Rheinmetall Group Corporate Presentation

December 2019

Rheinmetall Group

RHEINMETALL GROUP STRUCTURE.

Group performance indicator

Grow sales

~8% op.

around 8%

margin

Targeted 2-4%

30-35%

Cash on sales

payout ratio

RHEINMETALL

GROUP

Strategy roadmap

Organic

International

growth

expansion

Leading by

Targeted

innovations

acquisitions

AUTOMOTIVE Our heart beats for your engine

2018

DEFENCE Force protection is our mission

Op. margin

€2,930m

48%

Sales

52%

€3,221m

Op. margin

8.9%

€265m

53%

Oper. Result

47%

€247m

7.9%

*€478m

Order backlog

€8,577m

11,710

51%

Headcount**

49%

10,948

* Short-term;**Headcount at capacities;

© Rheinmetall AG / Corporate Presentation Q3 2019

2

Rheinmetall Group

Q3 2019 Group commercial highlights

Weak Automotive compensated by Defence performance

Order backlog Sales Operating result EPSoFCF

€9.2bn

€1.5bn

€99 m

€1.33

-€127 m

-1%

+2%*

+1%

-26%

-10%

  • Order backlog on high level
  • Organic sales at constant exchange rates grew +2.5%* (reported 5.0%) to €1.5bn
  • Operating result stable with significant shift between the segments
  • EPS decline of 26% to €1.33 after PY €1.80 (including €0.47 real estate gain)
  • Operating FCF down €11m yoy to -€127m including €15 m CTA funding
  • FY Guidance specified

© Rheinmetall AG / Corporate Presentation Q3 2019

3

Rheinmetall Group

Q3 2019 Group commercial highlights

Operational improvement of sales and operating result

Sales

Operating result in €m

in €m

Operating margin in %

+5.0%

+1.0%

1,481

1

-2

99

23

98

2

13

1,411

34

+2.2 %

+1.3%

-2.5%

+2.5 %

+0.9%

+1.6%

6.9%

6.7%

Q3

Operational

FX

M&A

Q3

Q3

Operational

FX

M&A

Q3

2018

2019

2018

2019

  • Earnings per share

in €

-26.1%

1,80

0%

1,33

1,33

Q3

Q3

reported EPS

2018

2019

adjusted EPS

© Rheinmetall AG / Corporate Presentation Q3 2019

4

Rheinmetall Group

Q3 2019 Group commercial highlights

Operating Free Cash Flow improved operationally

  • Operating free cash flow bridge

in €m

41

-116

4

-127

3

-19

-25

  • EAT operationally improved, but compares to a PY including €30m real estate gain
  • CTA funding of €15 m included in Pensions
  • Strong support from working capital optimization in Automotive

-16

Q3

EAT

D/A

Delta

Delta WC

Others

Capex

Q3

2018

Pensions

2019

© Rheinmetall AG / Corporate Presentation Q3 2019

5

Rheinmetall Group

Q3 2019 Group commercial highlights

Financial KPI impacted by M&A transactions and pension topic

Net financial debt

Net gearing

in €m

Net debt in % of total equity

+31.8pp

33.2

-31

1,4

-660

31.12.2018

30.09.2019

31.12.2018

30.09.2019

Equity bridge

in €m and equity margin in %

2.172

170

-153

1.990

-92

-107

Incl.:

Incl.:

32.1%

Actuarial changes

-192

RMMV-

27.9%

FX effects

+36

transaction -111

01.01.2019

EAT

OCI

Dividend

other

30.09.2019

© Rheinmetall AG / Corporate Presentation Q3 2019

6

Automotive

7

Rheinmetall Automotive

Q3 2019 Highlights: Automotive

Non-LV business and absence of equipment sales burdened the quarter

Quarterly sales and margin development

Comments on quarterly performance

In €m and %

708

731

714

727

659

9,4

8,5

7,3

6,5

6,9

Q3

Q4

Q1

Q2

Q3

Sales decline of -6.9%(FX-adjusted-8.5%)

LV sales were down 3.4%, in line with Global LV production of -3.2%*

Non-recurring China equipment sales and weak non-LV business created pressure on sales

Low visibility until year's end remains the key issue

OFCF benefited from improved working capital management

In €m

Q3 2018

Q3 2019

∆

YTD 2018

YTD 2019

∆

Sales

708

659

-6.9%

2,199

2,099

-4.6%

Operating result

60

43

-28.3%

193

144

-25.4%

Operating margin in %

8.5%

6.5%

-200 bp

8.8%

6.9%

-190 bp

Operating Free Cash Flow

-2

6

400.0%

-16

-8

50.0%

Operating FCF / Sales

-0.3%

0.9%

120 bp

-0.7%

-0.4%

30 bp

*IHS Markit: 5 November 2019

© Rheinmetall AG / Corporate Presentation Q3 2019

8

Rheinmetall Automotive

Q3 2019 Highlights: Automotive

Negative business development in all divisions and end markets

  • Sales Automotive

in €m

-6.9%

708

659

387

-7.5%

358

251

-9.2%

228

92

0.0%

92

-22

-20

Q3 18

Q3 19

  • Operating result Automotive

in €m

Margin

Margin

Q3 2019

Q3 2018

-28.3%

8.5%

60

6.5%

9.8%

38

43

-28.9%

27

7.4%

6.0%

15

-60.0%

6

2.8%

9.8%

9

0.0%

9

9.2%

-2

1

Q3 18

Q3 19

Mechatronics

  • Slow LV endmarkets
  • R&D for e-mobility
    Hardparts
  • Underlying business flat y-o-y, equipment sale already in Q2 '19
  • Operational issues at CZ plant persisted

Aftermarket

•Stable results in weak markets

Mechatronics Hardparts Aftermarket Consolidation/Others

© Rheinmetall AG / Corporate Presentation Q3 2019

9

Rheinmetall Automotive

Q3 2019 China Total Management View

Strong sales growth against the market trend

  • Sales

in €m

+21.0%

12

299

247

33

7

+13.4%

+2.8%

4.9%

265

214

Strong operation sales growth of 21% due to successful

33

34

ramp ups, supported by M&A versus a contracting

China LV production of -5.5% (YTD -10.6%)*

Q3 2018

operational

FX

M&A

Q3 2019

EBIT

JV

EBIT increased by 15.5% to €20m, but margin declined

+15.5%

WFOE

slightly from 7.0% to 6.7% due to adverse portfolio

in €m

effects and ramp up cost for new products

20

17

0

1

2

15

+10.7%

+3.4%

+1.4%

20

2

0

Including 100% figures of 50/50 JV, consolidated at equity

Q3 2018 operational

FX

M&A

Q3 2019

*IHS Markit: 5 November 2019

© Rheinmetall AG / Corporate Presentation Q3 2019

10

Rheinmetall Automotive

Q3 2019 Highlights: Automotive

All end markets under pressure

Sales split LV / Non-LV

Sales split Non-LV

in €m / in %

in €m / in %

-6.9%

708

659

161

-4.0%

154

247

237

LV:

LV:

461

246

422

101

96

239

54

29

21

21

247

237

92

92

33

28

Q3 2018

Q3 2019

Q3 2018

Q3 2019

Delta

absolute

in %

Diesel

-7

-4.3%

-3.4%

-7

-2.8%

Gasoline

other LV**

-25

-46.5%

LV Business

-39

-8.4%

Truck

-5

-4.6%

-4.1%

Large Bore

0

+1.9%

Aftermarket

0

0%

Other*

-5

-15.2%

Non-LV Business

-10

-4.0%

  • Other: MIR, Industrie, Continuous casting
  • Including €20m equipment sales

© Rheinmetall AG / Corporate Presentation Q3 2019

11

Rheinmetall Automotive

Q3 2019 Highlights: Automotive

Malware attack: Basic system environment reestablished, clean up continues

Malware attacked legal entities in the Automotive domain in the US, Mexico and Brazil

No infection of Defence systems detected

Production could be generally maintained, except warehouse for Aftermarkets business

Internal and external IT support as well as several

governmental agencies involved

Limited topline effect due to successful set up of work- arounds

EBIT effect expected at around €6-8m in Q4 2019 Higher logistic expenses

Consultant fees

Malware attack

© Rheinmetall AG / Corporate Presentation Q3 2019

12

12

Rheinmetall Automotive

IHS revised 2019 LV volumes repeatedly and provides weak outlook

  • IHS 2019 forecast

IHS swings almost 8% within last 12 months

+2.0%

Oct

Nov Dec

Jan

Feb Mrc Apr May Jun

Jul

Aug Sep

Oct

20182019

-5.8%

  • IHS Mid-term outlook with growth on low level

?

+2.3% CAGR

-6.7%

102

-5.8%

100

97

95

94

94

92

89

89

2017 2018 2019 2020 2021 2022 2023 2024 2025

Latest industry comments are very cautious short to mid-term!

© Rheinmetall AG / Corporate Presentation Q3 2019

13

Rheinmetall Automotive

Automotive impacted by special effects beyond market deterioration

Sales bridge

Operating result

in €m

in €m and %

731

69

9.4%

'19 Q3

level

~5%

Q4 2018

Market

GM Strike

Negative

Q4 2019

Q4 2018

Market

GM

Ramp

Malware

Q4 2019

decline

Ramp effect

effect

© Rheinmetall AG / Corporate Presentation Q3 2019

14

Rheinmetall Automotive

2019 reports biggest market decline post the financial crisis

Avg. cycle margin ~7.5%

Operating margins

-2.5%

7.0%

8.4%

8.9%

~6.5%

5-7%

~8%

2009

2013

2016

2018

2019

2020/21

2024/25

Market

Financial crisis

market decline -12.2%

Growth in CAGR

6.4%

-1.0%

-5.8%

2.3%

Market trend

Recovery

Growth

Decline

Flat

Slow growth

IHS November 2019

© Rheinmetall AG / Corporate Presentation Q3 2019

15

Rheinmetall Automotive

Early installation of self help in 2018 successful

  • Self help measures to protect the margin

Efficiency

General cost reduction programs

Eliminate quality issues

improvements

Selective R&D

  • Prioritization of R&D projects
  • Reduction of external R&D
  • But: Pedelec R&D affects P&L 2020 with €12-15m

HR Measures

  • Reduction of leased workers (-40% per 10/2019)
  • Reduction of time accounts and weekly working hours from 40-35
  • Reduction of direct personnel cost (short-time work at 3 sites)
  • Normal fluctuation (-1.6%) and recruitment stop

© Rheinmetall AG / Corporate Presentation Q3 2019

16

Defence

© Rheinmetall AG / Corporate Presentation Q3 2019

17

Rheinmetall Defence

Q3 2019 Highlights: Defence

Defence delivered as promised

Quarterly sales and margin development

In €m and %

1.255

703

14,3

746

823

629

7,8

6,3

1,4

8,1

Q3

Q4

Q1

Q2

Q3

In €m

Order intake

Sales

Operating result

Operating margin in %

Operating Free Cash Flow

Operating FCF / Sales

Comments on quarterly performance

  • Order intake of € 1.136m solid, including new VJTF orders
  • Sales growth of 17.1% (FX adjusted 13.4%) driven by ES and VS and including €23m M&A effect
  • Margin rose by 150 bp to 7.8%
  • OFCF basically stable

Q3 2018

Q3 2019

∆

YTD 2018

YTD 2019

∆

3,044

1,136

-62.7%

4,471

2,201

-50.8%

703

823

17.1%

1,966

2,198

11.8%

44

64

45.5%

75

134

78.7%

6.3%

7.8%

150 bp

3.8%

6.1%

220 bp

-98

-104

-6

-508

-328

180

-13.9%

-12.6%

130 bp

-25.8%

-14.9%

1,090 bp

© Rheinmetall AG / Corporate Presentation Q3 2019

18

Rheinmetall Defence

Q3 2019 Highlights: Defence

Double digit growth of operating result

  • Sales Defence

in €m

+17.1%

823

703

196

196

+0.0%

216

170

+27.1%

395

461

+16.7%

-58

-50

Q3 2018

Q3 2019

  • Operating result Defence

in €m

Margin

+45.5%

Margin

Q3 2018

Q3 2019

6.3%

64

7.8%

10

5.3%

44

5.1%

10

20

9.3%

4.7%

8

7.6%

30

35

7.6%

-4

-1

Q3 2018

Q3 2019

Weapon and Ammunition

  • Sales held back by missing export approvals

Electronic Solutions

  • Solid execution in all BU
  • Restructuring supportive

Vehicle Systems

  • High order execution
  • Stable margin

Weapon & Ammunition Electronic Solutions Vehicle Systems Consolidation

© Rheinmetall AG / Corporate Presentation Q3 2019

19

Rheinmetall Defence

Q3 2019 Highlights: Defence

Robust order intake comparing to extraordinary PY quarter

  • Order intake by division

in €m

3,044

185

-63%

241

Incl.

1,137

Australian

2.808

253

orders of

~€2.5bn!

345

774

-190

-235

Q3 2018

Q3 2019

Weapon and Ammunition

Electronic Solutions

Vehicle Systems

Consolidation

  • Order backlog profile

in €bn change in %

8.8

8.7

~1.2

~2.3

~5.2

30.9.18

30.9.19

Q4 2019E

2020E

2021E ff.

© Rheinmetall AG / Corporate Presentation Q3 2019

20

Rheinmetall Defence

New record year ahead for Defence

  • Defence sales and operating margin in €m and %

15

+9% sales

growth

3.221

10

~9.5% 7.9%

5

0

20182019e

Sales Margin

4.000

3.000

2.000

1.000

0

  • Growth across all three divisions
  • Margin improvement continues
  • Project pipeline is filled and diversified

Prepare for solid program execution

© Rheinmetall AG / Corporate Presentation Q3 2019

21

Rheinmetall Defence

Promising super cycle pipeline

USA:

Ammunition

Fuzes

OMGV

Green: booked business / black: potential

UK:

Sweden

MIV Boxer

Trucks

Challenger

France:

MGCS

Germany:

Trucks

IDZ

VJTFPuma

80 Leopards 3. Boxer lot 2. Puma lot 2. IDZ lot Fox Boxer variants TEN (D-LBO) Indirect fire Ammunition

MGCS

Lithuania:

Boxer

Poland:

Leopard II

Hungaria:

Leopard, Howitzer,

IFV (wheeled/tracked)

Czech Rep:

IFV (tracked)

Slovakia:

IFV

Bulgaria:

IFV (wheeled)

Romania:

IFV (wheeled)

Slovenia:

APC (wheeled)

Australia:

Land 17 1 C.2

Ammo

Land 121 3a, 5b

Trucks

Land 400 II

Boxer CRV

Land 400 III

Lynx

Simulation

M1

© Rheinmetall AG / Corporate Presentation Q3 2019

22

Rheinmetall Defence

Profitable growth lasts into the next decade

  • Operating margins

in %

11.7%

6.7%

-0.4%

5.0%

Avg. cycle margin ~5.4%

Market

2010

2012

Annexation

2016

Crimea

2014

Market trend Decline

Slow growth

7.9% ~9.5% >9% 9-10%

2021/22

2020

Super cycle intact

2019

Favorable book to bill ratio

2018 Increase of global

Steady top line growth

defence budgets

Margin improvements across

the divisions

Growth

© Rheinmetall AG / Corporate Presentation Q3 2019

23

Rheinmetall Group

Group margin guidance held stable

Sales

2018

2019e

Growth y/y in % at

Growth y/y in % at

constant FX

constant FX

GROUP

6.1

Slightly above 1

AUTOMOTIVE

4.2

Around -7

DEFENCE

7.9

Around 9

Operational growth at constant FX

© Rheinmetall AG / Corporate Presentation Q3 2019

Operating margin

20182019e

in %in %

8.0

Around 8

8.9Around

6.5

7.9

Slightly above

9.5

24

Rheinmetall Group

Sales growth and earnings improvement targeted

Mid-termMid-term

Sales growth

Operating margin

AUTOMOTIVE

DEFENCE

Short-term setback to 5-7%

Flat to slow growth(incl. Pedelec -€12-15m in 2020); mid-term recovery to around 8%

6-8%

9-10%

Operational growth at constant FX

© Rheinmetall AG / Corporate Presentation Q3 2019

25

Automotive - Focus on innovation

26

Rheinmetall Automotive

AUTOMOTIVE WITH LEADING TECHNOLOGY AND MARKET POSITIONS.

Structure

Key Figures

Sales:

€2.9bn

Hardparts

Op. result:

€262m

Pistons

Op. margin:

8.9%

Bearings

R&D:

€157m

Mechatronics

Capex:

€161m

Pump Technology

Headcount:

11.710

Solenoid Valves

Actuators

Aftermarket

All figures refer to FY 2018

© Rheinmetall AG / Corporate Presentation Q3 2019

Large-bore Pistons

Castings

Automotive

Emission Systems

Commercial Diesel

Systems

Sales by region

Sales by division*

Asia

1%

RoW

Aftermarket

Hardparts

17%

12%

33%

USMCA 16%

45%

Europe

Germany

21%

w/o

55%

Germany

Mechatronics

Sales by customer

Operating result by division*

Other

>10% Ford,

Aftermarket

Hardparts

22%

VW

13% 26%

2-5% DAF, 41%

5-10%

Volvo, PSA,

Renault/

BMW,

23

Nissan,

Cummins,

14%

%

GM, FCA,

64%

CAT/Perkins

Daimler

Mechatronics

*unconsolidated

27

Rheinmetall Automotive

EuropeAsia ex.

-1%

0%

China

USMCA

18,6

17,9

18,2

27,3

25,8

27,0

0%

China

17,0

16,7

16,3

0%

World

26,6

24,3

27,0

2018

2019e

2022e

2018

2019e

2022e

0%

2018

2019e

2022e

94,2

94,2

88,8

OTHERS

2018

2019e

2022e

+3%

4,7

4,6

5,3

2018

2019e

2022e

2018

2019e

2022e

Source: IHS November 2019

28

Market trends

The growth drivers of Mechatronics remain strong

3+

NT

Efficiency

Emission

Electrification

Outside

E

(CO2 Reduction)

(Reduction)

powertrain

The innovation pipeline for all three trends is packed!

29

Rheinmetall Automotive

MECHATRONICS

EXHAUST CONTROL

FUEL TANK ISOLATION

THERMAL

HRB

VACUUM PUMPS

MANAGEMENT

eCATHODE VALVE

VALVE

VALVE GEN. 3

EGR MODULE

SC AIR SYSTEM

eWastegate

ELECTRICAL COOLANT

GASOLINE EGR

HIGH-VOLTAGE

eCC

E-MOTOR COOLING

PUMP

COOLANT PUMP

Actuator

TURBO ACTUATOR VTG

EVAP

ELEC. BYPASS VALVE MULTI PURPOSE VALVE ELECTRICAL OIL PUMPS

CONTACTORS

THERMO MODULE FUEL CELL CONTROL VALVE

ENGINE BEARINGS

25% Share Carbon TT

NON-ENGINE

STEEL PISTONS

ALU PISTONS

STRUCTURAL PARTS

E-Motor HOUSING

POLYMER BEARINGS

HARDPARTS

ENGINE BLOCKS

BATTERY BOXES

ICE

EV / FUEL CELL

© Rheinmetall AG / Corporate Presentation Q3 2019

30

ELECTRIFICATION

at Rheinmetall Automotive

Life time

order value of €1bn booked*

* Rheinmetall Automotive and Joint Ventures, incl. BEV and Hybrid

31

Rheinmetall Automotive

Favorable increase of book to bill ratio due to rising order intake

4.000

1.5x

1.5x

1.5x

1.7x

2.0x

Book to bill

3.000

Sales

ratio

Order intake

2.000

1.000

>50% of order

intake for

new business

0

2015

2016

2017

2018

9m 2019

© Rheinmetall AG / Corporate Presentation Q3 2019

32

Innovative products for a variety of applications

High

El. Vapor

El. Climate

El. Cooling

High Voltage

Multi Purpose

Compact Door

Voltage

Pump

Compressor

Pumps

Recirculation

Valve

Actuator

Contactor

Blower

Estimated

>€0.6bn

€700m

> €2.5bn

>€1.5bn

>4m vehicles

Market

until 2026

potential

Examples

in 2025

© Rheinmetall AG / Corporate Presentation Q3 2019

33

Development cost of € ~30m until 2022

CAGR 2018-30:

+10%

Start of

9,0

8,0

8,5

Production

7,4

6,4

6,9

5,4

5,9

4,4

4,9

3,8

2,9

3,3

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

34

From internal innovations project to market entry

One Rheinmetall

Design make

Production

award for Pedelec

over

setup

2016

2017

2018

2019

2020

2021

2022

Total Development cost ~€30m

First market

Presentation at

Start of

presentation at

Eurobike

production

Eurobike

Customer

acquisition

-€12-15m

in 2020

Group R&D expenses

Division R&D expenses

35

Rheinmetall Automotive

Drivers for growth

Rising global fleet and regulatory restrictions are supporting our growth

  • Light vehicle production grows

million vehicles per year

+1%

ICE

130

HEV

95

94

106

113

2018 2020 2025 2030 2040

  • BEV 2018-2025

million vehicles per year

8.7

10.1

7.4

5.8

4.5

3.2

1.7

2.2

2018

2019

2020

2021

2022

2023

2024

2025

IHS 07/2019 and company

estimates

© Rheinmetall AG / Corporate Presentation Q3 2019

  • Emission thresholds decrease

CO2

NOx

in g/km

in mg/km

-24%

-56%

125

180

95

80

2015 2020

EU5

EU6

95g =

4.1l Gasoline or

3.6l Diesel

  • Stricter emission testing

WLTP

Mainly EU!

Stricter testing

sets the

benchmark

even higher!

RDE

36

Rheinmetall Automotive

Efficiency

CO2 - reduction with Automotive products - gasoline engine vehicle

130 g

95 g

CO2/km

CO2/km

2015

2020

Reference model

1.4L 4-cylinder

TC DI gasoline engine (115kW) Approx. 138 g CO2/km in NEDC

-2g CO2/km

-7 g CO2/km

-2 g CO2/km

Lightweight

design parts

Electr.

-3 g CO2/km

EGR system

-3 g CO2/km

Variable valve train

-1 g CO2/km

Electr. control

Tribology system

valve and variable

coolant pump

Variable oil pump

Rheinmetall Automotive products

© Rheinmetall AG / Corporate Presentation Q3 2019

37

Rheinmetall Automotive

TRUCK product portfolio

for truck compressors

Permaglide bearings

Main coolant

and truck hydraulics

pumps

Aluminum pistons

Auxiliary

coolant pumps

Steel pistons

Electrical oil pumps

Piston rings

Cooperation with

Riken

Bushings for

injection pumps

Main-bearings

Connecting rod bearings

Coolant

Bearings for seat adjustments and doors

valves

Variable Valve Control

EGR cooler modules

and mixer modules

Exhaust gas flaps

Dual poppet valves

Hydraulic valves

EGR reed valves

Electrical

Pressure

High

Cylinder

bypass

regulating

performance

valves

valves

actuators

bore coating

© Rheinmetall AG / Corporate Presentation Q3 2019

38

Rheinmetall Automotive

Diversification

Increasing portfolio for non-LV applications

Trucks

Large bore pistons

Bearings &

Aftermarket

continuous casting

Diverse portfolio for

E.g. ship and locomotive

Sanitary application

Global supply of spare parts

truck applications

pistons

© Rheinmetall AG / Corporate Presentation Q3 2019

39

Rheinmetall Automotive

  • Sales development by Division in €m

CAGR +10%

Mechatronics

Hardparts

Aftermarket

2016

2017

2018

2019e

  • Sales development by legal structure in €m

WFOE

Joint Venture 100% share

2016

2017

2018

2019e

© Rheinmetall AG / Corporate Presentation Q3 2019

40

Rheinmetall Automotive

CHINA

Motorservice

EA211 pistons

Heat sinks and shield covers

China

Build up of

Logistic Centre

2018

2019

2020

Diverse

Divert-air

Electrical

Electrical

Heavy-duty

Heavy-duty

valve

vapor pump

vacuum

Back pressure

Exhaust gas

pump

valve

recirculation

valve

© Rheinmetall AG / Corporate Presentation Q3 2019

EA888 pistons

2021

Variable

Variable oil

oil

pump front

pump

cover

41

Rheinmetall Automotive

Automotive in China

50/50 joint ventures

Wholly Foreign-Owned Enterprises

JV subsidiary

with HASCO (SAIC group)

(100% Rheinmetall Automotive)

Castings (KSHA)

Aftermarket

Pierburg

Large-bore pistons

Pumps (PMP Ch.)

Pistons (KSSP)

Castings (KPSNC)

Pumps (PHP)

2014

1997

2001

2012

2008

2009

2013

2012

Engine blocks and

Pistons

Engine blocks, cylinder

Electrical and

Spare parts

EGR modules and electric

Large-bore pistons

Electrical and

structural body parts

heads and structural

mechanical pumps

throttle bodies

mechanical pumps

body parts

Germany/

China

China

China

Europe

Sales China in €m

871

934

972

1,003

WFOEs

681

401

528

JVs (100%)

2012

2013

2014

2015

2016

2017

2018

EBIT China in €m

76

79

71

WFOEs

53

53

30

37

JVs (100%)

2012

2013

2014

2015

2016

2017

2018

KSHA: KS Huayu Alutech GmbH, Neckarsulm

KPSNC:

Kolbenschmidt Pierburg Shanghai Nonferrous Components Co., Ltd., Shanghai

PMP: Pierburg Mikuni Pump Technology (Shanghai) Corp., Shanghai

KSSP: Kolbenschmidt Shanghai Piston Co., Ltd., Shanghai

PHP:

Pierburg Huayu Pump Technology Co., Ltd., Shanghai

© Rheinmetall AG / Corporate Presentation Q3 2019

42

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

43

Defence - at the beginning of a "super cycle"

44

Rheinmetall Defence

TOP PRODUCTS PER DIVISION.

WEAPON AND

ELECTRONIC

AMMUNITION

SOLUTIONS

MID & LARGE CALIBER AMMO

MISSION EQUIPMENT

MID & LARGE CALIBER WEAPONS

AIR DEFENCE & RADAR SYSTEMS

PROTECTION SYSTEMS

Simulation & Training

- ACTIVE

- PASSIVE

- SOFTKILL

© Rheinmetall AG / Corporate Presentation Q3 2019

VEHICLE

SYSTEMS HX-FAMILY

LOGISTIC VEHICLES

TACTICAL VEHICLES

Medium wheeled Medium tracked

Heavy tracked

45

Rheinmetall Defence

DEFENCE IS A LEADING SUPPLIER

WITH AN INCREASING INTERNATIONAL PRESENCE.

Key Figures

Sales: €3.2bn

Op. result:

€254m

Op. margin: 7.9%

R&D: €75m

Capex: €101m

Headcount: 10,948

All figures refer to FY 2018

Structure

Weapon and Ammunition

Weapon and

Protection

Ammunition

Systems

Propulsion

Systems

Electronic Solutions

Air Defence &

Mission

Radar Systems

Equipment

Simulation and

Technical

Training

Publications

Vehicle Systems

Logistic Vehicles

Tactical Vehicles

Sales by region

Sales by division*

RoW

Germany

Weapon and

Aus/NZ

8%

Ammunition

15%

34%

31%

USMCA 4%

45%

Asia /

20%

19%

Vehicle

24%

Electronic

Middle East

Systems

Solutions

Europe

Order backlog by division

Operating result by division*

Weapon and

Other

Weapon and

23%

Ammunition

Vehicle

Ammunition

Systems

39%

44%

54%

Vehicle

23%

Electronic

Electronic

17%

Systems

Solutions

Solutions

*unconsolidated

© Rheinmetall AG / Corporate Presentation Q3 2019

46

Home Market UK

Joint venture - Strengthening the position in UK

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

7.500 MAN vehicles under service

Future

  • Boxer Mechanized Infantry Vehicle (MIV)

500 vehicles @ €1.3bn

  • Challenger 2 Life Extension Programpotential order size €800-1.2bn
  • Next generation of battle tanks

SALES 2020e: € ~200m

Rheinmetall Defence

Home market Australia

Successful establishment of a new home market

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

JV Supashock

Down selected

MilVehCoE

49% Rheinmetall (2017)

Military Vehicle Center of Exellence

"Brain-Trust"

Military Trucks

Combat Vehicles

SALES 2020e: € ~330m

Fleet-Service

© Rheinmetall AG / Corporate Presentation Q3 2019

48

Rheinmetall Defence

German defence budget investive expenses and Rheinmetall-share

in €m

8.263

6.011 6.063

5.327

5.419

5.025

Rheinmetall avg. 20%-25% share

Rheinmetall avg. 10%-15% share

2014

2015

2016

2017

2018

2019

2020*

2021*

2022*

© Rheinmetall AG / Corporate Presentation Q3 2019

49

Rheinmetall Defence

German Defence

NATO commitment key driver for German demand

Lead role in Very High Readiness Joint Task Force ( VJTF)

Bundeswehr

'19

'23

'27

'31

'32+

2016

white paper

VJTF´19

VJTF´23

1x Division

3x Division

3x Division

04/2018

(1 Brigade)

(3x Brigade)

(8x Brigade)

(10x Brigade)

Concept

Bundeswehr

~2.200

~9.000

~30.000

09/2018

vehicles

vehicles

vehicles

Capability

profile

100% equipment and digitization

© Rheinmetall AG / Corporate Presentation Q3 2019

50

Rheinmetall Defence

German Defence

Drivers behind budget increase

"Turnarounds" in Germany

  • Personnel:
    Mid-term return to 220,000 soldiers
  • Material:
    100% equipment level and additional division
  • Finance:
    Increase of defence budget 54% from 2018 to 2024

Enhanced future profile

  • Anchor army for smaller neighbor armies
  • Leading role in "enhanced Forward Presence" in
    Lithuania
  • Framework nation in "Very High Readiness Joint Task
    Force as of 2019
  • Currently 14 international mandates

© Rheinmetall AG / Corporate Presentation Q3 2019

Framework nation concept triggers standardization of equipment

Army 4.0: Rheinmetall integrates components to systems

51

Rheinmetall Defence

German Defence

Additional structural demand of German army under discussion

  • Vehicles - mid-to-long term potential

Fox (400 vehicles)

Boxer (300-400 vehicles)

Trucks (> 10.000 vehicles)

Puma (~250 vehicles)

  • Equipment and ammunition - multi billion programs

NNBS (Short range air defence)

TLVS (Tactical air defence)

D-LBO (> €5 bn net) (MoTaKo)

Ammunition (~€2 bn net)

© Rheinmetall AG / Corporate Presentation Q3 2019

52

Rheinmetall Defence

EUROPEAN DEFENCE.

CURRENT OR EXPECTED TENDERS TACTICAL VEHICLES.

UK MIV &

Challenger upgrade

Lt

Pl

Cz

Sk

H

Slo

Puma/Lynx

Boxer

Mixed

Ru

Bg

  • Drivers for European vehicle programmes
    • Return to territorial and alliance defence
    • Standardization of NATO equipment
    • Modernization and upgrades
  • Estimate for European tactical vehicles demand

(number of vehicles)

Germany

Rest of Europe

Tracked

~250

>600

Wheeled

700-800

>900

© Rheinmetall AG / Corporate Presentation Q3 2019

53

Rheinmetall Defence

European Defence

Consolidation landscape

49.9%

Kongsberg

50%

Nammo Patria

Saab

Cobham

BAE Systems Chemring

Rheinmetall

PL

RO

HUN

CZ

  • Governmental shareholding restricts room for cross-borderconsolidation
  • Big common armament programs could be catalysts for further consolidation

Rheinmetall's approach:

JV partnerships with companies in different

nations instead of "putting all eggs in one

basket"

KMW/Nexter

Thales RUAG

Oto Melara

Aselsan

Sufficient organic growth potential, but

suitable M&A transactions are possible

<25% or not state-owned > 25% state-owned Rheinmetall

© Rheinmetall AG / Corporate Presentation Q3 2019

54

Rheinmetall Defence

Defence International

Creation of new hubs in 2018

CANADA

SKANDINAVIA

EASTERN EUROPE

New

GREAT BRITAIN

POLAND

USA

NETHERLANDS

New

MIDDLE EAST

NORTH AFRICA

ASIA

SOUTH AFRICA

AUSTRALIA

55

Rheinmetall Defence

Innovations

Demand-driven product development and targeted cooperations

New logistical platforms

New tactical platforms

New business models

Groundbreaking sub-systems

Innovative weapon and ammunition

New cooperations with

Digitized command and reconnaissance

Sikorsky, Raytheon

© Rheinmetall AG / Corporate Presentation Q3 2019

56

GROUP

APPENDIX

© Rheinmetall AG / Corporate Presentation Q3 2019

57

Appendix: Rheinmetall Group

Group 2014 - 2018: Key figures (as reported)

in €m

2014

2015

2016

2017

2018

Balance sheet

Total assets

5,271

5,730

6,150

6,101

6,759

Shareholder's equity

1,197

1,562

1,781

1,870

2,172

Equity ratio (in %)

22.7

27.3

29.0

30.7

32.1

Pension liabilities

1121

1,128

1,186

1,080

972

Net financial debt

-330

-81

19

230

-31

Net gearing (in %)

27.6

5.2

-1.1

-12.3

1.4

Income statement

Sales

4,688

5,183

5,602

5,896

6,148

Operating result

160

287

353

400

492

Operating margin

(in %)

3.4

5.5

6.3

6.8

8.0

EBITDA

299

490

581

626

836

EBIT

102

287

353

385

518

EBIT margin (in %)

2.2

5.5

6.3

6.5

8.4

EBT

22

221

299

346

485

Net income

21

160

215

252

354

Earnings per share

(in EUR)

0.47

3.88

4.69

5.24

7.10

Dividend per share

(in EUR)

0.3

1.1

1.45

1.70

2.10

ROCE (in %)

3.9

10.1

12.3

13.8

17.1

Cash flow statement

Free cash flow from operations

-182

29

161

276

-35

Headcount

Employees (Dec 31) according to

20,166

20,676

20,993

21,610

22,899

capacity

© Rheinmetall AG / Corporate Presentation Q3 2019

58

Appendix: Rheinmetall Group

Segments 2014 - 2018 Key figures

AUTOMOTIVE

DEFENCE

2014

2015

2016

2017

2018

in €m

2014

2015

2016

2017

2018

2,466

2,621

2,670

2,922

2,889

Order intake

2,812

2,693

3,050

2,963

5,565

416

445

459

520

478

Order backlog (Dec. 31)

6,516

6,422

6,656

6,416

8,577

2,448

2,592

2,656

2,861

2,930

Sales

2,240

2,591

2,946

3,036

3,221

184

216

223

248.8

262

Operating result

-9

90

147

174

254

7.5

8.3

8.4

8.7

8.9

Operating margin

(in %)

-0.4

3.5

5.0

5.7

7.9

295

332

356

366.8

420

EBITDA

17

175

239

268

403

184

216

223

227

265

EBIT

-67

90

147

172

247

7.5

8.3

8.4

7.9

9.0

EBIT margin (in %)

-3

3.5

5.0

5.7

7.7

158

167

149

154

161

Capex

76

96

95

89

87

34

96

105

106

26

OFCF

-132

-38

103

238

-29

10,830

10,934

10,820

11,166

11,710

Employees (Dec 31) according to capacity

9,184

9,581

10,002

10,251

10,948

1,322

1,450

1,527

1,621

1,664

Mechatronics

Sales

Weapon &

977

881

1,112

1,175

1,056

96

119

142

176

171

EBIT

Ammunition

-4

74

108

117

121

7.3

8.1

9.3

10.9

10.3

EBIT margin

-0.4

8.4

9.7

10.0

11.5

934

952

921

968

989

Hardparts

Sales

Electronic

705

759

745

691

839

72

73

62

60

65

EBIT

Solutions

-53

26

25

20

47

7.7

7.7

6.7

6.2

6.6

EBIT margin

-7.5

3.4

3.4

2.9

5.6

269

285

305

359

367

Aftermarket

Sales

Vehicle

667

1,195

1,392

1,480

1,568

26

27

27

33

36

EBIT

Systems

-9

3

29

53.2

108

9.7

9.5

8.9

9.2

9.8

EBIT margin

-1.4

0.3

2.1

3.6

6.9

© Rheinmetall AG / Corporate Presentation Q3 2019

59

Rheinmetall technologies

as an answer to current threats and challenges

ONE

RHEINMETALL

AUTOMATION

NEXT SENSORS

DIGITIZATION

E-MOBILITY

NEW

PRODUCTS

ARTIFICIAL INTELLIGENCE

60

Rheinmetall Group

Our capital allocation policy is geared towards further growth

Funding of growth (organic and M&A)

9.4%

Dividend to shareholders (Payout ratio 30-35%)

level

(target level

Improvement of pension funding via CTA

50-60%)

© Rheinmetall AG / Corporate Presentation Q3 2019

61

Appendix: Rheinmetall Group

Select key data: outlook 2019

Rheinmetall Group

In % (Previous Year)

Holding cost

~€25-30m (€24m)

Comparable level

AutomotiveDefence

Capex

5.5-6% (5.5%)

3.5-4.5%(3.1%)

(w/o IFRS 16)

~5.5% (5.3%

3-3.5% (4.8%

Tax rate

(27%)

D&A

reported,

reported,

scheduled 5.2%)

scheduled 3.7%)

Interest result

~-€40m(-€33m)

© Rheinmetall AG / Corporate Presentation Q3 2019

R&D

5-6% (5.4%)

2-2.5% (2.3%)

(self-funded)

62

Appendix: Rheinmetall Group

Debt

Typical seasonal increase of net debt amplified by M&A payout

Net financial debt

Debt composition and maturity profile

in €m at quarter-end

in €m

Ʃ 1,055

162

Commercial

Papers

Other &

183

Leasing

-31

161

Bank loans

2019

2020

2021

2022

2023

2024

2025ff.

-171

300

Promissory

53

28

25

-387

notes

73

-514

122

-660

250

EIB loan*

30.09.2018

31.12.2018

31.03.2019

30.06.2019

30.09.2019

250

Q3/

2019

*€250 m EIB loan (0.962% coupon) maturing in August 2023

© Rheinmetall AG / Corporate Presentation Q3 2019

63

Appendix: Rheinmetall Group

More than 100 production sites and offices on all continents

Defence

Germany

UK

USA

Netherlands

Norway

Sites

Canada

Switzerland

Sweden

South

Mexico

Austria

Poland

Africa

Italy

USA

Mexico

Germany

Automotive

France

Spain

Brazil

Italy

Czech Republic

Sites

Malta

Turkey

Romania

UK

© Rheinmetall AG / Corporate Presentation Q3 2019

Russia

Singapore

Saudi Arabia

Malaysia

UAE

Australia

Japan

China

India

64

Appendix: Rheinmetall Group

Continuing ROCE improvement

  • ROCE

in %

25%

20%

15%

10%

5%

0%

-5%

Pre-tax WACC (2017):

19.0%

18.8%

17,1%

20,2%

18,7%

16.7%

13,4%

10.5% Group

15,9%

12.3%

10.6%

10.7%

11,8%

9.8%

4.7%

3.9%

6.1%

0.3%

-4.6%

2013

2014

2015

2016

2017

2018

Group

Defence

Automotive

© Rheinmetall AG / Corporate Presentation Q3 2019

65

Appendix: Rheinmetall Group

Board remuneration based on three building blocks

Annual target salary (100%)

Fixum (60%)

Performance-related variable remuneration (40%)

Twelve equal portions of monthly

Short term incentive

payments

Fringe benefits:

• KPI:

EBT, ROCE (each 50%)

•

Pension insurance (or comparable)

• Reference: Budget

•

Company car

• Range:

0 - 200%

• Escalators:

0% - <70% - < 110%

0% linear to max. 200%

• Payout:

cash

  • Long-termincentive
  • KPI: Average adjusted EBT of the last three years (EBT capped at €300m)
  • Payout: In shares and cash* with 4 year lock-up period

*for related tax payments

© Rheinmetall AG / Corporate Presentation Q3 2019

66

Appendix: Rheinmetall Group

ESG

High importance for Rheinmetall

Environment

  • Reduction of the ecological footprint
    • Decrease of energy needed
    • Selective use of raw materials
  • "Road to 95" and E-mobility
    • Our products increase fuel efficiency
    • New e-bike,e-motor and battery pack
  • Support of conservation
  • Transformation of the former production site in Düsseldorf

Social

  • Clear statement against cluster munition
  • Promoting education and training
  • Support of gender diversity
    • Women in management
  • Workforce
    • Integration of refugees via apprenticeships
    • Support of employee families

Governance

  • Transparency towards customer, investors and other stakeholder
  • Non-compliantbusiness behavior is unacceptable
  • Zero tolerance of corruption and fraud
  • Central Compliance Management System
    • Employee awareness initiative

© Rheinmetall AG / Corporate Presentation Q3 2019

67

Next events and IR contacts

Next Events

Berenberg Conference, Pennyhill

3 December 2019

Goldman Sachs Conference, London

4 December 2019

Oddo BHF Conference, Lyon

9 January 2020

Commerzbank GIS, New York

13-15 January 2020

Baader Heleva, Toronto

16 January 2020

Kepler Cheuvreux GCC, Frankfurt

20-22 January 2020

Lampe Conference, London

30 January 2020

FY Earnings release

18 March 2020

  • Quick link to documents

Corporate Presentation

Interim Reports

© Rheinmetall AG / Corporate Presentation Q3 2019

  • IR Contacts

Dirk Winkels

Head of IR

Tel: +49-211473-4749

Email: dirk.winkels@rheinmetall.com

René Weinberg

Senior Investor Relations Manager

Tel: +49-211473-4759

Email: rene.weinberg@rheinmetall.com

Rosalinde Schulte Investor Relations Assistant Tel: +49-211 473-4718

Email: rosalinde.schulte@rheinmetall.com

Annual Reports

68

Disclaimer

This presentation contains "forward-looking statements" within the meaning of the US Private Securities Litigation Reform Act of 1995 with respect to Rheinmetall's financial condition, results of operations and businesses and certain of Rheinmetall's plans and objectives. These forward-looking statements reflect the current views of Rheinmetall's management with respect to future events. In particular, such forward-looking statements include the financial guidance contained in the outlook for 2019.

Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as "will", "anticipates", "aims", "could", "may", "should", "expects", "believes", "intends", "plans" or "targets". By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. In particular, such factors may have a material adverse effect on the costs and revenue development of Rheinmetall. Further, the economic downturn in Rheinmetall's markets, and changes in interest and currency exchange rates, may also have an impact on Rheinmetall's business development and the availability of financing on favorable conditions. The factors that could affect Rheinmetall's future financial results are discussed more fully in Rheinmetall's most recent annual and quarterly reports which can be found on its website at www.rheinmetall.com.

All written or oral forward-looking statements attributable to Rheinmetall or any group company of Rheinmetall or any persons acting on their behalf contained in or made in connection with this presentation are expressly qualified in their entirety by factors of the kind referred to above. No assurances can be given that the forward-looking statements in this presentation will be realized. Except as otherwise stated herein and as may be required to comply with applicable law and regulations, Rheinmetall does not intend to update these forward-looking statements and does not undertake any obligation o do so.

This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire or dispose of securities in Rheinmetall AG or any of its direct or indirect subsidiaries.

© Rheinmetall AG / Corporate Presentation Q3 2019

69

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Rheinmetall AG published this content on 03 December 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 December 2019 09:42:03 UTC