: Outlook Automotive
Outlook Automotive vf RHEINMETALL
Slide 36: 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 LV production by region thousand units +24% 93,289 89,053 83,466 78,885 75,146 World +15% 39,639 40,867 Triad 35,583 36,991 37,442 +5% Western Europe 14
Slide 37: LV production in the short term
Rheinmetall Automotive LV production in the short term Globally growing, but slightly decreasing in Western Europe Expected global LV production thousand units Western Europe NAFTA Japan +5% -8% +10% 78,885 14,754 14,391 75,146 13,521 13,135 +18% 7,694 9,079 2011 2012e 2011 2012e 2011 2012e China In
Slide 38: Important issues on the agenda 2012
Rheinmetall Automotive Important issues on the agenda 2012 Sales growing stronger than production in international markets Benefitting from the dynamic growth of emerging countries: expansion of existing business in China and India Strengthening the earning power by extending the Non-LV and truck bu
Slide 39: Outlook Group
Outlook Group GF ercnerau
Slide 40: Outlook 2012
Rheinmetall Group Outlook 2012 Sales growth and safeguarding top level of earnings expected Sales EBIT € billion € million 2012 2011 2012 2011 on previous Group approximately 4.9 4.5 year’s level 354 slightly below Defence approximately 2.5 2.1 previous year 223 slightly above Automotive slightly ab
Slide 41: Appendix
Rheinmetall Group Appendix © Rheinmetall 2012
Slide 42: Cash flow Defence
Rheinmetall Group Cash flow Defence Defence 2010 2011 Δ (2011/2010) € million Net income 165 161 - 4 Amortization / depreciation 63 80 + 17 Change in pension accruals 8 - 3 - 11 Cash flow 236 238 +2 Changes in working capital and other items - 137 - 83 + 54 Net cash used in operating activities 99 1
Slide 43: Cash flow Automotive
Rheinmetall Group Cash flow Automotive Automotive 2010 2011 Δ (2011/2010) € million Net income 38 105 + 67 Amortization / depreciation 102 103 +1 Change in pension accruals - 14 - 5 +9 Cash flow 126 203 + 77 Changes in working capital and other items - 30 - 59 - 29 Net cash used in operating activit
Slide 44: 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