Slide 1: Conference Call 9M 2014
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 9M 2014 Düsseldorf | November 6, 2014 © RHEINMETALL AG 2014
Slide 2: Growth and risks: Ambivalent markets for security and mobility products
Rheinmetall Group Growth and risks Ambivalent markets for security and mobility products Defence — Geopolitical tensions – Ukraine, Syria, IS, Gaza – trigger debates on expanding procurement budgets — Global markets still challenging, esp. ammunition market below expectations — Export license policy
Slide 3: Q3 2014 at a glance
Rheinmetall Group Q3 2014 at a glance ― Sales increased by 9% to EUR 3,215 million (+ 11% adjusted for FX effects) ― Operational earnings down by EUR 19 million to EUR 39 million, EBT improved by EUR 24 million to EUR - 32 million, EPS at EUR - 0.39 after EUR - 0.65 in 9M 2013 ― Headcount reduced by
Slide 4: The first three quarters 2014 in detail
Rheinmetall Group The first three quarters 2014 in detail Continuing operations 9M 2013 9M 2014 ∆ 9M 2014/ in EUR million 9M 2013 Sales 2,956 3,215 + 259 Operational earnings 58 39 - 19 Special items: one-offs, restructuring costs - 60 - 16 + 44 EBIT (reported) -2 23 + 25 EBT - 56 - 32 + 24 Group ne
Slide 5: Cash flow statement
Rheinmetall Group Cash flow statement Positive operating free cash flow in Q3 due to decrease of working capital Continuing and discontinued operations Q3 2013 Q1 2014 Q2 2014 Q3 2014 ∆ Q3 2014/ in EUR million Q3 2013 Group net income -2 - 13 7 - 14 - 12 Amortization / depreciation 50 48 52 49 -1 Ch
Slide 6: Improved financial flexibility
Rheinmetall Group Improved financial flexibility Promissory note loans in the amount of EUR 168.5 million issued Allocation by investor type Cash credit facilities in EUR million ~1,570 Others ~1,400 8% Bilateral ~400 bank facilities ~400 International German banks private banks Syndicated loan 22%
Slide 7: Rheinmetall Defence
Rheinmetall Defence © RH E I N M ETAL L A G 2 0 1 4 | 9 M 2 0 1 4 RE P ORT | N OV E M BER 2 0 1 4 7
Slide 8: Q3 2014 at a glance
Rheinmetall Defence Q3 2014 at a glance ― Strong order intake of EUR 1,592 million in 9M 2014 results in a positive book-to-bill ratio of 1.2 ― Sales increased by 10% to EUR 1,384 million (+ 11% adjusted for FX effects) ― External and internal impacts affect Q3 earnings and will also influence Q4 ―
Slide 9: The first three quarters 2014 in detail
Rheinmetall Defence The first three quarters 2014 in detail Continuing operations 9M 2013 9M 2014 ∆ 9M 2014/ in EUR million 9M 2013 Order intake 2,644 1,592 - 1,052 Order backlog 6,285 6,165 - 120 Sales 1,263 1,384 + 121 Operational earnings (EBIT before special items) - 52 - 84 - 32 Special items (
Slide 10: Sales and earnings by division
Rheinmetall Defence Sales and earnings by division Headwinds in Combat Systems and Electronic Solutions Sales Defence in EUR million Operational earnings Defence in EUR million +121 -32 1,384 Reasons for earnings development 5 1,263 Combat Systems -26 ― Delayed export licenses 558 ― Provisions for p
Slide 11: A set of external and internal impacts
Rheinmetall Defence A set of external and internal impacts Defence is facing challenges… Operational earnings in EUR million 85-95 External impacts Delayed export Withdrawal of order licenses, Sales decline export license esp. ammunition due to to Russia and Protection weak markets Systems EUR ~ 60
Slide 12: A set of external and internal impacts: countermeasures
Rheinmetall Defence A set of external and internal impacts …but has initiated countermeasures External impacts Internal impacts / Product mix Delayed export Provisions for Withdrawal of order licenses, Sales decline potential warranties Cost overruns in export license esp. ammunition due to in naval
Slide 13: Rheinmetall Automotive
Rheinmetall Automotive © RH E I N M ETAL L A G 2 0 1 4 | 9 M 2 0 1 4 RE P ORT | N OV E M BER 2 0 1 4 13
Slide 14: Q3 2014 at a glance
Rheinmetall Automotive Q3 2014 at a glance — Sales up by 8% to EUR 1,831 million (+ 11% adjusted for FX effects), whereas global market grew by 4% — Headcount reduced by 3% to 10,861 employees — Operational earnings improved by 22% to EUR 139 million — Profitability increased to 7.6%, compared to 6.
Slide 15: The first three quarters 2014 in detail
Rheinmetall Automotive The first three quarters 2014 in detail Continuing operations 9M 2013 9M 2014 ∆ 9M 2014/ in EUR million 9M 2013 Sales 1,693 1,831 + 138 Operational earnings (EBIT before special items) 114 139 + 25 Special items (one-offs, restructuring costs) - 22 0 + 22 EBIT (reported) 92 13
Slide 16: Sales and earnings by division
Rheinmetall Automotive Sales and earnings by division Increasing sales and better operational performance Sales in EUR million Operational earnings in EUR million +25 +138 139 1,831 1,693 114 Reasons for earnings development 74 982 Mechatronics 875 Higher sales 55 Hardparts Higher sales and improved
Slide 17: Sales by region and by division
Rheinmetall Automotive Sales by region and by division Mechatronics benefits from growth in European markets Sales by region in EUR million Divisional sales share* in % +138 1,693 1,831 1,831 1,693 397 368 52% 54% Mechatronics 71% 69% 900 804 39% 38% Hardparts 158 169 31% 29% 363 365 12% 11% Afterma
Slide 18: Success story: Operational earnings close to target of 8% margin
Rheinmetall Automotive Success story Operational earnings close to target of 8% operational margin Operational earnings 9M in EUR million Operational earnings FY in EUR million Operational margin 9M in % Operational margin FY in % 180 159 151 139 139 115 114 108 7.6 81 7.5 6.6 6.7 6.5 7.0 63 6.0 5.9
Slide 19: Outlook
Rheinmetall Group OUTLOOK © RH E I N M ETAL L A G 2 0 1 4 | 9 M 2 0 1 4 RE P ORT | N OV E M BER 2 0 1 4 19
Slide 20: Outlook 2014: Defence down, Automotive up
Rheinmetall Group Outlook 2014 Defence down, Automotive up Sales Operational earnings in EUR billion in EUR million Previous Updated Previous Updated Group 4.6 - 4.7 4.6 200 - 220 150 Defence 2.3 2.2 65 - 75 - 10 Automotive 2.3 - 2.4 2.4 155 - 165 180 Current outlook includes non-operational expense
Slide 21: Appendix
Appendix: Rheinmetall Group APPENDIX © RH E I N M ETAL L A G 2 0 1 4 | 9 M 2 0 1 4 RE P ORT | N OV E M BER 2 0 1 4 21
Slide 22: Quarterly development
Appendix: Rheinmetall Group Quarterly development Sales in EUR million Operational earnings in EUR million 52 66 49 59 54 4 1 1 1 -1 1,460 153 1,100 1,084 1,031 981 892 112 0 32 7 414 481 489 30 429 38 44 46 47 46 -4 -4 -3 -10 617 619 -5 -32 552 568 595 -42 -7 -4 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2
Slide 23: Key figures Defence by division
Appendix: Rheinmetall Defence Key figures Defence by division (operational before special items) Combat Systems Electronic Solutions Wheeled Vehicles +121 -7 +21 1,384 +100 Sales 1,263 565 558 445 466 422 322 9M 2013 9M 2014 9M 2013 9M 2014 9M 2013 9M 2014 9M 2013 9M 2014 -32 -26 -7 +7 Opera- -26 -5
Slide 24: Quarterly development
Appendix: Rheinmetall Defence Quarterly development Sales Defence in EUR million Operational earnings Defence in EUR million 892 112 73 462 34 481 489 429 414 13 220 196 4 1 -1 1 207 142 -5 -8 -3 265 -4 -5 -1 -21 -4 -30 -10 140 140 174 152 -8 -1 -4 217 178 130 -10 -32 117 114 -1 -35 -52 -16 -21 -25
Slide 25: Cash flow statement
Appendix: Rheinmetall Defence Cash flow statement in EUR million Q3 2013 Q1 2014 Q2 2014 Q3 2014 ∆ Q3 2014/ Q3 2013 Group net income - 19 - 39 - 14 - 39 - 20 Amortization / depreciation 23 20 21 21 -2 Change in pension accruals 3 1 -1 2 -1 Cash flow 7 - 18 6 - 16 - 23 Changes in working capital and
Slide 26: Order intake by region
Rheinmetall Defence Order intake by region Order intake by region in EUR million -1,052 2,644 Rest of the World Asia/Middle East Europe (w/o Germany) Australia Germany 42% EUR 1.1 billion 1,592 4% 21% Qatar 18% EUR 475 million 27% 13% 31% 9% 14% 20% 9M 2013 9M 2014 © RH E I N M ETAL L A G 2 0 1 4 |
Slide 27: Order backlog
Rheinmetall Defence Order backlog Large-scale system contracts form the backbone for future top line growth Order backlog as of September 2014… in EUR million …turning into sales in EUR million -2% 6,285 ~ 2 bn 6,165 1,771 1,570 783 09/2013 09/2014 Q4 2014e 2015e 2016e 2017ff. e Expected sales cover
Slide 28: Key figures Automotive by division
Appendix: Rheinmetall Automotive Key figures Automotive by division (operational before special items) Continuing operations Mechatronics Hardparts Aftermarket +138 +107 +39 1,831 -1 Sales 982 1,693 875 666 705 203 202 9M 2013 9M 2014 9M 2013 9M 2014 9M 2013 9M 2014 9M 2013 9M 2014 +25 +19 Opera- +1
Slide 29: Quarterly development
Appendix: Rheinmetall Automotive Quarterly development Sales Automotive in € million Operational earnings Automotive in € million 52 66 49 59 54 4 1 1 1 -1 617 619 46 47 46 595 552 568 44 238 235 38 16 17 18 232 13 218 222 14 22 25 332 333 317 25 24 285 296 17 7 6 7 6 6 67 65 67 68 67 2 -18 -15 -20
Slide 30: Cash flow statement
Appendix: Rheinmetall Automotive Cash flow statement Continuing and discontinued operations Q3 2013 Q1 2014 Q2 2014 Q3 2014 ∆ Q3 2014/ in EUR million Q3 2013 Group net income 27 33 33 37 + 10 Amortization / depreciation 27 28 31 27 +0 Change in pension accruals 0 0 1 0 +0 Cash flow 54 61 65 64 + 10
Slide 31: Growth market China
Rheinmetall Automotive Growth market China Automotive outperforms strong increase of Chinese LV production LV production in million units +11% +11% 5.1 5.3 5.1 4.7 4.6 4.6 15.5 13.9 Q1 Q2 Q3 Q1 Q2 Q3 9M 9M 2013 2014 2013 2014 Sales in EUR million +29% +26% 162 176 159 497 126 132 136 161 394 461 150
Slide 32: Financial calendar
Rheinmetall Group Financial calendar Nov 26-27, 2014 Capital Markets Day, Düsseldorf/Neuss May 12, 2015 Annual General Meeting © RH E I N M ETAL L A G 2 0 1 4 | 9 M 2 0 1 4 RE P ORT | N OV E M BER 2 0 1 4 32
Slide 33: 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