Rheinmetall AG · XETR:RHM
Rheinmetall — Q1 2020 Earnings Presentation
38 slides from Rheinmetall's earnings presentation, May 8, 2020
Slide 1: Performance under difficult circumstances
Performance under difficult circumstances Conference Call Q1 2020 Düsseldorf, 8 May 2020
Slide 2: 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
Slide 3: Corona update: All action taken to protect, secure and support
Corona update: All action taken to protect, secure and support Protect our employees Secure our supply chains • Maximum protection on shop floor level • Supply chains in both segments tightly managed • Mobile office for all eligible staff • Business continuity safeguarded • Daily monitoring of g
Slide 4: Corona update: Majority of production plants fully operational at end of Q1 2020
Corona update: Majority of production plants fully operational at the end of Q1 2020 Production 31.3. 30.4. Production 31.3. 30.4. Production 31.3. 30.4. Americas A/D A/D Europe + ME A/D A/D China JV A A Normal 5/5 3/5 Normal 12/35 7/41 Normal - 12 Reduced 3/0 3/0 Reduced 5/1 12/0 Reduced 12 - On Ho
Slide 5: Corona update: Pandemic with global impact, especially on light vehicle markets
Corona update: Pandemic with global impact, especially on light vehicle markets Global LV market collapsed almost 23%* in Q1 • Automotive outperformance of 1% compared to relevant non-China market growth of -15%* • Production in China back on track after initial governmental lockdown -14% • Europe
Slide 6: Corona action: Disciplined cost and cash management
Corona action: Management initiated immediately strong actions Full freeze of non-essential expenditure Cash management under tight control • Automotive reduced leased workers by 50% yoy • All capex is on hold and subject to board approval • Automotive headcount reduced by 3% yoy • Receivables c
Slide 7: Q1 2020 Group: Highlights
Q1 2020 Group: Highlights Robust Defence helped to weather crisis ridden quarter Order backlog Sales Operating result €10.3bn €1.4bn €34m +13% +1% -37% Order intake Earnings per share Operating FCF €1.2bn €0.30 €-188m -59% -46% Analyst Conference Call Q1 2020 7
Slide 8: Q1 2020 Group: Key financial data
Q1 2020 Group: Key financial data Results impacted by pressure on Automotive business Sales Operating result in €m Earnings per share in €m Operating margin in % in € 1% -37% -59% 54 0.74 1,342 1,358 -5 -6 25 -22 34 1 2 -0.3% -0.4% +1.8% 4.0% 0.30 -41.1% +1.1% +3.5% 2.5% Q1 Operational FX M&A
Slide 9: Q1 2020 Group: Operating Free Cash Flow
Q1 2020 Group: Operating Free Cash Flow OFCF held back by CTA funding and working capital built-up in Defence Operating free cash flow per quarter in €m OFCF on normal level despite lower results 2016 2019 2017 2020 2018 Slight increase of D&A €42m CTA funding Q1 Q2 Q3 Q4 Operational built
Slide 10: Q1 2020 Group: Group key financials
Q1 2020 Group: Group key financials Balance sheet and financing remain rock solid Equity and Equity ratio Equity ratio Maturity profile in €m and % Total equity in €m Ʃ300 973 Other & Leasing 207 2020 2021 2022 2023 2024 2025 2026ff. 3,000 32.1 30.6 30.3 40 Bank loans 114 28.5 27.9 2,000 Promiss
Slide 11: Q1 2020 Highlights: Automotive
Q1 2020 Highlights: Automotive Positive result despite market collapse Quarterly sales and margin development Comments on quarterly performance In €m and % Lower order intake reflects muted environment 714 726 659 637 618 6.9 7.2 6.5 Sales decline of -13.5% vs relevant non-China market of -14.7%
Slide 12: Q1 2020 Highlights: Automotive, result remained positive
Q1 2020 Highlights: Automotive Result remained in positive territory Sales Automotive Operating result Automotive in €m in €m Margin Margin Mechatronics -13.5% Q1 2019 Q1 2020 •Decrease in market volumes -79.6% 714 6.9% 49 1.7% aggravated by negative ramp up 618 Hardparts 401 7.6% 31 •Market dec
Slide 13: Q1 2020 Highlights: Automotive, very slow non-LV sales
Q1 2020 Highlights: Automotive Very slow non-LV sales created additional burden Sales split LV/ Non-LV Sales split Non-LV in €m / in % in €m / in % Delta absolute in % -13.5% Diesel -25 -14.1% 714 Gazoline -23 -9.0% other LV -7 -18.7% 618 -16.8% 177 252 LV Business -54 -11.7% LV: 152 210 Truck 6
Slide 14: Automotive: regional consolidated sales split
Automotive: regional consolidated sales split Europe and USMCA performance clearly better than the market Regional sales in % vs. IHS 4 May 2020 -47% -20% -22% -23% -46% Q1 19 Q1 20 Q1 19 Q1 20 Q1 19 Q1 20 Q1 19 Q1 20 Q1 19 Q1 20 Germany Global IHS China** LV production -21% -14% -15% -14% -10% +2
Slide 15: Q1 2020 Automotive: China performance
Q1 2020 Automotive: China performance Sales decline less pronounced Sales* Comments on the quarter in €m -34% 249 Sales decline of -34% compares to a market -87 165 collapse of -47% (IHS Markit 4 May, 2020) 219 -1 4 144 Hardparts and Mechatronics both strongly 31 21 affected Q1 19 operativ F
Slide 16: Q1 2020 Automotive: Monthly development
Q1 2020 Automotive: Monthly development Corona started to impact consolidated topline from mid-March onwards China monthly sales @100% in €m (JV and WOFE) -40% February with highest sales impact due to Chinese -7% New Year and beginning of governmental shutdown -55% Recovery already visible in
Slide 17: Q2 2020: IHS outlook
Q2 2020: IHS outlook Impact shifts from China in Q1 to western world in Q2 Q1 LV growth Q2 expected LV growth in % -23% in % -47% -47% -11% -61% -20% -10% -71% 2019 2020 Europe US China World Europe US China World Direct hit on Automotive topline will be worse Automotive topline impact already v
Slide 18: Q1 2020 Highlights: Defence
Q1 2020 Highlights: Defence Strong Q1 performance with high leverage Quarterly sales and margin development Comments on quarterly performance In €m and % Strong order intake 1,324 15.8 Sales increase driven by ES and VS with M&A support 746 823 740 629 Operating result improved materially 8.1
Slide 19: Q1 2020 Highlights: Defence, strong sales increase
Q1 2020 Highlights: Defence Strong sales increase helped to triple Q1 results Sales Defence Operating result Defence in €m in €m Margin Margin Q1 2019 Q1 2020 17.6% +222.2% Weapon & Ammunition 740 1.4% 29 3.9% • Sales still held back by export 629 -7% 166 10% 11 6.4% restrictions 177 4% 174 Elec
Slide 20: Q1 2020: Defence order intake and backlog
Q1 2020 : Defence Strong Q1 order intake led by international customers Order intake by division Order backlog profile in €m in €m +16% 1,664 113 10,034 +30% -358 731 8,615 Weapon and Ammunition Electronic Solutions 564 327 2,486€m 2,059€m 5,489€m Vehicle Systems Consolidation 344 324 168 136 78
Slide 21: 2020: Defence resilience
2020 : Defence resilience Defence demand more resilient in times of crisis German demand • List of German €25m proposals unchanged International demand • Czech Republic tender not cancelled yet, decision expected for H2 2020 • East European IFV tender under negotiation, contract signing expected
Slide 22: 2020 Overview
2020 Overview Management aims to provide best possible orientation for 2020 Given the current volatility in the Automotive markets and the potential effects on supply chains and demand, any forecasting statements are subject to increased levels of risk. It is currently not possible to provide an
Slide 23: 2020 Overview: Trading update Q2 and guidance
2020 Overview Management aims to provide best possible orientation for 2020 Trading update Q2 FY 2020 Guidance Double digit sales decline around Management refrains to provide a FY AUTOMOTIVE 50% to 55% expected, operating guidance in light of the current leverage for Q2 expected to be uncertainty r
Slide 24: Next events and IR contacts
Next events and IR contacts Next Events IR Contacts dbAccess Berlin Conference Dirk Winkels All investor meetings Head of IR UBS Pan European Small and Mid-Cap Conference 2020 will be conducted as Tel: +49-211 473-4749 telephone conferences Email: [email protected] Berenberg Conferenc
Slide 25: Appendix
APPENDIX Analyst Conference Call Q1 2020 25
Slide 26: Select key data: outlook 2020
Select key data: outlook 2020 Rheinmetall Group In %(PY) Automotive Defence €20-25 Capex (w/o Holding cost IFRS 16) Around 5.5% (5.5%) Around 5%(4.7%) (PY: €25m) Comparable level Tax rate D&A 5.5-6.0% (5.9%) 3-3.5% (3.1%) (PY: 26%) Interest result ~-€45m (PY:-€35m) R&D Around 6% (5.9%) 2-2.5% (2.0%)
Slide 27: Group 2015 – 2019: Key figures
Group 2015 – 2019: Key figures (as reported) in €m 2015 2016 2017 2018 2019 Balance Sheet Total assets 5.730 6.150 6.101 6.759 7.415 Shareholder's equity 1.562 1.781 1.870 2.173 2.272 Equity ratio (in %) 27,3 29,0 30,7 32,1 30,6 Pension liabilities 1.128 1.186 1.080 972 1.169 Net financial debt -81
Slide 28: Segments 2015 – 2019 Key figures
Segments 2015 – 2019 Key figures Automotive Defence 2015 2016 2017 2018 2019 in €m 2015 2016 2017 2018 2019 2.621 2.670 2.922 2.888 2.705 Order intake 2.693 3.050 2.963 5.565 5.186 445 458 520 478 447 Order backlog (Dec. 31) 6.422 6.656 6.416 8.577 10.399 2.592 2.656 2.861 2.930 2.736 Sales 2.591 2.
Slide 29: Quarterly development Group
Quarterly development Group Sales Operational results in €m in €m 1.961 243 1.471 1.481 1.342 1.358 1.324 746 823 210 629 740 110 99 60 54 64 714 726 659 637 9 34 618 49 52 43 40 29 1 -1 -1 -1 0 10 -5 -3 -8 -7 -5 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Def
Slide 30: Free Cash Flow summary Group
Free Cash Flow summary Group Q1 Q2 Q3 Q4 Q1 Δ Q1 in €m 2019 2019 2019 2019 2020 '19/'20 Net Income 33 76 60 184 18 -15 Amortization / depreciation 65 68 71 75 75 10 Change in pension accruals -2 1 -15 -1 -43 -41 Cash Flow 96 145 116 258 50 -46 Changes in working capital and other items -125 -108 -15
Slide 31: Quarterly development Automotive
Quarterly development Automotive Sales by division Operational result by division in €m in €m 714 726 52 49 659 637 618 43 40 401 407 359 31 35 359 348 27 25 251 252 228 13 0 10 206 210 10 6 10 9 8 9 9 85 92 92 92 83 5 4 1 -24 -24 -20 -19 -23 -2 -2 -3 0 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q1
Slide 32: Free Cash Flow summary Automotive
Free Cash Flow summary Automotive Q1 Q2 Q3 Q4 Q1 Δ Q1 in €m 2019 2019 2019 2019 2020 '19/'20 Net Income 34 38 30 30 3 -31 Amortization / depreciation 38 41 41 43 45 7 Change in pension accruals -1 - -15 -2 -32 -31 Cash Flow 71 79 56 71 16 -55 Changes in working capital and other items -88 29 -3 92 -
Slide 33: Quarterly development Defence
Quarterly development Defence Sales by division Operational result by division in €m in €m 210 1.324 114 438 28 823 746 740 64 363 60 629 196 10 207 166 10 29 177 216 20 202 174 17 11 71 167 9 608 461 446 10 33 35 36 329 389 12 0 -1 -3 -45 -51 -50 -85 -46 -11 -16 -2 Q1 2019 Q2 2019 Q3 2019 Q4 20
Slide 34: Free Cash Flow summary Defence
Free Cash Flow summary Defence Q1 Q2 Q3 Q4 Q1 Δ Q1 in €m 2019 2019 2019 2019 2020 '19/'20 Net Income 1 35 37 172 11 10 Amortization / depreciation 25 26 29 30 28 3 Change in pension accruals -1 2 1 1 1 2 Cash Flow 25 63 67 203 40 15 Changes in working capital and other items -44 -136 -151 331 -138 -
Slide 35: Income Statement
Income Statement Q1 2019 Q1 2020 Δ In €m In €m Sales 1.342 1.358 16 Changes in inventory and other own work capitalized 90 126 36 Total operating performance 1.433 1.484 51 Other operating income 36 26 -10 Cost of materials 764 804 40 Personnel expenses 421 442 21 Amortization, depreciation and impa
Slide 36: Cash Flow Statement Group
Cash Flow Statement Group Q1 2019 Q1 2020 Δ Net income 33 18 -15 In €m Amortization, depreciation and impairments 65 75 10 Allocation of CTA assets to secure pension and partial 0 -42 -42 retirement obligations Changes in pension provisions -2 -3 -1 Income from disposition of non-current assets -1 0
Slide 37: Balance Sheet Group
Balance Sheet Group In €m In €m 31.12.2019 31.03.2020 Δ 31.12.2019 31.03.2020 Δ Non-current assets 3.195 3.142 -53 Equity 2.272 2.241 -31 Goodwill 567 563 -4 Share capital 112 112 - Other intangible assets 233 236 3 Additional paid-in capital 553 556 3 Usage rights 204 193 -11 Retained earnings 1.47
Slide 38: Glossary
Glossary bn billions LBP Large bore piston bp basis points LEP Life extension programme CAGR compounded average growth rate LV Light vehicle CER Constant Exchange Rates m million CP Commercial Paper MIV Mechanized Infantry Vehicle CTA Contractual trust agreement MGCS Main Ground Combat Vehicle D&A D