Rheinmetall : Transkript

Rheinmetall AG

Investor Relations

Conference FY 2022

Transcript

Publication:	14:00 am CET
Conference Call:	16 March 2023, 14:00 pm CET

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Content

	Contribution	Course	Duration (min)
	Presentation - Begin	0:21
	Presentation - End	0:46:04	0:45:43
	Questions:
1	Sven Weier, UBS AG	0:46:19	5:13
2	David Perry, JPMorgan	0:52:03	7:01
3	Sebastian Growe, EXANE	0:59:09	4:14
4	Sash Tusa, Agency Partners	1:03:22	3:38
5	Virginia Montorsi, Bank of America ML	1:07:09	1:58
6	Christian Cohrs, Warburg Research	1:09:11	7:29
7	Christoph Laskawi, Deutsche Bank	1:17:39	4:41

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Rheinmetall AG Conference Call

00:00:01 Operator

Good afternoon, ladies and gentlemen, and welcome to the Rheinmetall AG conference call regarding the full year result 2022. At this time all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Armin Papperger.

0:00:20.2 Armin Papperger

Thank you very much for your kind introduction. Good afternoon everyone and welcome to Rheinmetall 2022 fiscal year earnings. I'm here together with Dagmar Steinert, our new CFO and we both will walk you through our presentation for the next couple of minutes. Before we start, please be reminded of our legal disclaimer on the following page. And now let's go, we start with page no. 3.

Frank Walter Steinmeier, the president of the Federal Republic of Germany gave a speech in the occasion of his reelection where he made the following statement: "Peace cannot be taken for granted, it needs dialogue, but where necessary also deterrence and determination". He gave that speech ten days before Russia invaded the Ukraine and his words were proven right in the most dramatic way over the last 12 months.

Rheinmetall is a member of our society, a society that is determined to defend its values. We are taking responsibility in this changing world. We serve governments enabling them to fulfil their security policies and we develop technologies for the protection of the people that will protect us.

If you go to the next page, you see an overview of how Rheinmetall is partner and supports the Ukrainians. The support of the Ukrainian people has intensified over the course of the last year and Rheinmetall contributed on every level. In a first step, the Ukraine received soviet designed reinforcement and the donators

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replaced it with NATO standard equipment. The Leopards, Marders and trucks had a value of around half a billion Euro and came from our own inventories. I will provide you with a more detailed overview on the following page.

In a second step, Rheinmetall delivered trucks, ammunition, air defense and military field hospitals directly to Ukraine and finally we are now in talks with the Ukrainian customer to build a production site for modern tactical vehicles locally. The reason for that - and this is really important - is to help Ukrainians to help themselvess. They must be able to defend themselves and we go no risk because the production line will be built up from the Ukrainian government, if they make a positive decision.

If you go now to page no. 5, we see what Rheinmetall delivers or will deliver. First of all, have a look to the Leopard 1; we bought in 100 Leopard 1 plus a lot of spare parts, because we think we need them over the next years. We also have a possibility to buy another 30, up to 35 Leopards 1. And from the Ukrainian and from the first 100 we think that between 80 and 90 vehicles we can offer to the Ukrainians. And the reason for that is because not everyone is in a very good shape, that we can bring out 100. The potential that we see is that we're able to deliver 20 of that vehicles in 2023, maybe a little bit more. And the contract signing is expected soon. At the moment there is one obstacle and the obstacle is, maybe you know this, is that Switzerland is blocking the sale of the Italian tanks produced in Italy and also for the Italian forces. But currently these tanks belong to a Swiss company. So now the Swiss government is checking, if we can give it to the Ukraine or not.

Second point is Leopard 2. We have access to about 50 Leopard 2, 29 of them are in the ring swap. We discussed about that last time, this were the Slovaks and the Czechs, and the first deliveries are already done. We did that in Q4 2022, and the complete delivery will end in 2023 end of this year.

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There are some more vehicles that we want to deliver and at least another 40 to 50 can be sold directly to the Ukraine or via countries in Europe who will donate them to the Ukraine.

Case no. 3 is now Marder; in the meantime we have 140 to 150 Marders on stock. We have more but the 140 to 150 we are able to make operational tanks out of them. 60 vehicles are under contract and 40 Marder in the ring swap with Greece and 20 are directly delivered now to Ukraine. In fact, we will deliver to the German government and they will deliver to Ukraine. The potential that we see on top of these 60 right now, every month we will produce another ten vehicles so that our European partners are able to donate, or that the Ukrainians directly buy from us. So if you count that up, and if everything would work, only Rheinmetall is able to deliver over the next, let me say, twelve months 250 to 300 different vehicles.

We go now to page no. 6. On page no. 6 you see, how Rheinmetall is preparing for the acceleration, for the growth acceleration. And no. 1 is the capacity growth of our factories. So we did our homework and the growth rate or the capacity is going up in Germany, in Hungary, in the UK, in Australia but also in the United States of America. In United States of America the trigger point will be more and more this year, but last year we did a lot on these four countries.

In total temporary workers and fix workers is between 2,500 and 3,000 people, we drive some of the factories three shifts. The factory that we use for propulsion systems we work 24/7. And we will have capacity for a third shift, if the contracts are coming in.

No. 2 is the Merger and Acquisition that we did with EXPAL. That is very important for us, especially for artillery ammunition, medium caliber and mortar ammunition. So we are able to double our capacity together with EXPAL. The expectation is that in summer 2023 there is the closing. So hopefully June/July so that we can bring it then in the second half of the year on topline.

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