Rheinmetall’s 2013 Orders Reach New High With €4.6 billion, 2015 To Be More Profitable

Rheinmetall today said it expects the company sales growth and improved results in both corporate sectors.

After the order backlog reached a new high last year, consolidated sales of €4.8 billion to €4.9 billion are expected in 2014 (previous year: €4.6 billion), it said in a statement.

“Fiscal 2013 was dominated by our strategy program ‘Rheinmetall 2015’. We made key decisions and initiated important restructuring measures to lay the foundation for profitable growth in the future,” says Armin Papperger, CEO of Rheinmetall AG. “Initial progress will already be evident in the figures for 2014. But the strategy program will not reveal its full effect until 2015.”

While the Automotive sector improved both its sales and its operating result, Defence’s revenues and results were lower than in the previous year. 2013 was a year of transition, in which an array of restructuring measures was initiated.

“Our firm target, once our strategy program is concluded in 2015, is to return to the dividend level of the years before the restructuring,” emphasized CEO Armin Papperger.

In 2013, Rheinmetall Defence was faced with a difficult market environment. Declining defence spending worldwide curbed the sector’s sales performance. At €2,155 million, revenues were €180 million or 8% lower than in the previous year. After adjustment for currency effects, sales fell by 6%.

Following a year of transition during 2013 that was dominated by a series of measures to improve structures and increase cost efficiency, Rheinmetall expects growing consolidated sales and significant earnings improvements in 2014. Consolidated sales are forecasted at between €4.8 billion and €4.9 billion. €2.3 billion is expected to come from Defence and €2.5 billion to €2.6 billion from Automotive.

The first positive effects of the restructuring measures will emerge in the operating result (EBIT before special items): Rheinmetall expects a Group operating result of between €230 million and €250 million. €85 million to €95 million is expected to come from Defence, €165 million to €175 million from Automotive.

Subsequent expenses arising from non-recurring effects and restructuring measures of €10 million are expected, meaning that Group EBIT of between €220 million and €240 million is forecast.

From 2015, Rheinmetall expects average annual sales growth of 3% to 5%. The international share is expected to increase slightly in both sectors. Defence has set the target of generating about 50% of its sales from customers outside Europe. Automotive aims to increase its proportion of non-European sales to a third.

For this purpose, Rheinmetall will consistently pursue its successful internationalization strategy, which it launched several years ago, and further strengthen its local presence in growth regions.