Rheinmetall Ag · XETR:RHM

Rheinmetall — Investor Presentation (March 2017)

76 slides from Rheinmetall's investor presentation, March 2017

Slide 1: Corporate Presentation
Corporate Presentation Rheinmetall AG, March 2017
Slide 2: Highlights Rheinmetall Group FY 2016
Highlights Rheinmetall Group FY 2016 Performance improvements in both segments and high cash conversion Guidance achieved: €5.6 bn sales and margin of 6.3% EBIT increased by 23% to €353 m Free cash flow jumped from €29 m to €161 m EPS grew by 21% from €3.88 to €4.69 Dividend proposal of €1.45 New Te
Slide 3: Sales and profit growth boosted Free Cash Flow
Sales and profit growth boosted Free Cash Flow Sales Operational Result in EUR million Operating FCF in EUR million Margin in % in EUR million +8% +455% 5,602 +23% 161 353 5,183 287 4,688 160 6.3 5.5 29 3.4 -182 2014 2015 2016 2014 2015 2016 2014 2015 2016 © Rheinmetall AG / Corporate Presentation F
Slide 4: Increased net income transformed into higher dividend
Increased net income transformed into higher dividend Net income Earnings per share Dividend per share in EUR million in EUR million in EUR million +21% +32% +34% 4.69 1.45 * 215 3.88 1.10 160 0.30 21 0.47 2014 2015 2016 2014 2015 2016 2014 2015 2016 * Dividend proposal 2016 to the AGM 2017 © Rheinm
Slide 5: Conversion of profitable growth into free cash flow
Conversion of profitable growth into free cash flow in EUR million Q4 2015 Q4 2016 Δ% FY 2015 FY 2016 Δ% Sales 1,601 1,698 6.1% 5,183 5,602 8.1% Operating result 147 172 17.0% 287 353 23.0% Operating result margin in % 9.2 10.1 0.9 pp 5.5 6.3 0.8 pp Operating Free Cash Flow 299 463 54.8% 29 161 >100
Slide 6: Operating Free Cash Flow improved materially
Operating Free Cash Flow improved materially Operating Free Cash Flow changes y.o.y in EUR million 1 24 Operational performance lifts net income by €55 m 27 Higher D&A driven by Automotive 25 Capex decreased in Automotive and Holding 161 55 Others includes CTA funding (€30 m) Net-working capital sta
Slide 7: Net-financial debt considerably improved on positive cash development
Net-financial debt considerably improved on positive cash development Net-financial debt in EUR million at quarter end Debt composition and maturity profile of instruments Net Gearing in % at year end in EUR million 28% 5% -1% Other & 787 Leasing -19 16 Promissory 121 notes 146 Bank loan 2017 2018 2
Slide 8: Group ROCE of 12.3% clearly above capital cost
Group ROCE of 12.3% clearly above capital cost in EUR million FY 2015 FY 2016 Δ abs. EBITDA 490 581 +91 EBIT increase with major contribution from Defence Operating result / EBIT 287 353 +66 Actual tax rate amounted to 28% Interest result - 66 - 54 +12 Net income increased by 34% EBT 221 299 +78 Net
Slide 9: Stable capex and R&D levels support future growth
Stable capex and R&D levels support future growth Capex Group Research & Development Group in EUR million / ratio in % of Group sales in EUR million / ratio in % of Group sales 5.7% 6.0% 5.1% 4.6% 4.6% 4.6% 310 283 269 258 239 214 291 245 258 24* 19 * 25* 2014 2015 2016 2014 2015 2016 * Subsidies fo
Slide 10: First orders for public security and e-mobility
First orders for public security and e-mobility Public Security Electromobility Survivor vehicles Pump technology for for German police forces electric vehicles Drone detection systems Aluminum battery boxes for Swiss prisons for German premium OEM Innovative body armor Electric engine housing for G
Slide 11: Investments in New Technologies initiated
Investments in „New Technologies” initiated Cyber Security 3D Techcenter PanoView Development of two products Metal 3D print services Merging modern sensor finished technology with virtual reality to First applications: Compressor Marketing phase started in 2017 create a real-time 360° view wheel fo
Slide 12: Addressing the basic needs and megatrends in Defence and Automotive
Addressing the basic needs and megatrends in Defence and Automotive Sales: EUR 5.6 billion Employees: 20,800 Sales: EUR 2.9 billion Sales: EUR 2.7 billion Employees: 10,081 Employees: 10,820 Basic need Accumulating international conflict areas Megatrend Increasing world population, global trade, hig
Slide 14: Focused on the attractive segment of powertrain technology
Focused on the attractive segment of powertrain technology RHEINMETALL AUTOMOTIVE EUR 2.7 billion consolidated sales Sales by Division Sales by Region Sales by Customer Rest of the World Europe Ford Aftermarket 11% (excl. Germany) 13% VW Hardparts Asia 13% 3% others 33% 38% 11% NAFTA 17% 47% 11% 3%
Slide 15: Highlights Rheinmetall Automotive FY 2016
Highlights Rheinmetall Automotive FY 2016 Automotive demonstrated margin resilience EBIT margin rose to 8.4% Mechatronics outperformed with excellent sales and profitability Ongoing challenges in Brazil and a weakness in Large Bore Pistons International footprint expanded in China, India, Mexico and
Slide 16: Automotive accelerated by excellent Mechatronics performance
Automotive accelerated by excellent Mechatronics performance in EUR million Q4 2015 Q4 2016 Δ % FY 2015 FY 2016 Δ % Sales 635 664 4.6% 2,592 2,656 2.5% Operating result 52 60 15.2% 216 223 3.0% Operating margin in % 8.2 9.0 0.8 pp 8.3 8.4 0.1 pp Operating Free Cash Flow 26 147 465% 96 105 9.4% Opera
Slide 17: Automotive car sales again outperforming global markets
Automotive car sales again outperforming global markets Global LV production Sales Automotive LV/Non-LV in million units in EUR million 4.9% 2,656 2,592 93,0 88,7 21,5 838 -2.9% 814 Non LV business 20,9 17,8 Without China: 17,5 +1.4% 22,7 22,4 1,754 +5.0% 1,842 LV business 4,0 4,2 23,7 27,1 China: +
Slide 18: Automotive with broad and global customer portfolio
Automotive with broad and global customer portfolio Sales by customers 2016 Sales by region in % in EUR million Rest of the World Ford Asia 3% Germany 13% 13% 20% others VW 38% 11% €2,656m* NAFTA 17% €2,656m* 11% Renault / Nissan 2% 6% 3% PSA 5% GM 47% 3% DAF 4% 5% Fiat Volvo Europe Daimler BMW (exc
Slide 19: Further margin improvement at slightly increased sales level
Further margin improvement at slightly increased sales level Sales Automotive Operational earnings Automotive Reasons for earnings development in EUR million in EUR million 2% +3% Mechatronics 2,592 2,656 216 223 Sales growth and very good profitability +20% Hardparts 1,450 +5% 1,527 119 142 Declini
Slide 20: Market drivers: Realization of growth in changing market conditions
Market drivers Realization of growth in changing market conditions Alternative drive technologies: Global light vehicle production: Hybrid Rising number of vehicles Electric vehicles Digitalization: Traditional drive technologies: Autonomous driving Optimization of combustion engines Integrated data
Slide 21: Stable development even with quick introduction of electric engines
Stable development even with quick introduction of electric engines Combustion engine market share development in % of total LV production Total LV 91,4m 110,3m production 3% 1% Between 94-107m 15% Electric combustion engines vehicles Light vehicles: combustion & 99% 97% 85% hybrid 2025 2016 Scenari
Slide 22: Global LV production forecasted to grow
Global LV production forecasted to grow CAGR Light Vehicle-Produktion 2016-2020 in % / in million units Europa Germany NAFTA Asia* +1.3% +1.2% -0.6% +4.5% Japan +2.2% China Global -0.5% 101 93 +2.7% NAFTA 19 18 Europe 16 17 6 6 Germany Asia 50 55 * without China und Japan ROW ** without Deutschland
Slide 23: Impressive profitability improvement of Chinese activities
Impressive profitability improvement of Chinese activities China LV production Sales in CNY million EBIT in CNY million / in % in million units +13% +39% Sales growth in line with market development in local 6,835 518 6,070 currency 373 14% CNY 27,1 5,488 6,037 million 452 FX Effect on sales -€43.7
Slide 24: Three mainstreams for future mobility
Three mainstreams for future mobility Efficiency Electrification New Technologies © Rheinmetall AG / Corporate Presentation FY 2016 24
Slide 25: Global CO2-Emissions regulation gets tougher
Global CO2-Emissions regulation gets tougher CO2 Emission in g/km India 113 122 117 Europe 95 97 *Note that Japan has already exceeded its 2020 statutory target, as of 2013 Source: ICCT © Rheinmetall AG / Corporate Presentation FY 2016 25
Slide 26: Rheinmetall Automotive's Road to 95 g CO2/km
Rheinmetall Automotive’s Road to 95 130 g 95 g CO2/km CO2/km 2015 2020 Description vehicle model (Basis) 1.4L 4-cylinder gasoline engine with DI-injection and single- -2g CO2/km stage turbocharging (115kW) -2 g CO2/km -7 g CO2/km Light-weight structural El. low-press. -3 g CO2/km parts Var. valve tr
Slide 27: Trend of hybridization opens potential for more Rheinmetall products
Trend of hybridization opens potential for more Rheinmetall products Enlarging the traditional product portfolio for combustion engines… + … by products for hybrid and electric engines Actuators Solenoid valves Structural Engine Battery housings Electric throttle components bearings (2018) bodies E-
Slide 28: Full electric vehicles – complexity creates potential
Full electric vehicles – complexity creates potential pumpe Solenoid valve Kühlmittel- Leistungs- Elektro- Kondensator Ventil AC-Kompressor elektronik heizung Elektrischer Ventil pumpe Kühlmittel- Electric coolant pump Thermal management tauscher Wärme- Solenoid valve module (under development) Elec
Slide 29: Automotive strategy survey
Automotive strategy survey Hardparts Mechatronics Aftermarket 1. Focused investment 1. International growth 1. Growth in dedicated strategy markets 2. Strengthen thermal 2. Optimization of global management competence 2. Enlarge product portfolio footprint and own production 3. Load pipeline for emi
Slide 30: Automotive network in China - Mechatronics
Automotive network in China - Mechatronics Multi-channel approach of Mechatronics in China: Joint venture for the production of modules for cooled exhaust-gas recirculation New: Pierburg Yinlun Emission Technology (51%) • Headquarter: Shanghai region • Customers: Chinese market Pierburg China Ltd. (
Slide 31: Summary: Automotive is well prepared
Summary: Automotive is well prepared Markets and Customers: • We expect a stable market with moderate growth rates in the medium term • China will be the growth driver, Europe and NAFTA might weaken • Brazil seems to have left the worse behind Performance and Products: • Mechatronics will be the gro
Slide 33: Divisional structure of Defence
Divisional structure of Defence RHEINMETALL DEFENCE Sales by Division Order backlog by Division Weapon and Weapon and Ammunition 26% Ammunition Vehicle Systems 43% 34% Vehicle Systems 51% 23% 23% Electronic Solution Electronic Solution Weapon and Ammunition Electronic Solutions Vehicle Systems Weapo
Slide 34: Highlights Rheinmetall Defence FY 2016
Highlights Rheinmetall Defence FY 2016 Defence delivered excellent 2016 results and gears up for future growth Order execution well on track with sales growth >10% EBIT margin improved from 3.5% to 5.0% High order entry leads to book-to-bill ratio of 1.04 Down selection in major vehicle programs Pre
Slide 35: Defence with excellent cash conversion on improved profitability
Defence with excellent cash conversion on improved profitability in EUR million Q4 2015 Q4 2016 Δ % FY 2015 FY 2016 Δ % Order entry 919 725 -21.1% 2,693 3,050 13.3% Sales 966 1,034 7.0% 2,591 2,946 13.7% Operating result 101 115 14.3% 90 147 62.7% Operating margin in % 10.4 11.2 0.8 pp 3.5 5.0 1.5 p
Slide 36: Profitable growth especially in Weapon and Ammunition and Vehicle Systems
Profitable growth especially in Weapon and Ammunition and Vehicle Systems Sales Defence Operational earnings Defence Reasons for earnings development in EUR million in EUR million +14% +63% Weapon and Ammunition 2,946 147 Significantly higher sales 2,591 1,112 Electronic Solutions 881 +26% Lower sal
Slide 37: Regional distribution documents success of internationalization strategy
Regional distribution documents success of internationalization strategy Order intake by region Order backlog by region in EUR million in EUR million +4% +13% 6,656 3,050 6,422 4% 18% 2,693 3% 19% 3% 16% 3% 6% 46% 41% 41% 32% Rest of the World North America 26% 19% Asia/Middle East/Australia 13% 17%
Slide 38: High order book coverage of near-term sales
High order book coverage of near-term sales Order backlog by division Order backlog profile in EUR million in EUR million +4% ~2,500 6,422 6,656 ~2,300 Weapon and Ammunition 1,709 1,817 ~1,900 Electronic Solutions Vehicle Systems 1,334 Consolidation 1,579 3,975 3,577 -596 -317 2017e 2018e 2019e ff 2
Slide 39: Benefitting from growing and changing markets
Benefitting from growing and changing markets Change of international Rising defence/ responsibilities security budgets Global security Increasing conflicts environment changing combined with new threats Impact: Systematic expansion to security markets: Long-lasting market growth Innovations and sys
Slide 40: Defence is at the beginning of long lasting market growth
GLOBAL +1,3% Defence is at the beginning of long lasting market growth Defence budgets development 2016 – 2020 in % p.a. Europe North America +1.2% + MENA Asia/Pacific +3.0% +4.0% Latin America Global +2.7% +1.3% Global military expenditures in bn USD 2016: 1,563 2020: 1,649 Source: IHS Janes March2
Slide 41: Further increase of German defence budget expected
Further increase of German defence budget expected Enhanced future profile of German Bundeswehr German Defence budget 2016-2021 in EUR billion* 62 23% 2% “Anchor army” for smaller neighbors 37 39 40 41 42 34 1.2% Leading role in the “enhanced Forward Presence” in Lithuania 2% NATO target on Framewor
Slide 42: High domestic order potential
High domestic order potential Fox in Expansion and service of simulation center desert Modernization program Fox camouflage Additional Leopard 2 Partnering agreement ammunition restocking New military trucks Additional Gladius soldier systems Equipment upgrade and increased order volume for Puma Mob
Slide 43: Down selection in major international vehicle systems offers potential
Down selection in major international vehicle systems offers potential Boxer with Australia Lance turret − Land 400 program : Boxer with Lance turret − Land 121 -5b : Logistic Vehicles follow-up contract United Kingdom − Challenger 2 Life extension and upgrade − MIV-Boxer 1,700 vehicles Middle East
Slide 44: Securing growth by acquisition of further large-scale orders
Securing growth by acquisition of further large-scale orders UK: Challenger life extension Scandinavia: Military trucks UK: MIV Boxer Lithuania: Boxer Canada: Modernization Leopard Netherlands: Boxer Poland: Modernization program Germany: Military trucks Romania: Wheeled vehicles Algeria: Fox Singap
Slide 45: Recent developments in establishing hubs and JVs
Recent developments in establishing hubs and JVs Germany: JV with Russia / Rohde & Schwarz Scandinavia Kazakhstan Canada UK Poland: New company Romania: New Joint Venture Netherlands USA: New Joint Venture Turkey: New Joint Venture North Africa Israel Mexiko: New company India GCC Saudi Arabia Brazi
Slide 46: Weapon and Ammunition will be growing by various strategic partnerships
Weapon and Ammunition will be growing by various strategic partnerships United Kingdom United States, Defense Munitions International (DMI) Partnering agreements with Defence Equipment and 50:50-JV with General Dynamics Ordnance and Support (DE&S) and with BAE Systems Tactical Systems Netherlands Ne
Slide 47: Expanding local footprint by individual industrial partnerships
Expanding local footprint by individual industrial partnerships POLAND TURKEY — Cooperation with the Polish defence industry — Rheinmetall Turk as a local entity is a partner of joint ventures for a major Leopard modernization program with Turkish defence companies for vehicle systems ( ) and — Foun
Slide 48: Cooperation between Rheinmetall and Raytheon
Cooperation between Rheinmetall and Raytheon Memorandum of understanding signed February 2017; Sales: 24 bnUSD, 63,000 employees* Combining strength in possible Sales: 5.6 bnEUR, 21,000 employees* new business opportunities: Missile based, expert in radar technology, Cannon based, long-term market p
Slide 49: Cooperation between Rheinmetall and Rohde & Schwarz
Cooperation between Rheinmetall and Rohde & Schwarz Contractual agreement 25.1% 74.9% signed March 2017; Planned joint venture Sales: EUR1.9 bn, 10,000 employees* to compete for: Sales: EUR5.6 bn, 21,000 employees* Expertise in wireless communication, MoTaKo Supplier of a high number of network and
Slide 50: Defence strategy survey
Defence strategy survey Vehicle Systems Weapon and Ammunition Electronic Solutions 1. Leveraging the present status as the 1. Maintaining the globally leading 1. Widening the Air Defence product leading European system house for market position by organic growth portfolio by forming an exclusive tra
Slide 52: Assumptions 2017
Assumptions 2017 AU TO M OT I V E DEFENCE M a c ro v i ew Global LV production expected Further demand increase in key markets to grow by ~2%* expected Chinese LV production only with moderate Germany and other allies have increased growth of 2.5% investment budgets R h e i n m eta l l Automotive ex
Slide 53: Outlook FY 2017: Sales growth and earnings improvement targeted
Outlook FY 2017 Sales growth and earnings improvement targeted Sales Operational margin in % 2016 2017e 2016 2017e in EUR billion Growth yoy in % Group 5,602 4-5 6.3 ~6.3 Automotive 2,656 3-4 8.4 ≥8 Defence 2,946 5-6 5.0 5.0 - 5.5 New Guidance includes a P&L impact of a low 2-digit EUR million figur
Slide 55: Financial reminder for 2017
Financial reminder for 2017 Automotive Defence Capex ~5.5 - 6.5% ~3 - 4% D&A ~4.5 - 5.5% ~3 - 3.5% R&D ~4 - 6% ~2 - 3% Holding cost (underlying) ~EUR20 million - EUR25 million Expected corporate tax rate ~30% Financing EUR500 million bond (5,25% coupon) will mature in September EIB loan EUR250 milli
Slide 56: Group 2012 – 2016: Key figures
Group 2012 – 2016: Key figures in EUR million 2012 2013 2014 2015 2016 Balance sheet Total assets 4,899 4,866 5,271 5,730 6,124 Shareholder‘s equity 1,465 1,339 1,197 1,562 1,781 Equity ratio (in %) 29.9 27.5 22.7 27.3 29.0 Pension liabilities 919 891 1,121 1,128 1,186 Net financial debt 98 147 330
Slide 57: Segments 2012 – 2016 Key figures
Segments 2012 – 2016 Key figures AUTOMOTIVE DEFENCE 2012 2013 2014 2015 2016 in EUR million 2012 2013 2014 2015 2016 2,378 2,270 2,466 2,621 2,670 Order intake 2,933 3,339 2,812 2,693 3,050 418 392 416 445 459 Order backlog (Dec. 31) 4,987 6,050 6,516 6,422 6,656 2,369 2,262 2,448 2,592 2,656 Sales
Slide 58: Cash Flow Statement Group
Cash Flow Statement Group Q4 Q1 Q2 Q3 Q4 Δ Q4 in EUR million 2015 2016 2016 2016 2016 2016/2015 Group Net Income 96 12 41 46 117 21 Amortization / depreciation 55 55 54 52 67 12 Change in pension accruals 2 - 16 2 - - 4 - 6 Cash Flow 153 51 97 98 180 27 Changes in working capital and other items 267
Slide 59: Quarterly development Group
Quarterly development Group Sales Operational earnings in EUR million in EUR million +6% +17% 1,698 171 1,601 146 1,419 1,305 1,180 1,034 115 966 724 101 662 72 79 526 19 30 31 52 52 60 51 60 635 654 695 643 664 -7 -7 -2 -4 -17 -4 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q4 2015 Q1 2016 Q2 2016 Q3 20
Slide 60: Quarterly development Automotive
Quarterly development Automotive Sales by division Operational earnings by division in EUR million in EUR million +5% +15% 695 60 60 664 635 654 643 51 52 52 397 387 36 366 380 364 36 26 34 36 231 243 225 245 20 16 19 225 11 13 68 69 78 78 80 6 7 8 7 5 1 -24 -26 -23 -24 0 0 -2 -48 -4 Q4 2015 Q1 2016
Slide 61: Quarterly cash flow statement Automotive
Quarterly cash flow statement Automotive Q4 Q1 Q2 Q3 Q4 Δ Q4 in EUR million 2015 2016 2016 2016 2016 2016/2015 Net income 43 38 43 36 49 +6 Amortization / depreciation 32 33 28 29 40 +8 Change in pension accruals - - - - 1 - 1 -1 Cash Flow 75 21 68 64 88 +13 Changes in working capital and other item
Slide 62: Key figures Automotive by division (FY 2015/2016)
Key figures Automotive by division (FY 2015/2016) Mechatronics Hardparts Aftermarket +2% +5% -3% +7% Sales 2,592 2,656 1,450 1,527 952 921 285 305 +3% +19% Opera- -15% 0% tional 216 223 119 142 73 62 27 27 earnings -0.6pp +0.1pp +1.2pp -1.0pp Opera- tional 7.7% 6.7% 9.5% 8.9% margin 8.3% 8.4% 8.2% 9
Slide 63: Quarterly development Defence
Quarterly development Defence Sales by division Operational earnings by division in EUR million in EUR million +7% +14% 965 1,034 115 101 63 404 391 724 662 77 528 315 227 244 25 270 178 30 172 19 150 179 16 408 483 25 263 287 361 30 25 19 -63 -57 -98 -84 4 -117 -1 1 4 -5 -3 -11 -4 -6 -3 Q4 2015 Q1
Slide 64: Quarterly cash flow statement Defence
Quarterly cash flow statement Defence Q4 Q1 Q2 Q3 Q4 Δ Q4 in EUR million 2015 2016 2016 2016 2016 2016/2015 Net income 67 - 20 3 13 78 +11 Amortization / depreciation 22 22 22 22 26 +4 Change in pension accruals 3 1 2 1 - 3 -6 Cash Flow 92 3 27 36 101 +9 Changes in working capital and other items 21
Slide 65: Key figures Defence by division (FY 2015/2016)
Key figures Defence by division (FY 2015/2016) Weapon a. Munition Electronic Solutions Vehicle Systems +14% +26% +16% -2% Sales 2,591 2,946 1,112 1,195 1,392 881 759 745 +46% +63% Opera- -4% 108 +867% tional 147 74 26 25 90 earnings 29 3 +1.3pp +1.5pp +1.8pp Opera- 0pp tional +5.0% 8.4% 9.7% +2.1% +
Slide 66: Income statement Group
Income statement Group Income Statement In EUR million 2015 2016 Δ 2015 2016 Δ Total operating performance 5,182 5,711 529 Net operating income (EBIT) 287 353 66 Net interest income 3 5 2 Interest expenses - 69 - 59 10 Other operating income 170 160 -10 Earnings before tax (EBT) 221 299 78 Cost of m
Slide 67: Cash flow statement Group
Cash flow statement Group Cash Flow Statement In EUR million 2015 2016 Δ 2015 2016 Δ Net Income 160 215 55 Capital increase RHM AG 228 0 -228 Amortization, depreciation and impairment 203 228 25 -1 Capital payment to/ capital contribution by non-controlling interests 0 1 Dotation of CTA -30 -30 Incr
Slide 68: Balance Sheet Group
Balance Sheet Group Balance Sheet In EUR million 2015 2016 Delta 2015 2016 Delta Non-current assets 2,648 2,762 114 Equity 1,562 1,781 219 Goodwill 827 819 - 8 Share capital 112 112 - Other tangible assets 35 53 18 Additional paid-in capital 528 532 4 Property, plant and equipment 1,314 1,378 64 Ret
Slide 69: Moderate headcount increase to accompany growth
Moderate headcount increase to accompany growth Headcount per segment Headcount regional in capacities at year end in capacities at year end 1.5% 20,676 20,993 20,166 RoW Mexico 7% 4% 10,934 10,820 15% 10,830 Brazil 5% Americas 5% Asia 48% Germany Europe 9,184 9,581 10,002 73% 152 161 171 2014 2015
Slide 70: Equity and pension liabilities: Financial solidity materially improved
Equity and pension liabilities Financial solidity materially improved Drivers Equity and Equity ratio EUR m % 1,500 40% 28% 27% 29% 30% 1,000 23% Delivery on our targets 20% 500 Capitalizing on our restructuring efforts 10% 0 0% Achievement of a solid equity ratio 2013 2014 2015 2016 Pension liabili
Slide 71: Automotive in China
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 2001 2012 2008 2009 2013 2012 En
Slide 72: Electrification and downsizing require more sophisticated products
Electrification and downsizing require more sophisticated products Coolant pump Exhaust gas recirculation Valve, cooler, bypass and Mechanical >6x Electrical Valve >3x bypass actuator Oil pump Piston Mechanical >3x Variable Aluminum >3x Steel © Rheinmetall AG / Corporate Presentation FY 2016 72
Slide 73: News about consolidation in Europe
News about consolidation in Europe Governmental shareholding restricts room for cross-border consolidation Big common armament programs as Nammo Patria catalyst for further consolidation are not Saab at European mid-term horizon Cobham BAE Systems Chemring Rheinmetall CH PL TUR RO Rheinmetall’s appr
Slide 74: Next events and IR contacts
Next events and IR contacts Events 2017 IR Contacts Lampe Conference Baden-Baden 28 Mar Franz-Bernd Reich Head of IR Roadshow London 4 April Tel: +49-211 473-4718 Q1 Earnings call 4 May Email: franz-bernd.reich@rheinmetall.com Annual Stockholders’ Meeting Berlin 9 May Dirk Winkels Warburg Highlights
Slide 75: 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

Rheinmetall — Investor Presentation (March 2017) on 6ix

Rheinmetall — Investor Presentation (March 2017)

Slide 1: Corporate Presentation

Slide 2: Highlights Rheinmetall Group FY 2016

Slide 3: Sales and profit growth boosted Free Cash Flow

Slide 4: Increased net income transformed into higher dividend

Slide 5: Conversion of profitable growth into free cash flow

Slide 6: Operating Free Cash Flow improved materially

Slide 7: Net-financial debt considerably improved on positive cash development

Slide 8: Group ROCE of 12.3% clearly above capital cost

Slide 9: Stable capex and R&D levels support future growth

Slide 10: First orders for public security and e-mobility

Slide 11: Investments in New Technologies initiated

Slide 12: Addressing the basic needs and megatrends in Defence and Automotive

Slide 13: Rheinmetall Automotive

Slide 14: Focused on the attractive segment of powertrain technology

Slide 15: Highlights Rheinmetall Automotive FY 2016

Slide 16: Automotive accelerated by excellent Mechatronics performance

Slide 17: Automotive car sales again outperforming global markets

Slide 18: Automotive with broad and global customer portfolio

Slide 19: Further margin improvement at slightly increased sales level

Slide 20: Market drivers: Realization of growth in changing market conditions

Slide 21: Stable development even with quick introduction of electric engines

Slide 22: Global LV production forecasted to grow

Slide 23: Impressive profitability improvement of Chinese activities

Slide 24: Three mainstreams for future mobility

Slide 25: Global CO2-Emissions regulation gets tougher

Slide 26: Rheinmetall Automotive's Road to 95 g CO2/km

Slide 27: Trend of hybridization opens potential for more Rheinmetall products

Slide 28: Full electric vehicles – complexity creates potential

Slide 29: Automotive strategy survey

Slide 30: Automotive network in China - Mechatronics

Slide 31: Summary: Automotive is well prepared

Slide 32: Rheinmetall Defence

Slide 33: Divisional structure of Defence

Slide 34: Highlights Rheinmetall Defence FY 2016

Slide 35: Defence with excellent cash conversion on improved profitability

Slide 36: Profitable growth especially in Weapon and Ammunition and Vehicle Systems

Slide 37: Regional distribution documents success of internationalization strategy

Slide 38: High order book coverage of near-term sales

Slide 39: Benefitting from growing and changing markets

Slide 40: Defence is at the beginning of long lasting market growth

Slide 41: Further increase of German defence budget expected

Slide 42: High domestic order potential

Slide 43: Down selection in major international vehicle systems offers potential

Slide 44: Securing growth by acquisition of further large-scale orders

Slide 45: Recent developments in establishing hubs and JVs

Slide 46: Weapon and Ammunition will be growing by various strategic partnerships

Slide 47: Expanding local footprint by individual industrial partnerships

Slide 48: Cooperation between Rheinmetall and Raytheon

Slide 49: Cooperation between Rheinmetall and Rohde & Schwarz

Slide 50: Defence strategy survey

Slide 51: Outlook 2017

Slide 52: Assumptions 2017

Slide 53: Outlook FY 2017: Sales growth and earnings improvement targeted

Slide 54: Appendix

Slide 55: Financial reminder for 2017

Slide 56: Group 2012 – 2016: Key figures

Slide 57: Segments 2012 – 2016 Key figures

Slide 58: Cash Flow Statement Group

Slide 59: Quarterly development Group

Slide 60: Quarterly development Automotive

Slide 61: Quarterly cash flow statement Automotive

Slide 62: Key figures Automotive by division (FY 2015/2016)

Slide 63: Quarterly development Defence

Slide 64: Quarterly cash flow statement Defence

Slide 65: Key figures Defence by division (FY 2015/2016)

Slide 66: Income statement Group

Slide 67: Cash flow statement Group

Slide 68: Balance Sheet Group

Slide 69: Moderate headcount increase to accompany growth

Slide 70: Equity and pension liabilities: Financial solidity materially improved

Slide 71: Automotive in China

Slide 72: Electrification and downsizing require more sophisticated products

Slide 73: News about consolidation in Europe

Slide 74: Next events and IR contacts

Slide 75: Disclaimer

Slide 76: © Rheinmetall AG / Corporate Presentation FY 2016