Rheinmetall AG — Call Transcript 2021

May 6, 2021

Q1 above expectations Sound start to the year May 2021

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 management with respect to future events.

In particular, such forward-looking statements include the financial guidance contained in the outlook for 2021.

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 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. related to shares in Rheinmetall AG in the United States of America or any other jurisdiction. Therefore, neither Rheinmetall AG nor any of its affiliates has and or will accept any Please note that all figures in this presentation have been rounded on a standalone basis. This can result in minor differences when adding figures together or calculating % shares. Rheinmetall AG - Analyst Conference Call Q1 2021 ²

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 to do so.

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Q1 2021 Group Highlights Sales recovery and continued cost discipline drove profitability

Q1 2021 Group Highlights	Sales recovery and continued cost discipline drove profitability
Macro	 Strong recovery of LV markets led by Asia  Supply chain issues on price and availability emerged
Financials	 Sales increased to €1.405m (reported +3.5%, FX adjusted +5.1%)  Operating Result rose by €53m to €87m  OFCF improved by €129m to -€59m  EPS climbs to €1.14 after €0.30 last year
Restructuring	 Piston disposal process continues to next stage  Implementation of restructuring measures on schedule  Cost saving measures remain in place
	Rheinmetall AG - Analyst Conference Call Q1 2021

Q1 2021 Group Highlights

L3Harris in the US

• Rheinmetall joined forces with L3Harris Technologies joined "Team LYNX" together with Textron, Raytheon and American Rheinmetall Vehicles "Team LYNX" participates in
• upcoming Bradley replacement tender process in the US

Environmentally friendly technology for plug-in hybrids

• Lynx IFV Product sample for E-motor housing Innovative fuel tank isolation valve for hybrid vehicles with first commercial success with international customer
• Technology is triggered by tighter regulation

Electromotor housings for international automaker in China

• Double-digit sized order value of leading international automaker
• Electromotor housings made of aluminum to be used in the customer's entire fleet in the next 5 years Rheinmetall AG - Analyst Conference Call Q1 2021 Fuel tank isolation valve

Q1 2021 Group Highlights: Order profile Increased backlog and higher share of alternative powertrain business

1 Order intake and order backlog for all divisions

3 Additional "Shadow backlog" of ~€3.5bn including truck and ammunition framework agreements for the years 2021-28

Q1 2021 Group Highlights: Key financial data

Earnings per share soar due to strong operational performance

Q1 2021 Group Highlights: Key financial data Cash flow rose on earnings growth and working capital improvement

Highlights / Comments

• Strong earnings improvement -59
• Lower D&A includes mid-single digit effect from impairment Rheinmetall AG - Analyst Conference Call Q1 2021
• Lower CTA funding in Q1 2021
• Net working capital benefited from prepayments

Q1 2021 Group Highlights Equity ratio is approaching target range

	Gross debt and maturity profile
Equity ratio Total equity 29.7 2,221 31.03.2021	Ʃ 1,010 Leasing & Other 252 106 Bank loans 2021 2022 2023 2024 2025 2026ff. Promissory 402 28 45 73 notes 122 136 EIB loan 250 250 31.03.2021
	Highlights / Comments
-77	 Equity ratio of 29.7% approaching 30-35% target range  High cash position of €934m  Undrawn credit lines of €0.9 bn per end of Q1  Low net debt position underlines financial strength  Moody's confirmed "Baa3 stable" Feb 2021 Rheinmetall AG - Analyst Conference Call Q1 2021 8

• Equity ratio of 29.7% approaching 30-35% target range
• High cash position of €934m
• Low net debt position underlines financial strength
• Moody's confirmed "Baa3 stable" Feb 2021

Q1 2021 Division Highlights

Sales Operating Margin

Project ramp-down impacted	performance as expected
	In €m	Q1
		2020	2021	∆
	Order intake	136	178	+30.4%
	Sales	446	409	-8.4%
	Operating result	35	25	-29.2%
	Operating margin	7.9%	6.1%	-1.8pp
	EBIT Operating FCF	35 -21	25 79	-29.2% 100
Operating Margin	 Order intake on solid level
	 Normalized project settlement level especially due to project ramp down of tactical vehicles
507 457 446 436	 Strong operating FCF including prepayment 409
Q1 2020 Q2 2020 Q3 2020 Q4 2020	Q1 2021	Rheinmetall AG -	Analyst Conference Call Q1 2021	9

• Order intake on solid level
• Normalized project settlement level especially due to project ramp down of tactical vehicles
• 409 Strong operating FCF including prepayment

Q1 2021 Division Highlights Best starting quarter ever

	Q1
In €m	2020	2021	∆
Order intake	328	228	-30.4%
Sales	167	221	+32.1%
Operating result	-16	18	+33
Operating margin	-9.3%	8.0%	+17.3pp
EBIT	-16	18	+33
Operating FCF	-72	-56	+21.7%
 Order intake without larger individual projects
 Strong sales start
 Operating result jumped on higher sales volumes and favorable product mix
 OFCF improved on better financial performance
	Rheinmetall AG -	Analyst Conference Call Q1 2021	10

• Order intake without larger individual projects
• Strong sales start
• Operating result jumped on higher sales volumes and favorable product mix
• 221 OFCF improved on better financial performance

Q1 2021 Division Highlights Solid first quarter

	Q1
In €m	2020	2021	∆
Order intake	324	218	-32.6%
Sales	174	167	-4.0%
Operating result	10	10	-1%
Operating margin	6.0%	6.2%	+0.2pp
EBIT	10	10	-1%
Operating FCF	-43	-90	-106.7%
	Order intake Q1 2020 included large air defence		order
	Sales and result remained on a solid level
 build-up	OFCF includes first time CTA funding of €15m and working capital
	Rheinmetall AG -	Analyst Conference Call Q1 2021	11

Sales Operating Margin

• build-up

Q1 2021 Division Highlights Sales and margin recovery continues

Sales Operating Margin

		Q1
In €m	2020	2021	∆
	Booked Business 471	656	+39.2%
Sales	348	372	+7.1%
	Operating result 9	28	+194.2%
Operating	margin 2.7%	7.5%	+4.8pp
EBIT	9	28	+194.2%
	Operating FCF -33	-38	-16.9%
	Booked business successful with alternative powertrain products accounting for 33% (PY: 30%)
	Operational sales growth of 9.5% due to strong China business and net
	positive ramp up effect; chip shortage left no mark in Q1
	Improved operating leverage and continued cost discipline
	OFCF declined due to business related increase of working capital
	Rheinmetall AG -	Analyst Conference Call Q1 2021
			12

• Booked business successful with alternative powertrain products accounting for 33% (PY: 30%)
• Operational sales growth of 9.5% due to strong China business and netpositive ramp up effect; chip shortage left no mark in Q1
• Improved operating leverage and continued cost discipline
• OFCF declined due to business related increase of working capital

Q1 2021 Division Highlights

		Q1
	In €m	2020	2021	∆
	Booked Business	137	173	+26.6%
	Sales	140	160	+14.1%
	Operating result	7	14	+103.9%
	Operating margin	4.9%	8.8%	+3.9pp
	EBIT	7	14	+103.9%
	Operating FCF	-1	-9	-8
	Booked business increase underpins improved business outlook
	General demand recovery across all markets drove operational sales improvement of 18%
	Operating result improvement mostly volume driven and continued cost discipline
	Business related working capital increase
	Rheinmetall AG -		Analyst Conference Call Q1 2021	13

• Booked business increase underpins improved business outlook
• General demand recovery across all markets drove operational sales improvement of 18%
• Operating result improvement mostly volume driven and continued cost discipline
• Business related working capital increase

Q1 2021 Division Highlights Sales growth held back by adverse FX effects

NON-CORE
BUSINESS
PISTONS.

	Q1
In €m	2020	2021	∆
Booked Business	21	60	+191.8%
Sales	149	140	-6.4%
Operating result	-6	3	+143.9%
Operating margin	-4.1%	1.9%	+6.1pp
EBIT	-6	3	+143.9%
Operating FCF	-11	2	+13
 Booked business increase underpins improved business outlook
 Sales held back by €11m adverse FX-effect
 Continued cost saving measures, lower D&A and improved at equity contribution supported the operating result
 OFCF improved due to improved earnings and lower capex
Rheinmetall	AG -	Analyst Conference Call Q1 2021	14

Sales Operating Margin

• Booked business increase underpins improved business outlook
• Sales held back by €11m adverse FX-effect
• Continued cost saving measures, lower D&A and improved at equity contribution supported the operating result
• OFCF improved due to improved earnings and lower capex

Q1 2021 Key end market developments

Strong recovery of the truck and aftermarket business

Q1 2021 China JV China back on track

Market update

Latest budget updates for 2022 in key home markets all favorable

Tender update

• German engineering vehicle (PiPz) approved
• Challenger expected to be booked imminently
• Puma upgrade decision scheduled for June 2021
• East European IFV contract expected for H2 2021
• Italy indicated interest for IFV "Dardo" successor

Strong annual recovery, but downward revision of Q2 due to chip shortage Defence budget update IHS Forecast LV production volumes 2020 2021

Q2 2020 Q2 2021 (Apr)*

Supply situation

2022

• Semiconductor shortage is becoming more of a concern
• Raw material price increase, but pass through and hedging in place
• Transportation capacities under pressure

Outlook Application of IFRS 5 as of Q2 2021

• The status of the disposal process for the piston business has progressed sufficiently in order to qualify the business in accordance with IFRS 5 as discontinued operations
• Application as of Q2 2021
• Presentation of Pistons as discontinued operations triggers the following effects:

FY 2020	reported	Piston IFRS 5 adjusted	IFRS 5 adjusted
Sales	€5,875m	€469m	€5,406m
Operating result	€426m	-€26m	€452m
Operating margin	7.3%	-5.5%	8.4%

Outlook FY Guidance unchanged, updated for IFRS 5 accounting!

	 Large vehicle orders from the UK and Germany expected
Q2 trading	 Recovery of global LV markets supportive, but still uncertainties due
	to supply issues
update	 Group sales significantly above PY level
	 Operating margin expansion to 7-8%

FY 2021 Guidance

Outlook	FY Guidance unchanged, updated for IFRS 5 accounting!
Q2 trading update	 Large vehicle orders from the UK and Germany expected  to supply issues  Group sales significantly above PY level  Operating margin expansion to 7-8%	Recovery of global LV markets supportive, but still uncertainties due
		FY 2021 Guidance
Operational sales growth	7-9%	(2020 IFRS 5 adjusted: €5,406m)
Operating margin	9-10%	(2020 IFRS 5 adjusted: 8.4%)
	Guidance update reflects application of IFRS 5 starting in Q2 2021. This scenario is based on the assumption that potential production losses resulting from electronic component shortages in the first half of the year will be limited and excludes severe effects from additional Covid lockdowns.	Rheinmetall AG - Analyst Conference Call Q1 2021

Next events and IR contacts

Next Events

• Corporate Presentation Annual Reports Interim Reports Goldman Sachs, European Small and Mid Cap Conference 07 May 2021 UBS, Pan European Small and Mid Cap Conference 12 May 2021 Berenberg, US Conference 20 May 2021 UBS, Best of Europe 27 May 2021 UBS, Global Industrials and Transportation 08 June 2021 M.M. Warburg, Warburg Highlights 09 June 2021 DB, dbAccess Berlin Conference 16-17 June 2021 Annual General Meeting Rheinmetall AG 11 May 2021 Q2 2021 Earnings call 05 August 2021 Q3 2021 Earnings call 05 November 2021

virtual

All investor

IR Contacts

Dirk Winkels

Head of Investor Relations Tel: +49-211 473-4749 Email: dirk.winkels@rheinmetall.com

René Weinberg Senior Investor Relations Manager Tel: +49-211 473-4759 Email: rene.weinberg@rheinmetall.com meetings will be

Rosalinde Schulte Investor Relations Assistant Tel: +49-211 473-4718 Email: rosalinde.schulte@rheinmetall.com Rheinmetall AG - Analyst Conference Call Q1 2021

Quick link to documents

20

APPENDIX

Rheinmetall AG - Analyst Conference Call Q1 2021 ²¹

	Rheinmetall 2016-2020: Key figures (as		reported)
		2016	2017	2018	2019	2020
Balance Sheet	Total assets	6.150	6.101	6.759	7.415	7.267
	Shareholder's equity	1.781	1.870	2.173	2.272	2.053
	Equity ratio (in %)	29,0	30,7	32,1	30,6	28
	Pension liabilities	1.186	1.080	972	1.169	1.177
	Net financial debt	19	230	-30	-52	4
	Net gearing (in %)	-1,1	-12,3	1,4	2,3	-0,2
Income	Sales	5.602	5.896	6.148	6.255	5.875
	Operating result	353	400	491	505	426
	Operating margin (in %)	6,3	6,8	8,0	8,1	7,3
	EBITDA	581	626	836	792	647
				518	512	89
	EBIT	353	385
	EBIT margin (in %)	6,3	6,5	8,4	8,2	1,5
	EBT	299	346	485	477	57
	Net income	215	252	354	354	1
	Earnings per share (in EUR)	4,7	5,2	7,1	7,8	-0,6
	Dividend per share (in EUR)	1,5	1,7	2,1	2,4	2,0
	ROCE (in %)	10,6	12,3	13,8	17,1	2,7
CF statement Headcount	Free cashflow from operations Employees (Dec. 31) according to capacity	161 20.993	276 21.610	-35 22.899	314 23.780	217 23.268

Rheinmetall Q1 2020-Q1 2021: Key figures

Rheinmetall Q1 2020-Q1 2021: Key figures
					Rheinmetall
in €m	Q1 2020	Q2 2020	Q3 2020	Q4 2020	Q1 2021
Order intake	1.172	1.106	1.185	5.053	1.213
Order backlog	10.305	10.411	10.177	13.367	13.258
Sales	1.358	1.239	1.382	1.896	1.405
Operating result	34	36	101	256	87
Operating margin (in %)	2,5	2,9	7,3	13,5	6,2
EBITDA	109	73	127	337	148
EBIT	34	-266	66	256	87
EBIT margin (in %)	2,5	-21,5	4,8	13,5	6,2
Cash outflow for additions to tangible and intangible assets	46	49	50	91	41
OFCF	-188	-221	41	585	-59
	23.671	23.251	23.152	23.268	23.591

Balance Sheet

Balance Sheet
	31.12.2020	31.03.2021	Δ	Equity	31.12.2020 2.053	31.03.2021 2.221	Δ 168
Non-current assets	2.928	2.919	-9	Share capital	112	112	-
Goodwill	476	478	2	Additional paid-in capital	556	556	-
Other intangible assets	240	247	7	Retained earnings	1.233	1.389	156
	Right of use assets 233 224	-9	Treasury shares	-13	-13	-
				Rheinmetall AG shareholders' equity	1.888	2.044	156
Property, plant and equipment	1.132	1.125	-7	Minority interests	165	177	12
Investment property	39	38	-1	Non-current liabilities	2.326	2.183	-143
Investments carried at equity	288	307	19	Provisions for pensions and sim. obligations	1.177	1.037	-140
Other non-current financial assets	272	281	9	Other non-current provisions	191	200	9
Deferred tax assets	249	219	-30	Non-current financial debts	873	856	-17
	4.339	4.554		Other non-current liabilities	82	85	3
Current assets			215	Deferred tax liabilities	4	5	1
Inventories	1.573	1.696	123	Current liabilities	2.888	3.068	180
Contractual assets	352	324	-28	Other current provisions	796	859	63
Trade receivables	1.170	1.309	139	Current financial debts	150	154	4
Other current assets	192	254	14	Contractual liabilities Trade liabilities	968 700	1.108 684	140 -16
Income tax receivables	24	38	-	Other current liabilities	198	178	-20
Cash and cash equivalents	1.027	934	-93	Income tax liabilities	76	85	9
Total assets	7.267	7.473	206	Total liabilities	7.267	7.473	206
				Rheinmetall AG - Analyst Conference Call Q1 2021			24

Cashflow Statement

	Q1 2020	Q1 2021	Δ
Net income	18	58	40
Amortization, depreciation and impairments	75	61	-14
Allocation of CTA assets to secure pension and partial	-42	-25	17
retirement obligations
Changes in pension provisions	-3	-4	-1
Income from disposition of non-current assets	0	0	-
Changes in other provisions	59	82	23
Changes in inventories	-182	-112	70
Changes in receivables, liabilities (without financial debts) and prepaid & deferred items	-68	-91	-23
Pro rata income from investments carried at equity	1	-9	-10
Dividends received from investments carried at equity	0	1	1
Other non-cash expenses and income	0	22	22
Cashflows from operating activities	-142	-17	125
Cashflows from investing activities	-44	-60	-16
Cashflows from financing activities	-23	-16	7
Changes in financial resources	-209	-94	115
Changes in cash and cash equivalents due to exchange rates	-6	0	6
	-215	-94	121
Total change in financial resources
Cash and cash equivalents 31.12.2020	920	1.027	107

Income Statement

	Q1 2020	Q1 2021	Δ
Sales	1.358	1.405	47
Changes in inventory and other own work capitalized	126	87	-39
Total operating performance	1.484	1.492	8
Other operating income	26	25	-1
Cost of materials	804	747	-57
Personnel expenses	442	459	17
Amortization, depreciation and impairment	75	61	-14
Other operating expenses	160	161	1
Income from investments carried at equity	-1	9	10
Other net financial income	6	-10	-16
Earnings before interests and taxes (EBIT)	34	87	53
Net interest income	2	2	-
Interest expenses	-11	-11	-
Earnings before taxes (EBT)	25	78	53
Income taxes	-7	-20	-13
Earnings after taxes	18	58	40
Of which:
Minority interests	5	9	4
Rheinmetall AG shareholders	13	49	36
EBITDA	109	148	39

Free Cash Flow Summary

Free Cash Flow Summary
in €m	Q1 2021	Q1 2020	∆	∆ in%
Net Income	58	18	40	225,9%
Amortization / depreciation	61	75	-14	-18,7%
Allocation of CTA assets to secure pension and
partial retirement obligations	-25	-42	17	40,5%
				-300,0%
Change in pension accruals	-4	-1	-3
Income from disposition of non-current assets	0	0	0
Changes in working capital	-112	-182	70	38,2%
Changes in other items	5	-10	15	150,2%
Cash Flow from operating activities	-17	-142	124	87,8%
Cash outflow for additions to tangible and
intangible assets	-41	-46	5	11,1%

Outlook Guidance 2021 by division in the new reporting structure and IFRS 5 adjusted

			Guidance 2021 by division in the new reporting structure and IFRS 5 adjusted
		2020 Proforma	Outlook 2021e 1,2
Vehicles Systems	Sales	€1,846m	Slightly improved sales
	Margin	8.1%	On previous year margin level
Weapon and Ammunition	Sales Margin	€1,199m 15.4%	Notably improved sales Slightly above previous year level
Electronic Solutions	Sales	€931m	Slightly improved sales
	Margin	9.8%	On previous year margin level
Sensors and Actuators	Sales	€1,202m	Significantly improved sales
	Margin	3.0%	Significantly higher margin level
Materials	Sales	€536m	Notably improved sales
and Trade	Margin	6.1%	Notably higher margin level
Pistons (DCO)	Sales	€479m	Significantly improved sales
	Margin	-4.5%	Significantly higher margin level