Rheinmetall Ag · XETR:RHM
Rheinmetall — Investor Presentation (January 2018)
96 slides from Rheinmetall's investor presentation, January 2018
Slide 1: Rheinmetall AG Corporate Presentation
Rheinmetall AG Corporate Presentation Düsseldorf, January 2018
Slide 2: Rheinmetall Group
Appendix: Q3 2017 RHEINMETALL GROUP © Rheinmetall AG / Corporate Presentation January 2018 2
Slide 3: Rheinmetall Group: Serving the need for mobility and security
Rheinmetall Group Rheinmetall Group: Serving the need for mobility and security Sales €5,602m Organic growth Key EBIT €353m Strategy Performance Internationality expansion Operating FCF €161m roadmap Indicators EPS Headcount €4.69 20,993 (FTE) 2016 Leading by innovations Targeted acquisitions AUTOMO
Slide 4: Good business development in the first 9 months
Rheinmetall Group Good business development in the first 9 months Sales Operational result in EUR million in EUR million Operational margin in % 27% 7% 231 5% 4,174 3,904 23% 1,366 182 97 1,305 79 7.1 5.5 6.1 4.7 Q3 Q3 9m 9m Q3 Q3 9m 9m 2016 2017 2017 2017 2016 2017 2016 2017 © Rheinmetall AG / Corp
Slide 5: Financial KPIs on a positive track
Rheinmetall Group Financial KPIs on a positive track Equity ratio Moody’s Rating in % 31% 29% Ba1 Positive 27% Ba1 Stable Ba1 Negative 2015 2016 9m 2017 2015 2016 2017 © Rheinmetall AG / Corporate Presentation January 2018 5
Slide 6: Rheinmetall Automotive
Appendix: Q3 2017 RHEINMETALL AUTOMOTIVE © Rheinmetall AG / Corporate Presentation January 2018 6
Slide 7: Drivers for growth: rising fleet and regulatory restrictions
Rheinmetall Automotive Drivers for growth Rising global fleet and regulatory restrictions are supporting our growth Light vehicle production Emission limits: CO2 Emission limits: NOx million vehicles per year in g/km in mg/km +2% 124 102 -24% -56% 96 125 180 95 80 2017 2020 2030 2015 2020 EU5 EU6 Ou
Slide 8: Drivers for growth: ICE tapers off, E-mobility offers chances
Rheinmetall Automotive Drivers for growth ICE tapers off, but continues to dominate; E-mobility offers additional chances Light vehicle production 151 million vehicles per year 124 112 102 75.5 96 85,0 89.5 89,0 92,0 75.5 39,0 4,0 22.5 13,0 2017 2020 2025 2030 2040 E-Vehicles/Hybrids Combustion engi
Slide 9: Strategic goal to reduce ICE exposure
Rheinmetall Automotive Strategic goal to reduce ICE exposure Sales split Combustion Engines Combustion Engines 75% LV 85% 40% LV 30% 10% Truck 10% Truck e.g.: E-Mobility pistons Electric Drive engine blocks Hybrid Drive 2016 EGRs 2040 e.g.: 20% 30% E-engine housing (thereof non-ICE battery tray rela
Slide 10: Emissions: Additional new products at a glance
Rheinmetall Automotive Emissions Additional new products at a glance Electrical Vacuum Pump EVP 40 Electrical Vapor Pump Booked business for series production Booked business for series production Start of production 2017! Start of production 2018! New Side-Channel Secondary Air Pump Wastegate Actua
Slide 11: Efficiency: Variable valve train – UpValve
Rheinmetall Automotive Efficiency Variable valve train – UpValve Booked business for series production Asian customer – SOP 2020 4-cyl.-4V-turbo gasoline engine UpValve System Integrated in Gasoline Cylinder Head SOP: Start of production © Rheinmetall AG / Corporate Presentation January 2018 11
Slide 12: Efficiency: Lightweight design parts
Rheinmetall Automotive Efficiency Lightweight design parts – Valuable for all vehicle and powertrain concepts Existing Aluminum die cast technology Rear Axle Subframe Weight: 18 kg SOP: 01/2017 Lightweight is a strong trend in all Battery Box powertrain concepts Weight: 17 kg SOP: 2018 Housing for e
Slide 13: E-Mobility: complementary set of skills
Rheinmetall Automotive E-Mobility Rheinmetall commands an complementary set of skills for E-mobility Battery Pack Various Electrical Auxiliaries Electr. Coolant Pumps & Valves Electr. Oil Pumps Electr. A/C Compressor Electr. Vacuum Pumps Electr. Air Blower for Batt.-TM Thermal Management E-Traction
Slide 14: Automotive prepares to participate in future growth in China
Rheinmetall Automotive Automotive: Automotive prepares to participate in future growth in China China Strategy Chinese LV production In Mio. units 40 +45% Increase Chinese share of total Automotive sales 32 33 31 32 29 30 30 27 28 28 Strengthen presence by further local investment 23 24 Continue our
Slide 15: Automotive: Drivers for structural earnings improvement
Rheinmetall Automotive Automotive: Drivers for structural earnings improvement Automotive EUR In billion % 4 10% Continuing growth of 100-200 bp above LV production rate 9% Increasing share of higher margin Mechatronics business 3 ~ 8.5% Optimization of the cost structure in Hardparts, e.g. by 8% cl
Slide 16: Rheinmetall Defence
Appendix: Q3 2017 RHEINMETALL DEFENCE © Rheinmetall AG / Corporate Presentation January 2018 16
Slide 17: Multiple pillars support long-term demand growth
Rheinmetall Defence Multiple pillars support long-term demand growth EU defence policy NATO and international demand German defence policy European defence union; European defence fund New Products Generally increasing defence budgets From hollow structures to full equipment Digitization of army equ
Slide 18: German defence policy: Striving for full equipment
Rheinmetall Defence German defence policy: Striving for full equipment New Role Very High Readiness Joint Task Force Lead nation European land-systems More Personnel Mid-term return to 220,000 soldiers, from presently 170,000 Full Equipment Return to 100% equipment level Long-term structural reinfor
Slide 19: Germany is one of 22 NATO states to increase defence budgets
Rheinmetall Defence German defence policy: Germany is one of 22 NATO states to increase defence budgets Enhanced future profile of German Bundeswehr German defence budget 2016-2021 in € bn As % “Anchor army” for smaller neighbors of GDP Leading role in the “enhanced Forward 2.0% Presence” in Lithuan
Slide 20: Additional structural demand of German army under discussion
Rheinmetall Defence German defence policy: Additional structural demand of German army under discussion Vehicles – mid-to-long term potential Fox (400 vehicles) Boxer (300-400 vehicles) Trucks (> 10.000 vehicles) Puma (~250 vehicles) Equipment and ammunition – multi billion programs NNBS (Short air
Slide 21: German defence policy: Army 4.0
Rheinmetall Defence German defence policy: Army 4.0 Integration of soldier systems, vehicles and BMS will be essential Gladius Soldier System: System approach to soldier equipment Mission specific configurable equipment TacNet BMS*: Sensor-effector network Processing and visualization of information
Slide 22: Army 4.0: Rheinmetall integrates components to systems
Rheinmetall Defence German defence policy: Army 4.0 Rheinmetall integrates components to systems MoTaKo Battle Management Network Network-capability Air Defence Combined Systems System house Armored Infantryman Digitization HX truck Gladius Lynx Systems / Platforms Integration Key Components Lance t
Slide 23: German contracts essential for good order intake in 9m 2017
Rheinmetall Defence German defence policy: German contracts essential for good order intake in 9m 2017 Order intake by division Order backlog profile in EUR million in EUR billion 6.9 6.7 -1% 2.5 2,325 2,292 960 699 1.8 Major German 1.5 946 orders with total 881 value ~€1.3 bn 0.9 included 610 747 -
Slide 24: EU defence policy: Franco-German initiative
Rheinmetall Defence EU defence policy: Franco-German initiative with a project basket of approx. €175 bn Franco-German lighthouse projects Main Focus of Rheinmetall Defence Rheinmetall participates as component supplier © Rheinmetall AG / Corporate Presentation January 2018 24
Slide 25: EU defence policy: EU brought defense matters back on the agenda
Rheinmetall Defence EU defence policy: EU brought defense matters back on the agenda Drivers for European defense politics Gain strategic autonomy Improve efficiency and interoperability Increase EU industry competitiveness European Council decision Permanent structured cooperation (Pesco) European
Slide 26: EU defence policy: Standardization required in Europe
Rheinmetall Defence EU defence policy: Standardization required in Europe Pesco member states Current situation Benefits of Pesco US Army European NATO member Main Battle Tanks Combined 1 system 17 systems, thereof: technology Abrams Leopard 2 (D) Leclerc (F) Ariete (I) Challenger 2 (UK) Infantry Ve
Slide 27: NATO and international demand: Budget growth
Rheinmetall Defence NATO and international demand: Budget growth remains an important growth driver NATO target compliance Only 6 out of 29 member states are currently in line with the 2% target 50% of member states spend below 20% on equipment © Rheinmetall AG / Corporate Presentation January 2018
Slide 28: Framework nation concept triggers standardization
Rheinmetall Defence NATO and international demand: Framework nation concept triggers standardization of equipment Framework nation concept Joint concept + + EU NATO states Partner Joint training Standardized equipment German initiative Framework nation provides basic military structures (incl. logis
Slide 29: VJTF stimulates German and other countries' demand
Rheinmetall Defence NATO and international demand: VJTF stimulates German and other participating countries’ demand Very High Readiness Joint Task Force (VJTF) VJTF „the spearhead“ as part of the NATO Response Force Multinational brigade with 5 battalions (5.000 troops) Rotating lead nations Start o
Slide 30: Current tenders: UK and Australian vehicle programs
Rheinmetall Defence NATO and international demand (current tenders): UK and Australian vehicle programs UK Mechanised Infantry Challenger Upgrade LAND 121 Phase 3b LAND 400 Phase 2 Vehicle 227 vehicles with total value of Around 2,500 vehicles and 3,000 225 vehicles > GBP 0.5 bn modules 500 8x8 Boxe
Slide 31: Eastern European vehicle programs
Rheinmetall Defence NATO and international demand: Eastern European vehicle programs Leopard 2 upgrade Boxer BMP-2 replacement 8x8 TBT / AGILIS Poland Lithuania Czech Republic Romania Modernization of 88 Boxer (infantry fighting >200 infantry fighting vehicles 342 vehicles 128 Leopard tanks vehicles
Slide 32: New products: Innovative solutions as a catalyst for growth
Rheinmetall Defence New products: Innovative solutions as a catalyst for future growth New Vehicles New Air Defence Main battle tanks Gun-based Next generation artillery systems Missile-based (cooperation) Infantry fighting vehicles Main product innovations New Ammunition New Electronic Components T
Slide 33: Defence: Drivers for structural earnings improvement
Rheinmetall Defence Defence: Drivers for structural earnings improvement Defence EUR In billion % CAGR 2017-2020: ~10% 10% 3 Improving market environment 6-7% Increasing margins due to the lower impact of Revision legacy contracts 2 of mid- term 5% Higher margin contained in the order book guidance
Slide 34: Rheinmetall Group
Appendix: Q3 2017 RHEINMETALL GROUP © Rheinmetall AG / Corporate Presentation January 2018 34
Slide 35: Solid performance from a strong financial base
Appendix: Q3 2017 Solid performance from a strong financial base GROWTH Positive business cycle in both segments Automotive outpacing market Defence growing at double digits PERFORMANCE Profitability significantly improved Targeted margin corridor within reach Cash conversion on high level STABILITY
Slide 36: Rheinmetall Group Appendix
Appendix: Q3 2017 RHEINMETALL GROUP APPENDIX © Rheinmetall AG / Corporate Presentation January 2018 36
Slide 37: Outlook: Guidance affirmed for 2017
Appendix: Rheinmetall Group Outlook Guidance affirmed for 2017 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 stepped up investment budgets R h e i n m eta l l Automotive
Slide 38: Selected key data: outlook 2017
Appendix: Rheinmetall Group Selected key data: outlook 2017 Rheinmetall Group Automotive Defence Holding cost ~€20 – 25 m Capex* ~5.5 - 6.5% ~3 - 4% Tax rate ~30% D & A* ~4.5 - 5.5% ~3 - 3.5% R & D* ~4 - 6% ~2 - 3% Financing: Bond €500 m (5.25% coupon) redeemed in September 2017 EIB loan €250 m (0.9
Slide 39: Group 2012 – 2016: Key figures
Appendix: Rheinmetall Group 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 Ne
Slide 40: Segments 2012 – 2016 Key figures
Appendix: Rheinmetall Group 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,
Slide 41: Income statement Group
Appendix: Rheinmetall Group Income statement Group In EUR million Income Statement Q3 '16 Q3 '17 Δ Q3 '16 Q3 '17 Δ Total operating performance 1.385 1.407 22 Net operating income (EBIT) 79 75 -4 Net interest income 1 3 2 Interest expenses - 15 - 13 2 Other operating income 26 19 -7 Earnings before t
Slide 42: Cash flow statement Group
Appendix: Rheinmetall Group Cash flow statement Group In EUR million Cash Flow Statement 9m 2016 9m 2017 Δ 9m 2016 9m 2017 Δ Net Income 99 122 23 Capital payment to/ capital contribution by non-controlling interests-8 -10 -2 Amortization, depreciation and impairment 161 171 10 Increase in shares in
Slide 43: Balance Sheet Group
Appendix: Rheinmetall Group Balance Sheet Group In EUR million Balance Sheet 31.12.'16 30.09.'17 Δ 31.12.'16 30.09.'17 Δ Non-current assets 2,762 2,715 -47 Equity 1,781 1,811 30 Intangible assets 819 798 -21 Share capital 112 112 0 Property, plant and equipment 1,378 1,340 -38 Additional paid-in cap
Slide 44: Equity and pension liabilities: Financial solidity materially improved
Appendix: Rheinmetall Group Equity and pension liabilities Financial solidity materially improved Drivers Equity and Equity ratio EUR m % 1.500 40% 29% 31% 28% 27% 29% 30% 1.000 23% Confidence increased by delivery on our targets 20% 500 Capitalizing on our restructuring efforts 10% 0 0% Achievement
Slide 45: Net-financial debt considerably improved
Appendix: Rheinmetall Group Net-financial debt considerably improved on positive cash development Net-financial debt Debt composition and maturity profile of instruments in EUR million at quarter end in EUR million 652 -19 20 Other & Leasing 2017 2018 2019 2020 2021 2022 2023ff 139 29 Bank loan 35 8
Slide 46: Continuing ROCE improvement
Appendix: Rheinmetall Group Continuing ROCE improvement ROCE in % Pre-tax WACC 20% (2016): 19.0% 18.8% 15% 16.7% 12.3% 10.6% 10.9% Automotive 10% 10.7% 9.8% 9.3% Defence 4.7% 5% 3.9% 6.1% 0.3% 0% -4.6% -5% 2013 2014 2015 2016 Group Defence Automotive © Rheinmetall AG / Corporate Presentation January
Slide 47: More than 100 production sites and offices on all continents
Appendix: Rheinmetall Group Rheinmetall Group: More than 100 production sites and offices on all continents Germany UK Defence Russia USA Netherlands Norway Singapore Sites Canada Switzerland Sweden South Saudi Arabia Malaysia Mexico Austria Poland Africa UAE Australia Italy USA Mexico Japan China G
Slide 48: ESG with high importance for Rheinmetall
Appendix: Rheinmetall Group ESG with high importance for Rheinmetall Environment Social Governance • Reduction of the ecological footprint • Clear statement against cluster munition • Transparency towards customer, • Decrease of energy needed • Promoting education and training investors and other st
Slide 49: Management Structure
Appendix: Rheinmetall Group Management Structure Board of Directors (Group) Peter S. Krause Horst Binnig Armin Papperger Helmut P. Merch Human Resources Board Member CEO CFO Management Board Management Board (Automotive) (Defence) Horst Binnig Olaf Hedden Peter S. Krause Armin Papperger Gordon Hargr
Slide 50: Moderate headcount increase to accompany growth
Appendix: Rheinmetall Group Moderate headcount increase to accompany growth Headcount per segment Headcount per region 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,
Slide 51: Rheinmetall Q3 2017 Appendix
Appendix: Q3 2017 RHEINMETALL Q3 2017 APPENDIX © Rheinmetall AG / Corporate Presentation January 2018 51
Slide 52: Highlights Rheinmetall Group Q3 2017
Appendix: Q3 2017 Highlights Rheinmetall Group Q3 2017 Solid quarter with strong result contribution from Defence Sales increased by 4.7% to €1.366 bn or 5.4% currency adjusted Operating result improved by 23% to €97 m Group margin gained 100bp advancing from 6.1% to 7.1% Automotive optimized global
Slide 53: Cash flow affected by working capital buildup in Defence
Appendix: Q3 2017 Cash flow affected by working capital buildup in Defence Operating Free Cash Flow Earnings per share Headcount in EUR million in EUR in capacities -86% 8% 3% 36 1.18 2.40 20,982 21,552 2.22 +42% 0.97 0.35 -175 0.83 5 -302 Q3 Q3 9m 9m Q3 Q3 9m 9m 30.09.2016 30.09.2017 2016 2017 2016
Slide 54: Solid financial status further improved
Appendix: Q3 2017 Solid financial status further improved Net debt Equity ratio in EUR million in % of total assets -46% +5pp 445 31% 26% 242 30.09.2016 30.09.2017 30.09.2016 30.09.2017 © Rheinmetall AG / Corporate Presentation January 2018 54
Slide 55: Quarterly development Group
Appendix: Q3 2017 Quarterly development Group Sales Operational results in EUR million in EUR million 1,698 171 1,459 1,349 1,366 1,305 1,034 115 612 731 95 97 682 662 79 45 46 30 50 664 737 728 684 643 60 62 57 51 56 -2 -4 -10 -6 -6 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 -2 Q3 2016 Q4 2016 Q1 2017
Slide 56: Cash Flow Statement Group
Appendix: Q3 2017 Cash Flow Statement Group Q3 9m Q4 Q1 Q2 Q3 9m Δ Q3 Δ 9m in EUR million 2016 2016 2016 2017 2017 2017 2017 2016/2017 2016/2017 Group Net Income 46 99 116 28 51 43 122 -3 23 Amortization / depreciation 52 161 67 57 55 59 171 7 10 Change in pension accruals - -14 - -34 -3 1 -36 1 -22
Slide 57: Highlights Rheinmetall Automotive Q3 2017
Appendix: Q3 2017 Highlights Rheinmetall Automotive Q3 2017 Market outperformed, margin improved Sales rose by 6% to €684 m, FX adjusted 7.3% Operating result grew by 12% to €57 m Operating margin increased by 40bp to 8.3% Quarterly free cash flow improved by €34m to €81 m Restructuring impact on re
Slide 58: Automotive: Good operational performance on profitability and cash
Appendix: Q3 2017 Rheinmetall Automotive Good operational performance on profitability and cash level Quarterly sales and margins development Comments on quarterly performance 737 Sales increased by 6.4% compared to global LV growth of 2.2% 728 684 643 664 8.4 9.2 8.3 Operating result rose to €57 m
Slide 59: Operational leverage in Mechatronics and Hardparts
Appendix: Q3 2017 Operational leverage in Mechatronics and Hardparts drive the quarter Sales Automotive Operating result Automotive Reasons for result development in EUR million in EUR million 6% 684 12% Mechatronics 643 57 Strong demand for fuel 51 optimization as main driver; emission reduction on
Slide 60: Markets in better shape than anticipated
Appendix: Q3 2017 Markets in better shape than anticipated, outperformance intact Regional sales development Automotive Regional sales growth Q3 2017 in EUR million in % (IHS October 2017) 6% 684 Global 6.4 643 2.2 27 4 Row 3 21 South America 95 84 RoW 21 Asia -10 105 113 North America Asia 13 (incl
Slide 61: Chinese entities stronger than the market
Appendix: Q3 2017 Chinese entities stronger than the market China LV production Sales in million Operating result in million / in % in million units +7% +8% 1,845 146 Strong growth and operating 1,717 134 -0.4% earnings 1,514 1,610 CNY 119 6.3 6.3 116 JVs: Hardparts sales up; 0 204 -2 236 18 27 oper
Slide 62: Hardparts streamlined its global footprint
Appendix: Q3 2017 Hardparts streamlined its global footprint Closure of pistons plant in Thionville (Lorraine/France) Financial impact Strategic step to improve the One time cost of around €22 m, cost basis of Hardparts thereof: Concentration of European €17 m for severance payments LV pistons produ
Slide 63: Quarterly development Automotive
Appendix: Q3 2017 Quarterly development Automotive Sales by division Operational results by division in EUR million in EUR million 737 728 67 684 664 62 643 60 57 51 425 407 380 382 47 355 35 43 40 35 249 251 232 22 225 222 16 11 17 13 82 85 83 93 95 9 8 7 9 9 -19 -23 -20 -23 -25 -4 -5 -5 -5 -5 Q3 2
Slide 64: Cash flow statement Automotive
Appendix: Q3 2017 Cash flow statement Automotive Q3 9m Q4 Q1 Q2 Q3 9m Δ Q3 Δ 9m in EUR million 2016 2016 2016 2017 2017 2017 2017 '16/'17 '16/'17 Net income 36 116 49 46 50 25 121 -11 5 Amortization / depreciation 29 93 40 32 32 37 101 8 8 Change in pension accruals -1 -1 -1 - - - - 1 1 Cash Flow 64
Slide 65: Highlights Rheinmetall Defence Q3 2017
Appendix: Q3 2017 Highlights Rheinmetall Defence Q3 2017 Strong momentum in earnings and order intake Order intake rose by €296 m to €870 m Sales gained 3% to €682 m Operating result increased by 53% from €30 m to €46 m Operating margin went up from 4.5% to 6.7% Boxer „UK edition“ for DSEI fair 2017
Slide 66: Defence: Margin and order intake trend positively
Appendix: Q3 2017 Rheinmetall Defence Margin and order intake trend positively towards FY guidance Quarterly sales and margins development Comments on quarterly performance Strong increase of German orders (i.e. vehicles and ammunition) 1,034 661 731 682 Moderate sales growth of 3% as anticipated 11
Slide 67: Operational strength in Vehicle Systems and Weapon and Ammunition
Appendix: Q3 2017 Operational strength in Vehicle Systems as well as Weapon and Ammunition Sales Defence Operating results Defence in EUR million in EUR million Reasons for result development +3% +53% Weapon and Ammunition 662 682 46 Good sales development leads to higher earnings 227 248 +9% 30 28
Slide 68: German contracts essential for high order intake in Q3
Appendix: Q3 2017 German contracts essential for high order intake in Q3 Order intake by division Order backlog profile in EUR million in EUR billion 6.9 +52% 6.7 2.5 870 284 1.8 574 1.5 173 Major German 197 orders with total 185 value > €460 m 0.9 included 434 288 -72 -45 30.09. 30.09. 2017e 2018e
Slide 69: Rheinmetall will modernize German logistical fleet
Appendix: Q3 2017 Rheinmetall will modernize German logistical fleet 2017 2018 2021 First lot Second lot Bundeswehr Truck Order 558 trucks ~1.600 trucks Framework agreement signed Framework agreement HX2 family replaces the existing fleet of military trucks Net value: €760 m for ~2.200 vehicles Firs
Slide 70: Quarterly development Defence
Appendix: Q3 2017 Quarterly development Defence Sales by division Operational earnings by division in EUR million in EUR million 115 1,034 63 391 46 662 731 682 613 25 227 305 248 30 244 191 28 24 172 138 165 141 25 12 483 30 6 361 351 337 370 5 14 13 4 0 1 -98 -84 -67 -52 -101 -4 -3 -4 -1 -1 -1 -7
Slide 71: Cash flow statement Defence
Appendix: Q3 2017 Cash flow statement Defence Q3 9m Q4 Q1 Q2 Q3 9m Δ Q3 Δ 9m in EUR million 2016 2016 2016 2017 2017 2017 2017 '16/'17 '16/'17 Net income 13 -4 78 -16 8 32 24 19 28 Amortization / depreciation 22 66 26 24 22 21 67 -1 1 Change in pension accruals 1 4 1 -3 -6 2 -7 1 -11 Cash Flow 36 66
Slide 72: Rheinmetall Automotive Appendix
Appendix: Q3 2017 RHEINMETALL AUTOMOTIVE APPENDIX © Rheinmetall AG / Corporate Presentation January 2018 72
Slide 73: Automotive with leading technology and market positions
Appendix: Rheinmetall Automotive Automotive with leading technology and market positions Key Figures Structure Sales by region Sales by division Sales: €2.7 bn RoW Aftermarket Hardparts ASIA 3% EBIT: €223 m 13% 11% Pistons Large-bore Pistons Europe 33% Hardparts EBIT margin: 8.4% 17% 47% w/o Bearing
Slide 74: Strategic goals of Rheinmetall Automotive
Appendix: Rheinmetall Automotive Strategic goals of Rheinmetall Automotive STRATEGIC GOALS Increasing content per car Gaining powertrain neutrality More products at higher value as Minimize dependency on certain emission reduction, hybridization types of drives and electrification will require Incre
Slide 75: Rising global light vehicle production
Appendix: Rheinmetall Automotive Rising global light vehicle production Light vehicle production 2016-2020 CAGR 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 J
Slide 76: Governments will continue to demand reduction of CO2 emissions
Appendix: Rheinmetall Automotive Governments will continue to demand reduction of CO2 emissions 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 January 2018 76
Slide 77: CO2 Reduction with Automotive Products – Gasoline Engine Vehicle
Appendix: Rheinmetall Automotive Efficiency CO2 Reduction with Automotive Products – Gasoline Engine Vehicle 130 g 95 g CO2/km CO2/km 2015 2021 -2 g CO2/km -2 g CO2/km Reference model -7 g CO2/km Lightweight design parts Electr. 1.4L 4-cylinder -3 g CO2/km Variable valve train EGR system TC DI gasol
Slide 78: LV Diesel exposure limited; powertrain independence
Appendix: Rheinmetall Automotive LV Diesel exposure limited; powertrain independence is the strategic target Combined global engine production forecast* Automotive sales distribution by engine type** 100 30 LV Non Diesel units 80 25 Core Diesel 20 60 LV Diesel share in % Others 15 7% 40 17% 10 Fuel
Slide 79: Broad product range for alternative drive systems
Appendix: Rheinmetall Automotive Broad product range for alternative drive systems Enlarging the traditional product portfolio for combustion engines … + … by products for hybrid and electric engines Solenoid valves Actuators Structural components Electric throttle bodies Engine bearings Battery box
Slide 80: E-mobility competence underlined by contracts and initiatives
Appendix: Rheinmetall Automotive E-mobility competence underlined by contracts and by initiatives for new solutions Contract volume for electric vehicles (EV)* Product Volume Contract duration (Ø) E-Taxi London Battery EV €~300 m 6 – 8 years Pump technology for pure electric taxis (Plugin) Hybrid EV
Slide 81: Electrification and downsizing require more sophisticated products
Appendix: Rheinmetall Automotive 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 / Corpo
Slide 82: Automotive in China
Appendix: Rheinmetall Automotive 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
Slide 83: More than 40 locations with high focus on local needs
Appendix: Rheinmetall Automotive Markets with different growth focus: More than 40 locations with high focus on local needs Germany USA Tamm Auburn Hills Berlin Greensburg Dormagen Greenville (Fountain Inn) Hartha Marinette Langenhagen Neckarsulm (Headquarter) Mexico Neuss Celaya Neuenstadt Papenbur
Slide 84: Summary: Markets and Customers, Performance and Products
Appendix: Rheinmetall Automotive Summary Markets and Customers: Markets in better shape than anticipated, global LV production will grow by >2% Our global production and technology footprint will follow local needs Rheinmetall Automotive intends to outperform markets in future, too Performance and P
Slide 85: Rheinmetall Defence Appendix
Appendix: Q3 2017 RHEINMETALL DEFENCE APPENDIX © Rheinmetall AG / Corporate Presentation January 2018 85
Slide 86: Defence is a leading supplier with increasing international presence
Appendix: Rheinmetall Defence Defence is a leading supplier with an increasing international presence Key Figures Structure Sales by region Sales by division Sales: €2.9 bn Weapon and Ammunition RoW Vehicle Germany Systems Weapon and Weapon and Protection Ammunition EBIT: €147 m 16% Ammunition Syste
Slide 87: Strategic goals of Rheinmetall Defence
Appendix: Rheinmetall Defence Strategic goals of Rheinmetall Defence Strategic goals Entering new markets Enlarging internationalization Strategic partnerships to gain Form partnerships with local access to new markets suppliers to provide local content Target markets close to traditional markets, e
Slide 88: Defence is at the beginning of long lasting market growth
Appendix: Rheinmetall Defence 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:
Slide 89: EU member states en route to comply with NATO 2% target
Appendix: Rheinmetall Defence EU member states en route to comply with NATO 2% target NATO Defence budgets NATO equipment expenditure in % of GDP 2017e* in % of total expenditure * 30% 4,00 NATO Goal Germany NATO Europe NATO North America 3,50 3,00 2,50 2,00 20% 1,50 1,00 0,50 0,00 10% Greece France
Slide 90: 2017 marked by important strategic partnerships
Appendix: Rheinmetall Defence 2017 marked by important strategic partnerships Joint bid for MoTaKo /MoTIV Various areas of cooperation Cooperation agreement for drive by Partnering agreement for the project under analysis wire technology in military and dual Bundeswehr assault rifle RS 522 Scope use
Slide 91: Army 4.0: MoTaKo / MoTIV will propel the German Army
Appendix: Rheinmetall Defence Army 4.0: MoTaKo / MoTIV will propel the German Army into the digital future JV-share and core capabilities Rheinmetall (74.9%): Rohde & Schwarz (25.1%): Command systems Communication system Cross-functional operator architecture, IP based solution interface for voice a
Slide 92: MoTaKo/MoTIV: What supports our ambition?
Appendix: Rheinmetall Defence Army 4.0: MoTaKo/MoTIV: What supports our ambition? Exclusive Rohde &Schwarz is the key partner partnership for all communication equipment Top competency: Long-term partnership for all kind of Vehicle upgrades system upgrades Integrated Our infantry fighting vehicles c
Slide 93: Defence industry in Europe
Appendix: Rheinmetall Defence Defence industry in Europe Governmental shareholding restricts room for cross-border consolidation Kongsberg Big common armament programs could be Nammo Patria catalysts for further consolidation Saab Cobham BAE Systems Chemring Rheinmetall CH PL TUR RO Rheinmetall’s ap
Slide 94: Next events and IR contacts
Appendix: Rheinmetall Group Next events and IR contacts Events 2018 IR Contacts Commerzbank Conference New York 8 - 10 Jan Franz-Bernd Reich Head of IR Kepler Cheuvreux Conference Frankfurt 15 - 16 Jan Tel: +49-211 473-4718 Bankhaus Lampe Conference London 1 Feb Email: franz-bernd.reich@rheinmetall.
Slide 95: 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
Slide 96: © Rheinmetall AG / Corporate Presentation January 2018
© Rheinmetall AG / Corporate Presentation January 2018 96