Rheinmetall Ag · XETR:RHM
Rheinmetall — Q1 2016 Earnings Presentation
31 slides from Rheinmetall's earnings presentation, May 12, 2016
Slide 1: Conference Call Q1 2016
R H E I N M E TA L L A G T H E T EC H N O LO GY G RO U P FO R S EC U R I T Y A N D M O B I L I T Y Conference Call Q1 2016 Düsseldorf | May 12, 2016 © RHEINMETALL AG 2016
Slide 2: Highlights Q1 2016
Rheinmetall Group Highlights Q1 2016 Strong order backlog, stable sales development, earnings progressing Sales increased by 1%, FX-adjusted by 2% Order backlog further increase to EUR 7.3 billion Earnings up to EUR 31 million, margin raised to 2.6% Rating Moody´s outlook improved from “negative” to
Slide 3: Key figures Q1 2016
Rheinmetall Group Key figures Q1 2016 in EUR million Q1 2015 Q1 2016 ∆ Q1 2016 / Q1 2015 Order backlog 7,070 7,317 + 247 + 3% Sales 1,173 1,180 +7 + 1% EBITDA 71 86 + 15 + 21% EBIT (reported) 22 31 +9 + 41% EBIT margin in % 1.9 2.6 + 0.7pp EBT 6 17 + 11 + 183% Group net income 5 12 +7 + 140% Earning
Slide 4: Cash flow statement
Rheinmetall Group Cash flow statement in EUR million Q1 Q2 Q3 Q4 Q1 ∆ Q1 2015 2015 2015 2015 2016 2016/2015 Group net income 5 29 30 96 12 +7 Amortization / depreciation 49 50 49 55 55 +6 Change in pension accruals 0 1 0 2 -16 - 16 Cash flow 54 80 79 153 51 -3 Changes in working capital and - 202 -
Slide 5: Pension obligations – set-up of a CTA
Rheinmetall Group Pension obligations – set-up of a CTA Rheinmetall decided to start the external funding of German pension obligations and to establish a „Contractual Trust Arrangement“ (CTA) for the Group In January 2016, the CTA was initially funded with an amount of EUR 30 million Main goals of
Slide 6: Automotive
© RH E I N M ETAL L A G | I N T E RIM RE P ORT Q 1 2 0 1 6 | M A Y 1 2 , 2 0 1 6 6
Slide 7: Highlights Q1 2016
Rheinmetall Automotive Highlights Q1 2016 Sales slightly reduced, profitability stable Sales slightly reduced by EUR 10 million, FX-adjusted by -1% Earnings margin at target level of 8% China reduced growth rates of JVs and WFOEs Strategy alliance with Riken in China intensified by 30%-stake © RH E
Slide 8: Key figures Q1 2016
Rheinmetall Automotive Key figures Q1 2016 in EUR million Q1 2015 Q1 2016 ∆ Q1 2016 / Q1 2015 Order intake 689 662 - 27 - 4% Order backlog (March 31) 407 452 + 45 + 11% Sales 664 654 - 10 - 2% EBITDA 83 85 +2 + 2% EBIT (reported) 55 52 -3 - 5% EBIT margin in % 8.3 8.0 - 0.3pp Free cash flow from ope
Slide 9: Sales affected by partially weaker demand, EBIT margin at 8.0%
Rheinmetall Automotive Sales affected by partially weaker demand EBIT margin at 8.0% Sales Automotive in EUR million Operational earnings Automotive in EUR million 664 654 55 Reasons for earnings development 52 Mechatronics 375 380 — Continuing growth 31 Hardparts 34 — Further deterioration of deman
Slide 10: China: LV production continues to grow, but with reduced rates
Rheinmetall Automotive China: LV production continues to grow, but with reduced rates Stable performance of Chinese joint ventures LV production EBIT** in EUR million in million units 18 16 6.0 6.2 14 JVs 15 WFOEs* 4 2 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Sales** in EUR million Earnings contribution in E
Slide 11: Global alliance with Riken
Rheinmetall Automotive Global alliance with Riken Automotive acquires 30% in Riken Automobile Parts in China Riken Automobile Parts (Wuhan) Co. Ltd. Strengthening of the existing strategic partnership concerning development and marketing with Riken Corp., Tokyo Automotive took over 30 % of Riken Aut
Slide 12: Defence
© RH E I N M ETAL L A G | I N T E RIM RE P ORT Q 1 2 0 1 6 | M A Y 1 2 , 2 0 1 6 12
Slide 13: Highlights Q1 2016
Rheinmetall Defence Highlights Q1 2016 Strong order inflow, growing sales and improved earnings soared to roughly EUR 950 billion Order intake shifting the book-to-bill ratio to 1.8 Order backlog increased to EUR 6.9 billion Sales up by EUR 17 million; FX-adjusted by 6% Earnings losses reduced by EU
Slide 14: Key figures Q1 2016
Rheinmetall Defence Key figures Q1 2016 in EUR million Q1 2015 Q1 2016 ∆ Q1 2016/ Q1 2015 Order intake 542 948 + 406 + 75% Order backlog (March 31) 6,629 6,865 + 236 + 4% Sales 509 526 + 17 + 3% EBITDA -7 5 + 12 EBIT (reported) - 28 - 17 + 11 EBIT margin in % - 5.5 - 3.2 + 2.3pp Free cash flow from
Slide 15: Increasing share of non-European order intake
Rheinmetall Defence Increasing share of non-European order intake High order book coverage of mid-term future sales Order intake by region in EUR million Order backlog ….. turning into sales in EUR million 948 6,865 5% Rest of the World 6,629 RoW ~3,000 56% Asia/MENA 542 ~2,100 Asia/ ~1,800 31% MENA
Slide 16: Recent order flow
Rheinmetall Defence Recent order flow New orders and frame contracts Air Defence MENA Upgrade Leopard 2 Poland Artillery ammunition MENA EUR 390 million EUR 130 million EUR 84 million © RH E I N M ETAL L A G | I N T E RIM RE P ORT Q 1 2 0 1 6 | M A Y 1 2 , 2 0 1 6 16
Slide 17: Sales increase in Weapon and Ammunition and in Vehicle Systems
Rheinmetall Defence Sales increase in Weapon and Ammunition and in Vehicle Systems Earnings improving but seasonally not yet in profit zone Sales Defence in EUR million Operational earnings Defence in EUR million 526 Reasons for earnings development 509 -5 Weapon and Ammunition 178 -11 -4 — Higher s
Slide 18: Rheinmetall Group
Rheinmetall Group © RH E I N M ETAL L A G | I N T E RIM RE P ORT Q 1 2 0 1 6 | M A Y 1 2 , 2 0 1 6 18
Slide 19: Short-term perspective: Outlook fiscal year 2016 confirmed
Rheinmetall Group Short-term perspective Outlook fiscal year 2016 confirmed Sales in € billion Operational margin 2015 2016 2015 2016 Group 5.2 ~ 5.5 5.5% ~ 6% Defence 2.6 ~ 2.8 3.5% 4.5-5% Automotive 2.6 ~ 2.7 8.3% ~ 8% Assumptions Key large-scale projects in Defence to be realized as scheduled, no
Slide 20: 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
Slide 21: Appendix: Rheinmetall Group
Appendix: Rheinmetall Group © RH E I N M ETAL L A G | I N T E RIM RE P ORT Q 1 2 0 1 6 | M A Y 1 2 , 2 0 1 6 21
Slide 22: Quarterly development
Appendix: Rheinmetall Group Quarterly development Sales in EUR million Operational earnings in EUR million 1,601 147 1,221 1,188 1,180 1,173 101 966 509 545 526 61 571 57 22 1 16 31 55 59 52 52 50 664 676 617 635 654 -3 -5 -6 -17 -28 -4 -5 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q1 2015 Q2 2015 Q3 2
Slide 23: Key figures Automotive by division
Appendix: Rheinmetall Automotive Key figures Automotive by division Mechatronics Hardparts Aftermarket -10 +5 -9 Sales ±0 664 654 375 380 242 231 69 69 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 -3 +3 Opera- -7 55 -2 tional 52 31 34 20 13 7 5 earnings Q1 2015 Q1 2016 Q1 2015 Q1
Slide 24: Quarterly development
Appendix: Rheinmetall Automotive Quarterly development Sales Automotive in EUR million Operational earnings Automotive in EUR million 664 676 59 654 55 617 635 52 52 46 375 376 31 34 333 366 380 26 27 34 242 248 237 231 20 19 20 225 14 13 69 74 74 68 69 7 7 7 6 5 -22 -22 -27 -24 -26 -3 -1 -2 0 0 Q1
Slide 25: Sales structure and market growth
Rheinmetall Automotive Sales structure and market growth Sales by division in EUR million Sales by region in EUR million Market growth* +1% 664 654 664 654 30 -40% 18 Rest of the World -15% 80 ±0% 80 Asia (w/o China JVs) - 2% 98 +4% 102 NAFTA +5% 56% 58% Mechatronics 323 321 Europe (excl. Germany) +
Slide 26: Cash flow statement
Appendix: Rheinmetall Automotive Cash flow statement in EUR million Q1 Q2 Q3 Q4 Q1 ∆ Q1 2015 2015 2015 2015 2016 2016/2015 Net income 40 43 35 43 38 -2 Amortization / depreciation 28 28 28 32 33 +5 Change in pension accruals 0 0 -2 0 0 ±0 Cash flow 68 71 61 75 71 +3 Changes in working capital and -
Slide 27: Key figures Defence by division
Appendix: Rheinmetall Defence Key figures Defence by division Weapon and Ammunition Electronic Solutions Vehicle Systems +17 +24 -9 +35 Sales 509 526 154 178 159 150 226 261 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 +11 +6 -2 +7 Opera- -5 -2 -4 -13 -6 -17 -11 tional -28 earning
Slide 28: Quarterly development: Sales
Appendix: Rheinmetall Defence Quarterly development: Sales Sales Defence – old divisional structure Sales Defence – new divisional structure in EUR million in EUR million 966 966 404 553 545 571 571 546 527 509 509 158 270 165 178 239 278 312 154 271 174 155 150 159 159 155 174 408 265 296 263 211 2
Slide 29: Quarterly development: Operational earnings
Appendix: Rheinmetall Defence Quarterly development: Operational earnings Operational earnings Defence – Operational earnings Defence – old divisional structure in EUR million new divisional structure in EUR million 101 101 82 77 16 16 16 16 8 17 19 1 1 9 14 4 4 9 -1 -2 1 -5 3 -1 1 -11 -11 -4 -1 -6
Slide 30: Order backlog by region and division
Rheinmetall Defence Order backlog by region and division Order backlog by region in EUR million Order backlog by divisions in EUR million 6,865 6,629 6,865 6,629 7% 20% Rest of the World 26% Weapon and Ammunition 27% 19% 25% Electronic Solutions 55% 43% Asia/MENA 14% 16% Europe w/o Germany 64% 58% V
Slide 31: Cash flow statement
Appendix: Rheinmetall Defence Cash flow statement in EUR million Q1 Q2 Q3 Q4 Q1 ∆ Q1 2015 2015 2015 2015 2016 2016/2015 Net income - 30 -8 3 67 - 20 + 10 Amortization / depreciation 21 21 21 22 22 +1 Change in pension accruals 0 3 2 3 1 +1 Cash flow -9 16 26 92 3 + 12 Changes in working capital and