Rheinmetall Benefiting from Continued Growth at Defence - Group Anticipates Further Sales and Operating Result Growth for 2019
(Source: Rheinmetall AG; issued March 14, 2019)
Fiscal 2018
•Consolidated sales up 4.3% at €6,148 million
•Consolidated operating result up 23% at €492 million
•Earnings after taxes rise by €102 million to €354 million (+ 40%)
•Order backlog at Defence reaches new record of €8,577 million
•Dividend to be raised by 24% from €1.70 to €2.10

Outlook 2019
•Consolidated sales (before currency effects) forecast to rise between 4% and 6%
•Operating margin at Group level of approximately 8% anticipated
•Automotive expects a stable level of sales and an operating margin of approximately 8%
•Defence anticipates sales to rise (before currency effects) by between 9% and 11% with the operating margin improving to 8.0% to 8.5%.

Rheinmetall AG is forecasting further growth in organic sales at Group level and a corresponding increase in operating result for fiscal 2019. Primarily driven by continued dynamic development in the Defence sector, the technology corporation's annual sales are set to grow organically by 4% to 6% in the current fiscal year. For the Automotive sector, Rheinmetall expects a stable level of sales, despite significant market uncertainties. (…/…)

Defence significantly increases result – major orders bring record order backlog

Defence increased its sales by €185 million or 6.1% to €3,221 million in the reporting period after €3,036 million in the previous year. When adjusted for currency effects, the growth was 7.9%. Among other factors, sales growth was due to increased deliveries of trucks for the major project Land 121 in Australia and to the fact that series production was being utilized to full capacity for the Puma infantry fighting vehicle for the German armed forces.

In addition, the start-up of the major project Future Soldier System – also with the German armed forces – contributed to a significant increase in sales in the Electronic Solutions division. The Weapon and Ammunition division, in contrast, suffered a year-on-year drop in sales of approximately 10% or €119 million in 2018, owing to the loss of trading sales.

In 2018, the sector's order intake reached nearly twice the previous year's figure. In fiscal 2018, Defence posted orders worth €5,565 million, after €2,963 million in the previous year. This is growth of €2,602 million or 88%, which resulted primarily from two high-volume orders for the Australian armed forces. The order for 211 Boxer vehicles for the Australian armed forces stands out here in particular, as it marks the largest single order in the company's history, with a total value of approximately €2.1 billion.

The book-to-bill ratio was 1.7 in 2018 (previous year: 1). The individual divisions of the Defence sector likewise demonstrated their future growth potential with a respective book-to-bill ratio of over 1.

The order backlog increased significantly to a new record of €8,577 million, which equates to growth of 34% after €6,416 million in fiscal 2017.

The Defence sector also significantly increased its earnings. Operating result (EBIT before special items) amounted to €254 million in the past fiscal year, soaring by €80 million or 46% compared with the previous year. Special items of €-7 million – resulting from restructuring expenses in the Electronic Solutions division – led to reported EBIT of €247 million for the fiscal year.

This significant improvement in results was achieved thanks to the positive performance of the Electronic Solutions and Vehicle Systems divisions in particular. Both divisions increased their operating results by more than 100% year-on-year, which was due above all to improved utilization of capacity and organic growth in both areas.

Rheinmetall Defence's operating margin rose to 7.9% in fiscal 2018, significantly exceeding the previous year's figure of 5.7%.

Click here for the full statement, on the Rheinmetall website.


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