Rheinmetall Ag · XETR:RHM
Rheinmetall — Investor Day (November 2023)
37 slides from Rheinmetall's investor day presentation, Nov 21, 2023
Slide 1: Securing Tomorrow
SECURING TOMORROW Armin Papperger, CEO 21. November 2023
Slide 2: Next steps of our strategic vision implemented
SECURING TOMORROW Next steps of our strategic vision implemented TRANSFORMATION GROWTH PORTFOLIO TECHNOLOGY SUSTAINABILITY DIVISIONAL STRUCTURE Accelerated growth ACTIVE PORTFOLIO TECHNOLOGIES in ESG AS INTEGRAL UPDATED becomes tangible MANAGEMENT FOCUS STRATEGY COMPONENT New civil division Supe
Slide 3: The world is in turmoil…
The world is in turmoil… War in Ukraine Inflation Rising tensions in Supply chain disruptions Asia-Pacific Terror in Israel Onshoring Climate change …and we take responsibility! © Rheinmetall AG I CMD 2023 3
Slide 4: Providing solutions for the modern battlefield
SECURING TOMORROW Providing solutions for the modern battlefield Sensors are a deciding factor Air defense Ammunition has a new levels matter relevance Logistics are critical Tactical Long range vehicles are makes the indespensable difference © Rheinmetall AG I CMD 2023 4
Slide 5: Strong reaction to the war: Defence budgets start to accelerate
SECURING TOMORROW Strong reaction to the war: Defence budgets start to accelerate % Increased demand for defence systems in NATO countries* NATO Europe and Canada 9 defence expenditure 8.3 8 Annual real change in % 7 5.9 6 5 4.6 4.3 4 3.6 Ships Vehicles Airplanes 3.0 2.8 3 2.0 2 1.6 1 0 -1 -0.9 Netw
Slide 6: Our new financial Group targets 2026 are…
SECURING TOMORROW Our new financial Group targets 2026 are… Growth continues Sales target 13-14 €bn Improved profitability Operating margin target* >15% CASH CONVERSION RATE Cashflow to operating result* >50% © Rheinmetall AG I CMD 2023 *Based on new operating result definition pre-ppa 6
Slide 7: …and our operational divisions compare as follows
SECURING TOMORROW …and our operational divisions compare as follows VS + W&A + ES POWER SYSTEMS Sales target ~11€bn 2.5 -3€bn Operating margin target* ≥17% >9% © Rheinmetall AG I CMD 2023 *Based on new operating result definition pre-ppa 7
Slide 8: Existing backlog supports our growth targets
SECURING TOMORROW Existing backlog supports our growth targets 13-14 Rheinmetall Backlog in €bn Booking level p.a. ~20% 7.4-7.6 >85% Way-to-go >95% >60% 0.4 0.2 1.7 >45% Recurring 0.3 0.6 business* Order Backlog Sales YTD 4.6 Frame Backlog Nominated Backlog 2023e 2024e 2025e 2026e © Rheinmetall AG I
Slide 9: Internationalization of the defence business continues
SECURING TOMORROW Internationalization of the defence business continues 25% RoW 36% Germany ~11 USA €bn* Spain Ukraine UK Australia Hungary 39% Weapon and Ammunition 2022 Vehicle Systems Electronic Solutions 2026e © Rheinmetall AG I CMD 2023 *Divisional sales share in % before consolidation 9
Slide 10: Triple R – the structural long-term drivers for German demand
SECURING TOMORROW Triple R – the structural long-term drivers for German demand RE STOCKING RE EQUIPPING RE BUILDING Re-introduction of DOMAIN Replenish empty Return to 100% capabilities, e.g. LAND ammunition stock equipment level GBAD F-35 DOMAIN production and AIR sustainment © Rheinmetall AG I CM
Slide 11: German defence policy guidelines set the tone for the next years
SECURING TOMORROW German defence policy guidelines set the tone for the next years Strategic shift Territorial and treaty defense is back in focus GOAL Source: bundesregierung.de Transforming the “We have to get used to Revised procurement strategy the idea again that Available of the shelf solution
Slide 12: German defence spending based on three pillars
SECURING TOMORROW German defence spending based on three pillars Defence Budget Special Fund Ukraine Relief Fund Moderate growth Significant investment Germany Top 3 supporter* in €bn potential 1.2% Personnel Equipment Land 8€bn 50.1 51.8 52.0 52.0 in 2024 2023 2024 2025 2026 Digitization Air
Slide 13: Our mission is to become the first choice for Ukraine's armed forces
SECURING TOMORROW Our mission is to become the first choice for Ukraine‘s armed forces 1 2 3 4 5 Funding by GER & Ring Swaps Direct Deliveries Service & Sustainment Local Cooperation other states © Rheinmetall AG I CMD 2023 13
Slide 14: Candidates for the localization of vehicle production
SECURING TOMORROW Candidates for the localization of vehicle production Fuchs Lynx Panther © Rheinmetall AG I CMD 2023 14
Slide 15: RBSL JV in prime spot to modernize the UK armed forces
SECURING TOMORROW RBSL JV in prime spot to modernize the UK armed forces Key supplier to the land domain with Boxer MIV and Challenger upgrade Currently waiting for the 3. lot Boxer Sales contract and exploration of further Boxer variants including GBAD CAGR ~30% Frame work contracts for ammun
Slide 16: Heavy Weapon carrier – export from down under leverages MILVEHCOE
SECURING TOMORROW Heavy Weapon carrier – export from down under leverages MILVEHCOE Digitization and Domain Sea offer a huge potential, especially Land 125 soldier systems Heavy weapon carrier is one of the largest Sales Australian defense export contracts CAGR ~10% Growing our ammunition expo
Slide 17: The United States has the potential to become a new home market
SECURING TOMORROW The United States has the potential to become a new home market by late 20s Rheinmetall Common Tactical Trucks (CTT) performs XM30: down selected to final testing stage Sales Next generation Howitzer • Successful testing of L52 gun CAGR ~55% 2022 2023e 2026e © Rheinmetall AG
Slide 18: Rheinmetall Expal Munitions is our beachhead for the Spanish market
SECURING TOMORROW Rheinmetall Expal Munitions is our beachhead for the Spanish market Expal acquisition opens new possibilities to do business in Spain Intensification of our traditional ammo business Rheinmetall Expal Munitions (REM) is part of the consortia to supply long range artillery und
Slide 19: Hungary has developed into a new home market
SECURING TOMORROW Hungary has developed into a new home market Rheinmetall is the strategic partner of the Hungarian forces BUILD UP OF WIN-WIN SITUATION EXTENSIVE BUSINESS REALIZATION EXPORT CAPACITIES AND THROUGH MUTUAL POTENTIAL OPPORTUNITIES CAPABILITIES SUPPORT CAGR ~36% Sales 2022 2023e 2026e
Slide 20: Strong intensification of our Hungarian engagement across all divisions
SECURING TOMORROW Strong intensification of our Hungarian engagement across all divisions Vehicle Systems Weapon and Ammunition Electronic Solutions Ammo plant JV for Hybrid 8x8 digitization of the armed forces LYNX RDX plant Skyranger HERO Loitering Munition PANTHER © Rheinmetall AG I CMD 2023 20
Slide 21: Great opportunities ahead and challenges under control
SECURING TOMORROW Great opportunities ahead and challenges under control Opportunities Challenges Re-stocking, re-equipping, re-building Supply chains de-risked Expanding our global footprint Record number of applications Benefitting from operating leverage Accelerating business well managed © Rhein
Slide 22: Key Messages
SECURING TOMORROW Key Messages We are fully on track for 2023 Rheinmetall Backlog coverage is unprecedented Our home markets have strong growth potential And we are expanding in new regions with new partnerships © Rheinmetall AG I CMD 2023 22
Slide 23: BIG TICKETS – 2026 and beyond
BIG TICKETS – 2026 and beyond © Rheinmetall AG I CMD 2023 23
Slide 24: Artillery: Supply-demand imbalanced!
Supply-demand ARTILLERY imbalanced! Estimated demand in €bn 60 No linear development due to assumed loss of platforms Mortar 40 Medcal 20 Artillery Aircraft Bombs 0 3 7 15 30 Assumed total Western-European capacity Different conflict scenarios in days excluding Rheinmetall of < 200k rounds © Rheinme
Slide 25: Artillery: First volume, then range!
First volume, ARTILLERY then range! Rheinmetall invests in capacities… … and technologies Development of long range capabilities improved barrel performance Long range ammunition Loitering ammunition in cooperation with UVision Rocket artillery for the European market © Rheinmetall AG I CM
Slide 26: Artillery: Growth propellant!
ARTILLERY Growth propellant! ~4€bn ~700.000 rounds From 2025 +600% Q3 2023 350,000 1.5€bn +250% Q1 2022 100,000 Sales 0 Weapon and Ammunition 155mm production capacity (full shot) 2019 2020 2021 2022 2023e 2024e 2025e 2026e © Rheinmetall AG I CMD 2023 26
Slide 27: Main Battle Tank: The cats are back!
MAIN BATTLE TANK The cats are back! OPPORTUNITY – Growing MBT market creates potential MGCS Panther CAPTURE – Win key opportunities, Grow business INDUSTRIALISE – Increase capacity, Global supply chain EDF Leopard EXECUTE – Operational excellence to drive margin © Rheinmetall AG I CMD 2023 27
Slide 28: Panther - 100% Rheinmetall!
BIG TICKETS PANTHER - 100% Rheinmetall! Firepower Protection Unrivalled lethality with the 130mm Future The first MBT adopting an integrated Gun system (FGS) and optimised sensor-to- survivability concept of on and off platform shooter-links. sensors coupled with active, reactive and passive protect
Slide 29: F-35: Gate opener for our Domain Air
Gate opener for our F-35 Domain Air Rheinmetall is a partner in the world’s biggest defence project Rheinmetall will be the only German company with in-depth technological knowledge of the 5th generation of fighter jets First deliveries scheduled for 2027 50 42 40 34 105 12 32 36 64 35 20 20 2
Slide 30: Center fuselage is the nucleus to grow our Domain Air
BIG TICKETS Center fuselage is the nucleus to grow our Domain Air Other The CF is the entry gate for additional F-35 parts Avionic Parts Already a qualified F-35 ammunition supplier Ammo RHM in the pole to take over sustainment services Sustainment Center fuselage is the core F-35 system and consist
Slide 31: Leading provider of Air Defence
European Sky Shield Initiative (ESSI) Leading provider of AIR DEFENCE Ground Based Air Defence Order potential 2023-26 of up to 5€bn ESSI Participants Potential other European customers for Skyranger © Rheinmetall AG I CMD 2023 31
Slide 32: Integrated SHORAD approach against a wide range of threats
BIG TICKETS Integrated SHORAD approach against a wide range of threats Sensors Skymaster – Battle Management Systems Tactical Acquisition Radars Multi-Sensor Unit Effectors Revolver Gun Mk3 Twin Gun High Energy Laser SkyKnight Missile Launcher Unit Non-lethal jammers Platforms Stat
Slide 33: Logistics, Logistics, Logistics!
User Group Logistics, Logistics, TRUCKS Logistics! War in Ukraine has underpinned importance of logistics Germany is financing the next truck lot via special fund Austria is the most recent member of the HX-User Group Rheinmetall expands Vienna capacity from 2,200 to around 4,500 vehicles p.
Slide 34: Digitization: Our path to a digital future
Top Projects DIGITIZATION Gladius and D-LBO Digitalization of HDF Our path to a digital future Land 125 Analog Digitized Digitalized Digital Transformation © Rheinmetall AG I CMD 2023 34
Slide 35: Rheinmetall is a major partner for the digitization of the German army
SECURING TOMORROW Rheinmetall is a major partner for the digitization of the German army Gladius Soldier System D-LBO TAWAN System Panzergrenadier Personnel Equipment Networking PUMA to Digitalization of the Tactical Wide Area Soldier German Forces Network Already in use for VJTF, In service Part of
Slide 36: Key Messages
SECURING TOMORROW Key Messages Growth is structural and for the long-term Diversifying successfully into new domains Our big tickets offer potential beyond 2026 Shareholder value creation remains in focus © Rheinmetall AG I CMD 2023 36
Slide 37: 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