Rheinmetall Expects 50% Revenue Outside Europe By 2015, Focus on China, India

The Rheinmetall group sees potential in markets outside Europe such as in Asia and Australia. Hence 2015 strategic program intends to generate around 50% of sales with customers outside Europe. Rheinmetall will optimize its location structures and adjust capacity to the order situation in the specific divisions, anticipating these measures to bring down the annual savings between 40 million to 50 million Euros and hence, will have the Defence sector return to an EBIT margin of 10% from 2015 onwards.

The Düsseldorf-based Rheinmetall Group has designed the Rheinmetall 2015 strategic program, primarily focusing on internationalization, product innovations and cost, aiming to expand its leading position in a range of markets for ambitious growth and earnings targets. From 2015 onwards, the Group intends to generate average annual sales growth of between 3% and 5% with significantly improved profitability.

The year 2013 is aimed to be the beginning of a strategic program which is used to drive this development into an international partner for security and mobility. Both the Defence and Automotive sectors still harbor huge potential for profitable growth, therefore maintaining both pillars, as stated by Armin Papperger, CEO of Rheinmetall AG.

Also restructuring costs in 2013 to impact the income statement for the current fiscal year by between 60 million and 80 million Euros. Hence savings of about 55 million to 70 million Euros each year will become apparent from 2015 onwards. The dividend policy followed to date will be maintained, with a payout ratio of at least 30%.

From 2015, Automotive intends to generate over a third of its sales outside Europe. Particular attention will be paid to the Chinese and Indian markets. Rheinmetall will therefore systematically pursue its internationalization strategy of recent years in the Automotive sector, particularly in the Mechatronics division.

These measures will lead to restructuring costs in the automotive sector in the current fiscal year of between 20 million and 30 million Euros. And resulting in annual savings of 15 million to 20 million and The EBIT margin in the Automotive sector reaching 8% from 2015 onwards.