MTU Aero Engines AG · XETR:MTX
MTU Aero Engines — Investor Presentation (December 2023)
50 slides from MTU Aero Engines's investor presentation, December 2023
Slide 1: MTU Aero Engines AG Investor presentation
DRIVEN BY VISIONS OF TOMORROW MTU Aero Engines AG I Investor presentation December 2023
Slide 2: Agenda
Click to chapters Agenda 01 Track record 03 Production & Technology 05 Appendix 02 Market position 04 Financial outlook Investor presentation / November 23 © M T U A E R O E N G I N E S A G / T H E I N F O R M A T I O N C O N T A I N E D H E R E I N I S P R O P R I E T A R Y T O T H E M T U A E R O
Slide 3: 01 Track record
01 Track record We are one of the pioneers of the aviation industry and are firmly established in the market as a leading manufacturer of aircraft engines and member of the DAX stock index. Investor presentation / November 23 © M T U A E R O E N G I N E S A G / T H E I N F O R M A T I O N C O N T A
Slide 4: We shape the future of aviation!
We shape the future of aviation! WHAT WE DO I Design, development, production and support of aircraft engines in all thrust categories Fiscal I Commercial business: 30% of aircraft have MTU technology on board year 2022: Revenue around I Military business: full system capability, for more than 80 ye
Slide 5: MTU is built on excellence in these three pillars
MTU is built on excellence in these three pillars COMMERCIAL OEM BUSINESS MILITARY OEM BUSINESS COMMERCIAL MRO BUSINESS* I Revenues: ~ € 1.2 billion (26 %)** I Revenues: ~ € 0.4 billion (9 %) ** I Revenues: ~ € 3.1 billion (65 %) ** I Decades of partnerships with OEMs I European and U.S. engine prog
Slide 6: MTU looks back on many important names from the German industrial history
MTU looks back on many important names from the German industrial history 1934 1969 2005 Today BMW Flugmotorenbau GmbH MTU MTU goes public MTU Aero Engines is is founded 50% Daimler Benz established in the DAX, 50% MAN Germany‘s primary stock index 1989 1965 MTU becomes an affiliate of MAN takes ove
Slide 7: 02 Market position
02 Market position 2020-2021 was a test for the entire industry. We have proven resilience in the most severe aviation crisis since the end of the Second World War and are ready to further shape the future of aviation. Investor presentation / November 23 © M T U A E R O E N G I N E S A G / T H E I N
Slide 8: The aero engine industry
The aero engine industry CHARACTERISTICS I Industry players are specialized in different modules and technologies I Oligopolistic structure of market I OEM business and MRO are perfect supplements I New engine deliveries are almost EBIT neutral, spare parts business is the main value driver for the
Slide 9: MTU is an essential partner in the engine value chain
MTU is an essential partner in the engine value chain Subsystem/ Engine component module Engine Material suppliers* suppliers* suppliers* OEMs* Airframers* Airline operations MRO Engine MRO OEM market Aftermarket * selected market participants Investor presentation / November 23 © M T U A E R O E N
Slide 10: Long-term fundamentals for the aerospace industry remain intact
Long-term fundamentals for the aerospace industry remain intact Positive market environment for the aviation industry 20-year annual 20-year annual RPK2) 20-year annual CTK3) 20-year new aircraft GDP growth 2.5%1) traffic growth 3.5%1) traffic growth 3.2% deliveries 42,700 Solid new aircraft deliver
Slide 11: MTUs unique market position in both segments OEM and MRO
MTUs unique market position in both segments OEM and MRO OEM MRO I Strategic long-term partnership with Pratt & Whitney I No. 1 Independent MRO in the narrowbody market (LPT/HPC) secures growth provider worldwide opportunities I Worldwide broadest portfolio I Partnership on large engines for hot sec
Slide 12: A balanced portfolio in all thrust categories ensure MTU's long-term success
A balanced portfolio in all thrust categories ensure MTU’s long-term success + 01 MTU Programs Entry into service CF6-80, LM6000 outperforms the market in three V2500 747, 767, IGT, A300, A320, MD-90, A310, A330 of the four market segments by: KC-390 I Securing and expanding market and PW300, PW500
Slide 13: In the commercial OEM business MTU expands its position in all market segments
In the commercial OEM business MTU expands its position in all market segments BUSINESS JETS REGIONAL JETS NARROWBODIES WIDEBODIES Market position Market share will Excellent Adding the biggest and strongest improved increase from market position will engine to the portfolio 0 % to 90 % further impr
Slide 14: MTU's future growth is driven by narrowbody engines
MTU’s future growth is driven by narrowbody engines COMMERCIAL ENGINE FLEET WITH MTU PARTICIPATION 2022-2030 NEW ENGINE DELIVERIES 2022-2030 ~ 9,000 ~ 2,100 ~ 450 23,100 Passenger narrowbody Passenger widebody Cargo and government CAGR engine deliveries engine deliveries applications engine deliveri
Slide 15: MTU has a strong engine product portfolio to benefit from the aftermarket
MTU has a strong engine product portfolio to benefit from the aftermarket PW2000 (B757, C17) 1) CF6-80C/E (767, 747, A330) 1) GENX (787, 747-8) 1) SPARE PARTS REVENUE SPLIT Installed engines Installed engines Market share 13% ~ 30% ~ 40% ~ 33% 48% BizJet, others civil (757) passenger Trent 1000 NB ~
Slide 16: Solid military engine portfolio
Solid military engine portfolio FCAS CH-53K Eurocopter Tiger Tornado NEFE T408 MTR 390 RB199 EIS ~2040 EIS 2021 EIS 2004 EIS 1979 A400M Eurofighter Next Gen Helicopter TP400-D6 EJ200 Year 0 40-50 years Entry into service in service EIS 2013 EIS 2003 R&D Series Production Aftermarket Phase out Invest
Slide 17: Kick-off for the most advanced engine for the European next-generation fighter
Kick-off for the most advanced engine for the European next-generation fighter ~ 2,000 ~ 500 Achievements engines expected engineers at MTU I Foundation of 50:50 JV EUMET in 2021 I Strong partnerships across Europe I Start of demonstrator phase 1B, first milestones reached TIMELINE OF THE NEXT EUROP
Slide 18: MTU Maintenance weathered the Covid-19 storm and continues to perform above average
MTU Maintenance weathered the Covid-19 storm and continues to perform above average MRO REVENUES 2019 -2024 INCL. REVENUE MTU ZHUHAI (IN USD MILLION) I Pre-Covid revenue levels already reached in 2021 I Corona crisis well managed thanks to narrowbody and cargo exposure, high flexibility and quick re
Slide 19: MTU is working consistently to further strengthen its MRO market presence
MTU is working consistently to further strengthen its MRO market presence Secure market access Expansion of product portfolio Presence in key markets Increase competitiveness I Further increase independent I Expansion of existing and I Expansion of global MRO network I Digitalization and process MRO
Slide 20: MTU offers minimized maintenance costs and the best possible engine value retention
MTU offers minimized maintenance costs and the best possible engine value retention MARKET TRENDS BENEFITS Long-standing expertise and market leadership I Ongoing demand for independent solutions as an alternative to OEM aftermarket services 01 as an independent provider I Increasing focus on newer
Slide 21: Long-term partner in the OEM network
In the more recent programs, MTU increasingly supports the OEMs, providing standardized maintenance solutions MARKET TRENDS BENEFITS I Current OEM MRO market share is around 56%, tendency further growing 01 Long-term partner in the OEM network I High number of Airlines are focusing on their core bus
Slide 22: MTU's unique MRO expertise makes it a preferred airline partner
MTU’s unique MRO expertise makes it a preferred airline partner – together with China Southern, MTU has built up the No. 1 shop in China MARKET TRENDS BENEFITS I Strong growth of new airlines and large fleets forecasted 01 Local presence with high MTU quality standards I Selected Airlines are intere
Slide 23: Expansion of our global MRO network is progressing
Expansion of our global MRO network is progressing MTU Maintenance Canada MTU Maintenance Zhuhai (JV) Move to new facility 2021 Shop expansion 2021 MTU Maintenance Zhuhai #2 (JV) New shop 2024 MTU Maintenance Hannover MTU Maintenance Ludwigsfelde MTU Maintenance Serbia EME Aero (JV) ASSB Airfoil Ser
Slide 24: 03 Production & Technology
03 Production & Technology Investor presentation / November 23 © M T U A E R O E N G I N E S A G / T H E I N F O R M A T I O N C O N T A I N E D H E R E I N I S P R O P R I E T A R Y T O T H E M T U A E R O E N G I N E S G R O U P C O M P A N I E 24
Slide 25: Leading technology paving the way for emissions-free flight
Leading technology paving the way for emissions-free flight LEADING TECHNOLOGY FOR CORE ENGINE MODULES AND PRODUCTION PROCESSES I Fastrunning low-pressure turbine (LPT), high-pressure compressor (HPC) and turbine center frame (TCF) I MTU as role model for automation in aero engine manufacturing (Bli
Slide 26: MTU focuses on five core engine competencies
MTU focuses on five core engine competencies – three core components and on unique manufacturing and maintenance processes MANUFACTURING High-pressure compressor (HPC) Low-pressure turbine (LPT) MAINTENANCE Turbine center frame (TCF) Investor presentation / November 23 © M T U A E R O E N G I N E S
Slide 27: OEM global footprint – target vision for future manufacturing sites
OEM global footprint – target vision for future manufacturing sites Target set-up I Development/compliance hardware LABOUR COST PER HOUR OEM Munich: and pre-series Renewed infrastructure I High-tech procedures 2021 and competences I Military programs 2035 GEN2/NEFE/FFC* I Highly automated production
Slide 28: EcoRoadmap for a sustainable production
EcoRoadmap for a sustainable production 60% CO2 reduction by 2030 according to Paris climate agreement Since 2018: Since 2021: Since 2022: 2023 onward: Sustainability measures Project Zero for waste climate neutral production climate neutral production further measures for CO2 additionally support r
Slide 29: Energy sources for emission-free aviation
Energy sources for emission-free aviation IMPORTANCE OF SAF* FOR NEAR- AND LONG-TERM CLIMATE PROTECTION IMPORTANCE OF HYDROGEN AS CLEANEST ENERGY CARRIER Near-term Long-term I Drop-in application in existing fleet with imminent impact on climate I “Green” hydrogen has largest potential for zero emis
Slide 30: Engine concepts towards emission-free aviation
Engine concepts towards emission-free aviation 2ND GENERATION GEARED TURBOFAN WET CONCEPT FLYING FUEL CELL I Reduced fan pressure ratio and higher overall I Gas-turbine with waste heat recovery and I An electrochemical reaction in fuel cells pressure ratio steam injection into the combustion chamber
Slide 31: 04 Financials & outlook
04 Financials & outlook In recent years, we have proven resilience in a challenging market environment. From here, we start the future with a diversified portfolio and a considerable investment in new technologies. Investor presentation / November 23 © M T U A E R O E N G I N E S A G / T H E I N F O
Slide 32: Financial strength setting the ground for new investments
Financial strength setting the ground for new investments FINANCIAL STRENGTH I Strong balance sheet with a healthy leverage and high level of liquidity I Diversified funding mix – no short-term refinancing required I Resilience proven in crisis years 2020-2021 I Investment grade rating I Moody's: Ba
Slide 33: Fleet management program for GTF engine
Fleet management program for GTF engine Quality escape on Pratt & Whitney produced parts leads to accelerated engine removals and inspections for PW1100 engine FINANCIAL IMPACT I MTU has to share obligations for customer support as well as expenses for I Total effect on reported revenues 1,013 m$ 95
Slide 34: Guidance 2023 - Adjusted EBIT and adj. FCF 2023 confirmed
Guidance 2023 - Adjusted EBIT and adj. FCF 2023 confirmed Reported figures will be impacted by GTF fleet management plan ORGANIC REVENUE Military Commercial OE Total Group Sales* EBIT adj. Up mid teens % Up thirty % EUR 6.1 – 6.3 bn € >800 Mio € FCF adj. Commercial Commercial MRO > 2022 actuals Spar
Slide 35: Mid term outlook until 2025
Mid term outlook until 2025 I Demand recovery remains strong – Business I FX environment around USD/EUR parity provides AMBITION FOR 2025 parameters from last years mid term outlook remain strong uplift for revenues and EBIT adj. valid and intact I 2024 EBIT adj. expected significantly above 2019 I
Slide 36: MTU's financial policy remains prudent and reliable
MTU’s financial policy remains prudent and reliable Balanced leverage ratio target - 0.5 to 1.5 x net debt/EBITDA MTU’s cash deployment strategy Priorities Organic growth Dividends Share buybacks M&A Targets Opportunistic instrument New program Payout target of 40% to limit deleveraging and Opportun
Slide 37: MTU is well positioned in the market to benefit from further growth
MTU is well positioned in the market to benefit from further growth and to deal with market challenges Recovery & growth Economic slowdown Recovery expected for 2024, long-term growth and ongoing A strong financial and contractual position prepares well strong orderbooks → Operational excellence in
Slide 38: 05 Appendix
05 Appendix In our appendix you will find some more important financial data and further information. If you miss any information, please let us know. Investor presentation / November 23 © M T U A E R O E N G I N E S A G / T H E I N F O R M A T I O N C O N T A I N E D H E R E I N I S P R O P R I E T
Slide 39: Key Financials
Key Financials REVENUES EBIT ADJUSTED NET INCOME ADJUSTED FREE CASHFLOW / CCR*) [m €] (EBIT Margin) [m €] [m €] [m €] 5,330 757 (16.4%) 4,628 655 538 3,977 4,188 (12.3%) 358 476 (67%) 326 468 (69%) 416 (11.2%) (10.5%) 342 240 294 (70%) 105 (36%) FY 2019 FY 2020 FY 2021 FY 2022 FY 2019 FY 2020 FY 202
Slide 40: Strong balance sheet provides good cushion against current volatile market environment
Strong balance sheet provides good cushion against current volatile market environment Key credit figures NET FINANCIAL DEBT EQUITY EBITDA FREE CASHFLOW [m €] [m €] [m €] [m €] 3.107 2.760 2.635 2.421 961 965 865 358 781 753 326 712 673 612 240 105 FY 2019 FY 2020 FY 2021 FY 2022 FY 2019 FY 2020 FY
Slide 41: MTU's debt profile
MTU’s debt profile LOAN DETAILS AMOUNT COUPON ISSUE DATE MATURITY Revolving Credit Facility 500 m€ Customary market reference rates plus an additional margin; 29 June 2027 unused credit facilities are subject to a loan commitment fee Euro Bond 500 m€ 3.00% 01 July 2020 01 July 2025 Convertible Bond
Slide 42: USD exchange rate / Hedge portfolio
USD exchange rate / Hedge portfolio HEDGE BOOK AS OF OCTOBER 11TH, 2023 IN MILLION USD HEDGING MODEL – USD EXPOSURE I Approx. 75% of USD revenues are covered with USD costs 1.940 via procurement (“natural hedging”) I USD sensitivity will rise over the next years due to increasing net USD exposure 1.
Slide 43: Commercial engine portfolio
Commercial engine portfolio AIRCRAFT SEGMENT ENGINE PROGRAM SHARE AIRCRAFT APPLICATION Widebody GP7000 22.5% A380 (50 – 120 klb) PW4000G 12.5% B777 CF6-80C 9.1% B747-400, B767, Boeing MD-11, A310 GEnx 6.6% B787 Dreamliner, B747-8 CF6-80E n.n. A330 CF6-50/80A n.n. DC 10-30, B767, A310 GE9X 4% B777X N
Slide 44: Military engine portfolio
Military engine portfolio AIRCRAFT SEGMENT ENGINE PROGRAM SHARE AIRCRAFT APPLICATION Fighter Aircraft EJ200 30 % Eurofighter Typhoon RB199 40 % Panavia Tornado F414 4.4 % F414: F/A-18 E/F Super Hornet; EA-18G Growler Transport Aircraft TP400 22.2 % A400M Helicopter MTR390 40 % Eurocopter Tiger T408
Slide 45: MTU Management Board
MTU Management Board Lars Wagner Peter Kameritsch Michael Schreyögg Dr. Silke Maurer Chief Executive Officer Chief Financial Officer & Chief Program Officer Chief Operating Officer Chief Information Officer I CEO at MTU Aero Engines AG since January 2023 I Member of Executive Board acting as CFO and
Slide 46: IR Kalender
IR Kalender 29 February 30 April 8 May Conference call Conference call Annual general meeting Full year results 2023 Q1 2024 results for the fiscal year 2023 26 July 24 October 2024 Conference call Q2 2024 results Conference call Q3 2024 results Investor presentation / November 23 © M T U A E R O E
Slide 47: Thank you for your attention.
Thank you for your attention. Investor presentation / November 23 © M T U A E R O E N G I N E S A G / T H E I N F O R M A T I O N C O N T A I N E D H E R E I N I S P R O P R I E T A R Y T O T H E M T U A E R O E N G I N E S G R O U P C O M P A N I E 47
Slide 48: Contact
Contact Please contact us if you have any further questions MTU Aero Engines AG Thomas Franz Claudia Heinle Matthias Spies Investor Relations Vice President Investor Relations Senior Manager Investor Relations Senior Manager Investor Relations Dachauer Str. 665 Tel.: +49 89 1489 4787 Tel.: +49 89 14
Slide 49: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could
Slide 50: Proprietary Notice
Proprietary Notice Proprietary Notice This document contains proprietary information of the MTU Aero Engines AG group companies. The document and its contents shall not be copied or disclosed to any third party or used for any purpose other than that for which it is provided, without the prior writt
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