Rheinmetall Ag · XETR:RHM

Rheinmetall — Q1 2017 Earnings Presentation

32 slides from Rheinmetall's earnings presentation, May 4, 2017

  1. Slide 1: Conference Call Q1 2017

    Conference Call Q1 2017 Düsseldorf / 4 May 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 Q1 2017

    Highlights Rheinmetall Group Q1 2017 Successful start into 2017 for both segments Sales increased by 14% to €1.349 bn EBIT moved up by 61% to €50 m Margin gained 1.1pp to 3.7% Strong balance sheet with equity ratio at 29.3% EPS grew by 75% from €0.32 to €0.56 Announcements of strategically important

  4. Slide 4: Sales and results improved year over year

    Sales and results improved year over year Sales EBITDA Operational earnings in EUR million in EUR million in EUR million Operational margin in % 14% +24% +61% 1,349 107 50 86 31 1,180 3.7 2.6 Q1 Q1 Q1 Q1 Q1 Q1 2016 2017 2016 2017 2016 2017 © Rheinmetall AG / Conference Call Q1 2017 4

  5. Slide 5: Cash flow and earnings per share confirm positive trend

    Cash flow and earnings per share confirm positive trend Operating Free Cash Flow Earnings per share Headcount in EUR million in EUR million in capacities +2% +24% +75% 20,759 21,229 0.56 -199 0.32 -263 Q1 Q1 Q1 Q1 Q1 Q1 2016 2017 2016 2017 2016 2017 © Rheinmetall AG / Conference Call Q1 2017 5

  6. Slide 6: Highlights Rheinmetall Automotive Q1 2017

    Highlights Rheinmetall Automotive Q1 2017 Favorable market development and base effect lead to strong sales growth Sales rose by 13% to €737 m Strong Q1 sales in line with front end loaded FY expectation for global LV production EBIT grew by ~20% to €62 m Margin increased by 0.4pp to 8.4% China acti

  7. Slide 7: Automotive with positive leverage on the back of strong sales

    Automotive with positive leverage on the back of strong sales in EUR million Q1 2016 Q1 2017 Δ % Sales 654 737 12.7% Operating earnings Operating margin in % 52 8.0 62 8.4 19.2% 0.4 pp Q1 Operating Free Cash Flow - 139 - 118 15.1% Operating FCF / Sales in % - 21.3 - 16.0 5.3pp Quarterly sales and ma

  8. Slide 8: Very strong quarter for all three divisions

    Very strong quarter for all three divisions Sales Automotive Operational earnings Automotive Reasons for earnings development in EUR million in EUR million +13% +19% Mechatronics 737 62 Sales increased mostly in products 654 for emission reductions 52 425 Hardparts +15% 370 +26% 43 Solid start to th

  9. Slide 9: Markets for light vehicle and non-light vehicle products outpaced

    Markets for light vehicle and non-light vehicle products outpaced Global LV production Sales Automotive LV/Non-LV in million units in EUR million 4% 13% 24.0 737 23.0 654 5.9 5.5 +10% 232 Non-LV business 210 4.5 Without China: 4.5 +5% 5.8 6.0 +14% 444 505 LV business 0.9 1.0 6.4 6.6 China: +3% Q1 20

  10. Slide 10: Growth especially in regions outside Europe

    Growth especially in regions outside Europe Regional sales development Automotive Regional sales growth Q1 2017 in EUR million in % +13% 737 27 RoW 654 Row 18 88 Asia 80 121 Asia North America 102 149 Germany 133 North America 68% Germany 69% Europe 352 321 (excl. Germany) RHM Europe (excl. Germany)

  11. Slide 11: Mechatronics products gaining momentum in China

    Mechatronics products gaining momentum in China China LV production Sales in million EBIT in million / in % in million units +8% +24% 1,847 144 1,710 116 3% Hardparts JVs with modest 1,537 1,601 CNY 120 growth 6.4 6.6 104 Strong growth of WFOEs, 174 246 12 24 especially in Mechatronics 6.8% 7.5% Lim

  12. Slide 12: Highlights Rheinmetall Defence Q1 2017

    Highlights Rheinmetall Defence Q1 2017 Solid quarter marked by strategic milestones Lance turret Sales increased by 16% to €612 m EBIT rose by €7 m to -€10 m EBIT margin gained 1.6pp to -1.6% Despite low order intake in Q1, full year book-to-bill ratio expected to be at least around 1.0 Announcement

  13. Slide 13: Defence: Top line growth converted into result improvements

    Defence: Top line growth converted into result improvements in EUR million Q1 2016 Q1 2017 Δ % Order intake 948 391 -58.7% Sales Operating result 526 -17 612 -10 16.4% 41.2% Q1 Operating margin in % -3.2 -1.6 1.6 pp Operating Free Cash Flow -104 -72 30.8% Operating FCF / Sales in % -19.8 -11.8 8.0 p

  14. Slide 14: Earnings improvement in two divisions, Electronic Solutions stable

    Earnings improvement in two divisions, Electronic Solutions stable Sales Defence Operational earnings Defence Reasons for earnings development in EUR million in EUR million +16% +7 0 Weapon and Ammunition 612 1 +5 Favorable product mix 526 -4 191 -5 +7% +7 Electronic Solutions 178 Impact from lower

  15. Slide 15: High backlog declines on soft order intake in Q1

    High backlog declines on soft order intake in Q1 Order intake by division Order backlog profile in EUR million in EUR billion 6.9 6.4 -59% 2.5 948 243 Two major orders in Q1 2016: 2.0 1.9 ES: Air Defence Skyguard: €390 m VS: Leopard 2 upgrade (Poland): €126 m 515 391 207 215 116 Weapon and Ammunitio

  16. Slide 16: Three major partnering agreements mark next step for potential growth

    Three major partnering agreements mark next step for potential growth Bid for the planned rifle Potential areas of cooperation: Future digital communication procurement of the Bundeswehr Air defence (Patriot-replacement) and battle management system Plan: Technology partnership Weapon & Munition of

  17. Slide 17: Outlook 2017: Sales and earnings targets confirmed

    Outlook 2017 Sales and earnings targets confirmed AU TO M OT I V E DEFENCE M a c ro v i ew Global LV production expected Further demand increase in key markets to grow by ~2%* expected Chinese LV production only with moderate Germany and other allies have increased growth of 2.5% investment budgets

  18. Slide 18: Appendix

    Appendix © Rheinmetall AG / Conference Call Q1 2017 18

  19. Slide 19: 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

  20. Slide 20: Cash Flow Statement Group

    Cash Flow Statement Group Q1 Q2 Q3 Q4 Q1 Δ Q1 in EUR million 2016 2016 2016 2016 2017 2016/2017 Group Net Income 12 41 46 116 28 16 Amortization / depreciation 55 54 52 67 57 2 Change in pension accruals - 16 2 - - - 34 - 18 Cash Flow 51 97 98 183 51 - Changes in working capital and other items - 26

  21. Slide 21: Quarterly development Group

    Quarterly development Group Sales Operational earnings in EUR million in EUR million 1,698 171 1,419 1,305 1,349 1,180 1,034 724 612 662 115 526 72 79 19 30 50 31 654 695 664 737 643 60 60 62 52 51 -7 -2 -4 -10 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 -17 -2 -4 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

  22. Slide 22: Quarterly development Automotive

    Quarterly development Automotive Sales by division Operational earnings by division in EUR million in EUR million 737 62 60 695 60 654 664 643 51 52 425 35 43 387 35 370 355 380 36 34 22 243 249 16 17 231 225 222 11 13 8 8 8 7 83 81 85 83 5 1 74 0 -21 -23 -20 -4 -5 -5 -18 -18 Q1 2016 Q2 2016 Q3 2016

  23. Slide 23: Key figures Automotive by division (Q1 2016/2017)

    Key figures Automotive by division (Q1 2016/2017) Mechatronics Hardparts Aftermarket +13% +15% +8% +11% Sales 654 737 370 425 231 249 75 83 +19% +26% Opera- +31% +40% tional 52 62 34 43 13 17 5 7 earnings +1.6pp +0.4pp +0.9pp +1.2pp Opera- tional 8.4% margin 8.0% 8.4% 9.2% 10.1% 6.8% 6.8% 5.6% Figur

  24. Slide 24: Quarterly cash flow statement Automotive

    Quarterly cash flow statement Automotive Q1 Q2 Q3 Q4 Q1 Δ Q1 in EUR million 2016 2016 2016 2016 2017 2016/2017 Net income 38 42 36 49 46 +8 Amortization / depreciation 33 31 29 40 32 -1 Change in pension accruals - - - 1 - 1 - +/-0 Cash Flow 71 73 64 88 78 +7 Changes in working capital and other ite

  25. Slide 25: Quarterly development Defence

    Quarterly development Defence Sales by division Operational earnings by division in EUR million in EUR million 1,034 115 63 391 724 662 612 528 227 25 315 244 191 30 178 19 172 138 150 179 25 483 30 263 287 361 350 25 4 0 -63 -57 -98 -84 -67 -1 1 4 1 -4 -5 -6 -3 -3 -4 -7 Q1 2016 Q2 2016 Q3 2016 Q4 2

  26. Slide 26: Key figures Defence by division (Q1 2016/2017)

    Key figures Defence by division (Q1 2016/2017) Weapon a. Munition Electronic Solutions Vehicle Systems +16% +7% +34% -8% Sales 526 612 191 350 178 261 150 138 +65% +5 +7 0 Opera- 0 1 tional -17 -10 -5 -4 -4 -6 earnings +2.8pp +1.6pp +2.6pp 0.0% Opera- -0.2pp +0.3% tional -1.6% -2.8% -3.2% -2.7% -2.9

  27. Slide 27: Quarterly cash flow statement Defence

    Quarterly cash flow statement Defence Q1 Q2 Q3 Q4 Q1 Δ Q1 in EUR million 2016 2016 2016 2016 2017 2016/2017 Net income - 20 3 13 78 - 16 +4 Amortization / depreciation 22 22 22 26 24 +2 Change in pension accruals 1 2 1 - 3 - 3 -4 Cash Flow 3 27 36 105 5 +2 Changes in working capital and other items

  28. Slide 28: Income statement Group

    Income statement Group In EUR million Income Statement Q1 '16 Q1 '17 Δ Q1 '16 Q1 '17 Δ Total operating performance 1,256 1,416 160 Net operating income (EBIT) 31 50 19 Net interest income - 3 3 Interest expenses - 14 - 15 -1 Other operating income 26 27 1 Earnings before tax (EBT) 17 38 21 Cost of m

  29. Slide 29: Cash flow statement Group

    Cash flow statement Group In EUR million Cash Flow Statement Q1 '16 Q1 '17 Δ Q1 '16 Q1 '17 Δ Net Income 12 28 16 Capital payment to/ capital contribution by non-controlling interests0 4 4 Amortization, depreciation and impairment 55 57 2 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 31.3.'17 Δ 31.12.'16 31.3.'17 Δ Non-current assets 2,762 2,756 - 6 Equity 1,781 1,814 33 Intangible assets 819 811 - 8 Share capital 112 112 - Property, plant and equipment 1,378 1,371 - 7 Additional paid-in capital 532 532 - Investment prop

  31. Slide 31: Next events and IR contacts

    Next events and IR contacts Events 2017 IR Contacts Annual Stockholders’ Meeting Berlin 9 May Franz-Bernd Reich Head of IR RS Switzerland Zurich, Lugano 10-11 May Tel: +49-211 473-4718 Warburg Highlights Hamburg 19 May Email: franz-bernd.reich@rheinmetall.com RS Paris Paris 23 May Dirk Winkels Deuts

  32. Slide 32: © Rheinmetall AG / Conference Call Q1 2017

    © Rheinmetall AG / Conference Call Q1 2017 32

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