Slide 1: Preliminary FY 2014 Results - MTU Aero Engines
Preliminary FY 2014 Results - MTU Aero Engines Conference Call with Investors and Analysts 12 February 2015
Slide 2: Agenda
Agenda • Business Highlights • Group Key Figures • Commercial and Military OEM • Commercial MRO • Guidance 2015 • Appendix 12 February 2015 Investor Relations 2
Slide 3: Guidance 2014 Exceeded – Group Revenues at New Record Level
Guidance 2014 Exceeded – Group Revenues at New Record Level in m€ FY 2013 Guidance 2014 FY 2014 Update October Revenues 3,574.1 ~ 3,750 3,914 EBIT adj. 377.4 ~ 380 383 10.6% 9.8% Net income adj. 238.6 ~ 250 253 12 February 2015 Investor Relations 3
Slide 4: Business Highlights 2014
Business Highlights 2014 • IATA passenger traffic up 5.9% ytd. in 2014 • Encouraging outlook for 2015 • Falling oil price will improve profitability of airlines • Favorable development of US$ rate • Market position in all thrust ranges improved • Further strengthening of MRO market position • Develo
Slide 5: Agenda
Agenda • Business Highlights • Group Key Figures • Commercial and Military OEM • Commercial MRO • Guidance 2015 • Appendix 12 February 2015 Investor Relations 5
Slide 6: Financial Highlights 2014
Financial Highlights 2014 Revenues (m€) EBIT adj. / EBIT adj. Margin (m€ / %) +10% 3.914 10.6% 4000 500 9.8% 3.574 10% 400 377 +1% 383 3000 8% 300 2000 5% 200 1000 3% 100 0 0 0% FY 2013 FY 2014 FY 2013 FY 2014 Net Income adj. / EPS adj. (m€ / €) * / ** Free Cash Flow (m€) 4.97 5,0 100 4.70 80 300 25
Slide 7: US$ Exchange Rate / Hedge Portfolio
US$ Exchange Rate / Hedge Portfolio Hedge book as of February 12, 2015 (% of net exposure) (mUS$) 794 (=75%) 540 (=50%) 340 (=28%) 30 (=2%) 2015 2016 2017 2018 Average hedge rate (US$/€): 1.29 1.31 1.27 1.19 12 February 2015 Investor Relations 7
Slide 8: Agenda
Agenda • Business Highlights • Group Key Figures • Commercial and Military OEM • Commercial MRO • Guidance 2015 • Appendix 12 February 2015 Investor Relations 8
Slide 9: Commercial OEM Business
Commercial OEM Business • GE9x (B777x) program participation • PurePower engines have completed 13,500 hours of testing • MTU participates in PW800 for future Gulfstream business jets • Successful first flight of A320neo in Sept 2014 • FAA certification received for PW1100G-JM (A320neo) • Airbus lau
Slide 10: Military Business
Military Business • 1,100 EJ200 engines delivered • Ramp up TP400 engine program • GE38 successfully tested on Ground Test Vehicle • Successful first flight of KC390 equipped with V2500 engines 12 February 2015 Investor Relations 10
Slide 11: OEM Segment
OEM Segment Order book 31/12/2013 31/12/2014 Change Order book in m€ 5,403.6 6,763.6 25% Commercial business in mUS$ 6,185.8 7,450.0 20% Military business in m€ 918.2 627.4 -32% (in m€) FY 2013 FY 2014 Change Revenues 2,392.0 2,648.3 11% Commercial business 1,891.3 2,116.8 12% Military business 500.
Slide 12: OEM Segment
OEM Segment (in m€) FY 2013 FY 2014 Change Revenues 2,392.0 2,648.3 11% Gross profit 373.6 373.9 0% Gross profit margin 15.6% 14.1% R&D according to IFRS 89.1 71.1 -20% EBIT adj. 268.2 266.2 -1% EBIT adj. margin 11.2% 10.1% • Gross Profit margin impacted by business mix effects • R&D down by € 18 m
Slide 13: Agenda
Agenda • Business Highlights • Group Key Figures • Commercial and Military OEM • Commercial MRO • Guidance 2015 • Appendix 12 February 2015 Investor Relations 13
Slide 14: Commercial MRO Business
Commercial MRO Business • GEnx MRO contract signed • MRO contract wins of US$ 1,7 bn in FY 2014 being 25% up • New Contract wins on CFM56 e.g. with Solaseed Air – worth 260 m US$ • Q4/14 MRO at a new record level 12 February 2015 Investor Relations 14
Slide 15: Commercial MRO Business
Commercial MRO Business (in mUS$) 31/12/2013 31/12/2014 Change Contract volume 5,476.4 5,357.8 -2% (in m€) FY 2013 FY 2014 Change Revenues 1,213.7 1,298.9 7% Gross profit 146.6 159.3 9% Gross profit margin 12.1% 12.3% EBIT adj. 108.6 116.3 7% EBIT adj. margin 8.9% 9.0% • Contract volume at US$ 5.4 b
Slide 16: Agenda
Agenda • Business Highlights • Group Key Figures • Commercial and Military OEM • Commercial MRO • Guidance 2015 • Appendix 12 February 2015 Investor Relations 16
Slide 17: Guidance 2015
Guidance 2015 in m€ FY 2014 Guidance 2015 Revenues 3,913.9 ~ 4,400 EBIT adj. 382.7 ~ 420 9.8% Net income adj. 253.3 ~285 • Guidance 2015 based on 1,20 US$/€ • Commercial OE US$ sales up high single digit • Commercial US$ spare parts sales up mid single digit • Military revenues down mid single digit
Slide 18: Agenda
Agenda • Business Highlights • Group Key Figures • Commercial and Military OEM • Commercial MRO • Guidance 2015 • Appendix 12 February 2015 Investor Relations 18
Slide 19: Profit & Loss Highlights 2014
Appendix Profit & Loss Highlights 2014 Q4 2013 Q4 2014 Change FY 2013 FY 2014 Change Revenues 914.5 1,102.3 21% 3,574.1 3,913.9 10% EBIT adj. 109.6 111.8 2% 377.4 382.7 1% Thereof „at equity“ results 5.3 8.8 17.9 22.0 Interest result -4.2 -2.9 -12.2 -8.8 Interest for pension provisions -4.9 -5.4 -19
Slide 20: Profit & Loss
Appendix Profit & Loss (in m€) Q4 2013 Q4 2014 Change FY 2013 FY 2014 Change Revenues 914.5 1,102.3 21% 3,574.1 3,913.9 10% Total Cost of Sales -776.5 -950.8 -3,048.4 -3,375.4 Gross Profit 138.0 151.5 10% 525.7 538.5 2% Gross Profit Margin 15.1% 13.7% 14.7% 13.8% R&D company funded -24.1 -17.7 -93.2
Slide 21: Segment Revenues and EBIT adj.
Appendix Segment Revenues and EBIT adj. (in m€) Q4 2013 Q4 2014 Change FY 2013 FY 2014 Change Revenues Group 914.5 1,102.3 21% 3,574.1 3,913.9 10% OEM Commercial 488.4 552.9 13% 1,891.3 2,116.8 12% OEM Military 132.7 179.8 35% 500.7 531.5 6% MRO 301.9 378.1 25% 1,213.7 1,298.9 7% Consolidation -8.5
Slide 22: Research & Development
Appendix Research & Development (in m€) Q4 2013 Q4 2014 Change FY 2013 FY 2014 Change Company expensed R&D 35.7 61.8 73% 142.8 160.0 12% OEM 34.4 60.5 138.0 155.4 MRO 1.3 1.3 4.8 4.6 Capitalization of R&D -11.6 -44.1 -49.6 -84.3 OEM -11.6 -44.1 -48.9 -84.3 MRO 0.0 0.0 -0.7 0.0 R&D according to IFRS
Slide 23: MTU’s Cash development January – December 2014
Appendix MTU’s Cash development January – December 2014 12 February 2015 Investor Relations 23
Slide 24: Cash Flow
Appendix Cash Flow (in m€) FY 2013 FY 2014 Change Net Income IFRS 166.3 195.4 17% Depreciation and amortization 164.7 154.7 Change in provisions * -48.7 8.2 Change in Working Capital -90.3 -121.8 Taxes 19.6 -74.5 Interest, derivatives, others -22.8 42.8 Cash Flow from operating activities 188.8 204.
Slide 25: Net financial debt increased to 737.3 m€
Appendix Net financial debt increased to 737.3 m€ (in m€) FY 2013 FY 2014 Change Corporate bonds 352.3 352.7 Financial liabilities arising from IAE V2500 286.4 414.6 Financial liabilities to bank Promissory notes 12.0 0 RCF 9.6 Note Purchase Agreement 30.1 Liabilities to related companies 4.8 0.1 Fi
Slide 26: Working Capital
Appendix Working Capital (in m€) 31/12/2013 31/12/2014 Change Change in % Gross Inventories 745.2 741.0 -4.2 Prepayments -547.8 -485.7 62.1 Receivables 784.9 1,004.2 219.3 Payables -826.5 -981.9 -155.4 Working Capital 155.8 277.6 121.8 78% 12 February 2015 Investor Relations 26
Slide 27: PPA Depreciation / Amortization (in m€)
Appendix PPA Depreciation / Amortization (in m€) (in m€) Q4 2013 Q4 2014 FY 2013 FY 2014 Total depreciation / amortization MTU total 44.6 43.7 164.7 158.0 OEM 36.8 33.7 133.4 125.4 MRO 7.8 10.0 31.3 32.6 PPA depreciation /amortization MTU total 8.9 5.7 35.7 24.4 OEM 8.1 5.1 32.3 21.9 MRO 0.8 0.6 3.4
Slide 28: Guidance for PPA and IAE Upshare Amortization (in m€)
Appendix Guidance for PPA and IAE Upshare Amortization (in m€) in m€ 2013 2014 2015 2016 2017 2018 2019 PPA depreciation / amortization 35.7 24.4 ~ 24.2 ~ 21.2 ~ 21.2 ~ 21.1 ~ 21.0 IAE Upshare 24.4 24.8 ~ 30.0 ~ 30.0 ~ 30.0 ~ 30.0 ~ 30.0 Adjustments 60.1 49.2 ~ 54.2 ~ 51.2 ~ 51.2 ~ 51.1 ~ 51.0 12 Fe
Slide 29: 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