In the context of the current virus-related threat situation, the technology group is making substantial contributions towards resolving the urgent shortage of protective equipment for medical and nursing personnel. Rheinmetall has already procured a million respiratory masks from China and had them delivered to Germany. The Group has now concluded an exclusive framework agreement with the Procurement Office of the Bundeswehr that encompasses the supply of large quantities of medical protective equipment in the coming months. This includes 20 million respiratory masks of various types and protective suits, goggles and gloves in comparably large quantities.
A Rheinmetall site in South Africa is producing disinfectants, including for the German market. Roughly half a million liters of disinfectant will soon be delivered to Germany for use by the medical sector, with up to another million liters then to follow at a later date.
A major priority of the company's management during the coronavirus situation is the protection of the employees of both sectors at the Group's roughly 130 sites worldwide. Comprehensive measures have been adopted in order to minimize the risk of infection for employees and to ensure the highest possible level of safety in operational processes.
Shortfalls in orders from customers in the Automotive sector will be addressed with a variety of measures for reducing production which will be adjusted according to the respective situations of the different Automotive sites. Consistent efforts are being made to ensure that the plants’ supply chain remains functional as far possible. At the same time, all necessary preparations have been made at Automotive for a controlled restart of the plants which were required to suspend production by government order.
Rheinmetall AG: Slight increase in sales; order backlog of more than €10 billion
Rheinmetall AG is reporting consolidated sales of €1,358 million for the first quarter of 2020, after €1,342 million in the same quarter of the previous year. This represents growth of €15 million or 1.1%.
The order backlog for the Group remains at a high level. As of the end of the quarter (March 31, 2020), it amounts to €10.3 billion after €9.1 billion in the previous year, equating to growth of 13%.
Operating earnings amounted to €34 million during the reporting period, after
€54 million in the first quarter of the previous year. This decrease was entirely due to the Automotive sector, which posted a decline in operating earnings of €-39 million. By contrast, the Defence sector increased its operating earnings by €20 million to
€29 million. The operating earnings margin decreased accordingly from 4.0% in the previous year to 2.5% in the first quarter of 2020.
Automotive hampered by coronavirus – positive operating earnings despite substantial decline in sales
In the first quarter of 2020, Rheinmetall Automotive did not escape the downward trend on the global automotive markets and the effects of the coronavirus crisis, and reported decreased sales of €618 million for the first quarter of 2020 after €714 million in the same period of the previous year. This represents a decrease of €96 million or 13.5%. In comparison, the number of vehicles under 6 t produced worldwide outside of China decreased by 14.7% year-on-year. Calculated including the Chinese market, global automotive production decreased during the first quarter of 2020 by as much as 23% year-on-year.
Despite these industry-wide difficulties, Rheinmetall Automotive can report positive earnings for the first quarter of 2020. Operating earnings amounted to €10 million after €49 million in the same period of the previous year. The operating earnings margin of the sector therefore decreased to 1.7% (previous year: 6.9%).
The Mechatronics division is reporting a sales decline of 13% to €348 million in the first quarter of 2020. Operating earnings amounted to €9 million in the first quarter of 2020 after €31 million in the previous year.
At €210 million, the Hardparts division's sales were down in the first quarter of 2020, falling by 16% year-on-year. The operating earnings for the first three months of 2020 decreased from €13 million in the previous year to €-3 million.
In the Aftermarket division, sales for the first quarter of 2020 remained stable at the same level as the previous year. The sales volume generated by the division of
€83 million stands only €2 million below the previous year's figure of €85 million. The decrease amounts to 2.4%. The division’s operating earnings amounted to
€4 million (Q1 2019: €8 million).
The joint ventures in China, which are not included in the Automotive sector’s sales figures, were affected by the coronavirus crisis at an earlier point in the quarter and are reporting significant production downtime following government-ordered closures (which have now been lifted). These companies generated sales of only €144 million in the first quarter. This corresponds to a decrease by 34% relative to the figure for the same period of the previous year of €219 million. In comparison, light vehicle production in China decreased by 47% during the same period relative to the same quarter of the previous year. Production at the Chinese joint venture has now almost returned to the level from before the outbreak of the coronavirus crisis.
