Rheinmetall Ag · XETR:RHM
Rheinmetall — Investor Presentation (January 2012)
41 slides from Rheinmetall's investor presentation, January 2012
Slide 1: International Technology Group for Defence and Automotive
Corporate Presentation, January 2012 International Technology Group for Defence and Automotive VKI January 2012 © Rheinmetall 2012
Slide 2: Rheinmetall Group: Leading positions in Defence and Automotive
Rheinmetall Group Rheinmetall Group: Leading positions in Defence and Automotive Rheinmetall AG Sales: € 4.4 billion Employees: 21,500 Rheinmetall Defence Rheinmetall Automotive Leading European defence company Leading technology supplier for ground forces technology in powertrain Sales: € 2.1 billi
Slide 3: Key messages in the fiscal year 2011
Rheinmetall Group Key messages in the fiscal year 2011 Strong sales increase in Automotive and solid growth in Defence Group results again significantly better than in the previous year Full year group outlook as of Q3 2011 is confirmed Stable balance sheet with high equity ratio and a financing fra
Slide 4: Outlook 2011 as of Q3: On track to achieve the guided figures
Rheinmetall Group Outlook 2011 as of Q3 On track to achieve the guided figures Sales EBIT in € billion in € million FY 2010 Outlook 2011 FY 2010 Outlook 2011 Group 4.0 4.4 297 340 ‐ 360 thereof: Defence 2.0 2.1 234 220 ‐ 230 thereof: Automotive 2.0 2.3 81 140 ‐ 150 VKI January 2012 © Rheinmetall 201
Slide 5: Sales and EBIT at another new record level
Rheinmetall Group Sales and EBIT at another new record level Sales Group in € million EBIT Group in € million 360 4,400 4,005 3,989 340 3,869 297 3,420 270 245 15* 2007 2008 2009 2010 2011e 2007 2008 2009 2010 2011e * € 138 million restructuring costs deducted VKI January 2012 © Rheinmetall 2012 5
Slide 6: Strong balance sheet
Rheinmetall Group Strong balance sheet Solid basis for operative challenges and strategic development Equity in % of total assets Cash credit facilities in € million ∼34 ∼1,500 30.7 29.9 30.4 29.6 Bilateral bank facilities ∼400 (up to 1 year) Syndicated loan 500 (due December 2016) Promissory notes
Slide 7: Rheinmetall Defence
(OTOWSS Rheinmetall Defence PF evcinmerau
Slide 8: Rheinmetall Defence: Leading system house for international land forces
Rheinmetall Defence Rheinmetall Defence Leading system house for international land forces Rheinmetall MAN Combat Systems Electronic Solutions Military Vehicles Wheeled vehicles Combat platforms (Tracked vehicles, Air defence systems weapon and munitions) Military trucks Command & control/ Infantry
Slide 9: Top priorities on the Defence agenda
Rheinmetall Defence Top priorities on the Defence agenda Expanding the product and service portfolio, that lowers dependency on budget cuts, e.g. protection systems Strictly managing our resources in order to keep profitability high despite potential austerity measures Ensuring top‐line growth by sm
Slide 10: Defence growth will continue midterm but less dynamically
Rheinmetall Defence Defence growth will continue midterm… …but less dynamically than in the last decade Total global defence spending and procurement 2011‐2015 in US$ billion +7% CAGR: +1.6% 1,649 1,673 1,570 1,556 1,598 1,214 1,254 1,268 Other 1,207 1,198 +12% CAGR: +2.8% Procurement 363 358 384 39
Slide 11: Budget cuts in the US and Europe, strong growth in other regions
Rheinmetall Defence Budget cuts in the US and in many European countries… …but strong growth in other strategically important regions Change in defence spending 2015 vs. 2011 Canada + 4% Russia + 29% South Korea + 13% USA ‐ 14% Algeria + 20% Turkey + 20% UAE + 23% Saudi Arabia + 27% India Singapore
Slide 12: German defence budget will remain almost stable
Rheinmetall Defence German defence budget will remain almost stable Rheinmetall’s home market currently generates one third of sales German defence budget 2011‐2015 in € billion Split of expected Rheinmetall Defence sales 2011 ‐3.5% 31.9 Rest of the World 31.5 31.4 31.0 30.4 Other Asia and Australia
Slide 13: Defence budget cuts are challenging our business, but...
Rheinmetall Defence Defence budget cuts are challenging our business, but… …the order backlog of close to € 5 billion provides high visibility of sales in the upcoming years …Rheinmetall has received large orders in international markets and is pushing forward for further internationalization to div
Slide 14: Order backlog has doubled since 2004
Rheinmetall Defence Order backlog has doubled since 2004 Order backlog 2004‐2011 in € billion 4.8 4.8 4.6 3.3 2.8 2.9 2.6 2.4 2004 2005 2006 2007 2008 2009 2010 2011e VKI January 2012 © Rheinmetall 2012 14
Slide 15: Strong position in established markets, high potential in new markets
Rheinmetall Defence Strong position in established markets, high potential in new markets Rheinmetall pursues a strategy of consequent internationalization Production sites and sales offices 2011 Europe Norway Sweden United Kingdom Germany Canada Netherlands Austria Switzerland Turkey USA Italy Gree
Slide 16: Successful entry into new international markets in 2011
Rheinmetall Defence Successful entry into new international markets in 2011 Protected vehicles for Algeria, simulation and training for Russia Fox vehicles for Algeria Combat Training Centers for Russia Delivery of 54 Fox vehicles produced in Germany, Contract about one Combat Training Center volume
Slide 17: Opportunities for further organic growth
Rheinmetall Defence Opportunities for further organic growth Marketing new and innovative key products Multi‐role armored C‐RAM (MANTIS) vehicle Boxer On duty in Afghanistan Final shooting approval since September 2011 in February 2012 Increase of German Additional systems for order volume possible
Slide 18: Ongoing enlargement of protection business
Rheinmetall Defence Ongoing enlargement of protection business One of the key drivers in defence markets Protection by softkill Passive protection Active protection systems Comprising flares (airplanes) Enabling high protection and Innovative technology and fog (ships, vehicles) high mobility at the
Slide 19: Rheinmetall MAN Military Vehicles: A new joint venture
Rheinmetall Defence Rheinmetall MAN Military Vehicles A new joint venture of strategic importance Automotive know‐how: Mobility Closing of the final step in the set‐up of the joint venture on January 1, 2012: Integration of the production sites Kassel and Vienna Down‐selection in Australian tender i
Slide 20: Rheinmetall Automotive
Rheinmetall Automotive PF evcinmerau
Slide 21: Rheinmetall Automotive with two brands Kolbenschmidt and Pierburg
Rheinmetall Automotive Rheinmetall Automotive with two brands Kolbenschmidt and Pierburg Products for powertrain and engines Hardparts Mechatronics Motor Service Pistons for automotive and Emission control and Automotive parts for engine repair industrial applications air management and workshop Bea
Slide 22: Top priorities on the Automotive agenda
Rheinmetall Automotive Top priorities on the Automotive agenda Growing stronger than the markets with “clean” and “lean” products that are essential to meet the international emission and CO2‐regulation standards Participating in dynamic market growth in emerging countries: extending the business in
Slide 23: Product portfolio corresponding to global market trends
Rheinmetall Automotive Product portfolio corresponding to global market trends Main reason for outperforming the markets since the mid of 2010 Light vehicle (LV) production Change versus quarter of previous year in % 60 World LV production Triad LV production Western Europe LV production 40 20 Sales
Slide 24: CLEAN: Emission reduction as a key driver in powertrain market
Rheinmetall Automotive Emission reduction as a key driver in powertrain market Regulatory standards enforce exhaust gas recirculation technology CLEAN Strong growth through tightened emission regulations EGR valve EGR cooler Double EGR cooler high/low pressure EURO 4 EURO 5 EURO 6 Products for truck
Slide 25: LEAN: CO2 reduction as a key driver in powertrain market
Rheinmetall Automotive CO2 reduction as a key driver in powertrain market Turbocharging and hybridization increase demand for our products LEAN Substantial reduction of fuel consumption and therefore CO2 emissions CLEAN & LEAN Downsizing/Turbocharging Hybridization Powertrain technology content per
Slide 26: Success of Rheinmetall's CLEAN & LEAN strategy
Rheinmetall Group Success of Rheinmetall’s CLEAN & LEAN strategy Strong growth expected based on technology driven products Share of sales Strong growth expected Key drivers: 52% Truck business Technology Electric exhaust flaps driven products 32% Oil pumps Technology Water pumps driven products Con
Slide 27: Expectations for automotive production figures
Rheinmetall Automotive What are the expectations for automotive production figures? Globally upwards, but slightly downwards in Western Europe this year Expected production of light vehicles by region in thousand units +26% CAGR: +6.0% 90,810 94,294 84,763 79,918 74,718 World +16% CAGR: +3.8% 39,785
Slide 28: Dynamic markets: Capturing the growth opportunities in China
Rheinmetall Automotive Dynamic markets: Capturing the growth opportunities in China Expanding the strong JV‐business by own companies Sales Joint Ventures* in € million Key highlights 219 197 1 Two 50/50 JVs with SAIC – advantageous market entry strategy to benefit from SAIC’s customer base (since 1
Slide 29: Dynamic markets: Capturing the growth opportunities in India
Rheinmetall Automotive Dynamic markets: Capturing the growth opportunities in India Set‐up of a production facility and acquisition of bearings business Sales Joint Venture Shriram* in € million Key highlights 109 98 1 JV with Shriram (20 % stake) benefits from market growth (since 2005) 2 Set‐up of
Slide 30: Risk diversification by extending the high-margin non-LV business
Rheinmetall Automotive Risk diversification by extending the high‐margin non‐LV business Non‐LV business Q1‐3 2011 compared to Q1‐3 2010 in € million 138 (26%) Heavy Duty 1,735 +23% 187 Industrials 1,456 (36%) 524 Non‐LV 426 199 Motor Service (38%) +18% 1,211 LV 1,030 Q1‐3 2010 Q1‐3 2011 LV = Light
Slide 31: Prepared for market downturns
Rheinmetall Automotive Prepared for market downturns Headcount with a high degree of flexibility Sales in € million Headcount (capacities) in persons 2007 2009 2011e Sales 2,249 1,522 2,300 Headcount 11,895 10,339 11,503 thereof: High‐cost countries 8,755 7,694 7,972 thereof: Low‐cost countries 3,14
Slide 32: Objectives beyond staffing and personnel expenses
Rheinmetall Automotive Objectives beyond staffing and personnel expenses Rigid cost and pricing management Keeping capex strictly under control and stabilizing capex ratio sustainably at around 5%, coming from more than 7% in the past Fully shifting light vehicle piston production to low‐cost countr
Slide 33: Summary: Investment highlights
Summary: Investment highlights
Slide 34: Summary Rheinmetall Group: Investment highlights
Rheinmetall Group Summary Rheinmetall Group Investment highlights Defence as a leading international system house for ground forces Strong Automotive as a specialized provider of “clean” and “lean” market positions innovations in powertrain technology Profitable growth driven by product innova
Slide 35: Appendix
Appendix PF evcinmerau
Slide 36: Consolidated income statement
Appendix Consolidated income statement € million 2006 2007 2008 2009 2010 Sales 3,626 4,005 3,869 3,420 3,989 EBITDA 366 438 411 180 464 EBIT 215 270 245 15 297 EBIT margin (%) 5.9 6.7 6.3 0.4 7.4 Group net income 123 150 142 ‐ 52 174 Earnings per share (€) 3.41 4.15 4.09 ‐ 1.60 4.23 Dividend per sh
Slide 37: Consolidated balance sheet and consolidated cash flow statement
Appendix Consolidated balance sheet and consolidated cash flow statement Consolidated balance sheet € million 2006 2007 2008 2009 2010 Total assets 3,389 3,448 3,612 3,835 4,460 Total equity 937 1,059 1,080 1,134 1,355 Net liquidity ‐ 205 ‐ 236 ‐ 205 + 44 ‐ 76 Pension accruals 519 522 577 610 677 Co
Slide 38: Defence – Segment report
Appendix Defence – Segment report € million 2006 2007 2008 2009 2010 Sales 1,445 1,757 1,814 1,898 2,007 Order intake 1,696 1,804 1,723 3,153 1,977 Order backlog (Dec. 31) 2,819 2,868 3,307 4,590 4,772 EBITDA 147 211 237 263 297 Amortization / depreciation 36 51 43 48 63 EBIT 111 160 194 215 234 EBI
Slide 39: Automotive – Segment report
Appendix Automotive – Segment report € million 2006 2007 2008 2009 2010 Sales 2,181 2,249 2,055 1,522 1,982 EBITDA 226 237 184 ‐ 70 183 Amortization / depreciation 113 117 123 117 102 EBIT 113 120 61 ‐ 187 81 EBIT margin (%) 5.2 5.3 3.0 ‐ 12.3 4.1 Capital expenditures 149 148 146 70 96 Employees (De
Slide 40: Financial Diary
Appendix Financial Diary March 21, 2012 Annual report 2011 May 11, 2012 Q1 2012 May 15, 2012 Annual General Meeting August 10, 2012 Q2 2012 VKI January 2012 © Rheinmetall 2012 40
Slide 41: Disclaimer
Appendix 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 f