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Research Tree provides access to ongoing research coverage, media content and regulatory news on RHEINMETALL AG. We currently have 9 research reports from 1 professional analysts.
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Even brighter time to come!
24 Mar 17
Rheinmetall reported quite strong figures in its full-year 2016 report with a much stronger cash-flow generation. The group’s order backlog offers a good perspective in defence while most NATO countries’ defence budgets are being increased, specifically in Germany, the group’s biggest client. Profitability could have been even higher without some demand weakness in Brazil or operating issues in Norway.
Defence division performance source of the raised guidance
03 Nov 16
Rheinmetall published a strong Q3 performance driven by the fast-improving Defence division. Indeed, sales reached €1,305m in Q3 (+9.8% yoy), continuing the good 2016 revenue performance (+9% ytd), while the operating result rose by 30% yoy driven by the Defence operating result growth (+88% yoy). As a consequence, the operating result margin reached 6.1% (+1% point yoy) and stands at 4.7% ytd. Finally, EPS rose to €0.97 (+13% yoy and +17% ytd). The sales distribution by geography shows strong growth in Other regions and Asia, meanwhile sales decreased in Germany in 2016 ytd. The joint ventures in China brought satisfaction, generating an EBIT of €30m (+20% ytd).
Q1 softness but guidance confirmed
16 May 16
Headline figures: • Order backlog reached a new high of €7.3bn with a very strong order intake in Defence in Q1 c.€950m. • Consolidated sales were up 2% to €1,180m in the first quarter when adjusted for currency effects. Automotive sales were down 1% reported (-2% organic growth) or down €10m to €654m. The fall in revenues is primarily explained by the economic weakness in the market for large-bore pistons, the continuing decline in automotive production in Brazil which declined by 28% compared to Q1 15, as well as the planned phase-out of a substantial contract with PSA concerning the Mechatronics division. The weakness in large-bore pistons, which came as a surprise to management and had not been budgeted, was related to non-light vehicle end markets including Transport customers, fracking-related markets, as well as marine-related customers. The decline in Brazil is being compensated through cost adjustments including a reduction in the workforce which has already been implemented (headcount down 16% or c.200 employees) and Rheinmetall is seeking to increase exports from its Brazilian plants to take advantage of the weakness in the real. Finally, the phase out of the PSA contract will be compensated by new contracts in Mechatronics over the course of Q2 and Q3. The Defence sector’s sales however rose by €17m, or 3% reported (+6% organic growth) to €526m. Higher sales from the Weapons and Ammunition business and Tracked vehicles compensated for lower sales of Air Defence products in the Electronic solutions segment. The division has changed its reporting segments to reflect the reorganisation of its operations surrounding military vehicles. • Operating earnings for the group improved by €9m to €31m resulting in an improved margin of 2.6% for the group. Automotive’s operating earnings of €52m were down from €55m in Q1 15, the margin target of 8% was however achieved and would have been exceeded but for a €3m cost related to the opening of a new plant in the Czech Republic. Defence operating earnings improved by €11m yoy to -€17m. Guidance confirmed: Group sales €5.5bn vs €5.2bn in 2015. Operating margin of 6% vs 5.5% in 2015. Automotive: c.€2.8bn vs €2.7bn in 2015. Operating margin of 8% still the target vs 8.3% in 2015. Defence: €2.8bn vs €2.6bn in 2015. Operating margin of 4.5-5%% vs 3.5% in 2015.
Overly cautious ahead of 2016 despite solid prospects?
18 Mar 16
Results: FY 2015 Rheinmetall presented FY results yesterday. The sales and EBIT came as no surprise given the release of preliminary results last month. As a reminder, consolidated sales grew by 11% to €5.2bn, above €5bn for the first time, and group earnings before interest and tax was up significantly to €287m as Rheinmetall did not record any exceptional items during the year. Automotive posted a record EBIT of €216m on the back of €2.59bn in sales, leading to a divisional EBIT margin of 8.3%. Defence achieved a turnaround to generate an EBIT of €90m. As a group, Rheinmetall returned to a positive FCF generation of €29m (significant negative outflow of €182m in 2014) as Automotive’s cash flow generation of €96m compensated for the outflow of -€38m from Defence and the -€29m from corporate structure. The group’s net debt stood at €81m with the November €230m equity raise having helped strengthen the balance sheet in view of a potential acquisition. Rheinmetall announced a proposed dividend of €1.10 per share. Guidance: Consolidated sales set to grow to €5.5bn – with a further improvement in the operating margin to 6%. Automotive expects further sales growth to €2.7bn and a margin of 8%, while Defence anticipates organic growth leading to revenues of €2.8bn and an improved margin of 4.5-5%. In addition, management mentioned that while Automotive would continue to generate positive FCF, Defence would return to at least a breakeven FCF generation situation in 2016 after significant outflows in 2014 and 2015.
Strong positive momentum
02 Mar 16
Rheinmetall released provisional figures for FY 2015 which highlighted strong sales and even stronger profit growth. Consolidated sales were up 11% to €5,183m, with Automotive revenues up 6% to €2,592m and Defence revenues up 16% to €2,591m. Group EBIT climbs by 181% to €287m thanks to the significant €167m swing in defence operating profit from -€67m in 2014. Automotive EBIT grew to €216m, resulting in a divisional margin of 8.3%. Defence returned to profitability with EBIT reaching €90m, resulting in a margin of 3.5%, at the very upper end of guidance.
19 Apr 17
Lombard Risk Management* (LRM): Beats demanding growth and profit forecasts (CORP) | Frontier Developments* (FDEV): Steaming ahead (CORP) | Tax Systems* (TAX): Right place, right time (CORP) | Acal (ACL): Stronger H2 and brighter outlook (BUY) | Fenner (FENR): Interim results signal upgrades (BUY) | Minds + Machines* (MMX): US and Europe domain sales (CORP)
UK Housebuilding Sector: Q1 2017
10 Apr 17
Baron King of Lothbury, also known as Mervyn King former Governor of the Bank of England, is married to Barbara, a Finnish lady. She was his girlfriend in 1970 but distance and steam-driven telecoms conspired to keep them apart. Barbara went on to marry someone else and divorce - before being reunited with King in the late 1990s. They married in 2007 and King, who had never had children, was presented with two step-children and four grandchildren; and, in a Sunday Times interview, he quoted the Finnish apothegm “Grandchildren are the dessert of life”.
Mature market growth still negative, despite beat in Q1
20 Apr 17
Unilever (ULVR LN, HOLD, T/P 3800p) released their Q1 trading statement this morning – Q1 underlying sales grew 2.9%. Turnover increased 6.1% to €13.3bn, in front of Bloomberg consensus of €13.2bn. Despite trading market conditions being described as tough, Unilever grew pricing by 3.0%, but saw volume declining 0.1%.
Northland Capital Morning Report
02 Dec 15
Divergence looks set to dominate the final month of 2015 and set the tone for 2016. The European Central Bank is widely expected to extend its QE economic stimulus programme and could reduce its overnight deposit rate further in an attempt to boost inflation, and more stimulus could come from Japan and China. Meanwhile the Federal Reserve is now expected to lift rates from historic lows. Higher US rates will impact not only the cost of capital in the US but also emerging markets where growth remains much weaker and leverage high. The move by the ECB is unlikely to have a major impact, however, as it is an extension rather than a new tool and the headlines continue to be dominated by politics rather than financial markets (Isis, the refugee/migrant crisis, tensions between Russia and Turkey etc). The respective moves are likely to further weaken the euro in 2016. The UK sits somewhere in the middle. November’s Autumn Statement saw the Chancellor drop his tax credit reduction plans and benefit from a surprise £27bn improvement in the Office for Budget Responsibility’s five year public finances forecast, based on higher tax revenue and lower debt interest. The general shift away from austerity, the protection of tax credits and increased minimum wage should ensure further economic growth.