Rheinmetall (RHM) Pre-close call summary

Financial performance and outlook

• Top line and margin growth for 2024 are in line with previous guidance, with operating free cash flow exceeding expectations due to prepayments on new orders.

• Order backlog at year-end was €54 billion, below the €60 billion target, due to timing of German digital contracts, which have since been approved.

• Major Q4 contracts included D-LBO (€1.5 billion combined) and a Lithuanian 155mm ammunition contract worth over €700 million.

• Defense business is expected to grow over 30% in 2024, while civil business faces headwinds from declining production volumes.

• Long-term vision targets €30 billion in sales by 2030, with Weapon and Ammunition and Vehicle Systems each exceeding €10 billion.

Strategic initiatives and contracts

• Recent approval of key German contracts (TaWAN and Soldier Systems) aligns with order intake expectations above €11 billion.

• Willingness to divest non-core civil business, though no accounting actions have been taken.

• Submitted a non-binding offer for TKMS Marine business; awaiting feedback as TK pursues a spin-off.

Operational and ESG updates

• Incident at the Murcia Expal plant resulted in injuries but is not expected to cause major disruption; sabotage has been ruled out.

• Safety and incident rates are a key ESG focus, with ongoing efforts to improve global safety standards.

• Incident in South Africa delayed €250 million in shipments to 2025.