09 Aug 13. Rheinmetall: Stable development in Automotive, high order backlog in Defence; Consolidated sales fall 8% in the first half of 2013; Operating Group EBIT is €29m, but €63 m less than previous year; Automotive counters weakness in European automotive manufacturing and
shows earnings stability; Defence with considerable sales and earnings decline, but double-digit growth in order intake; Forecast for 2013 as a whole reduced due to lowered expectations for Defence. Business development of the Rheinmetall Group in the first half of 2013 showed a mixed picture. The Automotive sector continued to perform very well despite the declining automotive industry in Europe. By contrast, the Defence business, suffering from budget cuts in major client countries, fell behind the previous years in terms of sales and earnings. However, in the second quarter of 2013, the operating performance of the Defence sector recovered considerably compared with the development of the first three months of the fiscal year. In the first six months of fiscal 2013, Rheinmetall generated consolidated sales of €2,062m, which is an 8% decline on the first half of 2012 (€2,253m). Business volume decreased in the Defence sector in particular, while sales in the Automotive sector developed stably overall. Declining sales and increased project and acquisition costs in the Defence business resulted in the Rheinmetall Group’s operating earnings before interest and taxes (EBIT) falling below the comparative figures of the previous year. For the first six months, Rheinmetall posted operating EBIT (EBIT before special items) of €29m after €92m in the first half of 2012. However, there was positive development quarter-on-quarter. Operating EBIT increased significantly from €-14m in the first three months to €43m in the second quarter of 2013. Including the expenses reported in the first half of 2013 for restructuring measures, Group EBIT shows a loss of €18m after positive EBIT of €123m in the previous year.
Defence: Order intake grows in double digits
At €834m, the sales of Rheinmetall Defence fell below the previous year
(€1,010m) by €176m or 17% in the first six months of 2013. The decline related to the Wheeled Vehicles and Combat Systems divisions, in which budget cuts in key customer countries – particularly in the case of munitions procurement – made themselves felt. The Unmanned Aerial Systems product unit, the majority of which was sold in mid-2012, contributed €22m to the previous year’s sales. The decline in sales in particular had a negative impact on earnings performance. After a positive operating EBIT (EBIT before special items) of €25m was generated in the previous year, which still included an earnings contribution of €2m from the sold Unmanned Aerial Systems product unit, an operating result of €-48m was reported for the first half of 2013. However, operating EBIT in the second quarter was only just negative at €-5m. In the first half of 2013, costs of €26m were posted for the ongoing restructuring measures. In total, the Defence sector expects restructuring costs of €40m to €50m in 2013. Rheinmetall Defence strengthened its presence on the international markets, won new client countries and thus increased the order backlog in the first half of the year with a range of important new contracts. As of June 30, 2013, the sector had orders worth €5,383m on its books, after €4,589m twelve months earlier. The Defence sector’s order intake increased to €1,282m in the first half of the year, which is growth of €144m or 13% on the previous year’s figure of €1,138m. €475m of this is attributable to one major order, which Rheinmetall received in relation to supplying tanks and self-propelled howitzers to Qatar. Similarly in the second quarter, an order for military trucks worth €70m was booked for New Zealand. The major contract for 2,500 military transport vehicles for the Australian armed forces awarded in July 2013 with a total value of approxim