Rheinmetall Ag · XETR:RHM
Rheinmetall — Investor Presentation (March 2006)
38 slides from Rheinmetall's investor presentation, March 2006
Slide 1: Corporate Presentation Rheinmetall AG
Corporate Presentation Rheinmetall AG March 2006 1
Slide 2: Highlights of 2005 and Future Prospects
Rheinmetall Group Highlights of 2005 and Future Prospects Rheinmetall attains sales and earnings goals for 2005 EBIT and pre-tax earnings rise Earnings per share up strongly Automotive and Defence report sharp improvements in performance Kolbenschmidt Pierburg generates record sales, clearly o
Slide 3: Organic sales growth at Automotive and Defence
Rheinmetall Group Organic sales growth at Automotive and Defence Sales € million Comparison of sales: 2005 vs. 2004 € million +1.2% +3.7% 3,413 3,454 3,330 3,454 +5.6% +1.5% 1,941 2,050 1,384 1,402 2004 2005 2004 2005 2004 2005 2004 2005 Rheinmetall Group Rheinmetall Group Automotive Defence 3
Slide 4: Clear improvement in Group earnings
Rheinmetall Group Clear improvement in Group earnings EBIT € million EBT € million Net Income € million Earnings per share € +3.7% +16.4% +16.8% +20.8% 3.19 217 225 2.64 * 170 146 118 101 6.5% 6.4% 4.9% 4.3% 2004 2005 2004 2005 2004 2005 2004 2005 EBIT margin EBT margin *Common stock 4
Slide 5: Rheinmetall: Going for international growth
Rheinmetall Group Rheinmetall: Going for international growth Sales € million Sales by region Asia 3,454 North America Other 3,413 6% 5% 11% 33% 67% 64% 45% Germany Europe (without Germany) 2004 2005 Domestic Export ratio Foreign 5
Slide 6: Equity ratio, gearing, and return on capital continue to improve
Rheinmetall Group Equity ratio, gearing, and return on capital continue to improve Equity € million Net financial liabilities € million ROCE % Equity ratio 26% 25% Gearing 875 20% 779 15.2 828 17% 14.9 729 154 151 (95%) (94%) 2004 2005 2004 2005 2004 2005 Equity Equity of Rheinmetall shareholders 6
Slide 7: Adjusted EBIT and adjusted ROCE rise significantly
Rheinmetall Group Adjusted EBIT and adjusted ROCE rise significantly Adjusted EBIT € million Adjusted EBIT margin % Adjusted ROCE % +9.4% 245 16.6 224 15.4 7.1 6.6 2004 2005 2004 2005 2004 2005 7
Slide 8: Adjusted EBIT
Rheinmetall Konzern Adjusted EBIT € million 2004 2005 EBIT 217 225 shareholdings (23) (4) real estate 4 (1) restructuring programs 26 17 finance rescheduling -- 8 Adjusted EBIT 224 245 8
Slide 9: Employee productivity continues to increase
Rheinmetall Group Employee productivity continues to increase Headcount (Dec. 31) Sales per employee € thousand Value added per employee € thousand +1.4% +5.0% +4.5% 18,283 18,548 188 179 67 70 2004 2005 2004 2005 2004 2005 9
Slide 10: Key components of the cash flow statement
Rheinmetall Group Key components of the cash flow statement Capital expenditure Operational free Depreciation € million Cash flow in € million € million cash flow € million 277 264 183 190 63 168 157 5.5% 5.4% (19) 2004 2005 2004 2005 2004 2005 2004 2005 Capex ratio 10
Slide 11: Rheinmetall increases market capitalization and weight in MDAX
Rheinmetall Group Rheinmetall increases market capitalization and weight in MDAX Stock market value at December 31 € million Rise in common stock share price p.a. 2003: + 56% 2,347 2004: + 63% 1,917 2005: + 36% 1,394 MDAX position (market capitalization) 840 Dec. 31, 2003: 36 (preference shares only
Slide 12: Higher proposed dividend for 2005
Rheinmetall Group Higher proposed dividend for 2005 Dividend € 0.90 0.80 0.70 0.70 0.74 0.64 0.64 0.50 0.50 0.44 0.44 2001 2002 2003 2004 2005 Dividend per common share Bonus dividend €0.20 Dividend per preferred share 12
Slide 13: Rheinmetall Automotive
RHEINMETALL Rheinmetall Automotive 13
Slide 14: Highlights for 2005: Kolbenschmidt Pierburg
Rheinmetall Automotive Highlights for 2005: Kolbenschmidt Pierburg Sales and earnings again reach record levels Systematic policy of internationalization continues Positive trend in US operations Capex also targeted at German plants Innovation drive continues 14
Slide 15: Kolbenschmidt Pierburg breaks through €2 billion sales barrier
Rheinmetall Automotive Kolbenschmidt Pierburg breaks through €2 billion sales barrier Sales € million Capital expenditure € million Headcount (Dec. 31) +5.6% +21.8% +2.9% 2,050 11,699 1,941 11,364 162 133 2004 2005 2004 2005 2004 2005 15
Slide 16: Kolbenschmidt Pierburg substantially outpaces the market
Rheinmetall Automotive Kolbenschmidt Pierburg substantially outpaces the market Car production in million units Kolbenschmidt Pierburg: Growth by region +5.6% +1.3% +20.8% +7.7% +30.5% +18.4% +4.2% 59.7 62.3 (1.1%) +/-0% +15.4% +3.6% 16.9 16.7 +8.2% 15.8 15.8 11.2 12.9 9.6 9.9 3.0 3.3 2004 2005 2004
Slide 17: Kolbenschmidt Pierburg's performance continues to improve
Rheinmetall Automotive Kolbenschmidt Pierburg’s performance continues to improve EBIT € million EBT € million ROCE % 146 127 139 20.2 111 20.0 7.2% 7.1% 6.2% 5.7% 2004 2005 2004 2005 2004 2005 EBIT margin EBT margin 17
Slide 18: Rheinmetall Automotive steps up international activities
Rheinmetall Automotive Rheinmetall Automotive steps up international activities North and South America Europe Asia USA Czech Republic Japan Setting up of a joint Opening of a Pierburg plant Opening of a customer venture with Miba for plain in Ústí service centre in Tokyo bearings production materia
Slide 19: Rheinmetall Automotive steps up international activities
Rheinmetall Automotive Rheinmetall Automotive steps up international activities America Europe Asia Takeover of Pistones Moresa Pierburg production plant Stake in Shriram, New Delhi, in Celaya, Mexico in Ústí, Czech Republic India, increases from 3% to 20% Sales: €15 million Sales: €8 million Sales:
Slide 20: Positive trend in US operations: Turnaround in plain bearings
Rheinmetall Automotive Positive trend in US operations: Turnaround in plain bearings Pistons USA Marinette, WI (pistons) Headcount: 1,175 251 266 237 23.6 20.9 14.4 2003 2004 2005 Sales in US$ million EBIT in US$ million Fort Wayne, IN (pistons) Headcount: 220 Plain Bearings USA Greensburg, IN (plai
Slide 21: Capital expenditure at German locations: Customer and engineering centres
Rheinmetall Automotive Capital expenditure at German locations: Customer and engineering centres Neckarsulm Neuss To be completed in 2006 Completed in 2005 Capex volume: approx. €20 million 21
Slide 22: Capital expenditure at German locations: Finishing of engine blocks
Rheinmetall Automotive Capital expenditure at German locations: Finishing of engine blocks KS Aluminium Technology: sales and EBIT in € million Processing centre for KS Aluminium Technology 4.3% 2.7% -1.9% 210 183 160 Increased value added by processing 9 engine blocks 5 Casting and processing u
Slide 23: Innovation assures future growth
Rheinmetall Automotive Innovation assures future growth AGR cooler module Metal matrix composite engine block High integration of several Pierburg components Use of aluminium matrix composite materials Inexpensive aluminium pressure-cast cooler For highly robust cylinder crankcases Lower NOX emi
Slide 24: Innovation assures future growth
Rheinmetall Automotive Innovation assures future growth Steel pistons New plain bearings material Steel pistons making inroads in top-quality Newly developed steel-plastic composite material LCV segment worldwide Superior performance, e.g. in diesel injection pumps Trendsetter for future die
Slide 25: Kolbenschmidt Pierburg's innovation drive continues
Rheinmetall Automotive Kolbenschmidt Pierburg’s innovation drive continues Research and development in million € / as a percentage of sales 5.0% 5.1% 4.3% 104 97 81 2003 2004 2005 25
Slide 26: Rheinmetall Defence
RHEINMETALL Rheinmetall Defence 26
Slide 27: Highlights for 2005: Rheinmetall Defence
Rheinmetall Defence Highlights for 2005: Rheinmetall Defence Earnings and return on capital significantly improved Innovative projects result in new orders New market potential thanks to government-to-government transactions Well-targeted acquisitions 27
Slide 28: Incoming orders up by over 40 percent
Rheinmetall Defence Incoming orders up by over 40 percent Sales in € million Incoming orders € million Order backlog € million Headcount +1.2% +40.9% +6.1% -0.9% 2,565 2,418 6,799 6,741 1,553 1,384 1,401 1,102 2004 2005 2004 2005 2004 2005 2004 2005 28
Slide 29: EBIT margin rises to 6.9 percent
Rheinmetall Defence EBIT margin rises to 6.9 percent EBIT € million EBT € million ROCE % 97 18.4 77 77 15.5 56 6.9% 5.5% 5.6% 4.0% 2004 2005 2004 2005 2004 2005 EBIT margin EBT margin 29
Slide 30: Sales and EBIT of Rheinmetall Defence
Rheinmetall Defence Sales and EBIT of Rheinmetall Defence 8.1% 11.1% 7.1% -0.3% 402 383 349 44 286 28 27 (1) Land Systems Weapon Munition Defence Electronics Air Defence Systems Sales EBIT EBIT margin 30
Slide 31: Major incoming orders for strategically important projects (1)
Rheinmetall Defence Major incoming orders for strategically important projects (1) Fuchs/Fox NBC armoured Cargo loading system for A400M reconnaissance vehicle NBC Fuchs/Fox with “B” component Rheinmetall takes to the air: (detects biological agents) 180 cargo loading systems for the new A400M 32 sy
Slide 32: Major incoming orders for strategically important projects (2)
Rheinmetall Defence Major incoming orders for strategically important projects (2) Armoured vehicles Large-calibre ammunition Special purpose armoured vehicles for the Temperature-independent ammunition DM 63 Bundeswehr: - Incoming order – Germany: €30 million 100 Yak protected multipurpose vehicles
Slide 33: Major milestones reached
Rheinmetall Defence Major milestones reached Puma infantry fighting vehicle KZO unmanned reconnaissance aircraft The German Army’s most important World’s most advanced tactical reconnaissance procurement project system keeps troops out of harm’s way Total order volume: November 2005: first system tr
Slide 34: Government-to-government contracts bring added market potential
Rheinmetall Defence Government-to-government contracts bring added market potential Government-to-government Vehicle maintenance Greece (333 used Leopard 1 and 2) Sales trend: - Anticipated order volume for Rheinmetall in 2006: €80 million 2003: €39 million Türkei (298 used Leopard 2) 2004: €46 mill
Slide 35: Carefully targeted acquisitions in 2005
Rheinmetall Defence Carefully targeted acquisitions in 2005 telerob AIM Arges Stake in telerob GmbH Acquisition of 50% stake in 100% takeover of competitor increased from 57% to 100% AIM Infrarot Module GmbH Arges m.b.H. of Austria (remaining 50% held by Diehl) World’s leading supplier of Excellent
Slide 36: Prospects
RHEINMETALL Prospects 36
Slide 37: Prospects for 2006/2007
Rheinmetall Group Prospects for 2006/2007 Organic growth Automotive: Increasing sales revenue Defence: Steadily rising sales Average organic growth of 5% p.a. in the Rheinmetall Group Performance Automotive: Slight decline in earnings in 2006 - Rising earnings starting in 2007 Defence: Maintaining p
Slide 38: New Group performance goals for Rheinmetall
Rheinmetall Group New Group performance goals for Rheinmetall 20% EBIT margin and ROCE continue to be the main 16.6 Previous target: 15% 15.4 yardsticks for measuring performance 13.4 10.9 8.6 New margin targets are to be ROCE* % 4.3 attained in three to five years 9% Previous target: 7% 7.1 Presupp