Rheinmetall : Q1 results Investor Presentation

INVESTOR

PRESENTATION

SECURING TOMORROW

May 2024

INVESTOR PRESENTATION

Content

1 Rheinmetall at a glance

2		Market & Drivers	7
3		Four segments under one roof	42
4		Financials	51
5		Outlook	58
6		Appendix	65

2	© Rheinmetall AG I May 2024

INVESTOR PRESENTATION

Rheinmetall at a glance

Selected key business highlights

Sales by segment

In €m

-8%		Weapon and Ammunition
24%	Electronic Solutions
	Vehicle Systems
29%		Power Systems
7,176		Consolidation

18%

36%

Business Model

• Defence system house with broad innovative product portfolio for land based operations
• Leading global Tier 1 automotive supplier with high- tech products for all powertrains (ICE, EV, FC)

Result by segment

In €m

-10%		Weapon and Ammunition
	Electronic Solutions
15%
44%	Vehicle Systems
	Power Systems
918		Consolidation

35%

16%

Market Driver

• Increasing demand for security due to geostrategic power shifts and constantly changing conflict situations
• Megatrend clean mobility supported by stricter regulation

3

© Rheinmetall AG I May 2024

Note: Sensors and Actuators and Materials and Trade were merged into Power Systems with effect from January 1, 2024

INVESTOR PRESENTATION

Rheinmetall at a glance

Four segments under one roof

RHEINMETALL GROUP Holding

Weapon and	Electronic	Vehicles	Power	Power
Ammunition	Solutions	Systems	Systems	Systems

 Mid & Large Caliber		Integrated Electronic		Tactical Vehicles		Air management		Aftermarket
	Ammo		Systems
 Mid & Large Caliber		Air Defence & Radar		Logistic Vehicles		Thermal management		Bearings
	Weapons		Systems				Electrification &		Castings
	Explosives &		Avionics				Digitalisation		(50:50 JV)
	Propulsions		Other Projects				Hydrogen	Invent
Protection Systems

4

© Rheinmetall AG I May 2024

Note: Civil segments Sensors & Actuators, and Materials & Trade are reported as Power Systems beginning as of January 1st, 2024

INVESTOR PRESENTATION

Rheinmetall at a glance

Next steps of our strategic vision implemented

TRANSFORMATIONGROWTH

SEGMENT STRUCTURE	Accelerated growth
UPDATED	becomes tangible
 New civil segment	 Super cycle 2.0 in full
"Power Systems"	swing
	 Successful market
	entry

PORTFOLIO

ACTIVE PORTFOLIO MANAGEMENT

• Expal deal closed
• Large bore piston deal closed
• Small bore piston disposal closed

TECHNOLOGY SUSTAINABILITY

TECHNOLOGIES in	ESG AS INTEGRAL
FOCUS	STRATEGY COMPONENT
 Automation	 Solid ratings
 Sensors &	 Strong recruitment
Connectivity	performance
 New mobility	 Continued
	commitment

5	© Rheinmetall AG I May 2024

INVESTOR PRESENTATION

Rheinmetall at a glance
ESG: Taking responsibility in a changing world	ESG Factbook
FRAME-WORKS & INITIATIVES

CSR-DIA*	GRI	UN GC	CDP	SBTi	LkSG	CSRD
Since 2017	Since 2017	Joined in 2021	Applied in 2021	Q4 2021	2023	2024

ACTION

ENVIRONMENT

• Carbon neutral in 2035**
• • Improve energy efficiency
  • Increase self-generation of renewables
  • Switch to renewables
• Continuous reforestation of FoJaNa***
• Waste management
• • Avoidance before reduction before recycling
  • Environmentally friendly disposal

MAIN RATINGS

SOCIAL

• Employee well-being
• • Prioritizing employee well-being through occupational health programs
  • Flexible work arrangements
• Health protection
• • LTIR of 5.8 in 2023
  • Extend ISO 45001 certifications for OSH management
  • Extensive and systematic protection of employees
• Diversity
• • Promote diversity, equity and inclusion
  • Best practices for female recruitment and careers

GOVERNANCE

• Rigorous governance structures with strict compliance organization especially for export control, trade and tax compliance
• Continuous improvement of ESG transparency and ratings
• ESG objectives introduced in the variable compensation of top and middle management (Since 2022 as part of the STI and since 2024 also part of the LTI remuneration package)

MSCI ESG: A

6	© Rheinmetall AG I May 2024

	ISS ESG: C	Sustainalytics: 26.9	S&P Global: 39	CDP Climate Change
				B
* CSR-DIA: Corporate Social Responsibility - Directive Implementation Act ** net CO² neutrality aligned with Paris Agreement and for scope 1 and 2 related to the Science Based Target Initiative	6
*** FoJaNa is Rheinmetall's 55 square kilometer testing range with nearly 90% forestry operations

INVESTOR PRESENTATION

Content

1 Rheinmetall at a glance

2		Market & Drivers	7
3		Four segments under one roof	42
4		Financials	51
5		Outlook	58
6		Appendix	65

7	© Rheinmetall AG I May 2024

INVESTOR PRESENTATION

Markets & Drivers

Participating in the defence super cycle

							2022
							Ukraine
1990						Demand for	invasion
						100bn fund
						next
Downscaling		Inflection			Upscaling of	generation
			forces and	systems
of forces
	point			modernization
and			Return to treaty
armament	Out of		NATO	and territorial
		defence
	area
		2% target
	2014
	missions
	commitment
		Annexation

Crimea

2024

32 NATO members, Germany reaches 2% target

Declining budgets

Increase of global defence budgets

"watershed era" acceleration effect

8	© Rheinmetall AG I May 2024

INVESTOR PRESENTATION

Markets & Drivers:

Strong reaction to the war: Defence budgets start to accelerate

NATO Europe and Canada defence expenditure

9

8

7

6

5

4

3

%	Annual real change in %		Increased demand for defence systems in NATO countries
			8.3

5.9

4.3 4.6

3.6	Ships	Vehicles	Airplanes
3.0	2.8

2

1

0

1.6

2.0

-1

-0.9
							Networking systems		Ammunition		Protective gear
2014	2015	2016	2017	2018	2019	2020	2021 2022e 2023e

Source: NATO, July 2023

9	© Rheinmetall AG I May 2024

INVESTOR PRESENTATION

Markets & Drivers:

Significant reduction in export risk due to high NATO order backlog

• NATO and related countries*
• Rest of World

FY 2018

FY 2023

FY 2022

FY 2015

27%

12%

11%

35%

65%

73%

88%

89%

5.8 €bn

8.6 €bn

15.1 €bn

38.3 €bn

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© Rheinmetall AG I May 2024

* includes 32 NATO member states, global partnerships and the countries AUT, CH and SGP