Rheinmetall AG — Earnings Release 2003

Mar 29, 2004

News Details

Corporate | 29 March 2004 09:55

Rheinmetall AG raises like-for-like adjusted EBIT by 23 percent

Corporate-news announcement sent by DGAP. The sender is solely responsible for the contents of this announcement. ——————————————————————————– Rheinmetall AG raises like-for-like adjusted EBIT by 23 percent – Group restructuring successfully completed in 2003 – Results of operations up 5 percent, like-for-like EBIT up 23 percent – Looking ahead confidently to 2004 Restructuring completed at Rheinmetall Düsseldorf-based Rheinmetall AG completed its group restructuring programs in fiscal 2003, a period in which it exceeded its self-set earnings and financial targets. Having successfully refocused on its core Automotive and Defence sectors, the Group generated in fiscal 2003 sales of EUR 4,248 million (2002: EUR 4,571 million). Adjusted for consolidation group changes and exchange rate effects, sales advanced by 4.4 percent. At EUR 204 million, EBIT fell short of the 2002 all-time high of EUR 392 million, in which the EUR 246 million one-time gain from the sale of Heimann Systems shared to a large extent. Operationally, in contrast, the 2003 performance represented an improvement: the Group posted an EBIT of EUR 223 million, adjusted for nonoperating effects, and hence topped the year-earlier figure of EUR 213 million by 5 percent. The adjusted EBIT margin climbed from 4.7 percent in 2002 to 5.2 percent in 2003, the adjusted ROCE jumped from 10.9 to 13.4 percent. Adjusted EpS (preferred) mounts to EUR 2.85 The improved operating profitability is even more manifest once the multiple changes to the group portfolio are taken into account. The 2003 portfolio delivered adjusted and therefore comparable earnings up by EUR 42 million or 23 percent over 2002. The restructuring rewards become most visible when comparing EpS, adjusted for all positive and negative one-off effects and reflecting the impact of the lower net interest expense and the repurchase of minority interests in subsidiaries: EpS (preferred) has surged from EUR 1.38 in 2001 to EUR 1.83 in 2002 and to EUR 2.85 in 2003, more than double inside three years. Automotive and Defence with very good results Both Rheinmetall Group sectors showed organic growth that outpaced their industry averages. Automotive posted sales of EUR 1,884 million in 2003 (just above the year-earlier level of EUR 1,883 million). Adjusted for exchange rate and one-off effects, the organic growth was 4 percent, easily superior to the 1.6-percent gain in world automobile production. Sales by Defence reached EUR 1,605 million (2002: EUR 1,677 million). Taking into account the consolidation group changes (chiefly the spin-off of the Naval Systems unit from former STN Atlas Elektronik), Defence closed the year with 5- percent organic growth. Automotive accelerated its EBT in 2003 by 20 percent to EUR 72 million while Defence, despite the split-up of former STN Atlas Elektronik, managed to almost maintain its EBT of EUR 46 million at the year-earlier EUR 50 million. Group net income of EUR 68 million In 2003, the Rheinmetall Group posted an EBT of EUR 120 million (2002: EUR 290 million). Its net income amounted to EUR 68 million (2002: EUR 274 million). Because of the high gain booked from the sale of Heimann Systems, the bottom lines for the two years are not comparable. The pruned portfolio of shareholdings inevitably impacted on the Rheinmetall Group’s order figures for 2003: whereas order intake dropped from EUR 4,840 million to EUR 4,128 million, order backlog at year-end 2003 had dipped from EUR 4,165 million to EUR 3,143 million. The solid order situation within the Rheinmetall Group is reflected in the healthy book-to-bill ratio over the past three years: in the period 2001 to 2003, order intake was altogether EUR 579 million over sales. At year-end, the Rheinmetall Group employed 20,888 people, the sharp decline of almost 20 percent chiefly caused by divestments. Asset and capital structure again much healthier Net financial debts were again slashed in 2003, from EUR 301 million to EUR 230 million; Rheinmetall has thus shrunk its net debts by around 80 percent since 2000. This is also reflected in the net interest expense which, due to the decreasing debts, fell from the 2002 level by EUR 18 million to EUR 84 million in 2003. In order to streamline the corporate structure and widen its access to cash flows, Rheinmetall (just as in the preceding years) again invested in the repurchase of minority stakes. The outcome: minority interests in equity shrank from EUR 210 million in 2002 to EUR 56 million in 2003 and in the very same period, minority interests in net income were cut from EUR 28 million to EUR 5 million. Looking ahead confidently to 2004 Calculated according to the present corporate structure, Rheinmetall’s pro forma sales in 2003 would have totaled some EUR 3,300 million, and on this basis and assuming a continuation of some 5-percent organic growth, the Group is predicting total sales of about EUR 3,500 million for 2004. Further progress in operational profitability and EBIT margin are the targets for 2004. Commenting on the annual accounts for 2003, Klaus Eberhardt, Rheinmetall AG’s CEO: “2003 was a rewarding year for Rheinmetall. We have successfully rebuilt the Group and we have added appreciable value. The like-for-like adjusted EBIT was up by 23 percent. Financial debts, which in 2000 had still been in the region of EUR 1 billion, have now crumbled to EUR 230 million. As to 2004, we are confident that this success story will continue with no interruptions. Sales and earnings are again set to advance.” end of message, (c)DGAP 29.03.2004 ——————————————————————————– WKN: 703000; ISIN: DE0007030009; Index: MDAX Listed: Amtlicher Markt in Berlin-Bremen, Düsseldorf, Frankfurt (Prime Standard) und Hamburg; Geregelter Markt in München und Stuttgart 290955 Mär 04