Hello, ladies and gentlemen, and welcome to the Q1 Results Call 2024 of Rheinmetall AG. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to Dagmar Steinert, CFO of Rheinmetall. Thank you for the kind introduction. Good morning, everyone, and welcome to Rheinmetall's Q1 2024 Conference Call. Before I start on page 3, I would kindly remind you of two things. First, as we are hosting our virtual AGM later this morning, we have a hard stop at 9:15 A.M. I will try to be brief so that I have time to answer your questions in the Q&A. Second, please be reminded of our legal disclaimer on the second page. Let us now move to page 3, please. The first quarter marks an excellent start to the year and was characterized by double-digit top-line growth and a solid margin improvement. However, higher working capital and CapEx activities affected our operating free cash flow. As in previous years, I would like to remind you that we are expecting a heavy backend-loaded business. We didn't book business with the military trucks, which we are expecting to be called off in Q2 and in Q3 this year. Rheinmetall's backlog surpassed the EUR 40 billion mark for the first time. The main driver for Rheinmetall nominations of nearly EUR 4 billion were orders for SkyRanger air defense systems. Another significant contribution came from the service contract for the heavy weapon carrier, which, unlike the heavy weapon carrier itself, was already booked in the first quarter. The strong start to the year and the progress that we are currently seeing in our second quarter gives us high confidence to achieve our 2024 guidance. Lastly, we successfully closed the small bore piston disposal on April 15, and we were able to sell all remaining SRIRAM shares in the first quarter. With this, we fully accomplished the exit of the piston business, and overall, it marks an important milestone for the realignment of the Rheinmetall group. Please turn to page 4. We are conducting several capacity expansions across Europe. All of them are well on track. The new plant in Niedersachsen and the F-35 plant in Weeze are both expected to start production in 2025. Next to that, we are in advanced discussion with the Romanian government to establish a new powder factory in Romania with a potential annual capacity of up to 1,500 tons. Furthermore, on April 16, we signed a MOU with the Lithuanian government to establish a new plant for 155-millimeter artillery ammunition with a potential annual capacity of up to 100,000 rounds. Lastly, although not mentioned on the slide here, another interesting acquisition we completed in March was RIG in the Netherlands, of which we acquired 100%. RIG gives us access to promising hybrid technologies, which can be used in light tactical vehicles. Please move on to page 5. In the first quarter, we witnessed a sales increase of 16% year-over-year and a solid margin expansion. Sales rose to nearly EUR 1.6 billion, and the margin improved by 2.4 percentage points to 8.5%. Operating result improved significantly by 60% year-over-year thanks to a great contribution from Expire. The EBIT pre-PPA stood at EUR 138 million. Please turn to page 6. Our operating free cash flow came in at -EUR 187 million. This had two main effects. First, we continued to increase our working capital to nearly EUR 2 billion. A major share of this are the military trucks, which we are expecting to be called off in the second and the third quarter this year. Second, we kicked off multiple new CapEx projects, like, for example, the artillery plant in Niedersachsen. As I said earlier, a continued driver for the working capital buildup is a pronounced seasonality of the defense business, which is heavy backend-loaded. Moving on to page 7. Our balance sheet remained strong and unleveraged. Our net debt to EBITDA ratio stood at 1, well below our target of 3. As a result, Moody's confirmed our credit rating on April 23 at Baa2 with a stable outlook. With a cash position of EUR 515 million and undrawn credit lines of more than EUR 1 billion, we have amplifier power to stay opportunistic. Moving on to the next page. Rheinmetall Backlog jumped by more than 42% year-over-year and crossed the EUR 40 billion mark for the first time. A number of air defense orders were the main driver for a strong jump in Rheinmetall Nominations to more than EUR 3.9 billion in the first quarter. As mentioned before, a significant building block came from the service contract for the Heavy Weapon Carrier with the contribution of more than EUR 600 million net in Q1. The vehicles, however, will be booked in the second quarter. Please turn to page 9 for an update on our segments. Vehicle Systems grew sales by almost 7% to nearly EUR 500 million with an operating margin of 7.7% in Q1. Different seasonality of the Ring swap agreements affected the operating margin in the first quarter. Weapon and Ammunition saw a significant revenue increase of around 70% to EUR 362 million year-over-year as a result from higher ammunition call-offs. Key projects included several artillery orders from both Germany and Ukraine. Rheinmetall Expal Munitions generated sales of more than EUR 100 million in the first quarter and thus made a decisive contribution to sales growth. The operating result more than doubled to EUR 53 million, and margins expanded significantly to 14.7%. However, an organic increase of more than 400 full-time equivalents and adverse FX effects when compared to the previous year burdened the leverage effect in the first quarter in anticipation of further growth. Typically, Weapon and Ammunition has a very strong seasonality, as more than 40% of annual sales are expected to come in in the fourth quarter. Electronic Solutions reported sales growth of around 26% to EUR 287 million year-over-year and a great improvement of the operating result to EUR 17 million, increasing the operating margin to 6%. Germany was a key sales driver with SkyRanger air defense systems, further delivery shares for the Puma, as well as delivery of combat helmets. Our civil business, which is now operating under the new name Power Systems, had a flat quarter in terms of revenue growth but was able to improve the operating result by nearly 30%. Sales growth in the US and Asia offset the weak development in Europe. Higher sales prices and a better product mix, together with the at-equity result of our Chinese joint venture, led to a margin increase to 5.8%. Please move to page 10, where I would like to give you a bit more color on the consolidation line. Whereas our sales consolidation increased to -EUR 101 million year- over- year, we saw a significant improvement in the operating result consolidation to -EUR 6 million, which represents an increase of around 20 percentage points. There are three driving forces behind this. First, an improved operational performance of 4iG. Second, a change of the allocation logic for holding-related costs back to the segment level. And third, the disposal of all remaining Shriram shares. For full year 2024, we expect a sales consolidation effect of around 6% of sales and for the operating result, a consolidation effect of around 5% of operating result. Of course, all these figures are minus. Let us move to page 11. As we discussed in the last earnings call, we have guided for a CapEx spend of around 7% of sales. There are multiple large CapEx projects across all segments, which we have listed here. If there are any new major projects coming up in the next month, we will finance them in a cash-neutral manner. This could happen via down payments, grants, subsidies, etc. Please turn to page 12 for a brief outlook on the current quarter. As half of the second quarter already lies behind us, I would like to give you a bit of color on the current development. Our Q2 sales are expected to increase in line with our guided annual growth rate. Next to that, Rheinmetall nominations will double year-over-year, mostly as a result of German orders. Lastly, while Q1 CapEx spend stood at 6% of sales, we are seeing an acceleration, giving the groundbreaking ceremony for our new artillery plant in Niedersachsen only took place in mid-February. To sum it up, Rheinmetall reports a strong start to the first quarter of 2024 with ongoing sales growth and significant higher income. With this, I would like to conclude my presentation, and I'm now happy to take your questions. Again, please be reminded that we have a hard stop today at 9:15 A.M. due to the AGM. Ladies and gentlemen, if you would like to ask a question now, please press nine followed by the star key on your telephone keypad. In case you wish to cancel your question, please press nine followed by the star key a second time. The first question comes from Sven Weier, UBS. Please go ahead. Yeah, good morning, and thanks for taking my questions. The first one is following up on your order intake guidance. I just wanted to get the wording right here. Are we talking about firm order intake or nominations in total? And the other question I had, because you're expecting EUR 30 billion orders from Germany this year, I was just wondering to where that takes you by the end of Q2, what percentage of the EUR 30 billion you expect to have in by the end of the quarter. That's the first one. Thank you. Yeah, Mr. Meier, thank you for your question. Of course, we are talking about Rheinmetall nomination. And for the second quarter, our nomination from Germany, what we expect will be just around EUR 7 billion. And you had how much in Q1? In Q1, we had from you're asking now which how much from Germany? Just Germany. Just Germany. German nomination in Q1 was not that much. I mean, our nomination was EUR 3.9 billion in total in the first quarter, and from Germany, it was roughly a little bit less than EUR 2 billion. Okay. So meaning that the majority of the EUR 30 billion is then for the second half, I would guess. Yeah. Yes. Yes, that's correct. And then if I may, just the other point I had was on the organic performance of the weapon and ammunition business, because Q1 last year was a relatively soft start as well, and now I think the organic sales were up low double-digit, and EBIT went back. Is that also just a timing issue in terms of the client taking delivery? Because I guess it's not you. I mean, you're producing probably full steam on the ammo side. Is it also just a timing thing, and you're seeing those deliveries in the second quarter just on the truck side, or? Well, looking at weapon and ammunition, of course, it's a timing issue. And as we have a very strong growth in the running year, of course, we have to build up capacities, and therefore, our costs increase, and that's a burden for the leverage. And as I mentioned, especially weapon and ammunition is a heavy backend-loaded business, and therefore, we are just talking about a timing issue. Thank you, Ms. Steinert. You're welcome. The next question comes from Virginia Montorsi, Bank of America. Over to you. Good morning. Thank you for taking my question. It's a follow-up to something that has been mentioned already in the presentation. But if I look at your full-year guidance for revenues and what you've just said for Q2, it does imply over 40% growth in revenues for the second half of the year. So could you help us understand a little bit more how to think about the divisions, what's driving that, and is it mostly going to be Q4-related? Is there anything we should keep in mind? Thank you. Well, of course, our seasonality of the business applies to every segment except, of course, Power Systems. And we expect call-offs for the military trucks already in the second quarter, but more in the end of the second quarter. A bigger portion we expect in the second half of the year. Therefore, the Vehicle Systems business is backend-loaded as well. And looking at our Weapon and Ammunition is backend-loaded, as already mentioned. But of course, with Expire, which we included in our group in the third quarter last year, therefore, compared with the second quarter, there will be a strong growth as well from Expire seen in Weapon and Ammunition. Yeah, that's the development. Electronic Solutions will have the same development regarding seasonality like last year. Okay. Thank you very much. The next question comes from Sebastian Growe, BNP Paribas Exane. Please go ahead. Yeah, good morning. Thanks for taking my question. The first one would be a follow-up to Sven's question when it comes to the nomination from Germany. Can you shed a bit more light around what's behind the EUR 7 billion that you expect in the second quarter, referring to the mix by segments? And backdrop of the question clearly is you had, obviously, the slippage of both weapon and then clearly ammunition, I have to say, and then also trucks into 2024 from 2023. And my understanding is that this is a function of frame contracts that you still need to sign in order to get the shipments done. So if you could be a bit more specific around what's behind the EUR 7 billion, that's my first question. Then I have two more. Well, of course. One order intake, which we expect, is the Heavy Weapon Carrier, where we just got the service part in the first quarter. Then, of course, we expect our ammunition for our Weapon and Ammunition business, where we build our new plant in Niedersachsen. That are the, let me say, biggest order we expect from Germany. You've been precise here. The Heavy Weapon Carrier, that's about what, EUR 1.5 billion -2 billion-ish for the vehicles as such? No, the Heavy Weapon Carrier is in total a little bit less than EUR 3 billion. Okay. So 2.4 than if you had EUR 600 million in the first quarter, right? Yeah. And then, of course, we expect other order intake from trucks. But the large frame contract for large calibers for artillery, that's not yet in scope for the second quarter. Is that your fair understanding? It's in scope for the second quarter. Okay. And then the second question I had, I didn't really catch what you said around the Ring swap agreement impact. You made some comments around it for the first quarter, and if you could repeat those. And my question is also what you would expect from Ring swap agreements in the entirety of 2024. Well, the Ring swap agreements, they have quite a high margin, and we have booked sales in the first quarter 2023. Therefore, if you compare our margin year-on-year, we have a lower margin in this business in 2024. It's just a question of product mix in the segment Vehicle Systems. Of course, we have seen in the first quarter 2023 as well sales from material kits with Fuchs Algeria, and that was a high-margin business as well. Okay. Gotcha. The very last question then, just on the reallocation of the overhead costs, will you provide then also sort of readjusted figures for the first quarter of 2023 to get a better understanding of what the impact is at the operational level? Well, yeah, we reallocated mainly overhead costs regarding IT. And with that, of course, there is in the first quarter 2024, and that will remain, of course, in the future. Higher IT costs are seen in the segments, and there we are talking about a single-digit million EUR number. Okay. All right. Thank you. The next question comes from Christoph Laskawi, Deutsche Bank. Please go ahead. Good morning. Thank you for taking my question as well. The first will be a follow-up just on the ammunition frame contract. If we think about the scope that has been mentioned previously, which was around EUR 10 billion, could you comment on the technicalities of the booking there? Because the implied would obviously be lower in Q2. That will be the first question. And the second one would be on consolidation. Obviously, your CEO highlighted recently in an interview that he's very open for that, and you stressed that the balance sheet is healthy to be opportunistic. Is this opportunism or basically your strategic setup there just for a deal that you discussed in the US, or should we also think about Europe being in continued focus and you actively on a hunt for a deal here? Thank you. Yeah. Well, regarding the ammunition nomination or contract you'd expect, of course, overall, it's over EUR 10 billion. But it will be a little bit split in separate frame contracts, and therefore, we just expect in the second quarter from Germany EUR 7 billion and, of course, a call-off of around EUR 1 billion. Regarding our M&A activities, yes, we have a very strong balance sheet. We are open for further consolidation. And as we mentioned, we are looking at targets within the US, but there's nothing more I can mention today. Thank you. Just a follow-up on the ammo side, but you do expect the full EUR 10 billion in 2024, right? Yes. Definitely. Thank you. So at the moment, there seem to be no further questions. If you would still like to raise a question at this point, please press nine followed by the star key on your telephone keypad. And the next question comes from Sash Tusa, Agency Partners. Over to you. Thank you very much, indeed. Good morning. Just a very quick question. Could you just confirm what the capital gain was on the share of the Shriram shares in the first quarter? You said that that was included in the Power Systems result. It was EUR 4 million. Thank you so much. You're welcome. The next question comes from Michael Raab, Kepler. Please go ahead. Hey. Morning, everyone. Mike Raab from Kepler here. I'd like to get back to your targets of the order intake and order backlog for the full year. Just first of all, to reconfirm, you're looking for an order intake between EUR 28 billion and EUR 36 billion, and you mentioned you were going to look for an order backlog of between EUR 50 billion and EUR 60 billion, respectively. Is that correct? That is correct, yes. But just to clarify, it's nomination and not it's Rheinmetall nomination and not firm orders. It's nominations. It's not firm orders. It's nominations overall. Okay. So just okay. Yeah, that probably explains it because I was going to ask, if we take EUR 38 billion as an order backlog that you had at the end of last year, we take the midpoint of your order intake range of EUR 32 billion, we're going to get to EUR 70 billion. We deduct EUR 10 billion in sales roundabout, so we get to an order backlog of EUR 60 billion, which would already be at the upper end of the range. So let's say if you got to the upper end of the order intake range, then you could easily accumulate an order backlog in excess of EUR 60 billion. But what you're saying, this is including nominations, right? Yeah. Well, you made a perfect calculation. I couldn't have done it better. Okay. Okay. Good. Good. So, no mistake in my thinking. Thank you. So that seems to be it for the moment. There are no further questions. So I'd like to hand it back to you, Ms. Steinert, for some closing remarks. Yes. Thank you very much. Thank you very much for your open and interesting questions. And I'm looking forward to the performance of our second quarter and, of course, for the full year 2024. And I'm sure we will deliver, and we will fulfill our guidance. So thank you very much, and goodbye.