With our comprehensive know-how and broad product range, we are successful in two highly attractive and promising markets: mobility and security.

Stricter emission and consumption guidelines worldwide call for new solutions to optimize internal combustion engines. At the same time, the share of vehicles with alternative drive systems – the so-called New Energy Vehicles – and the demand for digitization solutions will increase significantly in the medium term. More efficient and thus lower-consumption engines as well as emission reduction and electrification are market-dictating technological drivers, which we are addressing. This creates opportunities for further profitable growth for our Automotive segment. From “classic” combustion engines to battery-electric powertrains and fuel cells – our products make internal combustion engines cleaner, drive hybrids and are e-mobility-ready.

In light of shifted geopolitics as well as new conflicts and threats across the world, the demand for greater security and protection solutions is increasing. Worldwide, there is a sustained high demand for the modernization and better equipment of armed and security forces. At the same time, most nations are becoming more willing to invest more in security. This global investment demand creates growth potential for our Defence segment, especially in Germany and Europe, but also on other continents like Australia.

The Bundeswehr's increased military responsibility within the framework of alliance defence as well as in international missions and the financial commitments made by the German government to NATO to further increase its own defence spend, support our growth path going forward.

We are present on all continents with more than 120 R&D, production and sales locations. We operate as an internationally highly networked Group. Our export share of Group sales regularly exceeds 70 percent.

Following the customer, Rheinmetall Automotive has production facilities in all major automotive regions of the world. We entered future markets at an early stage: for instance, we have benefited from more than 20 years of market growth in China, where supply also to domestic OEMs is increasing.

Today, Rheinmetall Defence is present on all continents. We applied the concept of "Think Globally, Act locally" to our expansion strategy at an early stage: This means that we co-operate with local partners or foster local know-how and thus meet the demands of our international customers for maximum autonomy in defence procurement. The success of this strategy is reflected in numerous major international orders won in our bridgeheads such as in Australia, our European neighbors or in Asia, for example.

As a provider of cutting-edge technology in both segments, our objective is to set market trends in the core areas of our current product portfolio, gain market share and rank among the three strongest competitors in our addressable markets.

With our Automotive segment, we are the global market leader in exhaust gas recirculation systems, solenoid valves and electric pumps. In pistons, we rank among the top 3 suppliers worldwide. In addition, as a major supplier of casting technology in China, we have taken the leading position in cylinder heads and structural components. We are also active outside the automotive industry, for example as a supplier of subsystems for the development of the 5G mobile communications technology.

We are the largest supplier of land-based systems for armed forces in Europe. In military vehicle systems and in the ammunition business, we rank amongst the top three suppliers in the Western world. This also applies to military training using live simulation systems and cannon-based air defence. This market position together with our comprehensive product portfolio is the basis for our objective to play a pivotal role in shaping the consolidation process of the defence sector in Europe.

At the same time, we use our technical know-how to successfully shape the transformation of the markets towards post-fossil mobility and to avert new threats with our products.

With regard to e-mobility for passenger cars, commercial vehicles and micro-mobility, we have systematically expanded and already successfully commercialized our product range.

In addition, we are increasingly focusing our R&D efforts on developing products that can be used independently of pure passenger car business or special drive technology. We also make use of new technologies and materials, such as for stabilized chassis or the use of carbon fiber reinforced plastics in lightweight chassis construction.

Rheinmetall Defence is systematically expanding its systems business, increasingly benefiting from follow-up business, such as maintenance, spare parts, logistics and training, over the entire, often decades-long, service life of its systems.

• We are the technology leader with the majority of our products. We utilize this advantage across our segments in currently five central technology fields: Automation, Digitization, Next Sensors, E-Mobility and Artificial Intelligence. We combine the respective know-how and development capacities from both segments under central co-ordination and work on future-proof products. We are thus positioning ourselves more and more as a fully integrated technology group with the aim of meeting people's most diverse needs in the areas of mobility and safety. In future, we intend to use our technologies in other areas and applications as well. In this way, we create a clear competitive advantage and additional synergetic growth potential for the future of our Group as a whole.
• To promote our innovative strength and maintain our technological leadership, we invest around five percent of our annual sales in R&D. Our Defence segment in particular also benefits to a great extent from client-funded new developments.

We are working on electrifying the powertrain, for example with our 48V Electric Drive Unit combined with a matching battery module for compact city cars or for hybridizing larger vehicles. We are also developing an efficient thermal management system for heating and cooling drive components and the passenger compartment of electric vehicles. We are working on fuel cell peripherals and have already received our first orders in this area. We are also focusing on new trends in lightweight construction, such as carbon-fiber-reinforced plastics, and are contributing our expertise to new applications such as automatic and controlled opening and closing vehicle doors

Forward-looking trends are also driving our activity in the Defence segment. We develop laser technologies for various applications. Automation and artificial intelligence play an important role in a large number of applications, for example in our autonomous and unmanned land systems or in the development of our radar technology. This is a core element in the detection of and defense against enemy drones. As a leading provider of simulation technology, virtual reality is key in our developments. In addition, we have successfully positioned ourselves as a competent partner for the digitization of the battlefield.

• Rheinmetall is run to generate cash flow and increase profitability. The Group benefits from flexible and efficient cost structures.
• With our "One Rheinmetall" strategic program, we are setting a course for long-term profitable growth: by 2021, Group sales are expected to grow to at least €7bn and the EBIT margin to improve to more than 8%. Operating free cash flow is expected to range between 2-4 percent of sales annually in the medium term.
• Sustainable sales growth, resilient margin development and efficient cash management enable us to create shareholder value, safeguard our investment grade rating and payout an attractive dividend.
• We want our shareholders to participate in our success through a continuous dividend policy. Our goal is a payout ratio of around 30 to 35 percent.

• Rheinmetall has been doing business for more than 130 years. We promote long-termism. For Rheinmetall, sustainability plays an important and steadily growing role in all business processes.
• Assuming responsibility for people, society and natural resources – Rheinmetall meets this obligation in all strategic and operational decisions.
• We create transparency and continue to develop our sustainability strategy in continuous dialogue with our stakeholders. We actively engage with investors to show how we make a positive contribution to society and achieve sustainable value creation.
• Key elements of our ESG strategy are:

  
  Environmental
  We want Rheinmetall, our products, suppliers and customers to consume fewer resources and make a positive contribution to reducing greenhouse gases and other emissions. In addition, we have set targets for reducing our energy consumption.

  Social
  One of our central tasks: we want to protect those who protect our society. We use our extensive network of locations for social initiatives: we promote and support community projects in various areas, large and small.

  Governance
  We stand for clean business. Uniform framework conditions and clear guidelines for lawful, compliant, ethically correct and fair conduct in day-to-day business give our employees security in making decisions. We staff important positions in the Group on the basis of a structured succession planning system that is systematically geared to diversity.

• Mobility and security are the DNA of Rheinmetall's business model.