Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on RHEINMETALL AG. We currently have 8 research reports from 1 professional analysts.
Frequency of research reports
Research reports on
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.
Raising equity to fund growth
12 Nov 15
Rheinmetall today issued 3,959,850 new ordinary bearer shares, raising c. €230m. The new shares will carry full dividend rights as of 1 January 2015. The shares were offered exclusively to institutional investors by means of a private placement using an accelerated bookbuilding process. Rheinmetall suggests that the “net proceeds from the capital increase will be used to finance Rheinmetall's growth strategy in the defence and automotive sectors, to strengthen the financial position of the company and for general corporate purposes”. Rheinmetall has agreed to a 180-day lock-up period with respect to any transaction related to its shares.
Panmure Morning Note 20-03-2017
20 Mar 17
Today’s strong H1FY17 trading statement is encouraging on multiple levels; (1) H1FY17’s revenue growth of c.+23% to £32m indicates revenue growth running well above our forecast assumption of +15% for FY17 (August 2017); (2) the revenue growth continues to be broad-based across the two main brand groups (Focusrite and Novation) and all of TUNE’s global regions (USA, Europe, and RoW); (3) H1FY17’s constant currency revenue growth of c.+12% is a sequential acceleration from the c.+9.5% of H2FY16 and c.+5.5% of H1FY16; and (4) H1FY17’s net cash of £9.4m is well ahead of our forecast of £7.7m by August 2017, reflecting strong revenue/profit conversion combined with much improved w/c control. In short, we think there is excellent scope for our FY17 forecasts to be raised at the time of the H1FY17 results on May 3. We maintain our BUY.
20 Mar 17
Focusrite has positioned itself in a way that makes its shares a particularly attractive investment: leadership in a niche product area protected from general consumer swings; an international market structure that makes it relatively currency agnostic; a habit of profit over delivery; a strong and further strengthening balance sheet; and an undemanding valuation. This first half trading statement confirms every one of those points.
10 for 17
09 Jan 17
As always at the start of a year, there are significant uncertainties about the year ahead but I think in 2017, the level of uncertainly has decisively moved up a gear. In fact, a leading economist at the LSE, Ethan Ilzetzki, was recently quoted as saying “I view the current global economic environment as the most uncertain in modern history”. Wow.
M&A coming to a company near you?
16 Mar 17
Markets have retained their relative strength over the last fortnight. We have seen a mixed reaction to the Budget last week, the passing of the Brexit Bill earlier in the week and the first interest rate hike by the Federal Reserve in the US yesterday. Against this backdrop, we have seen some notable M&A activity across a range of sectors which may move down the market capitalisation scale. We now face an extended period of heightened speculation but “no running commentary” regarding Brexit in the UK after Article 50 is triggered at the end of the month.