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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annual report/annual result/Earnings Forecast

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.

end of announcement euro adhoc
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ots Originaltext: Rheinmetall AG
Im Internet recherchierbar: http://www.presseportal.de

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: oliver.hoffmann@rheinmetall.com

Branche: Holding companies
ISIN: DE0007030009
WKN: 703000
Index: MDAX
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