EANS-News: Rheinmetall AG / After record year in 2010, Rheinmetall forecasts further improvements in sales and earnings - dividend at new high

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Düsseldorf (euro adhoc) - - Business figures for 2010: Consolidated sales grow
by 17% to EUR3,989 million,
EBIT reaches record level at EUR297 million
- Dividend increase from EUR0.30 to EUR1.50 per share proposed
- Forecast for 2011: EBIT grows considerably more than sales and rises to
between EUR330 million and EUR360 million

After a very successful 2010 financial year in both company divisions, the
course has been set for profitable growth to continue at Rheinmetall AG, based
in Düsseldorf. Following the record results that Rheinmetall posted in 2010, the
Group is again expecting strong growth in sales and earnings in 2011. Klaus
Eberhardt, CEO of Rheinmetall AG: "Thanks to an impressive turnaround in the
Automotive sector, we are once more on track for success."

Rheinmetall Group: Sales reach almost EUR4 billion - earnings at record level

Rheinmetall achieved consolidated sales of EUR3,989 million in 2010, which
equates to an increase of 17% in comparison with the previous year´s sales of
EUR3,420 million. This growth was largely driven by the highly positive
performance of the Automotive sector, which has emerged strengthened from the
crisis in the industry and increased its business volume by 30% in 2010. Sales
in the Defence sector rose by 6%. 69% of the Group's business volume was
achieved through business with customers abroad.

Earnings before interest and tax (EBIT) in the Rheinmetall Group rose by EUR282
million from EUR15 million the previous year to EUR297 million in fiscal 2010.
This brought operating earnings to a new record level. The previous year´s
earnings included EUR138 million for measures to overcome the crisis in the
Automotive sector. The EBIT margin in the Group was 7.4%,
well above the previous year´s level of 0.4%.

With net interest up EUR7 million and after deduction of taxes, Rheinmetall
achieved consolidated net income of EUR174 million, which exceeded the previous
year´s figure by EUR226 million. After deducting profit attributable to minority
interests of EUR12 million, this brought earnings per share to EUR4.23 (previous
year: EUR-1.60).

Dividend payment of EUR1.50 proposed

In light of the positive earnings situation and the positive business forecast,
the Executive Board and Supervisory Board will be proposing the distribution of
a dividend of EUR1.50 per share (previous year: EUR0.30) at the Annual General
Meeting on May 10, 2011. This represents a payout ratio of 35%.

Defence continues growth course - EBIT margin increases to 11.6%

For the Defence sector, the 2010 financial year was marked primarily by the
successful integration of a series of acquisitions in Germany and abroad that
serve mainly to complement the technological portfolio and open up new
international markets.

With sales of EUR2,007 million, Defence recorded a year-on-year increase of
EUR109 million or 6% in 2010 (2009: EUR1,898 million). Activities included for
the first time in 2010 contributed to the expansion of business with total sales
of EUR83 million. This comprised the development and distribution activities of
joint venture Rheinmetall MAN Military Vehicles GmbH (from May 2010), Simrad
Optronics AS (from July 2010), Rheinmetall Verseidag Ballistic Protection GmbH
(from July 2010) and RWM Italia Munitions S.r.l. (from December 2010). This was
countered by a loss of EUR11 million in sales against the previous year
resulting from the deconsolidation of Contraves Advanced Devices Sdn Bhd,
Malacca, Malaysia.

Rheinmetall Defence secured major contracts in Germany and abroad and reinforced
its position as a leading supplier to European armed forces. At EUR1,977
million, order intake in 2010 remained below the previous year´s very high level
of EUR3,153 million, although this included the EUR1.3 billion major contract
for the new Puma infantry fighting vehicle for the German armed forces. Adjusted
for this effect, order intake grew by approximately EUR95 million, or 5%. The
first two series production models of the Puma, the world´s most modern infantry
fighting vehicle, were handed over to the public client at the end of 2010.

The order backlog of the Defence sector remains at a high level, amounting to
EUR4,772 million on December 31, 2010 and again exceeding the previous year´s
figure (December 31, 2009: EUR4,590 million) by EUR182 million.

The sector posted a significant increase in earnings, achieving earnings before
interest and tax (EBIT) of EUR234 million in 2010 (2009: EUR215 million), which
represents growth of EUR19 million, or 9%. The above-average increase in
earnings compared with the growth in sales brought the EBIT margin up to 11.6% -
a new high for the Defence sector after 11.3% the previous year.

Automotive achieves sharp sales growth

The 2010 financial year at Rheinmetall Automotive was marked by the economic
recovery on the market and the associated positive effects. The conclusive
implementation of the restructuring measures to overcome the crisis that were
agreed upon at the end of 2008 also played a central part in the development of
the business.

In the year under review, Rheinmetall Automotive benefited primarily from the
22% increase in passenger car production in the triad markets of Western Europe,
NAFTA and Japan and achieved sales of EUR1,982 million, which represents a
year-on-year rise of EUR460 million or 30%.

The sector also benefited from long-term industry trends in particular, derived
from the necessity of reducing consumption and of developing optimized fuel
management for internal combustion engines. This resulted in the ramp-up of a
major order in the second half of 2010 for components for a particularly
fuel-efficient engine series, with an annual sales volume of more than EUR150
million.

With consistent expansion of business activities in Asia and developing
countries, Automotive is planning above-average growth in dynamic markets in
future. The non-consolidated Chinese joint venture companies posted a sales
volume of EUR258 million in 2010, after EUR155 million the previous year - with
the trend for significant growth continuing.

Automotive achieved earnings before interest and tax (EBIT) of EUR81 million in
2010, thereby exceeding the previous year´s figure of EUR-187 million by EUR268
million. This considerable increase in earnings was essentially due to higher
sales and a lower break-even point as a result of the restructuring carried out
during the crisis and the lack of expenses for measures to overcome the crisis.

Outlook: Rheinmetall Group expects growth in sales and earnings to continue

Based on the forecasts of experts at CSM Worldwide, who expect the growth in
worldwide automotive production to continue this year and next, and against the
backdrop of the high order backlog in the Defence sector, which began 2011 with
an order coverage rate of over 70%, Rheinmetall predicts consolidated sales of
around EUR4.3 billion for the current fiscal year, which represents growth of
8%. Both the Automotive and Defence sectors will contribute to this growth.

Supported by new orders, particularly for products that serve compliance with
international standards for emissions limits, Rheinmetall estimates that the
Automotive sector will see growth in sales in 2011 that will be slightly above
the 5% growth in global automotive production predicted by CSM. Sales of around
EUR2.1 billion are expected in the sector in the current fiscal year.

For the Defence sector, Rheinmetall is expecting to achieve sales of
approximately EUR2.2 billion in 2011, without taking into account the share in
sales attributable to MAN for Rheinmetall MAN Military Vehicles GmbH logistical
vehicles. The amount of these sales depends on the establishment of the second
stage of the joint venture, which is to take place by the end of fiscal 2011 at
the latest. This second stage of the joint venture, in which Rheinmetall holds
51% of shares, also includes the full integration of MAN´s production site in
Vienna.

Consolidated EBIT to grow significantly in 2011

On the basis of the growth forecasts for the Group´s two corporate sectors,
Rheinmetall is anticipating EBIT to rise more strongly than sales, anticipating
EBIT of between EUR330 million and EUR360 million in 2011. In particular, the
Automotive sector, for which - assuming the market growth predicted by CSM and
in connection with further operational improvements - EBIT of between EUR110
million and EUR130 million is expected, will contribute to this improvement in
results.

For the Defence sector, Rheinmetall still expects to see a sales return of over
10% and EBIT of between EUR230 million and EUR250 million for the current fiscal
year. One prerequisite for this is that all large ongoing projects can be
implemented according to schedule.

Rheinmetall also anticipates further growth in sales and earnings in both
sectors in 2012.

Further inquiry note:
Peter Ruecker
Director Corporate Communications
Phone: +49 211 473-4320

Oliver Hoffmann
Head of Public Relations
Phone: +49 211 473-4748
Mail: [email protected]
end of announcement euro adhoc
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company: Rheinmetall AG
Rheinmetall Platz 1
D-40476 Düsseldorf
phone: +49 (0)221 473-4680
WWW: http://www.rheinmetall.com
sector: Holding companies
ISIN: DE0007030009
indexes: MDAX
stockmarkets: regulated dealing/prime standard: Frankfurt, free trade: Hannover,
regulated dealing: Berlin, Hamburg, Stuttgart, Düsseldorf, München
language: English

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