Rheinmetall Ag · XETR:RHM
Rheinmetall — FY2013 Earnings Presentation
53 slides from Rheinmetall's earnings presentation, Mar 19, 2014
Slide 1: Conference Call FY 2013
R H E I N M E TA L L AG T H E T EC H N O LO GY G RO U P FO R S EC U R I T Y A N D M O B I L I T Y Conference Call FY 2013 Düsseldorf | March 19, 2014 © RHEINMETALL AG 2014
Slide 2: 2013 at a glance
Rheinmetall Group 2013 at a glance “RHEINMETALL 2015” DETERMINED OUR STRATEGIC AGENDA ― Transition year 2013 finalized in both sectors, recovery expected 2014 ― Group order backlog increased by 20% to record level of € 6.5 billion ― Group sales decreased by 2% to € 4,613 million, adjusted for FX eff
Slide 3: Mid-term strategy program Rheinmetall 2015: first steps in 2013
Rheinmetall Group Mid-term strategy program “Rheinmetall 2015” First successful steps in 2013 ― Defence: Order intake of € 2.4 billion from non-European customers Internationalization ― Automotive: Expansion of operations in China (sales +32%), Mexico (sales +38%) and the Czech Republic (sales +14%)
Slide 4: Order backlog increased, earnings down due to weak performance in Defence
Rheinmetall Group Order backlog increased Earnings down due to weak performance in Defence Sales in € million Order backlog in € million 4,454 4,704 4,613 6,475 3,989 5,136 4,950 5,405 3,420 4,940 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Operational earnings in € million resp. margin in % E
Slide 5: Earnings affected by restructuring charges; EPS and dividend
Rheinmetall Group Earnings particularly affected by restructuring charges EPS at € 0.75, dividend proposed at € 0.40 EBT in € million Net income in € million 295 225 229 216* 174 173* 35 22 -46 -52 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Earnings per share in € Dividend per share in € 5.55
Slide 6: Capex and R&D at a high level
Rheinmetall Group Capex and R&D at a high level Even in a difficult year more than € 400 million invested in the future Capex* in € million resp. in % of sales R&D (self-funded) in € million 238 230 226 207 208 212 205 198 189 145 5.1% 4.7% 4.6% 4.4% 4.2% 41 38 35 39 29 2009 2010 2011 2012 2013 2009
Slide 7: Cash flow statement
Rheinmetall Group Cash flow statement Positive free cash flow from operations in 2013 despite weak earnings 2012 in € million 2013 in € million 183 -234 173* 2.7%** 209 -191 3 0.1%** 125 22 -36 4 Net Depr. Capex Decrease Free cash Net Depr. Capex Increase Free cash income DPensions of working flow f
Slide 8: Free cash flow in Defence and Automotive
Rheinmetall Group Weak earnings burden free cash flow in Defence Free cash flow in Automotive significantly positive Free cash flow from operations Group in € million Free cash flow from operations Defence in € million 159 163 186 62 6 125 -45 2009 2010 2011 2012 2013 93 Free cash flow from operatio
Slide 9: Transition phase finalized, restructuring program on track
Rheinmetall Group Transition phase finalized, restructuring program fully on track All planned measures in implementation Costs Costs Total reduction Expected Full annual 2012 2013 of employees savings savings until 2016 2014 from 2015 Combat Systems (esp. Tracked Vehicles) 17 15 240 Electronic Solu
Slide 10: Rheinmetall Defence
Rheinmetall Defence © RH E I NMETAL L A G | MA RC H 2 0 1 4 10
Slide 11: Defence: 2013 at a glance
Rheinmetall Defence 2013 at a glance HIGH SHARE OF ORDER INTAKE FROM NON-EUROPEAN CUSTOMERS ― Order intake increased by € 406 million (+ 14%) to € 3,339 million despite weak traditional markets ― International large-scale orders from non-European customers acquired ― Operational earnings declined by
Slide 12: Defence in a transition year
Rheinmetall Defence Defence in a transition year Sales declined, order intake at a record level Sales in € million Order intake in € million 2,335 3,153 3,339 2,007 2,141 2,155 2,933 1,898 1,977 1,831 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Operational earnings in € million resp. margin in
Slide 13: Weak operational performance
Rheinmetall Defence Weak operational performance Earnings affected by lower sales and cost overruns Sales Defence in € million Operational earnings Defence in € million -180* Combat Systems -85 2,335 145 Electronic Solutions 2,155 Wheeled Vehicles Consolidation/Others 1,136 1,027 Reasons for earning
Slide 14: Internationalization: order intake by region
Rheinmetall Defence Internationalization Increasing share of order intake received from growth regions Order intake by region in € million resp. % +14% 3,339 2,933 17% 28% 24% 11% ― Large-scale orders from growth regions (e.g. Australia, Indonesia, Qatar) 46% overcompensate decreasing demand from 22
Slide 15: Rheinmetall Automotive
Rheinmetall Automotive © RH E I NMETAL L A G | MA RC H 2 0 1 4 15
Slide 16: Automotive: 2013 at a glance
Rheinmetall Automotive 2013 at a glance AUTOMOTIVE OUTPERFORMS THE GLOBAL MARKET ― Growth trend continued: sales increased by 4%, adjusted for FX effects by 6% ― Operational earnings at a record level of € 160 million ― Products for reducing emissions and fuel consumption are growth drivers ― Operat
Slide 17: Automotive sales and earnings
Rheinmetall Automotive Sales and earnings Strong sales and operational earnings in spite of a flat European market Sales in € million Sales China JVs (100%) in € million 2,369 2,458 499 2,313 1,982 388 1,522 298 258 155 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Operational earnings in € mill
Slide 18: Top and bottom line growth
Rheinmetall Automotive Top and bottom line growth Mechatronics pushes sales and operational earnings Sales Automotive in € million Operational earnings Automotive in € million +89* +21 2,458 160 Reasons for earnings development 2,369 139** Hardparts 51 ― Unfavorable product mix 1,085 57 1,087 ― Star
Slide 19: Sales by region and customer
Rheinmetall Automotive Sales growth due to European and American markets Automotive benefits from balanced customer base Sales by region in € million Sales by customer in % +4% Non-LCV business: 30% 2,458 2,369 Trucks/Others VW/Porsche/Audi Germany Germany Ships/ 13% 16% 549 576 Power plants/ MIR**
Slide 20: Strong growth in non-LCV business
Rheinmetall Automotive Strong growth in non-LCV business Sales of truck business doubled within 5 years Sales Automotive and non-LCV sales in € million Non-LCV sales and truck business sales in € million 2,458 CAGR 2,369 +13% 2,313 714 740 705 1,982 578 1,522 448 CAGR 705 714 740 +19% 578 231 448 20
Slide 21: Internationalization: joint ventures in China
Appendix: Rheinmetall Automotive Internationalization Joint ventures in China see another successful year LV production China in € million +14% 19.3 15.2 15.8 16.9 11.4 2009 2010 2011 2012 2013 Yantai Sales Automotive China in € million +32% Kunshan 528 Shanghai 401 264 306 159 499 JVs* 388 258 298
Slide 22: Markets and Outlook
Rheinmetall Group MARKETS AND OUTLOOK © RH E I NMETAL L A G | MA RC H 2 0 1 4 22
Slide 23: Looking at the markets: defence spending by region
Rheinmetall Defence Looking at the markets Shift of budget growth from traditional markets to emerging markets Defence spending by region in US$ billion Europe 276 271 266 262 2012 2013 2014 2015 USA 664 582 575 535 MENA* 2012 2013 2014 2015 108 121 125 126 2012 2013 2014 2015 Asia/Pacific 354 366 3
Slide 24: Weapon and ammunition business recovery
Rheinmetall Defence Weapon and ammunition business Recovery expected to begin later and to a lower extent Sales weapon and ammunition business in € million Previous estimates 600 650-670 700-750 750-800 700 665 682 675 643 650 580 580 Order intake gap 531 40 Recurring business (framework agreements,
Slide 25: Looking at the markets: light vehicle production
Rheinmetall Automotive Looking at the markets China still expected to grow rapidly, slight increase in Europe and the US Light vehicle production by region in million units Western Europe 13.6 13.6 13.9 14.4 China 2012 2013 2014 2015 16.9 19.3 21.3 23.2 2012 2013 2014 2015 USA 10.1 10.9 11.3 11.6 In
Slide 26: Automotive expected to remain a growth market
Rheinmetall Automotive Automotive is expected to remain a growth market “Continental shift” in Rheinmetall’s sales and staff figures Market and business expectations Rheinmetall Automotive 2012-2016e Western Europe Eastern Europe Market +8% Market +13% USA Sales Sales Market +16% Staff Staff China*
Slide 27: Megatrend protection of the environment
Appendix: Rheinmetall Automotive Megatrend “Protection of the environment” Regulations as growth drivers of the powertrain technology CO 2 limit g/km Global automotive CO 2 EU 130 75 Downsizing/ component market* Turbocharging CAGR USA 178 102 4.9 % Lightweight Design China 160 112 Fuel 5.7 % consum
Slide 28: Green technology sales share to increase to 60%
Rheinmetall Automotive Megatrend “Protection of the environment” Sales share of green technology products will increase to 60% Sales share 2013 Expected sales share 2016 Other sales Other sales 40% 60% 49% 51% Sales with products for reduction of Sales with products for reduction of emissions and fu
Slide 29: Rheinmetall 2015: the way forward in 2014
Rheinmetall Group Mid-term strategy program “Rheinmetall 2015” The way forward in 2014 ― Defence: Strengthening the international sales force and a non-European order intake of more than 50% Internationalization ― Automotive: Further shift of existing and new products to sites in growth regions ― De
Slide 30: Outlook 2014
Rheinmetall Group Outlook 2014 Top line growth and improvement of earnings Sales Operational earnings in € billion in € million 2013 2014e 2013 2014e Group 4.6 4.8 - 4.9 213 230 - 250 Defence 2.2 2.3 60 85 - 95 Automotive 2.5 2.5 - 2.6 160 165 - 175 ― Further non-operational expenses of € 10 million
Slide 31: Mid-term targets out of Rheinmetall 2015
Rheinmetall Group Mid-term targets out of “Rheinmetall 2015” Margin targets Assumptions and drivers Recovery of ammunition markets Defence 7 - 9% Savings effects out of restructuring Improvement of project management Recovery of European car production and strong growth in China Automotive 8
Slide 32: Appendix Group
Appendix: Rheinmetall Group APPENDIX GROUP © RH E I NMETAL L A G | MA RC H 2 0 1 4 32
Slide 33: Finance: sound equity ratio
Appendix: Rheinmetall Group Finance Sound equity ratio Equity (at year-end) in € million Treasury shares (at year-end) in % of all shares Equity ratio in % 1,546 1,465 1,355 1,339 4.8 1,134 3.9 3.5 3.3 3.4 32% 30% 30% 30% 28% 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 © RH E I NMETAL L A G |
Slide 34: Solid balance sheet: credit facilities and financial debt
Appendix: Rheinmetall Group Solid balance sheet High cash credit facilities and low financial debt Cash credit facilities (as of December 31, 2013) Net financial debt (at year-end) in € million in € million Net gearing in % 1,400 Bilateral bank facilities 400 (up to 1 year) 138 130 Syndicated loan
Slide 35: Solid balance sheet: pension liabilities
Appendix: Rheinmetall Group Solid balance sheet Pension liabilities reduced, current expenses almost stable Pension liabilities and discount rate* Domestic pension payments in € million in € million resp. in % 6.00 5.50 919 5.25 5.25 891 729 677 610 577 3.25 35 31 33 32 3.25 31 31 2008 2009 2010 201
Slide 36: Key figures
Appendix: Rheinmetall Group Key figures in € million 2012* 2013 D 2013/2012 Order intake 5,311 5,805 + 494 Order backlog 5,405 6,475 + 1,070 Sales 4,704 4,613 - 91 Operational earnings (EBIT before special items) 268 213 - 55 Special items (one-offs, restructuring costs) 28 - 101 - 129 EBIT (reporte
Slide 37: Quarterly development
Appendix: Rheinmetall Group Quarterly development Sales in € million Operational earnings* in € million +92 +7 1,521 153 1,429 146 112 43 1,100 114 31 1,030 892 865 962 471 46 363 429 44 39 31 31 1 2 -3 -5 -4 -43 -4 564 599 629 601 629 -2 -14 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q4 2012 Q1 2013 Q
Slide 38: Cash flow statement
Appendix: Rheinmetall Group Cash flow statement in € million 2012* 2013 D 2013/2012 Net income 173 22 - 151 Amortization / depreciation 194 212 + 18 Change in pension accruals - 11 -3 +8 Cash flow 356 231 - 125 Changes in working capital and other items 3 - 36 - 39 Net cash used in operating activit
Slide 39: Appendix: Rheinmetall Defence
Appendix: Rheinmetall Defence © RH E I NMETAL L A G | MA RC H 2 0 1 4 39
Slide 40: Global defence market 2013
Appendix: Rheinmetall Defence Global defence market 2013 Decreasing established markets, growth regions MENA and Asia/Pacific Russia USA $ 69 billion $ 582 billion Europe Global market D 2013/2012 share Global market D 2013/2012 $ 271 billion share 4% +7% Global market D 2013/2012 38% -12% sha
Slide 41: Key figures Defence by division
Appendix: Rheinmetall Defence Key figures Defence by division (operational before special items) Combat Systems Electronic Solutions Wheeled Vehicles -180 -109 -38 2,335 748 -28 Sales Drones 2,313 1,136 1,027 Drones (divested 2,155 (divested 726 710 30 June) 30 June) 567 539 22 22 2012 2013 2012 201
Slide 42: Quarterly development
Appendix: Rheinmetall Defence Quarterly development Sales Defence in € million Operational earnings Defence* in € million +27 -2 892 114 112 865 73 80 462 34 435 38 471 429 13 7 4 1 1 363 -3 -1 -4 -5 -8 210 -9 -4 207 265 -23 274 -4 148 -5 176 140 -7 129 189 217 -13 98 107 117 0 -33 -12 -22 -35 -52 -
Slide 43: Key figures
Appendix: Rheinmetall Defence Key figures in € million 2012* 2013 D 2013/2012 Order intake 2,933 3,339 + 406 Order backlog 4,987 6,050 + 1,063 Sales 2,335 2,155 - 180 Operational earnings (EBIT before special items) 145 60 - 85 Special items (one-offs, restructuring costs) 28 - 56 - 84 EBIT (reporte
Slide 44: Cash flow statement
Appendix: Rheinmetall Defence Cash flow statement in € million 2012* 2013 D 2013/2012 Net income 109 - 27 - 136 Amortization / depreciation 89 92 +3 Change in pension accruals -3 2 +5 Cash flow 195 67 - 128 Changes in working capital and other items 58 - 54 - 112 Net cash used in operating activitie
Slide 45: New joint venture with Ferrostaal started January 2014
Appendix: Rheinmetall Defence New joint venture with Ferrostaal started January 2014 Door opener and accelerator for further internationalization 50:50 Core capabilities: Project ― € 200-300 million sales p.a., Core capabilities: Expertise management, Plant engineering 200 employees in the Defence b
Slide 46: Appendix: Rheinmetall Automotive
Appendix: Rheinmetall Automotive © RH E I NMETAL L A G | MA RC H 2 0 1 4 46
Slide 47: Global automotive market 2013
Appendix: Rheinmetall Automotive Global automotive market 2013 Western Europe stagnating, China and the Americas growing USA China 10.9 million units Western Europe 19.3 million units Global market D 2013/2012 13.6 million units Global market D 2013/2012 share share Global market D 2013/2012 1
Slide 48: Key figures Automotive by division
Appendix: Rheinmetall Automotive Key figures Automotive by division (operational before special items) Hardparts Mechatronics Motor Service +89 -2 +80 2,369 2,458 +4 Sales 1,087 1,085 1,091 1,171 264 268 2012 2013 2012 2013 2012 2013 2012 2013 +21 EBIT -6 +8 before 160 +3 139 57 51 69 77 special 25
Slide 49: Key figures
Appendix: Rheinmetall Automotive Key figures in € million 2012* 2013 D 2013/2012 Sales 2,369 2,458 + 89 Operational earnings (EBIT before special items) 139 160 + 21 Special items (one-offs, restructuring costs) 0 - 45 - 45 EBIT (reported) 139 115 - 24 Employees 12,003 11,744 - 259 * 2012 figures re
Slide 50: Quarterly development
Appendix: Rheinmetall Automotive Quarterly development Sales Automotive in € million Operational earnings Automotive* in € million +65 629 629 599 601 564 273 283 +13 262 267 250 46 44 31 39 13 13 31 12 15 302 296 10 268 288 285 22 22 18 17 16 70 10 7 60 66 67 65 7 5 6 -14 -17 -16 -18 -15 0 1 1 2 -6
Slide 51: Cash flow statement
Appendix: Rheinmetall Automotive Cash flow statement in € million 2012* 2013 D 2013/2012 Net income 99 81 - 18 Amortization / depreciation 104 119 + 15 Change in pension accruals -9 -4 +5 Cash flow 194 196 +2 Changes in working capital and other items - 75 20 + 95 Net cash used in operating activiti
Slide 52: Financial diary
Appendix: Rheinmetall Automotive Financial diary March 19, 2014 Annual report FY 2013 May 6, 2014 Annual General Meeting May 8, 2014 Q1 2014 August 7, 2014 Q2 2014 © RH E I NMETAL L A G | MA RC H 2 0 1 4 52
Slide 53: 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