Rheinmetall : Capital Markets Day 2019, (Group CEO, Armin Papperger), 20. November 2019

Mobility I Security I Passion

Mobility technologies to drive.

Security technologies to protect.

Passion for both.

CMD 2019

Armin Papperger

Unterlüß | 20 November 2019

We live in a disruptive world

2

Mobility

Increasing complexity with diminishing transparency

Rapid transition and

increasing interconnectedness

Greater uncertainty and

a rise in the need for security

Security Increasing environmental risks and new conflict scenarios

3

What kind of needs do people have?

What threatens people?

4

Old threats…	New threats…
undergo a renaissance	emerge

5

	Attack on	Piracy
	trade roots
			Non-
			cooperative
			Drones
Accelerated	Scarcity of	Regional	Hybrid
Globalization	raw materials	Conflicts	Warfare

Old threats…	New threats…
undergo a renaissance	emerge

Failure of			Transmission
Critical	Expansionism	Terrorism	Impairments in
Infrastructure			Communication

Vulnerable	Nuclear	Organized
mission	Climate Change
Proliferation	Crime
logistic

Russian

Aggression

Cyber- attacks

6 6

Rheinmetall technologies as an answer to current threats and challenges

7

ONE

RHEINMETALL

AUTOMATION

NEXT SENSORSNEW

DIGITIZATIONPRODUCTS

E-MOBILITY

ARTIFICIAL INTELLIGENCE

8

POTENTIAL TECHNOLOGY PLATFORMS

POTENTIAL TECHNOLOGY PROJECTS

9

10

New Business

RHEINMETALL

TECHNOLOGY CENTER

Rheinmetall Technology

CTO UBA

CTO UBD

Management

Engineering / Operations

Mechatronics

Vehicle

Weapon &

Electronic

New Business

Hardparts

Aftermarket

Systems

Ammunition

Solutions

Project 1

New Business

Counterpart

Counterpart

Counterpart

Counterpart

Counterpart

Counterpart

Project …

Counterpart

Counterpart

Counterpart

Counterpart

Counterpart

Counterpart

11

Rheinmetall Products as an answer to current threats and challenges

12

	Attack on	Piracy
	trade roots
			Non-
			cooperative
			Drones
Accelerated	Scarcity of	Regional	Hybrid
Globalization	raw materials	Conflicts	Warfare

Old threats…	New threats…
undergo a renaissance	emerge

Failure of			Transmission
Critical	Expansionism	Terrorism	Impairments in
Infrastructure			Communication

Vulnerable	Nuclear	Organized
mission	Climate Change
Proliferation	Crime
logistic

Russian

Aggression

Cyber- attacks

13

CRITICAL INFRASTRUCTURE

14

	Attack on	Piracy
	trade roots
			Non-
			cooperative
			Drones
Accelerated	Scarcity of	Regional	Hybrid
Globalization	raw materials	Conflicts	Warfare

Old threats…	New threats…
undergo a renaissance	emerge

Failure of			Transmission
Critical	Expansionism	Terrorism	Impairments in
Infrastructure			Communication

Vulnerable	Nuclear	Organized
mission	Climate Change
Proliferation	Crime
logistic

Russian

Aggression

Cyber- attacks

15

DRONE DEFENCE

16







Top European airports

Rheinmetall Drone Defence System as an effective solution

(Radar, EO-Sensor, Sykmaster, Tracking Software, Jammer, Drone)

17

	Attack on	Piracy
	trade roots
			Non-
			cooperative
			Drones
Accelerated	Scarcity of	Regional	Hybrid
Globalization	raw materials	Conflicts	Warfare

Old threats…	New threats…
undergo a renaissance	emerge

Failure of			Transmission
Critical	Expansionism	Terrorism	Impairments in
Infrastructure			Communication

Vulnerable	Nuclear	Organized
mission	Climate Change
Proliferation	Crime
logistic

Russian

Aggression

Cyber- attacks

18

WEAPONIZED UNMANNED

GROUND VEHICLE

19

CARGO

Winner of ELROB* - Award 2018	PROTECTION

	SURVEILLANCE
Extremely versatile	COMM RELAY
Fully modular
Adaptable to various mission scenarios	FIREFIGHTING
Easily installable mission modules	CBRN DETECTION

*European Land Robot Trail

20

	Attack on	Piracy
	trade roots
			Non-
			cooperative
			Drones
Accelerated	Scarcity of	Regional	Hybrid
Globalization	raw materials	Conflicts	Warfare

Old threats…	New threats…
undergo a renaissance	emerge

Failure of			Transmission
Critical	Expansionism	Terrorism	Impairments in
Infrastructure			Communication

Vulnerable	Nuclear	Organized
mission	Climate Change
Proliferation	Crime
logistic

Russian

Aggression

Cyber- attacks

21

MAIN GROUND COMBAT SYSTEM

22

GROUND COMBAT SYSTEM

Digital turret

130mm cannon

23

130mm

Cannon and ammunition

24

25

	Attack on	Piracy
	trade roots
			Non-
			cooperative
			Drones
Accelerated	Scarcity of	Regional	Hybrid
Globalization	raw materials	Conflicts	Warfare

Old threats…	New threats…
undergo a renaissance	emerge

Failure of			Transmission
Critical	Expansionism	Terrorism	Impairments in
Infrastructure			Communication

Vulnerable	Nuclear	Organized
mission	Climate Change
Proliferation	Crime
logistic

Russian

Aggression

Cyber- attacks

26

TENDERED BUSINESS

• 4.000 Trucks Germany, thereof 2.000 protected

• Military trucks eg. UK, Australia and Scandinavia
• Exploration of civil market applications ongoing
• German market accounts for approx. 60.000 civil hooklift loaders

27

	Attack on	Piracy
	trade roots
			Non-
			cooperative
			Drones
Accelerated	Scarcity of	Regional	Hybrid
Globalization	raw materials	Conflicts	Warfare

Old threats…	New threats…
undergo a renaissance	emerge

Failure of			Transmission
Critical	Expansionism	Terrorism	Impairments in
Infrastructure			Communication

Vulnerable	Nuclear	Organized
mission	Climate Change
Proliferation	Crime
logistic

Russian

Aggression

Cyber- attacks

28

ELECTRIFICATION

EMISSION

EFFICIENCY

NEW PRODUCTS, CLUSTER TECHNOLOGIES, SERVICES,...

29

ELECTRIFICATION

at Rheinmetall Automotive

30

MARKET SUCCESS

Rheinmetall products for NEV

E-Tron	E-Golf

BATTERY	E-ENGINE
BOXES	HOUSING

Illustrative examples

German premium

OEM (Fuel Cell)

ELECTRIC	FUEL CELL
CATHODE	CONTROL
VALVE	VALVE
	31

32

2,9

Development cost of€ ~30m until2022

CAGR 2018-30:

+10%

Start of		9,0
8,0	8,5
Production
7,4

		6,9
		6,4
		5,9
		5,4
	4,4	4,9
3,8

3,3

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

European e-Bike sales forecast [mUnits]

33

	Attack on	Piracy
	trade roots
			Non-
			cooperative
			Drones
Accelerated	Scarcity of	Regional	Hybrid
Globalization	raw materials	Conflicts	Warfare

Old threats…	New threats…
undergo a renaissance	emerge

Failure of			Transmission
Critical	Expansionism	Terrorism	Impairments in
Infrastructure			Communication

Vulnerable	Nuclear	Organized
mission	Climate Change
Proliferation	Crime
logistic

Russian

Aggression

Cyber- attacks

34

5G-Data safety

Major contract for Rheinmetall in China

35

	Attack on	Piracy
	trade roots
			Non-
			cooperative
			Drones
Accelerated	Scarcity of	Regional	Hybrid
Globalization	raw materials	Conflicts	Warfare

Old threats…	New threats…
undergo a renaissance	emerge

Failure of			Transmission
Critical	Expansionism	Terrorism	Impairments in
Infrastructure			Communication

Vulnerable	Nuclear	Organized
mission	Climate Change
Proliferation	Crime
logistic

Russian

Aggression

Cyber- attacks

36

37

Home Market UK

Joint venture - Strengthening the position in UK

Rheinmetall Defence /
Rheinmetall MAN Military Vehicles	WASHINGTON

• Rheinmetall Defence UK

Rheinmetall Technical Publications

• Technical documentation for major OEMs

BICESTER

	TELDFORD (HQ)
Rheinmetall BAE Systems Land		FILTON
 Military vehicles and related products	BRISTOL
(development, production and service)	BOVINGTON
	ISLE OF WIGHT

Mechadyne Automotive

• Advanced valve train technology

RFEL

• Signal and video editing solutions for government, defence, security and industrial customers

SALES 2020e: € ~200m

38

Home Market UK

Joint Venture with BAE Land Systems

EXPANSION OF PRODUCT PORTFOLIO

Current

• BAE UK business
• Armoured engineering vehicles and bridge-laying tanks
• AS 90 self-propelled artillery system
• Force protection components
• Services

Future

• Boxer Mechanized Infantry Vehicle (MIV)
• Challenger 2 Life Extension Program (CR2 LEP)
• Development of artillery systems
• Next generation of battle tanks

39

BOXER MECHANISED INFANTRY VEHICLE (MIV)

• Demand for 500 vehicles with €1.3bn Rheinmetall share
• Cooperation with BAE Systems, Thales UK, Pearson Engineering, Raytheon UK and Rolls-Royce

40

CHALLENGER 2 LIFE EXTENSION PROGRAM (CR2 LEP)

• Order volume of approx. € 800 - 1,200m
• Lifetime extension offered by British-German Team (with Pearson Engineering, Thales UK and others)

41

41

LOGISTIC VEHICLES SERVICES

• Integrated Logistic Support for 7.500 trucks (together with MAN Truck & Bus UK)
• Post-designservice activities

42

Home Market UK

Domestic programs to load the JV

in €m	500

400

CHALLENGER LEP

300

200

BOXER MIV

100

RBSL LEGACY BUSINESS

0
2017	2018	2019	2020	2021	2022	2023	2024	2025	43

44

Darwin	SALES 2020e: € ~330m
 RDA office
Townsville	Maryborough
 RDA office	 JV Rheinmetall NIOA

• Ammunition factory

Adelaide		Brisbane
	JV Supashock
	Rheinmetall Electronics		RDA office
 Military vehicle center of excellence
	RDA office

Canberra

• RDA office

Melbourne	Wellington
 RDA headquarter	 Military trucks

RDA: Rheinmetall Defence Australia PTY, LTD

45

Military Trucks	JV Rheinmetall NIOA Munition	Simulation
 Land 121 35 / 5B (2013/2018)	 51% Rheinmetall (2017)	 Simulation / Training for M1A1
 EUR 2bn	 Land 17: 155mm Munition: EUR 350m	Fighting Vehicles Technology
	 Major Munition Framework Contract: EUR 60m
	 NEW Facility in Queensland

Boxer / Lance	Lynx
 Land 400 Phase 2 (2019)	 Land 400 Phase 3 (2022/2023)
 EUR 2.1bn	 EUR 5.6bn
	 Down selected

MilVehCoE

Military Vehicle Center of Exellence

• Military Trucks
• Combat Vehicles
• Fleet-Service

JV Supashock

• 49% Rheinmetall (2017)
• "Brain-Trust"

46

The new Brain-Trust in Australia

	Multi-Body		Programming		Artificial
Engineering	Dynamics	Electronics	Robotics
+ Coding	Intelligence
	Simulation

	Vehicle		Virtual		Quick	 Human 	Advanced Driver-		Target
	System		Prototyping		Prototyping	Machine	Assistance Systems		Localization
	Engineering		Performance		System	Interface 	Automated Load		Neural
	Complete		Simulation		Architecture		Handling		Networks
	System							Drone
						Stabilized Gangway
	Analysis						Detection
						Surround Awareness
							Systems

47

ACTIVE SUSPENSION (CIVIL/MILITARY)

OEM	RIDE LEVELING	SUPPORT ROLLER	ROAD WHEEL ARM
			& ASSEMBLY

4x4

IDLER WHEEL ARM

TRACK TENSIONER

48

49

CONCEPT: MOTION STABILISED GANGWAY

AUTONOMEOUS OEM DRIVING

 3D Camera System

 Natural Frequency Control

 Active Damping Capability

50

50

For the near Future

51

52

Germany

VJTF

Puma

Boxer

Leopard

Trucks

Europe (UK)

MIV

Challenger

Australia Simulation

Trucks Ammunition

Boxer …

Lynx

Ammunition

…

International

Eastern USA

Europe MENA

Lynx South-East

Boxer Asia

Algeria

MGCS

Indirect fire system

Load Handling System

Ammunition

…

Annexation

Crimea 2014

Increase of global defence budgets

2035 53

Australian Boxer EUR 2.1bn

MIV EUR 1.3bn

Trucks Germany & Australia
EUR 2.6bn + +	VJTF PUMA & IdZ EUR 0.4bn + +	54

German defence budget investive expenses and Rheinmetall-share

in €m

8.263

6.011 6.063

5.327 5.025 5.419

Rheinmetall avg. 20%-25% share

Rheinmetall avg. 10%-15% share

2014

2015

2016

2017

2018

2019

2020*

2021*

2022*

55

SUPER CYCLE GROWTH POTENTIALS

Sales in €bn

						Potential eg:
7.5						Land 400 3						Top 10 booked projects
					Vehicles Eastern Europe					Land 400
						MGCS								Land 121
5.0								Top 10 booked projects ~30%		Trucks Germany
								Trucks LHS Germany
											Base ~70%		Puma
2.5												Fuchs Mat Kits
														Gladius
02018														3 international progams
2019	2020	2021	2022	2023	2024	2025	2026	2027	2028	2029	2030

56

57

AUTOMOTIVE

HOW TO FILL THE GAP

growth

Cluster Technologies

Innovative Products

E-Mobility

Pedelec

Truck

58

Regional Overview flattish market until 2022

Europe		Asia ex. China
18,6	18,2	27,3	27,0

USMCA

17,0 16,7

2018 2022

2018 2022

World

94,2 94,2

2018 2022

China

26,6 27,0

2018 2022

Source: IHS September 2019

OTHERS

4,7 5,3

2018

2022

2018

2022

59

Booked Business Mechatronics

Booked Business

by Propulsion Type 2018 + YTD 2019

Book to	1.5	1.7	~1.7e
bill ratio
in € m		2.780
	2.476	2.650
	1.621	1.664
			1.166
			9m

4%

6%

7%

19%

0%

38%

2017	2018	2019e
	Booked Business	Sales

26%
Gasoline Diesel Truck Several Hybrid BEV/	Veh. Appl. Fuel Cell
Electric

60

Business Hardparts

Booked Business

Book to	1.1	1.1		~1.1e
bill ratio
in € m
	1.063	1.104	989	1.062
	968

731

9m

20172018 2019e

Booked Business Sales

by Propulsion Type 2018 + YTD 2019

0%

0%

9%

4%

32%

14%

	6%
34%
Gasoline Diesel Truck Several Hybrid BEV/	Veh. Appl. Fuel Cell
Electric

61

62

62

TRUCK product portfolio	for truck compressors
	Permaglide bearings
Main coolant	and truck hydraulics
	Aluminum pistons
Auxiliary
coolant pumps
	Steel pistons

Electrical oil pumps

Coolant valves

Variable Valve Control

Exhaust gas flaps

Hydraulicvalves

Cylinder bore coating

Piston rings

Cooperation with

Riken

Bushings injection

-bearings

Connecting rod bearings

Bearings for seat adjustments and doors

EGR cooler modules and mixer modules

Dual poppet valves

EGR reed valves

performance actuators

63

Worldwide TRUCK PRODUCTION development

Truck production according to IHS (in m units)	Rheinmetall truck sales estimates in €m
	-12%			>10%
3,4	3,2		3,0	424
	2,9
	2,9

2018

2019

2020

2021

2022

2018

2019e

2020e

2021e

2022e

Source: IHS September 2019	64

65

China LV

Volume Evolution (m units)

China NEV Volume Evolution (m units)

Source: IHS October 2019

CAGR 4%

CAGR 4%

	27,1	27,7	-9%		+1%		27,0	28,4	29,6	30,7
	26,6	24,2	24,4	25,5
23,7					BEV
													PHEV
													Others
2015	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025

							CAGR 31%			7,2
								5,1	6,2
	CAGR 74%			+46%
		+21%		3,8
		2,9
			1,2	1,4	2,1
0,2	0,4	0,7
2015	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025

66

HIGHLIGHTS

CHINA

Partner of local big players SAIC and HASCO

Biggest casting capacities in China - technology leader

Regulation (China 6) - provides substantial growth potential for mechatronics division

Strong demand for NEV products

China Story on track: product pipeline supports growth ambitions

67

CAGR ~10%

~20%

~6%

>10%

2018

2019e

2020e

2021e

2022e

68

Mobility I Security I Passion

Mobility technologies to drive. Security technologies to protect. Passion for both.

69