Rheinmetall Ag · XETR:RHM
Rheinmetall — Q1 2019 Earnings Presentation
30 slides from Rheinmetall's earnings presentation, May 9, 2019
Slide 1: Q1 set a solid base to achieve FY targets
1 Draft Q1 set a solid base to achieve FY targets Conference Call Q1 2019 Düsseldorf, 9 May 2019
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
Slide 3: Q1 2019 Group commercial highlights
Q1 2019 Group commercial highlights Solid operational performance and improved cash flow Order backlog Sales Operating result EPS oFCF €9.1bn +26% €1.3bn +6%* €54m +15% €0.74 +35% €-128m +55% Order backlog increased 26% y-o-y Sales climbed 6.5% at *constant exchange rates (reported 6.6%) to €1,343m
Slide 4: Higher operating result drove EPS by almost 35%
Higher operating result drove EPS by almost 35% Sales Operating result in €m Earnings per share in €m Operating margin in % in € +6.5% +0.1% 1,343 2 +12.8% +2.1% 34.5% 6 1 54 1 55 0.74 81 47 0.55 1,260 3.7% 4.0% +6.6% +14.9 % Q1 2018 Operational FX Q1 2019 Q1 Operational FX Q1 Special Q1 Q1 2018 Q1
Slide 5: Working capital optimization main driver for cash flow improvement
Working capital optimization main driver for cash flow improvement Operating free cash flow bridge in €m No CTA funding in Q1 2019 Working capital inflow especially 3 from Defence -128 109 40 6 1 -287 Q1 2018 EAT D/A Delta Pensions Delta WC Capex Q1 2019 and others © Rheinmetall AG / Conference Call
Slide 6: KPI improvement continues
KPI improvement continues Net debt Net Gearing in €m Net debt in % of total equity 11.7 7.8 +48 31.03.2018 31.03.2019 Equity ratio in % of total assets +210bp 32.1% 30.0% -171 -219 31.03.2018 31.03.2019 31.03.2018 31.03.2019 © Rheinmetall AG / Conference Call Q1 2019 6
Slide 7: Q1 2019 Highlights: Automotive
Q1 2019 Highlights: Automotive Q1 sales in line with expectations, operating result slightly better Quarterly sales and margin development Comments on quarterly performance Sales decline of -4.9% (FX-adjusted -5.4%) in line with a contracting 751 740 708 731 714 market environment (Global LV product
Slide 8: Q1 2019 Highlights: Automotive – All three divisions impacted by slow market
Q1 2019 Highlights: Automotive All three divisions impacted by a slow market environment Sales Automotive Operating result Automotive in €m in €m Mechatronics Sales slower than market on Margin Margin -4.9% Q1 2018 Q1 2019 particular customer order pattern -24.6% 751 8.6% 65 6.9% Negative leverage a
Slide 9: Automotive sales follow weak global LV production pattern
Automotive sales follow weak global LV production pattern Regional sales development Automotive in €m -4.9% 751 714 5.1% 0.6% 0.6% 9.4% 5.9% 3.2% 9.1% Weak market environment, global LV production 3.3% 15.1% declined by 5.7% 15.5% RoW China Diesel and WLTP still burdened Europe in Q1 Asia (excl. CN)
Slide 10: Rheinmetall successfully managed China market crash in Q1
China Rheinmetall successfully managed China market crash in Q1 Sales in €m -0.6% +1.2% 248 3 250 -1 Sales stable on previous year level (-0.6% FX-adjusted) 218 219 vs. a crashing Chinese LV-market of -12.1% +0.6% 31 31 Q1 without major adverse FX-effects on sales and EBIT Q1 2018 operational FX Q1
Slide 11: Truck and other businesses helped mitigating the LV sales decline
Q1 2019 Highlights: Automotive Truck and other businesses helped mitigating the LV sales decline Sales split LV/ Non-LV Sales split Non-LV in €m / in % in €m / in % Delta absolute in % -4.9% Diesel - 25 -12.4% 751 Gazoline -5 -1.9% 714 other LV -3 -7.7% -1.5% 201 176 256 252 LV Business -33 -6.7% LV
Slide 12: Q1 2019 Highlights: Defence
Q1 2019 Highlights: Defence Profit turnaround and improved operating FCF Quarterly sales and margin development Comments on quarterly performance 1,255 Order intake of €564m despite absence of major single order 754 703 14.3 629 Strong sales growth of 24% to €629m with easy comparables 509 5.8 6.3 1
Slide 13: Q1 2019 Highlights: Defence – Strong sales increase drives margin improvement
Q1 2019 Highlights: Defence Strong sales increase drives considerable margin improvement Sales Defence Operating result Defence Weapon and Ammunition in €m in €m Sales increased supported by 23.6% Margin +€22m Margin higher German demand Q1 2018 Q1 2019 629 9 Solid leverage supported by -2.6% 1.4% f
Slide 14: Major orders expected for later in the year
Major orders expected for later in the year Order intake by division Order backlog profile in €m in €bn Weapon and Ammunition change in % Electronic Solutions Vehicle Systems 857 -34% Consolidation 28% 8.6 Incl. €380m ~2.4 ~1.9 ~4.3 for an international 6.7 564 customer 344 237 120 168 137 78 -17 -2
Slide 15: Acquisition IBD Deisenroth
Acquisition IBD Deisenroth Strategic move to fully in-house technologies for active and passive protection Acquisition provides 100% access to cutting edge-technology Buy out of minority shareholdings in existing long- term cooperation (Chempro & RAP*) and integration of IBD Group (120 employees on
Slide 16: FY 2019 Guidance
Rheinmetall Group FY 2019 Guidance Guidance confirmed Sales Operating margin 2018 2019e 2018 2019e Growth y/y in % at Growth y/y in % at in % in % constant FX constant FX Group 6.1 4–6 8.0 around 8 Automotive 4.2 0–1 8.9 around 8 Defence 7.9 9 – 11 7.9 8.0 – 8.5 Operational growth at constant FX; As
Slide 17: Next events and IR contacts
Next events and IR contacts Next Events IR Contacts UBS Conference, London 15 May Franz-Bernd Reich Commerzbank Conference, New York & Boston 15/16 May Head of IR Tel: +49-211 473-4777 RS Zurich/Lugano 21/22 May Email: franz-bernd.reich@rheinmetall.com DB Conference, Berlin 5/6 June Dirk Winkels RS
Slide 18: Appendix
APPENDIX © Rheinmetall AG / Conference Call Q1 2019 18
Slide 19: Select key data: outlook 2019
Appendix Select key data: outlook 2019 Rheinmetall Group In %(PY) Automotive Defence Holding cost ~€25-30m (PY: €24m) Capex 5.5-6% (5.5%) 3.5-4.5%(3.1%) (w/o IFRS 16) 3-3.5% (4.8% ~5.5% (5.3% Comparable level reported, Tax rate D&A reported, (PY: 27%) scheduled D&A scheduled 5.2%) 3.7%) Interest res
Slide 20: Quarterly development Group
Appendix Quarterly development Group Sales Operational results in €m in €m 1,984 240 1,493 1,411 1,343 1,260 1,255 179 754 703 629 509 107 98 44 47 60 54 9 751 740 708 731 714 65 68 69 44 49 -1 0 -2 0 -5 -6 -8 -4 -13 -5 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
Slide 21: Free Cash Flow summary Group
Appendix Free Cash Flow summary Group Q1 Δ Q1 in €m Q1 2018 Q2 2018 Q3 2018 Q4 2018 2019 '18 /'19 Group Net Income 27 65 85 177 33 6 Amortization / depreciation 64 91 68 95 65 1 Change in pension accruals -42 1 1 -8 -2 40 Cash Flow 49 157 154 265 96 47 Changes in working capital -258 -197 -200 257 -
Slide 22: Quarterly development Automotive
Appendix Quarterly development Automotive Sales by division Operational result by division in €m in €m 751 740 708 731 714 65 68 69 60 429 417 49 387 431 401 44 46 43 38 31 254 250 251 234 252 15 18 17 15 13 8 9 9 10 92 97 92 86 85 7 -2 1 -2 -24 -24 -22 -20 -24 -5 -4 Q1 2018 Q2 2018 Q3 2018 Q4 2018
Slide 23: Free Cash flow summary Automotive
Appendix Free Cash flow summary Automotive Q1 Δ Q1 in €m Q1 2018 Q2 2018 Q3 2018 Q4 2018 2019 '18 /'19 Net income 45 52 42 56 34 -11 Amortization / depreciation 36 38 39 42 38 2 Change in pension accruals -20 -1 - -6 -1 19 Cash Flow 61 89 81 92 71 10 Changes in working capital and other items -62 4
Slide 24: Quarterly development Defence
Appendix Quarterly development Defence Sales by division Operational result by division in €m in €m 179 1,255 107 472 35 754 44 703 44 249 629 196 346 10 509 23 177 8 139 197 170 5 9 168 44 126 30 10 501 23 375 395 11 12 297 329 -7 -4 -7 -11 -53 -58 -45 -19 -2 -67 -64 Q1 2018 Q2 2018 Q3 2018 Q4 2018
Slide 25: Free Cash flow summary Defence
Appendix Free Cash flow summary Defence Q1 Δ Q1 in €m Q1 2018 Q2 2018 Q3 2018 Q4 2018 2019 '18 /'19 Net income -21 23 27 131 1 22 Amortization / depreciation 26 52 27 51 25 -1 Change in pension accruals -2 2 2 -1 -1 1 Cash Flow 3 77 56 181 25 22 Changes in working capital and other items -200 -202 -
Slide 26: Income Statement Group
Appendix In €m In €m Income Statement Group Q1 2018 Q1 2019 Δ Q1 2018 Q1 2019 Δ Sales 1,260 1,343 83 120 90 -30 Total operating performance 1,380 1,433 53 Earnings before interets and taxes (EBIT) 47 55 8 Net interest income 1 1 0 Interest expenses -11 - 11 0 Other operating income 33 36 3 Earnings
Slide 27: Cash Flow Statement Group
Appendix In €m Cash Flow Statement Group Q1 2018 Q1 2019 Δ Q1 2018 Q1 2019 Δ Net income 27 33 6 Dividends paid out by Rheinmetall AG 0 0 0 Amortization, depreciation and impairments 64 65 1 Other profit distributions -2 -1 1 Allocation of CTA assets to secure pension and partial retirement obligatio
Slide 28: Balance Sheet Group
Appendix In €m Balance Sheet Group In €m 31.12.2018 31.03.2019 Δ 31.12.2018 31.03.2019 Δ Non-current assets 2,951 3,003 52 Equity 2,172 2,194 22 Goodwill 550 551 1 Share capital 112 112 0 Other intangible assets 172 170 -2 Additional paid-in capital 547 547 0 Usage rights 0 Retained earnings 1,383 1
Slide 29: Glossary
Appendix Glossary bn billions LBP Large bore piston bp basis points LV Light vehicle CAGR compounded average growth rate m million CER Constant Exchange Rates NWC Net working capital CP Commercial Paper OEM Original Equipment Manufacturer CTA Contractual trust agreement Operating FCF Operating free
Slide 30: © Rheinmetall AG / Conference Call Q1 2019
© Rheinmetall AG / Conference Call Q1 2019 30