Rheinmetall : Corporate Presentation, January 2020

Rheinmetall Group Corporate Presentation

January 2020

Rheinmetall Group

Rheinmetall Group

Segments perform with different momentum

AU TO M OT I V E		D E F E N C E

• End markets with flat / negative growth
• Engine cycles with currently limited visibility
• Regulation increased as a key positive business driver
• Raise powertrain independence (product and market diversification)

• Super cycle with sustainable momentum
• Long-termproject cycles with backlog already until second half of next decade
• Political risk mitigated by increased sales to uncritical regions (GER, AUS, UK)

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Group

Rheinmetall Group

2019: Defence performance to overcompensate Automotive

Overall weak end markets, continuation of reduced momentum expected

• Strong performance in China
• Competitive product portfolio
• Entrance in new markets (5G) - Diesel impact
  - GM strike

• Czech plant issues
• Malware attack

Positive macro environment for Defence will continue in the coming years

• Strong order intake
• High sales execution profile
• Favorable sales mix
• Margin increase

• Export limitations

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Group

Summary

Managing opposite developments: Challenges for 2020

Automotive	Monitor market developments closely
	Prepare for technological change
	Gain powertrain independence
		Defence
Deliver on order execution
Participate in market growth - acquisition of new orders
Manage regulatory exposure

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Group

AUTOMOTIVE

HOW TO FILL THE GAP POST ICE OUTPHASING

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Automotive

New Markets Telecommunication

Diversification into new growth areas

5G-Data safety:

Major production contract for manufacturing aluminum housings for 5G network

• Rheinmetall JV with HASCO in China is the leading supplier of die-casting capacities in China
• High technological competence
• Great opportunity to diversify in growth markets

Contract value of €150m for six-digit number of boxes in 2020

Additional demand for 10.000.000 boxes until 2030 creates further potential

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Automotive

E-Mobility

Rheinmetall products for NEV

	BOOKED BUSINESS		ADDITIONAL POTENTIAL
E-Tron	E-Golf	German premium
			OEMs

BATTERY

BOXES

Recent market contact suggest potential of around 1.000.000 e-engine housings p.a. starting 2020

E-ENGINE

HOUSING

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Automotive

Self help measures to be continued throughout 2020

Efficiency

optimization

• General cost reduction programs
• Process optimization to reduce scrap rate
• CAPEX reduction

		Selective R&D	 Prioritization and optimization of R&D projects
			Micro Mobility R&D affects P&L 2020 with ~ €12m
			 Reduction of leased workers (-40% yoy)
HR Measures		 Reduction of time accounts and weekly working hours from 40-35
			 Reduction of direct personnel cost (short-time work extended to 5 sites)
			 Normal fluctuation (-3% yoy) and recruitment stop

Further intensification of tools possible

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Defence

Germany

VJTF

Puma

Boxer

Leopard

Trucks

Load Handling System

Ammunition

…

Annexation

Crimea 2014

			International
		Eastern	USA
	Europe (UK)	Europe	MENA
	Lynx	South-East
	MIV
	Boxer	Asia
Australia	Challenger
	Algeria
Simulation
Trucks
Ammunition
Boxer	…
Lynx
Ammunition
…

Increase of global defence budgets

MGCS

Indirect fire system

2035

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Defence

Defence tender overview Promising super cycle pipeline

USA:

Ammunition

Fuzes

OMGV

Green: booked business / black: potential

UK:	Sweden
MIV Boxer	Trucks 
Challenger
France:
MGCS	Germany:
	Trucks	
	IDZ	
	VJTFPuma	

Leopards

3. Boxer lot

2. Puma lot

2. IDZ lot Fox Boxer variants TEN (D-LBO)

Indirect fire Ammunition

MGCS

Lithuania:	Boxer	
Poland:	Leopard II	
Hungaria:	Leopard, Howitzer,

	IFV (wheeled/tracked)
Czech Rep:	IFV (tracked)
Slovakia:	IFV
Bulgaria:	IFV (wheeled)
Romania:	IFV (wheeled)
Slovenia:	APC (wheeled)

Australia:
Land 17 1 C.2	 Ammo
Land 121 3a, 5b	 Trucks
Land 400 II	 Boxer CRV
Land 400 III	Lynx
Simulation	M1

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Defence

German defence budget

Investive expenses and Rheinmetall-share - budgets become sizeable

in €m

			8.263
		6.011	6.063
5.327	5.025	5.419	Rheinmetall

avg. 20%-25% share

Rheinmetall

avg. 10%-15% share

2014

2015

2016

2017

2018

2019

2020*

2021*

2022*

2023*

2024*

Drivers for budget increase:

• More personnel, return to ~200.000 soldiers
• More equipment (100% equipment level)
• More finance, investive share increased by 36% from 2018 to 2019
• If political 1.5% commitment is to be achieved in 2024 this could lead to € ~12 bn investive spend

NATO and VJTF commitment as

strong drivers!

*based on BMWi GDP forecast Oct. 19; assumption 20% of German defence budget investive

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Defence

German defence

NATO commitment key driver for German demand

Lead role in Very High Readiness Joint Task Force ( VJTF)
Bundeswehr	'19	'23	'27	'31	'32+
2016
White paper
	VJTF´19	VJTF´23	1x Division	3x Division	3x Division
04/2018		(1 Brigade)	(3x Brigade)	(8x Brigade)	(10x Brigade)
Concept
Bundeswehr		~2.200	~9.000	~30.000
09/2018		vehicles	vehicles	vehicles
Capability
profile

100% equipment and digitization

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Defence

Additional business opportunities

on the base of current success in vehicle and soldier system sales

creates additional business over the entire life cycle on

- consisting of:

Spare parts

Service & Maintenance

Training & Simulation

Technical Documentation

Upgrades (Life time extension)

Illustrative
© Rheinmetall AG / Corporate Presentation Q3 2019	13

Rheinmetall Defence

German mid-term potential

Be the key land systems provider in our home market

TRUCKS		LEOPARD UPGRADES		PUMA/BOXER/FUCHS

• Three Major Truck Programs (unprotected and protected trucks, load handling system)
• Framework contracts 2018 - 2027
• New logistic fleet 10,000 to 20,000 trucks
• unprotected: 2,271 units,
  protected: 1,000 units,
  load handling system: 4,000 units
• Potential € 3 - 6bn

• Development and production of a digitized turret with ~130mm gun for Leopard user nations
• Delivery > 2025
• > 300 systems
• Potential € > 1.7bn Germany and Netherlands

• Additional batches
• development and production of new variants and increase of the number of current variants
• Order intake expected in 2021
• > 1000 systems
• Potential: € > 3bn

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Defence

German mid-term potential

Large ammunition sales potential from expected restocking

Rheinmetall share on German ammunition purchases*	Development of ammunition spending in €m*
						1.200
	Rheinmetall Products e.g.:					~35%
	40mm
~35%	Medium caliber	560
Large caliber
	Artillery	~35%
	Mortar
	Fuses
	Pyro
	Air bombs
		2019		2030e
					Ammunition spending		Rheinmetall share

Estimated € 12bn spending up to 2030, € 1.2bn pa purchase value

*based on company estimates and current BMVG EPL 14 data

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Defence

German portfolio enhancement

Rheinmetall enters Bundeswehr contractor based operations services (G-CAP*)

Military in theatre camps

• Build, operate and rebuild camps for in-theatre operations
• Tender start in Q2 2020, award expected in Q1 2021
• Long term contracts >10 years
• Potential contract volume ~€100m per camp, per annum

Persistent Surveillance System

• Contractor run surveillance operations
• Long term contracts >10 years
• Contract volume >€20m per camp, per annum

*Contractor Augmentation Programs are framework contracts, outsourcing specific task to third party providers

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Defence

International order potential

UK home market: Current and future orders

Mechanized Infantry Vehicle (Boxer)

• Background
  Mechanized Infantry Vehicle (MIV), several different configurations, including armored personnel carrier, command vehicle, specialist carrier and field ambulance.
• Order size

• 500 vehicles volume of € 1.4bn

• Timeline

Delivery is expected to start from 2023

Challenger Life Extension Program

• Background
  Challenger life extension program with focus on switch from rifled to smoothbore gun (NATO)
• Order size

148 MBT

volume of approx. € 0.8 - 1.2bn

• Timeline
• • Decision expected for Q4 2020
  • Start of production in 2023

Shift from rifled to smoothbore gun offers potential for additional ammunition sales!

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Defence

International order potential

Actual Infantry Fighting Vehicles tenders and potentials

Australia

• Land 400 Phase 3 program
• Quantity: 400 Lynx KF41
• Status: In risk mitigation phase
• Timing: Decision in 2022
• Potential: ~€ 4.5bn
• BMP-2replacement
• Timing: 2020 - 2026
• Quantity: 210 Lynx KF41
• Potential: ~€ 1.7bn

Czech Republic

Hungary

• New IFV
• Timing: 2020 - 2022
• Quantity: ~220 Lynx KF41
• Potential: ~€ 2.3bn
• Various IFV replacement programs
• Deliver Lynx KF41 to NATO and other markets
• Timing: 2020+

Other Market Potential

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Group

FY mid-term guidance next three years

Sales growth and earnings improvement targeted

AUTOMOTIVE

DEFENCE

Mid-term	Mid-term
Sales growth	Operating margin

Short-term setback to 5-7%

Flat to slow growth (incl. micro mobility -€12m in 2020); mid-term recovery to around 8%

6-8%

9-10%

Operational growth at constant FX

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Group

RHEINMETALL GROUP STRUCTURE.

Group performance indicator

Grow sales	~8% op.
around 8%	margin
Targeted 2-4%	30-35%
Cash on sales	payout ratio

RHEINMETALL

GROUP

Strategy roadmap
Organic	International
growth	expansion
Leading by	Targeted
innovations	acquisitions

AUTOMOTIVE Our heart beats for your engine	2018	DEFENCE Force protection is our mission
Op. margin	€2,930m	48%	Sales	52%	€3,221m	Op. margin
8.9%	€265m	53%	Oper. Result	47%	€247m	7.9%
	*€478m		Order backlog	49%	€8,577m
	11,710	51%	Headcount**	10,948
		* Short-term; **Headcount at capacities;
© Rheinmetall AG / Corporate Presentation Q3 2019					20

Rheinmetall Group

Q3 2019 Group commercial highlights

Weak Automotive compensated by Defence performance

Order backlogSales Operating result EPSoFCF

€9.2bn		€1.5bn		€99 m		€1.33		-€127
						-26%		-10%

• Order backlog on high level
• Organic sales at constant exchange rates grew +2.5%* (reported 5.0%) to €1.5bn
• Operating result stable with significant shift between the segments
• EPS decline of 26% to €1.33 after PY €1.80 (including €0.47 real estate gain)
• Operating FCF down €11m yoy to -€127m including €15 m CTA funding
• FY Guidance specified

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Group

Q3 2019 Group commercial highlights

Operational improvement of sales and operating result

 Sales								 Operating result in €m				 Earnings per share
in €m								Operating margin in %				in €
				+5.0%					+1.0%
							1,481				1	-2	99		-26.1%
				23
				98		2					1,80
					13							0%
1,411		34								+2.2 % +1.3%	-2.5%
											1,33		1,33
	+2.5 %	+0.9% +1.6%
										6.9%					6.7%

Q3 Operational FX	M&A	Q3	Q3 Operational FX	M&A	Q3	Q3	Q3
2018		2019	2018		2019		reported EPS	2018	2019
© Rheinmetall AG / Corporate Presentation Q3 2019						adjusted EPS		22

Rheinmetall Group

Q3 2019 Group commercial highlights

Operating Free Cash Flow improved operationally

• Operating free cash flow bridge

in €m

	41
-116
	4
	-127
3	-19
-25

			-16
Q3	EAT	D/A	Delta	Delta WC Others	Capex	Q3
2018			Pensions			2019

• EAT operationally improved
• CTA funding of €15 m included in Pensions
• Strong support from working capital optimization in Automotive

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Group

Q3 2019 Group commercial highlights

Financial KPI impacted by M&A transactions and pension topic

• Net financial debt

in €m

-31

-660

31.12.2018 30.09.2019

• Equity bridge

in €m and equity margin in %

2.172170

32.1%

• Net gearing

Net debt in % of total equity	+31.8pp

33.2

1,4

31.12.2018 30.09.2019

	-153							1.990
		-92
	-107
Incl.:
		Incl.:
Actuarial changes	-192		RMMV-	27.9%
FX effects	+36		transaction -111

01.01.2019

EAT

OCI

Dividend

other

30.09.2019

© Rheinmetall AG / Corporate Presentation Q3 2019

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Automotive

25

Rheinmetall Automotive

Q3 2019 Highlights: Automotive

Non-LV business and absence of equipment sales burdened the quarter

Quarterly sales and margin development

In €m and %
708	731	714	727	659
8,5	9,4
		7,3
		6,9		6,5
Q3	Q4	Q1	Q2	Q3
In €m

Comments on quarterly performance

• Sales decline of -6.9%(FX-adjusted-8.5%)
• LV sales were down 3.4%, in line with Global LV production of -3.2%*
• Non-recurringChina equipment sales and weak non-LV business created pressure on sales
• Low visibility until year's end remains the key issue
• OFCF benefited from improved working capital management

Q3 2018 Q3 2019

∆ YTD 2018 YTD 2019

∆

Sales	708	659	-6.9%	2,199	2,099	-4.6%
Operating result	60	43	-28.3%	193	144	-25.4%
Operating margin in %	8.5%	6.5%	-200 bp	8.8%	6.9%	-190 bp
Operating Free Cash Flow	-2	6	400.0%	-16	-8	50.0%
Operating FCF / Sales	-0.3%	0.9%	120 bp	-0.7%	-0.4%	30 bp

*IHS Markit: 5 November 2019

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Automotive

Q3 2019 Highlights: Automotive

Negative business development in all divisions and end markets

• Sales Automotive

in €m

-6.9%

708

387 -7.5%

251 -9.2%

92 0.0%

-22

Q3 18

• Operating result Automotive

	in €m
	Margin				Margin
	Q3 2018		-28.3%		Q3 2019
			6.5%
	8.5%	60
659
358	9.8%	38	-28.9%	43
				27	7.4%
228	6.0%	15
	-60.0%	6	2.8%
92	9.8%	9	0.0%	9	9.2%
-20		-2		1
Q3 19
	Q3 18		Q3 19

Mechatronics

• Slow LV endmarkets
• R&D for e-mobility
  Hardparts
• Underlying business flat y-o-y, equipment sale already in Q2 '19
• Operational issues at CZ plant persisted

Aftermarket

•Stable results in weak markets

		Mechatronics		Hardparts		Aftermarket		Consolidation/Others
© Rheinmetall AG / Corporate Presentation Q3 2019	27

Rheinmetall Automotive

Q3 2019 China Total Management View Strong sales growth against the market trend

• Sales

in €m						+21.0%
									12
247						7
		33
		214	+13.4%	+2.8%	4.9%
			33
	Q3 2018 operational	FX	M&A

 EBIT

+15.5%

in €m

17

0

1

2

+3.4%

+1.4%

15

+10.7%

2

Q3 2018

operational

FX

M&A

299

265

• Strong operation sales growth of 21% due to successful

									ramp ups, supported by M&A versus a contracting
		34
						China LV production of -5.5% (YTD -10.6%)*
Q3 2019
							JV		EBIT increased by 15.5% to €20m, but margin declined
							WFOE
									slightly from 7.0% to 6.7% due to adverse portfolio
20					effects and ramp up cost for new products
	20
			0						Including 100% figures of 50/50 JV, consolidated at equity
Q3 2019		*IHS Markit: 5 November 2019

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Automotive

Q3 2019 Highlights: Automotive All end markets under pressure

• Sales split LV / Non-LV in €m / in %

		-6.9%
	708	659
	161	154
LV:
461	246
	239
	54
		29
	247	237
	Q3 2018	Q3 2019

• Sales split Non-LV in €m / in %

		-4.0%
	247	237
LV:	101
422	96
	21	21
	92	92
	33	28
	Q3 2018	Q3 2019

					Delta
				absolute	in %
			Diesel	-7	-4.3%	-3.4%
		-7	-2.8%
			Gasoline
			other LV**	-25	-46.5%
			LV Business	-39
			Truck	-5	-4.6%	-4.1%
			Large Bore	0	+1.9%
			Aftermarket	0	0%
			Other*	-5	-15.2%
			Non-LV Business	-10	-4.0%

• Other: MIR, Industrie, Continuous casting ** Including €20m equipment sales

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Automotive

Q3 2019 Highlights: Automotive

Malware attack: Basic system environment reestablished, clean up continues

 Malware attacked legal entities in the Automotive domain in the US, Mexico and Brazil

 No infection of Defence systems detected

 Production could be generally maintained, except warehouse for Aftermarkets business

 Internal and external IT support as well as several governmental agencies involved

 Limited topline effect due to successful set up of work- arounds

 EBIT effect expected at around €6-8m in Q4 2019  Higher logistic expenses

Malware attack

 Consultant fees

© Rheinmetall AG / Corporate Presentation Q3 2019	30
	30

Rheinmetall Automotive

IHS revised 2019 LV volumes repeatedly and provides weak outlook

• IHS 2019 forecast

IHS swings almost 8% within last 12 months

+2.0%

Oct Nov Dec

Jan

Feb Mrc Apr May Jun

Jul

Aug Sep

Oct

20182019

-5.8%

• IHS Mid-term outlook with growth on low level

					?
				+2.3% CAGR
	-6.7%							102
							100
	-5.8%
				97
95
94				94
				92
		89	89
2017	2018	2019	2020	2021	2022	2023	2024	2025

Latest industry comments are very cautious short to mid-term!

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Automotive

Automotive impacted by special effects beyond market deterioration

 Sales bridge	 Operating result
in €m	in €m and %
731	69

9.4%

level '19 Q3

~5%

Q4 2018	Market	GM Strike	Negative	Q4 2019	Q4 2018 Market	GM	Ramp	Malware Q4 2019
	decline		Ramp effect				effect

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Automotive

2019 reports biggest market decline post the financial crisis

Avg. cycle margin ~7.5%

Operating margins	-2.5%	7.0%	8.4%	8.9%	~6.5%	5-7%	~8%
		2009	2013	2016	2018	2019	2020/21	2024/25
Market	Financial crisis
	market decline -12.2%
Growth in CAGR			6.4%	-1.0%	-5.8%	2.3%

Market trend	Recovery	Growth	Decline	Flat	Slow growth
					IHS November 2019
© Rheinmetall AG / Corporate Presentation Q3 2019				33

Defence

Rheinmetall Defence

Q3 2019 Highlights: Defence Defence delivered as promised

Quarterly sales and margin development

In €m and %	1.255
703	14,3		746	823
629	7,8
6,3		1,4	8,1
	Q3	Q4	Q1	Q2	Q3

In €m

Order intake

Sales

Operating result

Operating margin in %

Operating Free Cash Flow

Operating FCF / Sales

Comments on quarterly performance

• Order intake of € 1.136m solid, including new VJTF orders
• Sales growth of 17.1% (FX adjusted 13.4%) driven by ES and VS and including €23m M&A effect
• Margin rose by 150 bp to 7.8%
• OFCF basically stable

Q3 2018	Q3 2019	∆	YTD 2018	YTD 2019	∆
3,044	1,136	-62.7%	4,471	2,201	-50.8%
703	823	17.1%	1,966	2,198	11.8%
44	64	45.5%	75	134	78.7%
6.3%	7.8%	150 bp	3.8%	6.1%	220 bp
-98	-104	-6	-508	-328	180
-13.9%	-12.6%	130 bp	-25.8%	-14.9%	1,090 bp

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Defence

Q3 2019 Highlights: Defence

Double digit growth of operating result

• Sales Defence

in €m

+17.1%

823

703196

196 +0.0%

216

170 +27.1%

395 +16.7% 461

	-58			-50
Q3 2018	Q3 2019

• Operating result Defence

in €m

Margin				+45.5%			Margin
Q3 2018						Q3 2019
6.3%				64		7.8%
					10
						5.3%
		44
5.1%	10		20		9.3%
4.7%	8
7.6%	30		35		7.6%
						-1
			-4
		Q3 2018	Q3 2019

Weapon and Ammunition

• Sales held back by missing export approvals

Electronic Solutions

• Solid execution in all BU
• Restructuring supportive

Vehicle Systems

• High order execution
• Stable margin

Weapon & Ammunition Electronic Solutions Vehicle Systems Consolidation © Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Defence

Q3 2019 Highlights: Defence

Robust order intake comparing to extraordinary PY quarter

• Order intake by division

in €m

3,044

241 185-63%

Incl.				1,137
Australian	2.808
253
orders of
~€2.5bn!				345
					774
			-190			-235
		Q3 2018	Q3 2019

• Order backlog profile

	in €bn
Weapon and Ammunition	change in %
Electronic Solutions
Vehicle Systems	8.8	8.7
Consolidation

~1.2 ~2.3 ~5.2

30.9.18

30.9.19

Q4 2019E

2020E

2021E ff.

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Defence

New record year ahead for Defence

• Defence sales and operating margin in €m and %

15	+9% sales
growth
	3.221
10

~9.5% 7.9%

5

0

20182019e

Sales Margin

4.000

3.000

2.000

1.000

0

• Growth across all three divisions
• Margin improvement continues
• Project pipeline is filled and diversified

Prepare for solid program execution

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Group

FY 19 Guidance

Group margin guidance held stable

Sales		Operating margin
2018	2019e	2018	2019e
Growth y/y in % at	Growth y/y in % at
in %	in %
constant FX	constant FX

GROUP

AUTOMOTIVE DEFENCE

6.1

Slightly above 1

8.0

Around 8

4.2	Around -7	8.9	Around
			6.5
7.9	Around 9	7.9	Slightly above
			9.5

Operational growth at constant FX

© Rheinmetall AG / Corporate Presentation Q3 2019

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Automotive - Focus on innovation

40

Rheinmetall Automotive

AUTOMOTIVE WITH LEADING TECHNOLOGY AND MARKET POSITIONS.

Key Figures

Sales:	€2.9bn
Op. result:	€262m
Op. margin:	8.9%
R&D:	€157m
Capex:	€161m
Headcount:	11.710

All figures refer to FY 2018

Structure

Hardparts

Pistons

Bearings

Mechatronics

Pump Technology

Solenoid Valves

Actuators

Aftermarket

Large-bore Pistons

Castings

Automotive

Emission Systems

Commercial Diesel

Systems

Sales by region			Sales by division*
Asia		1%	RoW	Aftermarket	12%	Hardparts
17%
				33%
			45%
USMCA 16%
	Europe
Germany	21%	w/o		55%
Germany	Mechatronics

Sales by customer			Operating result by division*
Other			>10% Ford,	Aftermarket	Hardparts
	22%	VW	13%
	41%	26%
2-5% DAF,		5-10%
Volvo, PSA,		23	Renault/
BMW,		Nissan,	64%
Cummins,	14%	%	GM, FCA,
CAT/Perkins
		Daimler	Mechatronics

*unconsolidated

© Rheinmetall AG / Corporate Presentation Q3 2019

41

Rheinmetall Automotive

Europe

-1%

-1%

Asia ex. China

USMCA

0%

17.0 16.3 16.7

2018 2019 2022e

18.6 17.5 18.0

World 2018 2019 2022e

0%

94.2 88.8 93.1

27.3 25.9 26.7

2018 2019 2022e

China

0%

26.6 24.4 26.5

OTHERS

+3%

4.7 4.5

2018 2019 2022e

5.2

Source: IHS December 2019

2018

2019

2022e

2018

2019

2022e

42

Market trends

The growth drivers remain strong

3+						NT
Efficiency		Emission		Electrification	Outside
E	(CO2 Reduction)		(Reduction)			powertrain

The innovation pipeline is packed!

43

Rheinmetall Automotive

		EXHAUST CONTROL	FUEL TANK ISOLATION	THERMAL	HRB
	VACUUM PUMPS	VALVE	MANAGEMENT
			VALVE GEN. 3
EGR MODULE	SC AIR SYSTEM		eWastegate	ELECTRICAL COOLANT	GASOLINE EGR	HIGH-VOLTAGE	E-MOTOR COOLING
	PUMP		COOLANT PUMP
			Actuator
TURBO ACTUATOR VTG		ELEC	VALVE	MULTI PURPOSE VALVE	ELECTRICAL OIL PUMPS	CONTACTORS	THERMO MODULE FUEL CELL CONTROL VALVE

	ENGINE BEARINGS	Share Carbon TT
	NON-ENGINE
ALU PISTONS
POLYMER BEARINGS
	ENGINE BLOCKS
	ICE	EV / FUEL CELL

44

ELECTRIFICATION

at Rheinmetall Automotive

Life time

order value of €1bn booked*

* Rheinmetall Automotive and Joint Ventures, incl. BEV and Hybrid

45

Rheinmetall Automotive

Favorable increase of book to bill ratio due to rising order intake

4.000
	1.5x	1.5x	1.5x	1.7x	2.0x
						Book to bill
3.000		Sales				ratio

Order intake

2.000

1.000					>50% of order
						intake for
					new business
0
2015	2016	2017	2018	9m 2019

© Rheinmetall AG / Corporate Presentation Q3 2019

46

Innovative products for a variety of applications

	High	El. Vapor	El. Climate	El. Cooling	High Voltage	Multi Purpose	Compact Door
	Voltage	Pump	Compressor	Pumps		Recirculation	Valve	Actuator
	Contactor					Blower		
								
								
Estimated	>€0.6bn	€700m	> €2.5bn	>€1.5bn				>4m vehicles
Market		until 2026
potential								Examples
in 2025

© Rheinmetall AG / Corporate Presentation Q3 2019

47

2,9

Development cost of € ~30m until 2022

		CAGR 2018-30:
		+10%
Start of		9,0
8,0	8,5
Production
7,4

		6,9
		6,4
		5,9
		5,4
	4,4	4,9
3,8

3,3

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

48

Rheinmetall Automotive

Micro Mobility

From internal innovations project to market entry

	High growth market		USP Rheinmetall
	European market with	Smooth phasing of engine
	10% CAGR between 2018	support
	and 2030	Excellent freewheeling
	High market	Low weight and compact
	concentration with Bosch	build
	representing almost 50%	Low noise emission
	of market share	High thermic stability
	E-bike market price	Interesting connectivity
	averaged at €3.000 last 3	features
	years	Speedy service concept

Start of production scheduled for 2021 with competitive product

© Rheinmetall AG / Corporate Presentation Q3 2019

49

Rheinmetall Automotive

Drivers for growth

Rising global fleet and regulatory restrictions are supporting our growth

• Light vehicle production grows

million vehicles per year

		+1%				ICE
		113	130		HEV
95	94	106

2018

2020

2025

2030

2040

• BEV 2018-2025

million vehicles per year		8.7	10.1
					7.4
				5.8
			4.5
		3.2
1.7	2.2
2018	2019	2020	2021	2022	2023	2024	2025
				IHS 07/2019 and company
				estimates

• Emission thresholds decrease

CO2	NOx
in g/km	in mg/km
-24%	-56%
125	180
95
	80

2015 2020

EU5

EU6

95g =

4.1l Gasoline or

3.6l Diesel

• Stricter emission testing

WLTP

Mainly EU!

	Stricter testing
	sets the
	benchmark
	even higher!
RDE

© Rheinmetall AG / Corporate Presentation Q3 2019

50

Rheinmetall Automotive

Efficiency

CO2 - reduction with Automotive products - gasoline engine vehicle

130 g	95 g
CO2/km	CO2/km
2015	2020

1.4L 4-cylinder

TC DI gasoline engine (115kW) Approx. 138 g CO2/km in NEDC

Rheinmetall Automotive products

-7 g CO2

		-3 g CO2/km
	-3 g CO2/km	Electr. control
-1 g CO2/km
Tribology system	valve and variable
Variable oil pump

-2g CO2/km

-2 g CO2/km

© Rheinmetall AG / Corporate Presentation Q3 2019

51

Rheinmetall Automotive

TRUCK product portfolio	for truck compressors
	Permaglide bearings

	Main coolant	and truck hydraulics
		Aluminum pistons
Auxiliary
coolant pumps
		Steel pistons
Electrical oil pumps		Piston rings
		Cooperation with
		Riken
		Bushings
		injection
		-bearings
		Connecting rod bearings
Coolant		Bearings for seat adjustments and doors
valves
Variable Valve Control		EGR cooler modules
	and mixer modules
Exhaust gas flaps		Dual poppet valves
Hydraulicvalves		EGR reed valves
	Cylinder	performance
	actuators
	bore coating

© Rheinmetall AG / Corporate Presentation Q3 2019

52

Rheinmetall Automotive

Diversification

Increasing portfolio for non-LV applications

Trucks	Large bore pistons	Bearings &	Aftermarket
		continuous casting

Diverse portfolio for	E.g. ship and locomotive	Sanitary application	Global supply of spare parts
truck applications	pistons

© Rheinmetall AG / Corporate Presentation Q3 2019

53

Rheinmetall Automotive

• Sales development by Division in €m

CAGR +10%

Mechatronics

Hardparts

Aftermarket

2016

2017

2018

2019e

• Sales development by legal structure in €m
  WFOE

Joint Venture 100% share

2016

2017

2018

2019e

© Rheinmetall AG / Corporate Presentation Q3 2019

54

Rheinmetall Automotive

CHINA

Motorservice

EA211 pistons Heat sinks and shield coversChinaEA888 pistons

Build up of

Logistic Centre

Diverse		Electrical	Heavy-duty	Heavy-duty	Variable	Variable oil
Divert-air	Electrical
valve	vapor pump	vacuum	Back pressure	Exhaust gas	oil	pump front
		pump	valve	recirculation	pump	cover
				valve

© Rheinmetall AG / Corporate Presentation Q3 2019

55

Rheinmetall Automotive

Automotive in China

50/50 joint ventures

Wholly Foreign-Owned Enterprises

JV subsidiary

with HASCO (SAIC group)

(100% Rheinmetall Automotive)

Castings (KSHA)

Pistons (KSSP)

Castings (KPSNC)

Pumps (PHP)

Aftermarket

Pierburg

Large-bore pistons

Pumps (PMP Ch.)

2014

1997

2001

2012

2008

2009

2013

2012

Engine blocks and

Pistons

Engine blocks, cylinder

Electrical and

Spare parts

EGR modules and electric

Large-bore pistons

Electrical and

structural body parts

heads and structural

mechanical pumps

throttle bodies

mechanical pumps

body parts

Germany/

China

China

China

Europe

	Sales China in €m				1,003		EBIT China in €m		71	76	79
					934	972						WFOEs
				871
						WFOEs			53	53
			681
		528							37
401						JVs (100%)	30						JVs (100%)
2012	2013	2014	2015	2016	2017	2018		2012	2013	2014	2015	2016	2017	2018
KSHA: KS Huayu Alutech GmbH, Neckarsulm		KPSNC:	Kolbenschmidt Pierburg Shanghai Nonferrous Components Co., Ltd., Shanghai PMP: Pierburg Mikuni Pump Technology (Shanghai) Corp., Shanghai
KSSP: Kolbenschmidt Shanghai Piston Co., Ltd., Shanghai	PHP:	Pierburg Huayu Pump Technology Co., Ltd., Shanghai

© Rheinmetall AG / Corporate Presentation Q3 2019

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HIGHLIGHTS

CHINA

Partner of local big players SAIC and HASCO

Biggest casting capacities in China - technology leader

Regulation (China 6) - provides substantial growth potential for mechatronics division

Strong demand for NEV products

China Story on track: product pipeline supports growth ambitions

57

Defence - at the beginning of a "super cycle"

58

Rheinmetall Defence

TOP PRODUCTS PER DIVISION.

WEAPON AND		ELECTRONIC
AMMUNITION		SOLUTIONS
MID & LARGE CALIBER AMMO		MISSION EQUIPMENT
		AIR DEFENCE & RADAR SYSTEMS
MID & LARGE CALIBER WEAPONS
PROTECTION SYSTEMS		Simulation & Training

• • ACTIVE
  • PASSIVE
• SOFTKILL

VEHICLE

SYSTEMS HX-FAMILY

LOGISTIC VEHICLES

TACTICAL VEHICLES

Medium wheeled Medium tracked

Heavy tracked

59

Rheinmetall Defence

DEFENCE IS A LEADING SUPPLIER

WITH AN INCREASING INTERNATIONAL PRESENCE.

Key Figures

Sales:	€3.2bn
Op. result:	€254m
Op. margin:	7.9%
R&D:	€75m
Capex:	€101m
Headcount:	10,948

All figures refer to FY 2018

Structure

Weapon and Ammunition

Weapon and	Protection
Ammunition		Systems
Propulsion
Systems

Electronic Solutions

Air Defence &		Mission
Radar Systems		Equipment
Simulation and		Technical
Training		Publications

Vehicle Systems

Logistic Vehicles		Tactical Vehicles

Sales by region			Sales by division*
RoW	15%8%		Germany			Weapon and
Aus/NZ	34%		31%	Ammunition
USMCA 4%				45%
Asia /	20%	19%		Vehicle	24%	Electronic
Middle East			Europe	Systems		Solutions

Order backlog by division	Operating result by division*
		Weapon and	Other	Weapon and
	23%	Ammunition	Vehicle	Ammunition
	54%		Systems 39%	44%
Vehicle	23%	Electronic	Electronic	17%
Systems		Solutions	Solutions

*unconsolidated

© Rheinmetall AG / Corporate Presentation Q3 2019

60

Home Market UK

Joint venture - Strengthening the position in UK

EXPANSION OF PRODUCT PORTFOLIO

Current

• BAE UK business
• Armoured engineering vehicles and bridge-laying tanks
• AS 90 self-propelled artillery system
• Force protection components
• Services
  7.500 MAN vehicles under service

Future

• Boxer Mechanized Infantry Vehicle (MIV)

500 vehicles @ €1.4bn

• Challenger 2 Life Extension Program potential
• Next

SALES 2020e: € ~200m

Rheinmetall Defence

Home market Australia

Successful establishment of a new home market

Military Trucks	JV Rheinmetall NIOA Munition	Simulation
 Land 121 35 / 5B (2013/2018)	 51% Rheinmetall (2017)	 Simulation / Training for M1A1
 EUR 2bn	 Land 17: 155mm Munition: EUR 350m	Fighting Vehicles Technology

• Major Munition FrameworkContract: EUR 60m
• NEW Facility in Queensland

Boxer / Lance	Lynx
 Land 400 Phase 2 (2019)	 Land 400 Phase 3 (2022/2023)
 EUR 2.1bn	 EUR 5.6bn	JV Supashock
	 Down selected

MilVehCoE	 49% Rheinmetall (2017)
Military Vehicle Center of Exellence	 "Brain-Trust"
 Military Trucks
 Combat Vehicles	SALES 2020e: € ~330m
 Fleet-Service

© Rheinmetall AG / Corporate Presentation Q3 2019

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Rheinmetall Defence

German Defence

Drivers behind budget increase

"Turnarounds" in Germany

• Personnel:
  Mid-term return to 200,000 soldiers
• Material:
  100% equipment level and additional division
• Finance:
  Increase of defence budget 54% from 2018 to 2024

Enhanced future profile

• Anchor army for smaller neighbor armies
• Leading role in "enhanced Forward Presence" in Lithuania
• Framework nation in "Very High Readiness Joint Task Force as of 2019
• Currently 14 international mandates

Framework nation concept triggers standardization of equipment

Army 4.0: Rheinmetall integrates components to systems

© Rheinmetall AG / Corporate Presentation Q3 2019

63

Rheinmetall Defence

German Defence

Additional structural demand of German army under discussion

• Vehicles - mid-to-long term potential

Fox (400 vehicles)

Boxer (300-400 vehicles)

Trucks (> 10.000 vehicles)

Puma (~250 vehicles)

• Equipment and ammunition - multi billion programs

NNBS (Short range air defence)

TLVS (Tactical air defence)

D-LBO (> €5 bn net) (MoTaKo)

Ammunition (~€2 bn net)

© Rheinmetall AG / Corporate Presentation Q3 2019

64

Rheinmetall Defence

EUROPEAN DEFENCE.

CURRENT OR EXPECTED TENDERS TACTICAL VEHICLES.

UK MIV &

Challenger upgrade

Lt

Pl

Cz

Sk

H

SloRu

• Drivers for European vehicle programmes
• • Return to territorial and alliance defence
  • Standardization of NATO equipment
  • Modernization and upgrades
• Estimate for European tactical vehicles demand

(number of vehicles)

Puma/Lynx

Boxer

Mixed

Bg

	Germany	Rest of Europe
Tracked	~250	>600
Wheeled	700-800	>900

© Rheinmetall AG / Corporate Presentation Q3 2019

65

Rheinmetall Defence

European Defence

Consolidation landscape

	Kongsberg	49.9%
	50%
	Nammo	Patria
		Saab
Cobham
BAE Systems Chemring	Rheinmetall		PL		RO		HUN			CZ
KMW/Nexter	Thales	RUAG
		Oto Melara
					Aselsan
<25% or not state-owned	>25% state-owned	Rheinmetall

• Governmental shareholding restricts room for cross-border consolidation
• Big common armament programs could be catalysts for further consolidation

Rheinmetall's approach:

• JV partnerships with companies in different nations instead of "putting all eggs in one basket"
• Sufficient organic growth potential, but suitable M&A transactions are possible

66

Rheinmetall Defence

Innovations

Demand-driven product development and targeted cooperations

New logistical platforms	New tactical platforms	New business models
Groundbreaking sub-systems	Innovative weapon and ammunition	New cooperations with
	Digitized command and reconnaissance	Sikorsky, Raytheon

© Rheinmetall AG / Corporate Presentation Q3 2019

67

GROUPAPPENDIX

© Rheinmetall AG / Corporate Presentation Q3 2019

68

Appendix: Rheinmetall Group

Group 2014 - 2018: Key figures (as reported)

in €m			2014	2015	2016	2017	2018
Balance sheet	Total assets		5,271	5,730	6,150	6,101	6,759
	Shareholder's equity	1,197	1,562	1,781	1,870	2,172
	Equity ratio (in %)		22.7	27.3	29.0	30.7	32.1
	Pension liabilities		1121	1,128	1,186	1,080	972
	Net financial debt		-330	-81	19	230	-31
	Net gearing (in %)		27.6	5.2	-1.1	-12.3	1.4
Income statement	Sales		4,688	5,183	5,602	5,896	6,148
	Operating result		160	287	353	400	492
	Operating margin	(in %)	3.4	5.5	6.3	6.8	8.0
	EBITDA		299	490	581	626	836
	EBIT		102	287	353	385	518
	EBIT margin (in %)	2.2	5.5	6.3	6.5	8.4
	EBT		22	221	299	346	485
	Net income		21	160	215	252	354
	Earnings per share	(in EUR)	0.47	3.88	4.69	5.24	7.10
	Dividend per share	(in EUR)	0.3	1.1	1.45	1.70	2.10
	ROCE (in %)		3.9	10.1	12.3	13.8	17.1
Cash flow statement	Free cash flow from operations	-182	29	161	276	-35
Headcount	Employees (Dec 31) according to	20,166	20,676	20,993	21,610	22,899
capacity

© Rheinmetall AG / Corporate Presentation Q3 2019

69

Appendix: Rheinmetall Group

Segments 2014 - 2018 Key figures

		AUTOMOTIVE														DEFENCE
2014	2015	2016			2017	2018			in €m			2014	2015	2016	2017	2018
2,466	2,621	2,670			2,922	2,889			Order intake			2,812	2,693	3,050	2,963	5,565
416	445	459			520	478	Order backlog (Dec. 31)	6,516	6,422	6,656	6,416	8,577
2,448	2,592	2,656			2,861	2,930			Sales			2,240	2,591	2,946	3,036	3,221
184	216	223			248.8	262			Operating result	-9	90	147	174	254
7.5	8.3	8.4			8.7	8.9	Operating margin	(in %)	-0.4	3.5	5.0	5.7	7.9
295	332	356			366.8	420			EBITDA			17	175	239	268	403
184	216	223			227	265			EBIT			-67	90	147	172	247
7.5	8.3	8.4			7.9	9.0		EBIT margin (in %)	-3	3.5	5.0	5.7	7.7
158	167	149			154	161			Capex			76	96	95	89	87
34	96	105			106	26			OFCF			-132	-38	103	238	-29
10,830	10,934	10,820			11,166	11,710	Employees (Dec 31) according to capacity	9,184	9,581	10,002	10,251	10,948
1,322		1,450		1,527			1,621	1,664	Mechatronics		Sales		Weapon &	977	881	1,112	1,175	1,056
96		119		142			176	171			EBIT		Ammunition		-4		74		108		117		121
7.3		8.1		9.3			10.9	10.3			EBIT margin				-0.4		8.4		9.7		10.0		11.5
934		952		921			968	989	Hardparts		Sales		Electronic	705	759	745	691	839
72		73		62			60	65			EBIT		Solutions		-53		26		25		20		47
7.7		7.7		6.7			6.2	6.6			EBIT margin				-7.5		3.4		3.4		2.9		5.6
269		285		305			359	367	Aftermarket		Sales		Vehicle	667	1,195	1,392	1,480	1,568
26		27		27			33	36			EBIT		Systems		-9		3		29		53.2		108
9.7	9.5	8.9			9.2		9.8			EBIT margin			-1.4	0.3	2.1	3.6	6.9

© Rheinmetall AG / Corporate Presentation Q3 2019

70

Rheinmetall technologies

as an answer to current threats and challenges

ONE

RHEINMETALL

AUTOMATION

NEXT SENSORS

DIGITIZATION

E-MOBILITY

ARTIFICIAL INTELLIGENCE

NEW

PRODUCTS

71

Rheinmetall Group

Our capital allocation policy is geared towards further growth

Funding of growth (organic and M&A)

9.4%

Dividend to shareholders (Payout ratio 30-35%)

Improvement of pension funding via CTA	(target level
50-60%)

© Rheinmetall AG / Corporate Presentation Q3 2019

72

Appendix: Rheinmetall Group

Select key data: outlook 2019

Rheinmetall Group			Automotive	Defence
In % (Previous Year)
Holding cost	~€25-30m (€24m)	Capex	5.5-6% (5.5%)	3.5-4.5%(3.1%)
		(w/o IFRS 16)
	Comparable level		~5.5% (5.3%	3-3.5% (4.8%
Tax rate	D&A	reported,	reported,
(27%)
		scheduled 5.2%)	scheduled 3.7%)
Interest result	~-€40m(-€33m)	R&D	5-6% (5.4%)	2-2.5% (2.3%)
		(self-funded)

© Rheinmetall AG / Corporate Presentation Q3 2019

73

Appendix: Rheinmetall Group

Debt

Typical seasonal increase of net debt amplified by M&A payout

 Net financial debt

 Debt composition and maturity profile

in €m at quarter-end				in €m
					Ʃ 1,055
					162	Commercial
					Papers
					183	Other &
					Leasing
	-31				161	Bank loans	2019	2020	2021	2022	2023	2024	2025ff.
		-171
					300	Promissory	53		28			25
			-387		notes						73
-514										122
				-660	250	EIB loan*
30.09.2018	31.12.2018	31.03.2019	30.06.2019	30.09.2019							250
					Q3/
					2019		*€250 m EIB loan (0.962% coupon) maturing in August 2023

© Rheinmetall AG / Corporate Presentation Q3 2019

74

Appendix: Rheinmetall Group

More than 100 production sites and offices on all continents

Defence		Germany	UK
USA	Netherlands	Norway
Sites	Canada	Switzerland	Sweden	South
	Mexico	Austria	Poland	Africa
		Italy

		USA
		Mexico
				Germany
Automotive		France	Spain
Brazil	Italy	Czech Republic
Sites	Malta	Turkey
				Romania	UK

Russia
Saudi Arabia	Singapore
Malaysia
UAE
Australia

Japan

China

India

© Rheinmetall AG / Corporate Presentation Q3 2019

75

Appendix: Rheinmetall Group

Continuing ROCE improvement

• ROCE

in %

25%

20%

15%

10%

5%

0%

-5%

					Pre-tax WACC
					(2018):
19.0%	18.8%		18.7%	17.1%	20.2%
		10.5% Group
16.7%		.13,4%
12.3%		15.9%

10.6%

	10.7%		11.8%
		9.8%
4.7%		3.9%	6.1%
	0.3%
			-4.6%

2013	2014	2015			2016	2017	2018
© Rheinmetall AG / Corporate Presentation Q3 2019		Group		Defence		Automotive		76

Appendix: Rheinmetall Group

Board remuneration based on three building blocks

		Annual target salary (100%)
	Fixum (60%)		Performance-related variable remuneration (40%)
 Twelve equal portions of monthly		Short term incentive		Long-term incentive
payments
Fringe benefits:	•	KPI:	EBT, ROCE (each 50%)	•	KPI:	Average adjusted EBT
•	Pension insurance (or comparable)	•	Reference: Budget			of the last three years
•	Company car	•	Range:	0 - 200%			(EBT capped at €300m)
		•	Escalators:	0% - <70% - < 110%	•	Payout: In shares and cash* with
				0% linear to max. 200%			4 year lock-up period
		•	Payout:	cash			*for related tax payments

© Rheinmetall AG / Corporate Presentation Q3 2019

77

Appendix: Rheinmetall Group

ESG

High importance for Rheinmetall

 Environment

• Reduction of the ecological footprint
• • Decrease of energy needed
  • Selective use of raw materials
• "Road to 95" and E-mobility
• • Our products increase fuel efficiency
  • New e-bike,e-motor and battery pack
• Support of conservation
• Transformation of the former production site in Düsseldorf

 Social

• Clear statement against cluster munition
• Promoting education and training
• Support of gender diversity
• • Women in management
• Workforce
• • Integration of refugees via apprenticeships
  • Support of employee families

 Governance

• Transparency towards customer, investors and other stakeholder
• Non-compliantbusiness behavior is unacceptable
• Zero tolerance of corruption and fraud
• Central Compliance Management System
• • Employee awareness initiative

© Rheinmetall AG / Corporate Presentation Q3 2019

78

Next events and IR contacts

 Next Events

Commerzbank GIS, New York	13-15 January 2020
Baader Helvea, Toronto	16 January 2020
Unicredit Kepler Cheuvreux GCC, Frankfurt	20-21 January 2020
Bankhaus Lampe Conference, London	30 January 2020
FY Provisional figures	2 March 2020
FY Earnings release	18 March 2020
Bank of America Merril Lynch, Global Industrials Conference	19 March 2020

• Quick link to documents

Corporate Presentation

Interim Reports

© Rheinmetall AG / Corporate Presentation Q3 2019

• IR Contacts

Dirk Winkels

Head of IR

Tel: [phone]

Email: [e-mail]

René Weinberg

Senior Investor Relations Manager

Tel: [phone]

Email: [e-mail]

Rosalinde Schulte

Investor Relations Assistant Tel: [phone]

Email: [e-mail]

Annual Reports

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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-looking statements reflect the current views of Rheinmetall's management with respect to future events. In particular, such forward-looking statements include the financial guidance contained in the outlook for 2020.

Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as "will", "anticipates", "aims", "could", "may", "should", "expects", "believes", "intends", "plans" or "targets". By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. In particular, such factors may have a material adverse effect on the costs and revenue development of Rheinmetall. Further, the economic downturn in Rheinmetall's markets, and changes in interest and currency exchange rates, may also have an impact on Rheinmetall's business development and the availability of financing on favorable conditions. The factors that could affect Rheinmetall's future financial results are discussed more fully in Rheinmetall's most recent annual and quarterly reports which can be found on its website at www.rheinmetall.com.

All written or oral forward-looking statements attributable to Rheinmetall or any group company of Rheinmetall or any persons acting on their behalf contained in or made in connection with this presentation are expressly qualified in their entirety by factors of the kind referred to above. No assurances can be given that the forward-looking statements in this presentation will be realized. Except as otherwise stated herein and as may be required to comply with applicable law and regulations, Rheinmetall does not intend to update these forward-looking statements and does not undertake any obligation o do so.

This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire or dispose of securities in Rheinmetall AG or any of its direct or indirect subsidiaries.

© Rheinmetall AG / Corporate Presentation Q3 2019

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