An international customer has awarded Rheinmetall a contract to supply it with practice tank ammunition. Now official, the order is worth around €20 million.
The DM78A1 and DM78A3 subcalibre practice ammunition will be delivered in two lots between 2016 and 2018.
The 120mm x 570 DM78 round is based on an innovative acceleration and replacement techology that enables an especially economical design. In addition, the DM78 is safe to fire in all the same climatic zones as the DM63 KE service round.
The DM78’s very low pressure level results in negligible erosion, fostering extremely long barrel life. Moreover, the round can be used at any tank firing range that meets the safety standards required for its predecessors, the DM38 family and the DM48.
This new order underscores once again Rheinmetall’s clear technological lead in the field of large-calibre weapon systems and ammunition.
Sales growth and significant increase in consolidated result
Forecast: 2015 sales to rise to over €5 billion
– Consolidated sales grow 11% to €3,582 million after three quarters
– Defence posts sales growth of 17% to €1,625 million, operating earnings improved by €73 million
– Automotive increases sales by 7% to €1,957 million and operating result by 18% to €164 million
– Significant rise in Group EBIT: growth of €117 million to €140 million
– Earnings per share improve from €-0.39 to €1.89
With good business performance in both corporate sectors and a significant rise in the consolidated result, Düsseldorf-based Rheinmetall AG is on the home stretch for a successful fiscal year 2015. Both sectors are generating sales growth and boast a strong upturn in earnings.
The successful business performance in the first three quarters has prompted the technology group to increase its annual forecast for 2015 slightly. Rheinmetall is now targeting consolidated sales of €5.1 billion (previous forecast: €5.0 billion) and an operating margin slightly above 5% (previously: around 5%).
Armin Papperger, CEO of Rheinmetall AG: “Rheinmetall is back on track and has put itself in a strong position with its deployment in numerous important markets. This is also demonstrated by the good development of sales and orders. Our products in the Defence sector serve the demand for equipment for armed forces that is rising again in many countries. In the Automotive sector, the issues of fuel and emissions reduction are still highly topical – and here, too, our pioneering technologies make us optimally poised to continue building on our market positions.”
In the first nine months of 2015, Rheinmetall generated consolidated sales of €3,582 million. Compared to the same period of the previous year, this is an increase in business volume of €367 million or 11%. Adjusted for currency effects, growth came to 9%.
Earnings before interest and taxes (EBIT) in the first nine months of 2015 improved considerably and climbed €117 million to €140 million (Q3 2014: €23 million). In the same period of the previous year, negative non-recurring effects (including for restructuring) of €16 million were incurred in the Defence sector.
The Group’s operating result (EBIT before special items) increased in the same period from €39 million to €140 million. This corresponds to growth of €101 million.
This significant rise in earnings increased earnings per share from €-0.39 (2014) to €1.89 in the period under review.
The Rheinmetall Group’s order backlog remained at a record level, and at €6,988 million on September 30, 2015, was €405 million higher than the corresponding figure of the previous year (€6,583 million).
The proportion of sales achieved abroad remained at a high level (74%). In addition to the German market (26%), the key regions in terms of sales volumes were Europe excluding Germany (36%), followed by Asia (21%) and North America (11%).
The financing of the Group’s business activities is served by a new five-year syndicated loan of €500 million, which Rheinmetall agreed at attractive terms in September 2015. It replaces the former five-year syndicated loan and also offers two options for extension at one year each.
Defence: sales growth and recovery of operating earnings
The Defence sector generated sales of €1,625 million in the first nine months of 2015. This corresponds to growth of €241 million or 17% compared to the previous year’s figure of €1,384 million. Adjusted for currency effects, the growth was 15%.
The sector’s earnings before interest and taxes (EBIT) increased by €89 million year on year to €-11 million. The considerable sales increase in the Combat Systems division had a particularly positive effect on earnings development.
On the basis of the individual quarters of the current fiscal year, the Defence sector’s earnings performance shows a positive trend. Operating earnings reached €16 million in the third quarter after €-28 million in the first three months and €1 million in the second quarter of 2015. Traditionally, major sales and earnings contributions are not generated in the Defence business until the fourth quarter.
The Defence sector posted a solid order intake of €1,774 million in the first nine months of 2015, exceeding the prior-year figure (€1,592 million). Key orders received in the third quarter of 2015 included protected and unprotected wheeled vehicles and air defence systems for countries in Asia, equipment for infantry in the MENA region and various ammunition orders.
The book-to-bill ratio remains higher than 1. The sector’s order backlog as of September 30, 2015, amounted to €6,547 million, €382 million higher than the previous year.
