Rheinmetall Ag · XETR:RHM
Rheinmetall — Investor Presentation (September 2012)
39 slides from Rheinmetall's investor presentation, Sep 27, 2012
Slide 1: International Technology Group for Defence and Automotive
Corporate Presentation I September 2012 International Technology Group for Defence and Automotive © Rheinmetall 2012
Slide 2: Rheinmetall Group: Leading positions in Defence and Automotive
Rheinmetall Group Rheinmetall Group: Leading positions in Defence and Automotive Sales: € 4.454 billion Rheinmetall AG Employees: 21,516 Rheinmetall Defence Rheinmetall Automotive Leading European defence company Leading technology supplier for ground forces technology in powertrain Sales: € 2.141 b
Slide 3: Key messages H1 2012
Rheinmetall Group Rheinmetall Group Key messages H1 2012 Sales increased by 9% Solid earnings: EBIT on previous year’s level, EBT and EPS above Operating cash flow € 65 million higher than in H1 2011 Confirming outlook as of March 2012, given a stable economic environment in the Eurozone and unchang
Slide 4: Rheinmetall Defence: Leading European defence company for ground forces technology
Rheinmetall Defence Rheinmetall Defence Leading European defence company for ground forces technology Sales: € 2,1 billion Rheinmetall Defence Employees: 9,800 Combat Systems Electronic Solutions Wheeled Vehicles Sales : € 1.1 billion Sales: € 0.8 billion Sales: € 0.3 billion Combat Platforms Air De
Slide 5: Defence Key messages
Rheinmetall Defence Rheinmetall Defence Key messages Order intake remarkably improved by 33%, mainly caused by four medium-sized orders indicated in the Q1 call Sales grew by 12%, as logistic vehicles are consolidated now EBIT of € 56 million below previous year’s H1 (€ 62 million) Operating free ca
Slide 6: Defence sales and earnings
Rheinmetall Defence Defence sales and earnings Strong order intake Defence H1 H1 Δ H1 € million 2011 2012 (2012/2011) Order intake 853 1,138 + 285 + 33 % Order backlog 4,740 4,589 - 151 -3% Sales 904 1,010 + 106 + 12 % EBITDA 100 99 -1 -1% EBIT 62 56 -6 - 10 % EBIT margin (%) 6.9 5.5 - 1.4 pp - 20 %
Slide 7: Explanation for the development of sales and earnings (H1)
Rheinmetall Defence Rheinmetall Defence Explanation for the development of sales and earnings (H1) Sales bridge H1 2011 to H1 2012 € million -30 1,010 0 +136 904 0 EBIT bridge H1 2011 to H1 2012 € million +20 -9 62 -10 -7 56 H1 2011 One-off gains Logistic vehicles Volume effect Product/project H1 20
Slide 8: Defence cash flow
Rheinmetall Defence Defence cash flow Operating cash flow reflects success of working capital program Defence H1 H1 Δ H1 € million 2011 2012 (2012/2011) Net income 44 45 +1 Amortization / depreciation 38 43 +5 Change in pension accruals -3 -5 -2 Cash flow 79 83 +4 Changes in working capital and othe
Slide 9: Defence industry in a challenging environment
Rheinmetall Defence Defence industry in a challenging environment Global defence budgets will continue to grow, but differently by regions Expected global defence spending and procurement US$ billion +5% 1,633 1,639 1,674 1,595 1,602 Other 1,264 1,258 1,283 1,285 1,311 +10% Procurement 331 344 350 3
Slide 10: Budget cuts in the US and Europe, strong growth elsewhere
Rheinmetall Defence Budget cuts in the US and in many European countries… …but strong growth in other strategically important regions Change in expected defence spending 2016 vs. 2012 Canada + 1% Russia + 19% South Korea + 18% USA - 8% Algeria + 26% Turkey + 7% UAE + 18% Saudi Arabia + 21% India Sin
Slide 11: Focus on domestic market
Rheinmetall Defence Focus on domestic market Domestic market not hit by severe austerity measures Top down defence budget planning of Department of Treasury € billion +1.8% 33.3 33.0 32.5 32.5 31.9 German defence budget will remain almost stable until 2016 Defence budget cuts of € 8 billion and abov
Slide 12: Increasing order intake
Rheinmetall Defence Increasing order intake Considerable improvement compared to previous year Order intake H1 2011 vs. H1 2012 € million Significant orders Q2 2012 +33% Two Air Defence orders from an Asian and from a 1,138 Middle East country (total volume: € 133 million) Prolongation of the Heron
Slide 13: Innovative products with excellent market positions
Rheinmetall Defence Innovative products with excellent market positions Basis of future organic growth Infantry fighting vehicle (IFV) Multi-role armoured vehicle Multi-role armoured vehicle Puma Boxer Fox Latest technology in IFV segment First vehicles delivered to “Experiencing its second life“ wo
Slide 14: Combining the future growth potential of Fox, Boxer and Puma
Rheinmetall Defence Rheinmetall Defence Combining the future growth potential of Fox, Boxer and Puma Volumes of top orders by year 2010-2020 € million Fox Algeria (in negotiation) 413 413 Fox Algeria Boxer NL Total order 384 volume: Boxer D € 2.2 billion Puma 306 283 273 247 180 143 100 76 2010 2011
Slide 15: Changes of the Puma order volume
Rheinmetall Defence Rheinmetall Defence Changes of the Puma order volume Order volume* € million 1,261 1,232 +44 -148 +75 Original order Reduction Contract Additional Current total volume 2009 per 12/31/2011 amendments equipment order volume ordered * Rheinmetall share of total order volume Corporat
Slide 16: Combining two coherent know-hows: RMMV full consolidation
Rheinmetall Defence Combining two coherent know-hows Full consolidation of RMMV by Rheinmetall from 2012 on Rheinmetall MAN Rheinmetall 51% MAN Military 49% Vehicles (RMMV) Military know-how: Protection Automotive know-how: Mobility May 2010: Combination of development and marketing activities (400
Slide 17: Logistic vehicles: New and different business model
Rheinmetall Defence Logistic vehicles New and different business model Fundamental structure: Business model characterized by assembly production with low working capital and low capex requirements; value-added lower than in the tactical vehicle business ROCE satisfactory; focus lies on raising the
Slide 18: New markets penetration
Rheinmetall Defence New markets penetration Securing future growth by large-scale orders in new markets Industrial cooperation Market entry in Russia Military logistic vehicles with Algeria for Australia Contract for 54 vehicles signed in Contract for one combat training Down-selected as preferred 2
Slide 19: Airborne systems: Joint venture with Cassidian closed
Rheinmetall Defence Airborne systems Joint venture with Cassidian closed Rheinmetall EADS Cassidian 49% Joint 51% Venture Closing of the joint venture per 30 June 2012 Expected figures for H2 2012 that will be deconsolidated: sales € 34 million, EBIT € 4 million Corporate Presentation August 2012 ©
Slide 20: Outlook 2012: Slightly below previous year
Rheinmetall Defence Outlook 2012: “Slightly below previous year” Although under pressure, guidance is achievable Defence 2011 2012 € million (actually) Sales 2,141 Guidance: 2,500e Logistic vehicles - - 400e Sales net 2,141 2,100e Sales H1 net 904 (1,010 – 136 =) 874 Sales H2 net 1,237 1,226e EBIT H
Slide 21: Rheinmetall Automotive: Leading technology supplier in powertrain
Rheinmetall Automotive Rheinmetall Automotive Leading technology supplier in powertrain Sales: € 2.3 billion Rheinmetall Automotive Employees: 11,500 Hardparts Mechatronics Motor Service Sales: € 1.1 billion Sales: € 1.0 billion Sales: € 0.3 billion Pistons Pierburg International Aluminum technology
Slide 22: Automotive Key messages H1 2012
Rheinmetall Automotive Rheinmetall Automotive Key messages H1 2012 Again increasing results in H1 2012: • Sales raised by 6% • EBIT grew by 12% Counting on the right trends: sales continued to grow even though European markets are shrinking Continuing growth in China and India Corporate Presentation
Slide 23: Automotive sales and earnings
Rheinmetall Automotive Automotive sales and earnings Sales, earnings and profitability at another record level Automotive H1 H1 Δ H1 € million 2011 2012 (2012/2011) Sales 1,171 1,243 + 72 +6% EBITDA 127 138 + 11 +9% EBIT 76 85 +9 + 12 % EBIT margin (%) 6.5 6.8 + 0.3 pp +5% EBT 68 77 +9 + 13 % Capex
Slide 24: Automotive cash flow
Rheinmetall Automotive Automotive cash flow Slightly increasing working capital due to growth Automotive H1 H1 Δ H1 € million 2011 2012 (2012/2011) Net income 50 57 +7 Amortization / depreciation 51 53 +2 Change in pension accruals -2 -2 +0 Cash flow 99 108 +9 Changes in working capital and other it
Slide 25: Product portfolio corresponding to global market trends
Rheinmetall Automotive Product portfolio corresponding to global market trends Main reason for outperforming the Western European market Growth rate (quarter compared to previous year’s quarter) in % 60 World LV production Triad LV production Western Europe LV production 40 20 Sales Automotive 0 -20
Slide 26: Outperformance of the European market since mid of 2010
Rheinmetall Automotive Outperformance of the European market since the mid of 2010 Confirming the strategic focus of the product portfolio Difference in quarterly growth rate of LV production Western Europe and Sales Automotive +26.1pp +24.8pp +20.5pp +21.1pp +15.5pp +13.5pp +11.9pp +10.9pp +10.2pp
Slide 27: Dynamic markets: China
Rheinmetall Automotive Dynamic markets: China Continuing growth in sales and earnings Sales Joint Ventures* € million EBIT Joint Ventures* € million +37% 196 143 +51% 15 10 H1 2011 H1 2012 H1 2011 H1 2012 Sales WFOEs** € million LV production China million units +8% +41% 5 4 7.693 8.301 H1 2011 H1 2
Slide 28: Dynamic markets: India
Rheinmetall Automotive Dynamic markets: India Increasing business by strong organic growth and strategic acquisition Sales KSPG India € million Key facts KSPG India Integration of Kirloskar Bearings – included in +172% the figures since Q4 2011 – completed 19 Employees: 615 (as of 06/30/2012) Kirlos
Slide 29: LV production expected to grow further in the long term
Rheinmetall Automotive LV production expected to grow further in the long term Globally increasing, but regionwise with different dynamics Expected LV production by region thousand units +22% 91,324 86,438 78,453 80,769 74,829 World +13% 39,005 40,295 Triad 35,514 37,463 37,101 +4% Western Europe 14
Slide 30: Sales at a new peak based on a well-balanced customer structure
Rheinmetall Automotive Sales at a new peak based on a well-balanced customer structure Sales 2011 € million Sales by customer +17% 2,313 Others VW/Porsche/Audi 1,982 Ships/ Power plants/ Ford MIR* 2011 PSA After market Renault/ Daimler Nissan GM Fiat 2010 2011 BMW * Marine, Industry, Recreation Corp
Slide 31: Growth drivers: Tightened emission regulations
Rheinmetall Automotive Growth drivers: Tightened emission regulations EGR valve EGR cooler Double EGR cooler high/low pressure EURO 4 EURO 5 EURO 6 Truck business expected to follow 2005 2010 2015 •EGR valve •EGR cooler modules Emerging countries expected to follow with a lag of 5 to 10 years •Back
Slide 32: Growth drivers: Reduction of fuel consumption and CO2 emissions
Rheinmetall Automotive Growth drivers: Reduction of fuel consumption and CO2 emissions Downsizing/Turbocharging Hybridization Powertrain technology content per mid-size gasoline vehicle in € +36% 3,000 2,200 2010 2020e Ring carrier pistons Electric water pumps Source: Roland Berger (2010/2011) High-
Slide 33: Important issues on the agenda 2012
Rheinmetall Automotive Important issues on the agenda 2012 Sales growing stronger than production in international markets Benefitting from the dynamic growth of emerging countries: expansion of existing business in China and India Strengthening the earnings power by extending the Non-LV and truck b
Slide 34: Outlook Group
Rheinmetall Group Outlook Group Corporate Presentation August 2012 © Rheinmetall 2012
Slide 35: Rheinmetall Group Outlook 2012
Rheinmetall Group Rheinmetall Group Outlook 2012 Sales EBIT € billion € million 2012e 2011 2012e 2011 on previous Group approximately 4.9 4.5 year’s level 354 slightly below Defence approximately 2.5 2.1 previous year 223 slightly above Automotive slightly above 2.4 2.3 previous year 151 We confirm
Slide 36: Appendix
APPENDIX Corporate Presentation August 2012 © Rheinmetall 2012
Slide 37: Key figures Defence by divisions
Rheinmetall Defence Key figures Defence by divisions Combat Systems Electronic Solutions Wheeled Vehicles +12% +1% -13% 1,010 +143% Sales 904 471 477 372 324 265 109 H1 2011 H1 2012 H1 2011 H1 2012 H1 2011 H1 2012 H1 2011 H1 2012 -10% -49% +14% 62 56 EBIT 43 41 +53% 22 36 -17 -8 H1 2011 H1 2012 H1 2
Slide 38: Key figures Automotive by divisions
Rheinmetall Automotive Key figures Automotive by divisions Hardparts Mechatronics Motor Service +6% +7% +7% 1,171 1,243 +3% Sales 541 578 530 565 133 137 H1 2011 H1 2012 H1 2011 H1 2012 H1 2011 H1 2012 H1 2011 H1 2012 +12% +30% +4% 85 -14% EBIT 76 39 37 39 30 14 12 H1 2011 H1 2012 H1 2011 H1 2012 H1
Slide 39: 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