EANS-News: Rheinmetall AG /Rheinmetall increases whole-year guidance for 2010
Düsseldorf (euro adhoc) -
- Consolidated sales increase by 15% to 1,728 million in first half of 2010 - Consolidated half-year EBIT up 166 million to 104 million - 2010 earnings guidance increased to 260 million 280 million
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Earnings/quarterly report/6-month report
Subtitle: - Consolidated sales increase by 15% to 1,728 million in first half of 2010 - Consolidated half-year EBIT up 166 million to 104 million - 2010 earnings guidance increased to 260 million 280 million
With a strong upturn in profitability and significant sales growth, the Rheinmetall Group is leaving the automotive crisis behind and returning to its earlier profitability. While the Defence sector showed ongoing positive business development at a high level in the first half of 2010, the Automotive sector increased its sales volume considerably and again posted a significantly positive result as compared to the same period of the previous year. Successful business development in the first half of 2010 prompted the group to increase its earnings guidance for 2010 to EUR260 million - EUR280 million (EBIT). Up to now, EUR220 million to EUR250 million had been forecast. On the basis of 35% sales growth in the Automotive sector, Rheinmetall increased its business volume at group level by around 15% in the first half of the year to EUR1,728 million. Driven by the extremely positive development of the Automotive sector and the Defence sector remaining strong, EBIT rose by EUR166 million in the same period to EUR104 million (preceding year: minus EUR62 million). In the first half of 2010, the Rheinmetall Group generated net income of EUR57 million, EUR127 million up year-on-year. Earnings per share rose to plus EUR1.43, compared to minus EUR2.04 in the same period of the previous year. Net financial liabilities were reduced by EUR199 million year-on-year to reach EUR338 million on June 30, 2010.
Klaus Eberhardt, CEO of Rheinmetall AG: "2010 will be a strong year for Rheinmetall. This has become apparent after the first six months. In the Defence sector, our product portfolio means that we are benefitting from the continuing mission-based modernization of armed forces, both in Germany and abroad. Following the turnaround, the Automotive sector is back on the road to success - and quicker than we expected at the start of the year. We are now reaping the benefits of the far-reaching restructuring measures implemented in the Automotive sector in the past year. We are also optimistic for the second half of the year. For this reason, we have increased our sales and earnings guidance."
Defence: Order intake continues to grow
Despite a slight decline in sales, EBIT for the Defence sector in the first half of 2010 was EUR71 million, matching the EUR70 million of the preceding year. The EBIT margin increased to 9.3% in the first six months, compared to 8.9% in the same period of the previous year. At 11.1%, the EBIT margin for the second quarter of 2010 is already in double digits. Sales in the Defence sector amounted to EUR762 million in the first half of the year, while the same figure for the previous year stood at EUR789 million. This decrease of EUR27 million year-on-year is invoice-related; the total operating performance for the sector in the first six months of 2010 has increased by just under 3% year-on-year. Order intake continued to rise in the first half of the year, due primarily to strategically important, high-volume international orders from Asia, the Middle East, North America and Great Britain. It reached EUR1,084 million and has thus increased by EUR66 million (or 6%) year-on-year. The second quarter of 2010 in particular exhibits a significantly positive trend: Large orders for air defence and weapons systems boosted order intake - which amounted to EUR467 million in the first quarter - to EUR619 million in the second quarter. As at June 30, 2010, the order backlog amounted to EUR4,954 million, exceeding the previous year´s level of EUR3,554 million by 39%.
Automotive: Sales and income increase significantly
Rheinmetall´s Automotive sector is emerging from the sector crisis and, with a strong increase in business volume, is returning to its former profitability. The company is benefiting from the package of measures implemented last year to lower the break-even point and from strong growth in the powertrain and exhaust emission reduction areas thanks to its innovative product portfolio. The sector generated sales of EUR966 million in the first six months of 2010, thus exceeding the previous year´s level by EUR249 million or 35%. The Automotive sector generated EBIT of EUR43 million in the first half of 2010. A loss of EUR128 million was recorded in the same period of the previous year, although this includes EUR68 million in non-recurring expenditure for capacity adjustments. The EBIT margin in the first half of the year was 4.5%, following minus 17.9% last year. In the second quarter of 2010, the Automotive sector had already attained an EBIT margin of 5.1%.
Outlook: Sales and earnings guidance increased
Rheinmetall expects group sales to reach around EUR3.9 billion for the current financial year; the prior forecast was EUR3.7 billion. This is an increase of around EUR500 million year-on-year, including EUR100 million for Defence acquisitions conducted in the current financial year. Organic sales growth of approximately EUR2 billion is expected for the Defence sector in the 2010 financial year. Including acquisitions, growth of EUR2.1 billion is forecast, following sales of EUR1.9 billion in the previous year. Based on expert forecasts from CSM Worldwide, Rheinmetall expects global automobile production to continue developing positively in the second half of 2010 as well, although this will be weaker than in the preceding six months due to market-related and seasonal factors. In this context, Rheinmetall expects annual sales for the Automotive sector to increase to around EUR1.8 billion, following EUR1.5 billion in the previous year. On the basis of the best ever half-yearly result in the current financial year, Rheinmetall is increasing the EBIT forecast in 2010 from EUR260 million to EUR280 million. Up to now, EUR220 million to EUR250 million had been forecast. Rheinmetall´s Defence sector will further improve EBIT compared to the previous year. Rheinmetall´s Automotive sector is also anticipating positive EBIT for the second half of 2010, although - in line with sales performance - this will not match the value of the first half of the year.
end of announcement euro adhoc
Further inquiry note:
Peter Ruecker
Head of Corporate Communications
Phone 0049-211 473 4320
Oliver Hoffmann
Head of Public Relations
Phone 0049-211 473 4748
Branche: Holding companies
ISIN: DE0007030009
WKN: 703000
Index: MDAX
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