Rheinmetall Ag · XETR:RHM
Rheinmetall — Investor Presentation (March 2013)
44 slides from Rheinmetall's investor presentation, Mar 20, 2013
Slide 1: International Partner for Security and Mobility
Corporate Presentation I 20 March 2013 International Partner for Security and Mobility © Rheinmetall 2013
Slide 2: Business Year 2012 in Detail
BUSINESS YEAR 2012 IN DETAIL © Rheinmetall 2013
Slide 3: Highlights 2012: Steady performance in a difficult market
Rheinmetall Group Highlights 2012 Steady performance in a difficult market Sales increased by 6% to € 4.7 billion EBIT remains on a high level with € 301 million Strong order intake in Defence as a consequence of the successful internationalization strategy: increase by 60% to € 2.933 billion Automo
Slide 4: Sales and earnings: Earnings remain high
Rheinmetall Group Sales and earnings Earnings remain high Sales in € million EBITDA in € million 4,454 4,704 538 464 495 3,869 3,989 3,420 411 180 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 EBIT in € million Net income in € million EBIT margin in % of sales 354 297 301 225 245 174 190 7.9% 14
Slide 5: Finance: Solid equity ratio
Rheinmetall Group Finance Solid equity ratio Equity (at year-end) in € million Rheinmetall – own shares (at year-end) in % Equity ratio in % 1,546 4.8 1,461 4.5 1,355 1,080 1,134 3.5 3.4 3.3 32% 30% 30% 30% 30% 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 © Rheinmetall 2013 5
Slide 6: Rising pension provisions; net financial debt low
Rheinmetall Group Rising pension provisions triggered by decreasing interest rates Net financial debt low Pension liabilities (at year-end) in € million Net financial debt (at year-end) in € million Interest rate* in % Net gearing* in % 920 729 677 577 610 205 6.00 5.50 5.25 5.25 130 19% 98 3.25 76
Slide 7: Cash flow: Improved operating free cash flow
Rheinmetall Group Cash flow Improved operating free cash flow 2011 in € million 2012 in € million 177 197 182 234 225 190 2.7%* 2.1%* 112 13 125 93 Net income Depr. Capex Working Operating Net income Depr. Capex Working Operating ∆Pensions Capital free ∆Pensions Capital free increase cash flow incre
Slide 8: Earnings per share and dividend
Rheinmetall Group Earnings per share and dividend Dividend stable at € 1.80 Earnings per share in € Dividend per share in € Payout ratio in % 5.55 5.00 4.09 4.23 1.80 1.80* 1.50 1.30 36% 35% 32% 32% 0.30 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 -1.60 * Proposal to the annual general meeting
Slide 9: Defence sales and order situation
Rheinmetall Defence Defence sales and order situation Sales up by 9%, order intake rises strongly by 60% to almost € 3 billion Sales in € million Order intake in € million Order backlog in € million Book-to-bill-ratio +10% +60% 4,987 +9% 2,933 4,541 2,335 2,141 1,831 1.26 0.86 2011 2012 2011 2012 20
Slide 10: Order intake: Increasing share from growth regions
Rheinmetall Defence Order intake Increasing share received from growth regions Order intake by region in € million +60% 2,933 Germany 24% 46% 1,831 Europe* 22% Germany 28% 58% Asia/Middle East Europe* 27% 30% Asia/Middle East 54% 14% Rest of the World Rest of the World 42% 27% 28% 2011 2012 * Withou
Slide 11: Defence earnings development: Lower operational performance
Rheinmetall Defence Earnings development Lower operational performance EBITDA in € million EBIT in € million EBITDA margin in % of sales EBIT margin in % of sales -13% 303 One-offs 2012 in € million 263 -22% Partial divestment of + 48 223 drone business 11* Restructuring costs - 20 174 14.1 Net effe
Slide 12: Defence earnings: Reasons for lower operational performance
Rheinmetall Defence Earnings development Reasons for lower operational performance compared to FY 2011 ∆ FY 2012 vs. FY 2011 Combat Systems EBIT - € 19 million Sales - € 74 million Restructuring started Lower sales of Tracked Vehicles EBIT - € 19 million in 2012 Electronic Solutions EBIT - € 35 mill
Slide 13: Automotive sales: Balanced customer base
Rheinmetall Automotive Automotive sales Automotive benefits from balanced customer base Sales Automotive in € million Sales by customer in % +2% Trucks/ 2,313 2,369 Others VW/Porsche/Audi 19% 16% Ships/ Power plants/ Ford 7% 12% MIR* 2012 11% 8% Renault/ Aftermarket Nissan 7% 4% Fiat 4% 6% 6% PSA Da
Slide 14: Automotive sales by region
Rheinmetall Automotive Automotive sales by region Growth particularly encouraging in North America and Asia Sales by region in € million resp. % +2% 2,313 2,369 Germany Germany 24% 23% 75% 71% Europe* Europe* 51% 48% Asia (w/o China JVs) Americas Americas Rest of 17% 25% 19% 29% the World 7% 9% 1% 1
Slide 15: Automotive earnings development
Rheinmetall Automotive Earnings development Ramp-ups and investments in non-domestic locations affect margin EBITDA in € million EBIT in € million EBITDA margin in % of sales EBIT margin in % of sales -3% 254 247 -5% 151 143 11.0 10.4 6.5 6.0 2011 2012 2011 2012 © Rheinmetall 2013 15
Slide 16: Rheinmetall 2015
RHEINMETALL 2015 © Rheinmetall 2013
Slide 17: Rheinmetall 2015: Key points of strategy
Rheinmetall Group Rheinmetall 2015 Key points of strategy Two pillars • Defence and Automotive with good growth potential • Risk diversification for the group Internationalization • Higher proportion of business outside of Europe in both segments Growth, products • From 2015 organic growth of 3-5% (
Slide 18: Two pillars: Defence and Automotive
Rheinmetall Group Rheinmetall 2015 Two pillars: Defence and Automotive Rheinmetall AG Defence Automotive Automotive is a solid pillar of Rheinmetall group with a stable and steady earnings development Both segments have attractive growth prospects and contribute to the necessary risk diversification
Slide 19: Rheinmetall 2015 – Defence
RHEINMETALL 2015 – Defence © Rheinmetall 2013
Slide 20: Global defence budgets develop differently by region
Rheinmetall Group Rheinmetall 2015 Global defence budgets develop differently by region Expected global defence spending and procurement 2012-2017 in US$ billion Ø Growth p.a. (CAGR): -1.2% +0.4% 1,591 1,571 1,538 1,561 1,580 1,597 392 417 465 486 506 Asia +5.3% 435 128 139 139 144 147 149 MENA* +3.
Slide 21: Strategic development Defence
Rheinmetall Defence Rheinmetall 2015 Strategic development Defence Internationalization • Focused continuation of the hub strategy • Strengthening of local presence in growth markets outside of Europe • Safeguarding technological leadership by comprehensive Growth, products innovation pipeline and i
Slide 22: Internationalization – Blue print South Africa
Rheinmetall Defence Rheinmetall 2015 Internationalization – “Blue print” South Africa Market entry by takeover of Acquisition (51%) of the ammunition business of 1 a local supplier state-owned Denel Ltd. in 2008 Support by global Accelerated growth from € 80 million (2008) to 2 marketing power € 113
Slide 23: Acquisition of new markets by hub strategy
Rheinmetall Defence Rheinmetall 2015 Acquisition of new markets by hub strategy Nordic Region Russian Federation North Europe America Gulf Region (GCC) South America Africa Australia © Rheinmetall 2013 23
Slide 24: Extension of systems- and service business
Rheinmetall Defence Rheinmetall 2015 Extension of systems- and service business Sales split Components Systems Turrets and weapon stations Tracked vehicles Weapon and ammunition Wheeled vehicles Active and passive protection Simulation and training Propellants 35-45% 40-50% Air defence Electro-optic
Slide 25: Defence: Measures to improve cost efficiency
Rheinmetall Defence Rheinmetall 2015 Measures to improve cost efficiency Measures Restructuring costs € 20 million in 2012 Adjustment of capacities to the segment € 40-50 million in 2013 specific order situation (e.g. Tracked Vehicles, Air Defence) Optimization of the location structure (e.g. Tracke
Slide 26: Defence: Growth and earnings targets
Rheinmetall Defence Rheinmetall 2015 Growth and earnings targets From 2014 onwards we want to grow organically and gain market share From 2015 onwards about 50% of our sales should be generated with customers from outside Europe We see growth potential especially in Asia and Australia The Defence se
Slide 27: Rheinmetall 2015 – Automotive
RHEINMETALL 2015 – Automotive © Rheinmetall 2013
Slide 28: Global growth driven by emerging markets
Rheinmetall Automotive Rheinmetall 2015 Global growth driven by emerging markets Expected production of light vehicles by region 2012-2017 in thousand units Ø Growth p.a. (CAGR): +23% 95,275 98,336 91,144 85,603 79,745 80,929 +52% 31,853 34,421 36,294 BIC* +8.8% 23,823 25,857 28,819 9,243 8,136 8,10
Slide 29: Strategic development Automotive
Rheinmetall Automotive Rheinmetall 2015 Strategic development Automotive • Strengthening of presence in the growth markets China and India Internationalization • Expanding Mechatronics business activities outside of Europe • Realization of growth potential of Mechatronics products, Growth, products
Slide 30: High growth in emerging markets with local production
Rheinmetall Automotive Rheinmetall 2015 Disproportionately high growth in emerging markets with local production Expected change of LV production 2015 vs. 2012 in % Sales Automotive 2012 in € million Western Europe + 2% 400* USA + 13% 59 China + 35% 42 Mexico + 21% Automotive Automotive Automotive I
Slide 31: Automotive well-positioned with large product portfolio
Rheinmetall Automotive Rheinmetall 2015 Automotive well-positioned with large product portfolio Sales split 2012* Mechatronics Hardparts Exhaust gas recirculation LV- and truck pistons Solenoid valves Large bore pistons Actuators Bearings 45% 44% Water-, oil- and vacuum pumps Continuous casting Engi
Slide 32: Stricter emission regulations drive Mechatronics business
Rheinmetall Automotive Rheinmetall 2015 Stricter emission regulations drive the Mechatronics business Estimated value-added of KSPG per vehicle for EGR-products KSPG-share per truck in € (est.) x2 +60% +21% +22% x2 80 41 50 34 2005 2010 2015 2010 2011 2012 Target 2015 EURO 4 EURO 5 EURO 6 Truck busi
Slide 33: Stricter standards for energy efficient fuel consumption
Rheinmetall Automotive Rheinmetall 2015 Stricter standards for improved energy efficient fuel consumption Downsizing/Turbocharging Hybridization Savings effect of CO2-penalties in € UniValve Low friction High performance bearings Wastegate actuator Electric vacuum pump piston Variable Legal famework
Slide 34: Automotive: Measures to improve cost efficiency
Rheinmetall Automotive Rheinmetall 2015 Measures to improve cost efficiency Measures Restructuring costs Optimization of the European production- and € 20-30 million in 2013 location structure: adjustment of capacities in line with the market development in Western Europe Enhanced expansion of capac
Slide 35: Automotive: Growth and earnings targets
Rheinmetall Automotive Rheinmetall 2015 Growth and earnings targets In a continuously growing Automotive market, Automotive wants to exceed sector growth slightly and, together with the Chinese JVs, exceed sector growth clearly From 2015 on, more than one third of sales should be generated in region
Slide 36: Cash flow and finance
Rheinmetall Group Rheinmetall 2015 Cash flow and finance We concentrate on the successful organic development of both segments and on the improvement of operating free cash flow We want to maintain our investment grade rating We will seize opportunities for focused acquisitions in both segments We c
Slide 37: Outlook 2013
OUTLOOK 2013 © Rheinmetall 2013 37
Slide 38: Outlook 2013: A year of transition to improved profitability
Rheinmetall Group Outlook 2013 A year of transition to improved profitability Sales EBIT in € billion in € million 2012 2013e 2012 2013e Restructuring costs 60 - 80 Defence 2.3 around 2.4 174 130** Restructuring costs 40 - 50 Automotive 2.4 2.4 - 2.5 143 140** Restructuring costs 20 - 30 * Including
Slide 39: Summary
Rheinmetall Group Summary We maintain the two pillars Defence and Automotive By establishing Rheinmetall 2015, we have set ambitious growth and earnings targets We will continue to internationalize our business In 2013, we will invest in measures to improve cost efficiency in order to realize saving
Slide 40: Appendix
APPENDIX © Rheinmetall 2013 40
Slide 41: Key figures Defence by divisions
Rheinmetall Defence Key figures Defence by divisions Combat Systems Electronic Solutions Wheeled Vehicles +9% -5% -6% +122% Sales 2,335 1,198 1,136 799 748 567 2,141 255 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 -22% -30% +9% EBIT 223 174 146 48* -92% 102 89 49 -13 -25 FY 2011
Slide 42: Key figures Automotive by divisions
Rheinmetall Automotive Key figures Automotive by divisions Hardparts Mechatronics Motor Service +2% 0% +6% Sales +2% 2,313 2,369 1,092 1,087 1,025 1,091 259 264 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 -5% -6% 0% +4% EBIT 151 143 65 61 69 69 24 25 FY 2011 FY 2012 FY 2011 FY 20
Slide 43: Financial Diary
Appendix: Rheinmetall Group Financial Diary March 20, 2013 Annual report 2012 May 8, 2013 Q1 2013 May 14, 2013 Annual General Meeting August 9, 2013 Q2 2013 © Rheinmetall 2013 43
Slide 44: 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