Rheinmetall Ag · XETR:RHM

Rheinmetall — Q2 2017 Earnings Presentation

32 slides from Rheinmetall's earnings presentation, Aug 3, 2017

  1. Slide 1: Conference Call Q2 2017

    Conference Call Q2 2017 Düsseldorf / 3 August 2017

  2. Slide 2: 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

  3. Slide 3: Highlights Rheinmetall Group Q2 2017

    Highlights Rheinmetall Group Q2 2017 Guidance raised upon another good quarter and positive outlook Sales increased by 3% to €1.459 bn or 2% currency adjusted Operating result moved up on margin improvement by 17% to €84 m Positive cash flow development continues Outlook raised on excellent Automoti

  4. Slide 4: Earnings benefit from good leverage

    Earnings benefit from good leverage Sales EBITDA Operational result in EUR million in EUR million in EUR million Operational margin in % 3% 9% 1,459 137 126 17% 1,419 84 72 5.8 5.1 Q2 Q2 Q2 Q2 Q2 Q2 2016 2017 2016 2017 2016 2017 © Rheinmetall AG / Conference Call Q2 2017 4

  5. Slide 5: Q2 with continued cash flow improvement

    Q2 with continued cash flow improvement Operating Free Cash Flow Earnings per share Headcount in EUR million in EUR million in capacities +125% 2% 19 7% 20,954 21,371 1.01 0.94 -75 Q2 Q2 Q2 Q2 30. June 30. June 2016 2017 2016 2017 2016 2017 © Rheinmetall AG / Conference Call Q2 2017 5

  6. Slide 6: Working capital reduction main driver for free cash flow

    Working capital reduction main driver for free cash flow Operating free cash flow development Main Drivers in EUR million y-o-y comparison +125% 19 16 10 Earnings after tax increased by €10 m 94 Working capital reduction of €94 m mainly on Defence prepayments 1 5 Others includes change of provisions

  7. Slide 7: Further reduction of net debt

    Further reduction of net debt Net Debt development in EUR million -49% 485 Net-debt reduced y-o-y by -€240 m Issuance of €122 m promissory notes (1.15%) to prepare 245 for €500 m bond (5.25%) redemption in September 2017 EIB loan (€250 m @ 0.96%) with payout in August 2017 for dedicated funding of A

  8. Slide 8: Highlights Rheinmetall Automotive Q2 2017

    Highlights Rheinmetall Automotive Q2 2017 Solid outperformance of a flat market Sales rose by 5% to €728 m, FX adjusted 4% Operating result grew by 12% to €67 m Operating margin increased by 0.6pp to 9.2% Free cash flow improved in Q2 by €18 m to €69 m Exhaust gas recirculation module © Rheinmetall

  9. Slide 9: Rheinmetall Automotive: Highly profitable sales growth with good cash generation

    Rheinmetall Automotive Highly profitable sales growth with good cash generation in EUR million Q2 2016 Q2 2017 Δ % H1 2016 H1 2017 Δ % Sales 695 728 4.7% 1,349 1,465 8.6% Operating result 60 67 11.7% 112 129 15.2% Operating margin in % 8.6 9.2 0.6pp 8.3 8.8 0.5 pp Operating Free Cash Flow 51 69 35.3

  10. Slide 10: Mechatronics driven by positive mix development

    Mechatronics driven by positive mix development Sales Automotive Operating result Automotive Reasons for result development in EUR million in EUR million 5% 12% Mechatronics 728 695 67 Increasing demand and favorable product mix 60 407 Hardparts 387 +5% +34% 47 Further recovery in trucks and 35 larg

  11. Slide 11: Another quarter with clear market outperformance in all regions

    Another quarter with clear market outperformance in all regions Regional sales development Automotive Regional sales growth Q2 2017 in EUR million in % (IHS July 2017) 5% 728 RoW 63 695 6 -5 Row 4 25 18 Asia 23 South America 76 93 (incl. China) 1 Asia China 30 116 125 -1 North America North America

  12. Slide 12: Successful quarter in a stagnant Chinese market

    Successful quarter in a stagnant Chinese market China LV production Sales in million Operating result in million / in % in million units +10% +13% 1,816 130 Solid operating leverage; 1,646 115 -1% margin increasing by 0.2pp 1,480 1,594 CNY 121 6.1 6.0 105 JVs: Hardparts outperforming 166 223 10 10 m

  13. Slide 13: Extending competencies towards E-mobility

    Extending competencies towards E-mobility Contract volume for electric vehicles (EV) New products for the International Motor Show (IAA) in Frankfurt, September 2017: Product Volume Contract duration (Ø) E-traction motor Battery EV ~€300 m 6 – 8 years High voltage motor (Plugin) Hybrid EV ~€200 m 4

  14. Slide 14: Highlights Rheinmetall Defence Q2 2017

    Highlights Rheinmetall Defence Q2 2017 Further margin improvement and high order intake Lance turret Order intake in excess of 1€ bn Flat sales development as expected Operating result rose by €5 m to €24 m Operating margin gained 0.7pp to 3.3% HX 77 Military truck with Australian camouflage © Rhein

  15. Slide 15: Rheinmetall Defence: Strong order intake on track to achieve FY guidance

    Rheinmetall Defence Strong order intake on track to achieve FY guidance in EUR million Q2 2016 Q2 2017 Δ % H1 2016 H1 2017 Δ % Order intake 803 1,031 28.4% 1,751 1,422 -18.8% Sales 724 731 1.0% 1,250 1,343 7.4% Operating result 19 24 26.3% 2 14 600.0% Operating margin in % 2.6 3.3 0.7pp 0.2 1.0 0.8p

  16. Slide 16: Q2 marked by operational strength in Vehicle Systems

    Q2 marked by operational strength in Vehicle Systems Sales Defence Operating results Defence Reasons for result development in EUR million in EUR million +1% +26% Weapon and Ammunition 724 731 19 24 Weaker sales and temporary shift to lower margin product mix 315 -3% 305 -52% 12 Electronic Solutions

  17. Slide 17: Excellent order entry development mainly driven by Electronic Solutions

    Excellent order entry development mainly driven by Electronic Solutions Order intake by division Order backlog profile in EUR million in EUR billion 6.9 6.7 +28% 2.2 1,031 208 1.7 803 1.4 1.4 544 633 Weapon and Ammunition Electronic Solutions 181 Vehicle Systems 229 107 Consolidation -29 -39 Q2 2016

  18. Slide 18: German order entry on good track to achieve target

    German order entry on good track to achieve target Order intake Germany by Quarter Projects Amount Total German volume (net value) various projects €146 m Q1: €146 m H1 Gladius €310 m various projects €221 m Q2: €531 m H1: €677 m Trucks €220 m Puma package €100 m Tank ammunition €38 m H2 ~€850 m = b

  19. Slide 19: Outlook 2017

    Outlook 2017 Guidance raised on improved Automotive outlook AU TO M OT I V E DEFENCE M a c ro v i ew Global LV production growth ~2%* Further demand increase in key markets Chinese LV production growth ~1% Germany and other allies have increased investment budgets R h e i n m eta l l Automotive expe

  20. Slide 20: Appendix

    Appendix © Rheinmetall AG / Conference Call Q2 2017 20

  21. Slide 21: 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 million (0,962% c

  22. Slide 22: Cash Flow Statement Group

    Cash Flow Statement Group Q2 H1 Q3 Q4 Q1 Q2 H1 Δ Q2 Δ H1 in EUR million 2016 2016 2016 2016 2017 2017 2017 2016/2017 2016/2017 Group Net Income 41 53 46 116 28 51 79 10 26 Amortization / depreciation 54 109 52 67 57 55 112 1 3 Change in pension accruals 2 -14 - - -34 -3 -37 -5 -23 Cash Flow 97 148 9

  23. Slide 23: Quarterly development Group

    Quarterly development Group Sales Operational results in EUR million in EUR million 1,698 171 1,419 1,459 1,305 1,349 1,034 115 724 612 731 662 84 72 79 24 19 30 50 695 664 737 728 67 643 60 60 62 51 -7 -2 -4 -10 -7 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 -2 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 D

  24. Slide 24: Quarterly development Automotive

    Quarterly development Automotive Sales by division Operational results by division in EUR million in EUR million 737 728 67 695 62 664 60 643 60 51 425 407 387 47 355 380 35 43 35 36 243 249 251 225 222 22 16 17 16 11 82 81 85 83 93 8 8 8 7 9 -17 -18 -23 -20 -23 1 -4 -5 -5 -5 Q2 2016 Q3 2016 Q4 2016

  25. Slide 25: Cash flow statement Automotive

    Cash flow statement Automotive Q2 H1 Q3 Q4 Q1 Q2 H1 Δ Q2 Δ H1 in EUR million 2016 2016 2016 2016 2017 2017 2017 '16/'17 '16/'17 Net income 42 80 36 49 46 50 96 8 16 Amortization / depreciation 31 64 29 40 32 32 64 1 - Change in pension accruals - - -1 -1 - - - - - Cash Flow 73 144 64 88 78 82 160 9

  26. Slide 26: Quarterly development Defence

    Quarterly development Defence Sales by division Operational earnings by division in EUR million in EUR million 115 1,034 63 391 724 662 731 612 25 315 227 305 30 244 191 19 24 172 138 179 141 25 12 483 25 30 361 350 337 287 14 4 4 0 1 -1 1 -57 -98 -84 -67 -52 -3 -3 -4 -1 -1 -6 -7 Q2 2016 Q3 2016 Q4

  27. Slide 27: Cash flow statement Defence

    Cash flow statement Defence Q2 H1 Q3 Q4 Q1 Q2 H1 Δ Q2 Δ H1 in EUR million 2016 2016 2016 2016 2017 2017 2017 '16/'17 '16/'17 Net income 3 -17 13 78 -16 8 -8 5 9 Amortization / depreciation 22 44 22 26 24 22 46 - 2 Change in pension accruals 2 3 1 1 -3 -6 -9 -8 -12 Cash Flow 27 30 36 105 5 24 29 -3 -

  28. Slide 28: Income statement Group

    Income statement Group In EUR million Income Statement Q2 '16 Q2 '17 Δ Q2 '16 Q2 '17 Δ Total operating performance 1,461 1,493 32 Net operating income (EBIT) 72 81 9 Net interest income 1 - -1 Interest expenses - 15 - 13 2 Other operating income 33 36 3 Earnings before tax (EBT) 58 68 10 Cost of mat

  29. Slide 29: Cash flow statement Group

    Cash flow statement Group In EUR million Cash Flow Statement Q2 '16 Q2 '17 Δ Q2 '16 Q2 '17 Δ Net Income 41 51 10 Capital payment to/ capital contribution by non-controlling interests0 0 0 Amortization, depreciation and impairment 54 55 1 Increase in shares in consolidated subsidiaries 0 0 0 Dotation

  30. Slide 30: Balance Sheet Group

    Balance Sheet Group In EUR million Balance Sheet 31.12.'16 30.06.'17 Δ 31.12.'16 30.06.'17 Δ Non-current assets 2,762 2,727 -35 Equity 1,781 1,781 0 Intangible assets 819 804 -15 Share capital 112 112 0 Property, plant and equipment 1,378 1,351 -27 Additional paid-in capital 532 536 4 Investment pro

  31. Slide 31: Next events and IR contacts

    Next events and IR contacts Events 2017 IR Contacts Commerzbank Conference Frankfurt 29 Aug Franz-Bernd Reich Head of IR UBS German Conference New York 13 - 14 Sept Tel: +49-211 473-4718 Goldman / Berenberg Conference Munich 19 - 20 Sept Email: franz-bernd.reich@rheinmetall.com Q3 Earnings call 7 No

  32. Slide 32: © Rheinmetall AG / Conference Call Q2 2017

    © Rheinmetall AG / Conference Call Q2 2017 32

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