Rheinmetall Ag · XETR:RHM
Rheinmetall — Investor Day (November 2017)
33 slides from Rheinmetall's investor day presentation, Nov 21, 2017
Slide 1: Capital Markets Day 2017
Capital Markets Day 2017 Armin Papperger, CEO Rheinmetall AG, 21 November 2017
Slide 2: Welcome to Bremen
Welcome to Bremen Key site of Electronic Solutions Division Sales: €745 million, Headcount: 2,927 Home of two business units: Mission Equipment and Simulation & Training Sales: €500 million, Headcount: 1,206 thereof 60% engineers All figures refer to FY 2016 © Rheinmetall AG / CMD 2017 2
Slide 3: Bremen as key site for Electronic Solutions Division
Norway: Optronics Bremen as key site for United Kingdom: Signal processing Electronic Solutions Division Canada: Mission Equipment Germany: Simulation & Training, Technical Publications, Mission Equipment USA: Optronics Switzerland: Air Defence Mexico: Simulation & Training Italy: Radar Malaysia: Ra
Slide 4: Review 2017
REVIEW2017 © Rheinmetall AG / CMD 2017 4
Slide 5: Defence with strong recovery of KPIs and solid base for future development
Defence with strong recovery of KPIs and solid base for future development Sales and operating margin development Order book development in € million / % in € million 5 - 5.5% 4.9% +10% 37% 3.5% 7.114 2.8% 6.932 6.867 Book to 5% - 6% Bill 2,946 sales >1 -0.4% 2,591 growth 2,155 2,240 6.442 2013 2014
Slide 6: 2017 with successful order acquisition especially in Germany
2017 with successful order acquisition especially in Germany Fox Ammunition Gladius Trucks framework agreement upgrade High German order intake 2017 Combat Puma Leopard Training add. equipment upgrade Center Delayed to 2018 © Rheinmetall AG / CMD 2017 6
Slide 7: 2017 marked by important strategic partnerships
2017 marked by important strategic partnerships Partnering agreement for the Joint bid for MoTaKo /MoTIV Various areas of cooperation Cooperation agreement for drive by Bundeswehr assault rifle RS 522 project under analysis wire technology in military and dual Scope use applications incl. civilian e
Slide 8: Market Insights
MARKETINSIGHTS © Rheinmetall AG / CMD 2017 8
Slide 9: Defence budgets made it to the headlines in 2017
Defence budgets made it to the headlines in 2017 The Independent , Sept 26 2017 CNN, June 22, 2017 DW, Feb 25, 2017 Defence 24, June 9 2017 Reuters, Oct 12, 2017 © Rheinmetall AG / CMD 2017 9
Slide 10: Defence budgets made it to the headlines in 2017
Defence budgets made it to the headlines in 2017 The Associated Press, Nov. 13 2017 © Rheinmetall AG / CMD 2017 10
Slide 11: Market growth based on several drivers
Market growth based on several drivers NATO and international demand: Generally increasing defence budgets EU defence policy European defence union; European defence fund German domestic demand From hollow structures to full equipment Army 4.0: Digitization of army equipment and communication © Rhei
Slide 12: Only 6 out of 29 member states are currently in line with the 2% target
NATO Targets: Target achievement 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 NATO data on 2017 budgets © Rheinmetall AG / CMD 2017 12
Slide 13: NATO and international demand: Framework nation concept triggers standardization of equipment
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. logistical and command st
Slide 14: NATO and international demand: UK vehicle programs
NATO and international demand: UK vehicle programs UK Mechanised Infantry Vehicle (MIV) 500 8x8 Boxer Utility Vehicles Total Value > GBP3 bn Decision on tender process pending – collaborative via OCCAR or competition Assessment phase expected to begin in 2018 © Rheinmetall AG / CMD 2017 14
Slide 15: NATO and international demand: UK vehicle programs
NATO and international demand: UK vehicle programs Challenger Upgrade 227 vehicles with total value of GBP685 m 10 year life extension of existing fleet End of program in 2035 Rheinmetall and BAE final competitors Assessment phase contract awarded Dec 2016 (GBP23 m) Next steps: Finalization of asses
Slide 16: NATO and international demand: Australia vehicle programs
NATO and international demand: Australia vehicle programs LAND 121 Phase 3b Around 2,500 vehicles and 3,000 modules Total Value: AUD 1.9 bn Delivery in process LAND 121 Phase 5b Around 1,100 vehicles and 700 modules Follow up order to Phase 3b Tender submitted in August 2017 © Rheinmetall AG / CMD 2
Slide 17: NATO and international demand: Australia vehicle programs
NATO and international demand: Australia vehicle programs LAND 400 Phase 2 225 vehicles Total value: AUD 4 bn Rheinmetall: Boxer BAE/Patria final competitor LAND 400 Phase 3 Up to 467 tracked vehicles, thereof 365 Infantry Fighting Vehicles Lynx At least three competitors © Rheinmetall AG / CMD 2017
Slide 18: EU defence policy: EU brought defense matters back on the agenda
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 Defence Fund (€1.5 b
Slide 19: EU defence policy: Franco-German initiative with a project basket of approx. €175 bn
EU defence policy: Franco-German initiative with a project basket of approx. €175 bn Franco-German lighthouse projects Main Focus for Rheinmetall Defence Rheinmetall participates as component supplier © Rheinmetall AG / CMD 2017 19
Slide 20: German domestic demand: German MoD initiated three trend reversals
German domestic demand: German MoD initiated three trend reversals Personnel Mid-term return to 220,000 soldiers Equipment Full equipment level Long-term structural reinforcement (new division) Budget Increase of defence budgets €130 billion investment until 2030 © Rheinmetall AG / CMD 2017 20
Slide 21: German domestic demand: German army with new role as lead nation for VJTF
German domestic demand: German army with new role as lead nation for VJTF 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 of operation in 2017 Germany will take on l
Slide 22: German domestic demand: Additional structural demand of German army under discussion
German domestic demand: Additional structural demand of German army under discussion Vehicles – mid-term potential Fox Boxer Trucks Puma Equipment and ammunition – multi billion programs NNBS (Short air defence) TLVS (Tactical air defence) MoTaKo Ammunition © Rheinmetall AG / CMD 2017 22
Slide 23: German domestic demand: IFV Puma additional potential until 2026 in detail
German domestic demand: IFV Puma additional potential until 2026 in detail Puma OPTICAL SENSORS MELLS TSWA SPARE PART PACKAGE TURRET TRAINER AGDUS © Rheinmetall AG / CMD 2017
Slide 24: Army 4.0: Rheinmetall integrates components to systems
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 turret Innovation & Ammunition Weapon Laser
Slide 25: Army 4.0: Soldier systems build the foundation of all digitization
Army 4.0: Soldier systems build the foundation of all digitization System Infantry Armored Infantrymen Battle Management System + Simulation and Training © Rheinmetall AG / CMD 2017 25
Slide 26: Army 4.0: Panoview is the next level in digital turret systems
Army 4.0: Panoview is the next level in digital turret systems Delivers real-time panoramic view Improves situational awareness, reduces reaction time and increases survivability Integrates with existing solutions PanoView allows to fuse sensor and tracker information such as areas of interest, trac
Slide 27: Army 4.0: SENECA – Latest development to enhance effectiveness of combatants
Army 4.0: SENECA – Latest development to enhance effectiveness of combatants Sensor Effector Network for Enhanced Combat Applications © Rheinmetall AG / CMD 2017 27
Slide 28: Army 4.0: MoTaKo / MoTIV will propel the German Army into the digital future
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 and data transmission Vehicle i
Slide 29: Army 4.0: Live simulation of the three building blocks
Army 4.0: Live simulation of the three building blocks © Rheinmetall AG / CMD 2017 29
Slide 30: Growth: Rheinmetall Defence with a strong focus on organic growth
Growth: Rheinmetall Defence with a strong focus on organic growth Long-term demand based on several pillars Strong order backlog © Rheinmetall AG / CMD 2017 30
Slide 31: Growing at improved performance
Growing at improved performance GROWTH Long-term growth trend fully intact Defence business growth returns to double digit %-rate PERFORMANCE Profitability improved on product mix and higher leverage Lagging business in Electronic Solutions is stabilizing OUTLOOK Well on track to enter target corrid
Slide 32: Mobility. Security. Passion.
MOBILITY. SECURITY. PASSION.
Slide 33: 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