Our Bureau
03:04 PM, August 4, 2016
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Rheinmetall won Swiss air force's ground-based short-range air defence systems contract in May this year.

Rheinmetall’s defence sector posted a high order intake of €1,751 million in the first half of 2016, considerably exceeding the prior-year figure (H1/2015: €1,235 million) with growth of 42 percent.

The sector’s order backlog reached a new record value of €6,905 million (June 30, 2016). The largest single orders in the second quarter of 2016 were acquired by the Defence divisions Weapon and Ammunition and Electronic Solutions, the company said in a statement Thursday.

For example, one international customer ordered munitions worth just over €400 million to be delivered until 2022. A major modernization order from the Swiss Armed Forces has a mid-eight-figure volume in euros and includes the modification of the Swiss Air Force’s air defense systems until 2019.

At €1,250 million, the Defence sector’s sales rose by €196 million or 19 percent on the previous year’s figure in the first half of the year. Operating earnings (EBIT) improved by €29 million year on year to €2 million and were therefore positive again in the first half of a year for the first time since 2012.

Rheinmetall Group ended the first half of the year with substantial sales growth and a sharp rise in operating earnings.

The upward trend is being driven by both sectors of the technology group. The Defence is seeing high growth both in sales and order intake, Automotive shows persistently high profitability and is now returning to its growth path with an increase in sales after a slightly weak first quarter.

The technology group has confirmed its annual forecast for 2016 and continues to target consolidated sales of roughly €5.5 billion and an operating margin of around 6 percent for the fiscal year.

Armin Papperger, CEO of Rheinmetall AG, “We are seeing profitable growth in both sectors. In Defence, with our broad technological portfolio, we are benefiting from growing global demand for defense products. This is evidenced by the amount of orders obtained recently: Our order backlog in Defence has never been higher. Automotive remains continuously highly profitable and more than compensated in the second quarter for the slight drop in sales at the start of the year. With our pioneering technologies and global positioning, we are confident of participating further in the growth of the major automotive markets.”

In the first half of 2016, Rheinmetall generated consolidated sales of €2,599 million, an increase of €205 million or 9 % on the same period of the previous year. Adjusted for currency effects, the growth was 10 percent, with the proportion of business activities abroad increasing to 78 percent after 75 percent in the first half of 2015.

Operating earnings for the Group (EBIT) grew at a higher rate of 30 percent or by €24 million to €103 million.

The Rheinmetall Group’s order backlog remains at a record level. Like three months ago, it was about €7.3 billion on June 30, 2016, which represents growth of €181 million on the comparative figure for the previous year.

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