Mtu Aero Engines Ag · XETR:MTX
Mtu Aero Engines — Investor Day (November 2018)
106 slides from Mtu Aero Engines's investor day presentation, Nov 30, 2018
Slide 1: Investor & Analyst Day 2018
Investor & Analyst Day 2018 London, 30th November 2018 – MTU Aero Engines AG
Slide 2: MTU Innovation Days Movie
MTU Innovation Days Movie Investor & Analyst Day 2018 – London 2 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.
Slide 3: Agenda – MTU Investor & Analyst Day 2018
Agenda – MTU Investor & Analyst Day 2018 Time Event Speaker 11:00 – 11:10 Welcome Michael Röger, VP Investor Relations 11:10 – 11:30 MTU´s Market Environment Reiner Winkler, Chief Executive Officer 11:30 – 12:30 Commercial OEM | Military OEM | Commercial MRO Michael Schreyögg, Chief Program Officer
Slide 4: MTU's market environment – Ongoing growth backed by normalizing market indicators
MTU´s market environment – Ongoing growth backed by normalizing market indicators Reiner Winkler, Chief Executive Officer
Slide 5: Positive environment for aerospace despite rising oil price
Positive environment for aerospace despite rising oil price Demand indicators ~ 2000 ~ 2010 Today Influence on demand Backlog has stabilized at 13,900 a/c since 2017 1 Backlog 4 yrs 8 yrs 8 yrs Production growing 2 Technology status '90s '90s '10s Proven step change in efficiency achieved 3 Cost of
Slide 6: Backlog remains at historic high level, represents 8 years of production
Backlog remains at historic high level, represents 8 years of production Growing production is stabilizing backlog and turning it into deliveries [# a/c on order] [# years] • Recent cancellation and deferral data remain 14,000 Narrowbodies 14 negligible as a share of backlog Widebodies • 1,442 aircr
Slide 7: Production plans under review for increase
Production plans under review for increase Backlog distribution vs. production plans [# a/c] [# a/c] NB Orders Planned Production WB Orders Planned Production 2,000 500 400 1,500 300 1,000 200 500 100 0 0 2015 2017 2019 2021 2023 2025 2015 2017 2019 2021 2023 2025 • Narrowbody backlog equates to 10
Slide 8: GTF technology offering a step change in fuel efficiency
GTF technology offering a step change in fuel efficiency US$ 150 billion of kerosene to be saved alone by PW1100G-JM Fuel savings GTF fleet to date Total expected fuel savings • 20,000 GTF deliveries expected PW1100G-JM fleet alone in total • 290+ GTF powered aircraft • Lower airline operating costs
Slide 9: Latest rise in oil prices too recent to have a material impact on aftermarket
Latest rise in oil prices too recent to have a material impact on aftermarket Strong traffic demand continues to stimulate usage of both mature and newer MTU engines Crude oil price Passenger traffic growth [US Dollars per Barrel (Brent)] [Growth rate in %] 120 9% 7.0% 100 7% 73 80 5% 60 3% 40 1% 20
Slide 10: Strong traffic growth has led to a continuing decline in parked and retired engines
Strong traffic growth has led to a continuing decline in parked and retired engines Industry parked fleet Industry retirements [Stored/parked engine fleet] [Park rate] [Retired engines] 6,000 15% 1,800 1,500 5,000 12% 1,200 -8% 3,325 -11% 4,000 7.6% 9% 899 6.6% 2,943 900 828 5.6% 3,000 6% 600 2,000
Slide 11: Global geopolitics and imbalances in the global economy send some negative signals
Global geopolitics and imbalances in the global economy send some negative signals Mitigation especially through MTU´s fleet and backlog Trade US$ strength vs. emerging Rising US Higher oil price barriers markets currencies interest rates (US$ ~70) IATA sees minimal impact from Diversified MTU fleet
Slide 12: Higher growth expectations in all business units
Higher growth expectations in all business units Michael Schreyögg, Chief Program Officer
Slide 13: Growth topics per business unit
Additional thrust for our business segments: Growth topics per business unit Commercial Programs Military Programs Commercial MRO Freight P W 1 1 0 0 G - J M LEAP@TZ Recovery Growing spare National & International parts business Opportunities Capacity E x p a n s i o n Technology New Programs V2500
Slide 14: Commercial OEM in the sweet-spot for organic growth
Commercial OEM in the sweet-spot for organic growth
Slide 15: New Falcon 6X application strengthens MTU's position in heavy business jet segment
New Falcon 6X application strengthens MTU’s position in the heavy business jet segment New PW812D powers Falcon 6X Business Jet engine outlook • High value heavy business jet segment • Positive EBIT contribution from series with full MRO participation for MTU • New Falcon 6X complements PW800 positi
Slide 16: Airbus takeover of CSeries spurs the PW1500G program
Airbus takeover of CSeries spurs the PW1500G program A220 complementing Airbus single-aisle portfolio PW1500G outlook Capacity A321neo • A220 brings superior economics and efficiency • Delivery outlook clearly improves thanks to Airbus financial strength and global customer reach A320neo • PW1500G e
Slide 17: Rate 70 makes sense and requires a 10% production increase for large GTFs
Rate 70 makes sense and requires a 10% production increase for large GTFs at MTU A320 family orders vs. production scenarios [# a/c] 1,000 Current orders/LoIs Add. Slots provided with rate 70 PW1100G-JM outlook Rate 70 800 • A320 family backlog stands at 6,600 firm orders & LoIs as of September (10
Slide 18: Latest MTU widebody platform GEnx with growing market share
Latest MTU widebody platform GEnx with growing market share Growing GEnx installed base and orders Total GEnx Trent Unannounced GEnx outlook +13% 1,348 508 506 • 4th largest MTU commercial fleet following 1,190 V2500, CF6-80 and PW2000 • Fast-growing installed base reaching over 1,300 engines 492 38
Slide 19: High visibility of PW2000 aftermarket
High visibility of PW2000 aftermarket PW2000 fleet by usage Highlights Freighter • Younger C-17 application accounts for 2/3 of total fleet Passenger • 200 engines are under the wing of the 757 freighter (Others) with FedEx and UPS. • 300 engines continue to remain in 757 passenger service, the majo
Slide 20: Stabilization of the CF6-80 fleet, boosting spare parts demand
The last few years of strong passenger and freight traffic have led to a stabilization of the CF6-80 fleet, boosting spare parts demand CF6-80C/E fleet by usage Highlights CF6-80E • CF6-80 fleet has grown in spite of its maturity CF6-80C Passenger • Used serviceable material is scarce, driving healt
Slide 21: Rising maintenance events and growth in SV content drives V2500 aftermarket growth
Rising maintenance events and growth in SV content drives V2500 aftermarket growth V2500 fleet by year of delivery Growing share of heavy shop visits • The gradual ageing of the V2500 fleet is pushing an ever 2,500 increasing number of engines towards the 1st and 2nd shop visits • 40% of the fleet h
Slide 22: Stronger growth in series than planned last year in all market segments
MTU is facing stronger growth in series than planned last year in all market segments MTU engine delivery schedule Comments 2015 2020 2025 • PW800’s position has strengthened with a new application Widebodies • Airbus majority stake in CSeries partnership is securing the future of the PW1500G progra
Slide 23: Military Business with Attractive Growth Opportunities
Military Business with Attractive Growth Opportunities
Slide 24: Over 11,500 military engines with MTU components are flown worldwide
Over 11,500 military engines with MTU components are flown worldwide MTU‘s worldwide footprint in Military Business Fighter: ~ 8,170 engines Transport: ~ 2,170 engines North America / Europe Canada Helicopter: Fighter: ~ 2,190 Fighter: ~ 3,500 ~ 1,200 engines Transport: ~ 920 Transport: ~ 910 Helico
Slide 25: MTU is well positioned in the international military aircraft market
MTU is well positioned in the international military aircraft market Fighter Transport Helicopter • 140 Eurofighters and 85 Tornados • 170 A400M ordered, thereof 67 • 181 Eurocopter Tiger delivered in service in Germany delivered • CH53-K entry into service on track for 2019 • Eurofighter with attra
Slide 26: Revenue contribution from Fighters by far most important
Revenue contribution from Fighters by far most important MTU Military revenue split (2021) Helicopter Highlights • Revenue share increase from Fighter ~70% today to ~80% by 2021 • Growing customer base secures Eurofighter Transport aftermarket business 2021 • Fighter export campaigns with high poten
Slide 27: MTU wants to participate in the New European Fighter Aircraft
MTU wants to participate in the New European Fighter Aircraft Highlights • Successor for Eurofighter / Rafale • Airbus and Dassault collaborate as Airframe OEM • First prototype expected by ~2031 • Entry into service expected by ~2040 • Roughly 1,100 engines (incl. spares) expected 30.11.2018 Invest
Slide 28: MTU and Safran target joint development for the Next European Fighter Engine
MTU and Safran target joint development for the Next European Fighter Engine (NEFE) Cooperation with Safran could secure strong MTU role within NEFE project MTU objectives • MTU as German engine partner • Clear division of responsibilities and a partnership at eye level • Achievement of 50% workshar
Slide 29: Early start of technology development secures entry into service by 2040
Early start of technology development secures entry into service of New European Fighter Aircraft by 2040 Timetable of the New European Fighter Aircraft project Technology development Engine certification Certification of weapon system Entry into service of NGWS Proto IOC FOC 2020 2030 2040 2050 IOC
Slide 30: Military revenue outlook 2018 to 2025
Improved sentiment in the military business leads to an annual expected growth rate of ~ mid single digit MTU Military revenue outlook 2018 to 2025 (in m€) Series Aftermarket/Services Upside Highlights ~ 600 • Fighter engines remain key revenue drivers • Upside potential driven by ongoing national a
Slide 31: MRO Roadmap
MRO Roadmap
Slide 32: MRO revenues significantly outperformed the market
MRO revenues significantly outperformed the market ~ US$ 3bn Highlights • Key drivers are the V2500 and PW1100G-JM CAGR + high teens % • Higher material content • Mature engine types perform better than expected • Increase in share of OEM flighthour agreements • Increasing customer demand for engine
Slide 33: MRO Movie
MRO Movie Investor & Analyst Day 2018 – London 33 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.
Slide 34: Independent MRO continues its success story
Independent MRO continues its success story Independent MRO campaign wins 2014 – 2018 in US$ billion Highlights 3.5 • Ongoing strong campaign wins 3.0 • Key programs are V2500, CF34, CFM56, GE90G • Basis for future revenue growth 2.2 2.1 1.7 2014 2015 2016 2017 Est. 2018 30.11.2018 Investor & Analys
Slide 35: Increase in market shares by OEMs secures workload for decades
Increase in market shares by OEMs secures workload for decades OEM-MRO cooperation order book as of 30th September 2018 Widebody Highlights • V2500 ~60% under FHA agreement Narrowbody • FHA-share on new programs increase • GTF ~70-80% under FHA agreement • Access to OEM-MRO cooperation secured by Ri
Slide 36: Higher than expected volumes drive capacity increase at best-cost locations
Higher than expected volumes drive capacity increase primarily at best-cost locations Capacity demand vs. available capacity Available capacity Highlights Current Capacity • Rising demand for mature and Demand new engine programs Previous Best-cost Capacity locations • Short term: Full capacity util
Slide 37: Expansion of MRO Network by short term measures and structural adjustments
Expansion of MRO Network by short term measurements and structural adjustments Disassembly Assembly Test Facilities EME Aero (Poland) New GTF MRO shop in cooperation with LHT MTU Maintenance MTU Maintenance Canada Berlin-Brandenburg V2500 MRO capability New logistic center MTU Maintenance MTU Mainte
Slide 38: Site extension of MTU Maintenance Hanover and Berlin-Brandenburg
Site extension of MTU Maintenance Hanover and MTU Maintenance Berlin-Brandenburg Site extension Berlin MTU Maintenance Berlin New logistic center MTU Maintenance Hanover Additional space & workforce MRO for GTF engines Site extension Hanover 30.11.2018 Investor & Analyst Day 2018 – London 38 © MTU A
Slide 39: JV with China Southern secures future growth in the Asian market
JV with China Southern secures future growth in the strong growing Asian market MTU Maintenance Zhuhai No.1 MRO shop in China with strong revenue growth ~US$ 1.2bn Highlights CAGR + low to mid teens % • 50:50 JV with China Southern • Prolongation of JV with China Southern until 2051 • JV partner Chi
Slide 40: Lufthansa Technik – a strong partner for our new GTF MRO shop in Poland
Lufthansa Technik – a strong partner for our new GTF MRO shop in Poland EME Aero will become the most efficient GTF MRO shop worldwide Highlights • 50:50 JV with Lufthansa Technik • Total investment of € 150m from both shareholders • Start of operations in 2020 • Workforce ~ 800 employees • Capacity
Slide 41: Further increase in added value business will enable further profitable growth
Further increase in added value business will enable further profitable growth Repair & Service locations with strong growth potential Netherlands Eastern Europe MTU Maintenance Lease Service New Best Cost repair shop Strong growth since founding year New construction Malaysia Airfoil Services (ASSB
Slide 42: Expanding our repair shop in Malaysia ASSB with Lufthansa Technik
Together with Lufthansa Technik we intend to expand our repair shop in Malaysia ASSB – a competitive repair shop Highlights • Successful JV with LHT since 2003 • Focus on repair of LPT and HPC airfoils • Future growth in repair hours driven by new engine programs • Capacity increase by 60% at ASSB A
Slide 43: Rising demand for repairs requires additional capacity increase
Rising demand for repairs requires additional capacity increase New best cost repair shop under examination Motivation for a new best cost repair shop Capacity +21% expansion • Growth especially through new programs • Currently full utilization in existing locations Capacity • New repair shop being
Slide 44: MRO service portfolio complemented by engine lease and asset management
MRO service portfolio is complemented by engine lease and asset management Business model of MTU Maintenance Lease Services in Amsterdam Lease-In Lease-Out Lease-end • Fleet Mgmt. • Exit Mgmt. • Technical • Sunset Services Short Term Leasing Thrust Solutions Asset Management Purchase of engines Disa
Slide 45: MTU Maintenance Lease Service is a successful Joint Venture with Sumitomo
MTU Maintenance Lease Service (MLS) is a successful Joint Venture with Sumitomo Strong growth performance of MLS since foundation ~ US$ 200m Highlights • Focus on engine leasing and asset & material management • Revenue growth exceeded expectations since founding year • Lease pool of +100 engines by
Slide 46: Clear strategy to increase MRO service portfolio and capacity
Clear strategy to increase MRO service portfolio and capacity Overview about expansion roadmap MRO Service Portfolio New programs Adding new engine programs Repairs Further expansion of repair services Service Expansion of service portfolio MRO Network Structure EME Aero Construction Ramp-up Repair
Slide 47: All business segments to grow stronger than previously expected
All business segments to grow stronger than previously expected Commercial OEM business Military OEM business Commercial MRO business • New application for PW800 • Positive sentiment from national • New engine programs and further • A220 secures PW1500G program with and international campaigns expan
Slide 48: Higher growth expectations in all business units Q&A
Higher growth expectations in all business units Q&A
Slide 49: Lunch
Lunch © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.
Slide 50: MTU 4.0 Movie
MTU 4.0 Movie Investor & Analyst Day 2018 – London 50 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.
Slide 51: Successful execution and a prosperous technology roadmap
Successful execution and a prosperous technology roadmap Lars Wagner, Chief Operating Officer
Slide 52: Status Execution
Status Execution
Slide 53: PW1900G and PW800 entered service in 2018
With PW1900G and PW800 two more engine programs entered service in 2018 Development milestones of new engine programs PW1500G PW1100G-JM PW1200G PW1400G-JM PW1900G PW800 GE9X T408 A220 A320neo MRJ MS-21 E-Jets 2. Gen G500 / G600 B 777X CH-53K First engine to test Tested in flying tes
Slide 54: GTF engine programs continue to be a main driver for company growth
GTF engine programs continue to be a main driver for company growth Strong ramp-up in GTF engine deliveries Aircraft applications A320neo MS-21 CAGR + 42% A220 MRJ E-Jets 2017 2018 2019 2020 30.11.2018 Investor & Analyst Day 2018 – London 54 © MTU Aero Engines AG. The information contained herein is
Slide 55: GTF product family powers eleven different aircraft
GTF product family powers eleven different aircraft and provides a wide range of thrust Classification according to core engine size Medium by-pass direct drive turbofan High by-pass geared turbofan Large core PW1100G-JM: Airbus A320neo family PW1400G-JM: Irkut MS-21 ~81” Fan Medium core PW814: PW15
Slide 56: GTF in-service fleet is growing and meets all specifications
GTF in-service fleet is growing and meets all specifications of economical performance Deliveries and in-service experience • More than 290 GTF-powered aircraft delivered to 31 operators, flying to 570+ destinations on 5 continents • More than 550,000 flights accomplished, 260 million litre of fue
Slide 57: OEM production is continuously ramping-up
OEM production is continuously ramping-up with additional demands in various programs Deliveries per year of all OEM programs Production status • Quality is on a high level Turbines Increase by a • Program demands further increased in 2018 factor of 4 • Commercial: additional 12% increase for 2019 C
Slide 58: External supply chain management is a key factor to ensure company growth
External supply chain management is a key factor to ensure company growth OEM and MRO purchasing figures in 2017 • Utilization levels are very • € 2.5 billion purchasing volume high for OEM and MRO • Ramp-up weaknesses • Broadly based OEM supply chain identified • Actions to mitigate risks • # 197 i
Slide 59: Smart Factory
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Slide 60: Production ramp-up triggers extensive automation (1/2)
Production ramp-up triggers extensive automation with state-of-the-art production technology (1 / 2) Blisks Disks Blades Flow path hardware (compressor) (turbine) (turbine) (turbine center frame) 30.11.2018 Investor & Analyst Day 2018 – London 60 © MTU Aero Engines AG. The information contained here
Slide 61: Production ramp-up triggers extensive automation (2/2)
Production ramp-up triggers extensive automation with state-of-the-art production technology (2 / 2) Blisks Disks Blades Flow path hardware (compressor) (turbine) (turbine) (turbine center frame) • State of the art production • New disk machining shop in • Flexible manufacturing • State of the art p
Slide 62: A broad digitization strategy enables automation and efficient growth
A broad digitization strategy enables automation and supports efficient company growth Digital Twin RPA Technology 4.0 Work 4.0 IT-Security Virtual Engine Simulation of materials and UCC production processes E-learning Manufacturing 4.0 MRO 4.0 Additive Manufacturing Intelligent machine control & au
Slide 63: Manufacturing 4.0: Additive manufacturing
Manufacturing 4.0: Additive manufacturing to create new (bionic) design possibilities Estimated amount of AM parts in aero engines Static Hot 30% Section Parts Lightweight … Bionic Design 15% Integral structure design Rotating blades with complex Substitution cooling system * of castings 10% 5% Year
Slide 64: Manufacturing 4.0: Manufacturing Execution System
Manufacturing 4.0: Manufacturing Execution System (MES) to optimize in-house production flow and capacity utilization Basic structure of production planning and control • Real-time network to connect, monitor and control entire manufacturing process ERP level: • Monitors all available resources for
Slide 65: Manufacturing 4.0: Supply chain end-to-end connection
Manufacturing 4.0: Supply chain end-to-end connection to create a highly efficient value stream E2E connection of all tiers Procurement Operations Sales MES Planning Planning Planning Upstream Supplier Logistic In-house Logistic Customer Supplier Inbound Production Outbound Transparency Integrated s
Slide 66: Technology 4.0: Process data management
Technology 4.0: Process data management to utilize available (big) data for enhancement of automated processes Basic scheme Example of a trend analysis • Real-time processing and usage of big data out of production • Enabling predictive part quality – with high impact on quality processes management
Slide 67: Technology 4.0: Cutting edge simulation methods
Technology 4.0: Cutting edge simulation methods to improve materials and production processes Vibration analysis (for machining processes) Material treatment analysis Frequency Frequency Frequency step 4 step 3 step 2 FRF of Tool Frequency Frequency Frequency step 4 step 3 step 2 • Simulation of phy
Slide 68: Technology Roadmap
Technology Roadmap
Slide 69: Updated technology roadmap is based on three time horizons
Updated technology roadmap is based on three time horizons Scopes of 10 / 20 / 30 years plus Commercial engines: Entry-into-service of 2. Geared Turbofan (GTF) 10 years + engine generation Military engines: Entry-into-service of Next European Fighter Engine Source: Bauhaus Luftfahrt 20 years + (NEFE
Slide 70: GTF engine concept has a high enhancement potential
GTF engine concept has a high enhancement potential for further applications Commercial technology development for 2. GTF engine generation Targets Key enabler relative to 1. GTF generation • - 10% fuel burn at least • Higher By-Pass-Ratio (BPR): • - 10% dB noise bigger fan and slim nacelle • Up to
Slide 71: Key technologies will enable the 2nd GTF engine generation
Various key technologies will enable entry-into-service of the 2. GTF engine generation Digitalization and industry 4.0 Additive manufacturing On-wing repairs New production technologies CMC materials “World class” testing and validation Engine trend monitoring Simulation 30.11.2018 Investor & Analy
Slide 72: GTF engine concept results from a straight roadmap since decades
GTF engine concept results from a straight roadmap since decades Commercial and military technology development in the past GTF family GE9X New commercial HPC & LPT winning Innovation Award GP7000 TP400-D6 First MTU-designed commercial TCF PW6000 PW2000 EJ200 Commercial LPT that sets new standards N
Slide 73: NEFE 4.0 Movie
NEFE 4.0 Movie Investor & Analyst Day 2018 – London 73 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.
Slide 74: Next European Fighter Engine – a new impulse at the military market
Next European Fighter Engine (NEFE) – a new impulse at the military market Military technology development for NEFE Targets Key enabler • Long range • Variable cycle engine technology • High mission flexibility • Very efficient components • High availability • High temperature, low weight materials
Slide 75: Significant synergies between commercial and military development
Significant synergies between commercial and military development are achievable GTF 2. Generation: GTF 2. Generation: Technology ready 2027+ Entry-into-service 2033+ Commercial Military NEFE prototype: NEFE prototype: Technology ready 2025+ Entry-into-service 2031+ 30.11.2018 Investor & Analyst Day
Slide 76: Electrification of jet engines will play a role in the future
Electrification of jet engines will play a role in the future Evaluation and actions for hybrid and turbo-electric propulsion • Turbo-electric (hybrid) concepts are technology-wise necessary for aircraft with more than 4 passengers • Gas turbine to generate electric power to run an electric motor bo
Slide 77: Revolutionary new propulsion concepts are necessary for Flightpath 2050
Revolutionary new propulsion concepts are necessary for Flightpath 2050 targets Targets and fields of research • Targets relevant to 1. GTF engine generation • -25% fuel burn • -25% dB noise • Low emissions • Strategic concepts • Gas turbine including piston engine • Gas turbine with water steam inj
Slide 78: Conclusion Status Execution, Smart Factory, Technology Roadmap
Conclusion Status Execution Smart Factory Technology Roadmap • Engine programs are successively • Cutting-edge production capabilities are • Technology roadmap is in place to align entering into service and accumulating installed or planned for every part next generation commercial and flight hours
Slide 79: Successful execution and a prosperous technology roadmap Q&A
Successful execution and a prosperous technology roadmap Q&A
Slide 80: MTU Financials & Outlook: Ramp-up of cash conversion continues
MTU Financials & Outlook: Ramp-up of cash conversion continues Peter Kameritsch, Chief Financial Officer 30.11.2018 Investor & Analyst Day 2018 – London
Slide 81: Future presentation OEM-MRO cooperation shopvisits
Future presentation OEM-MRO cooperation shopvisits
Slide 82: Today MTU Hanover is sole contract partner to IAE for V2500 FHA shopvisits
Today MTU Hanover is sole contract partner to IAE for V2500 FHA shopvisits All Revenues for MRO services are fully consolidated even work is carried out by MTU Zhuhai Contracting streams V2500 FHA OEM-MRO shopvisits IFRS consolidated revenue V2500 Airline OEM Segment Customers Holds a FHA agreement
Slide 83: Starting 2019 MTU Zhuhai will be contracted for V2500 MRO work directly from IAE
Starting 2019 MTU Zhuhai will be contracted for V2500 MRO work directly from IAE Revenue of MRO segment will be lowered leading to higher margin and less complexity Contracting streams V2500 FHA OEM-MRO shopvisits IFRS consolidated revenue V2500 Airline OEM Segment Customers Holds a FHA agreement wi
Slide 84: OEM segment is prime contractor in newer programs such as PW1100G-JM
In newer engine programs such as PW1100G-JM the OEM segment is today prime contractor MRO services are recognized in both segments and 1x eliminated for group consolidation Contracting streams PW1100G-JM FHA OEM-MRO shopvisits IFRS consolidated revenue PW1100G-JM Airline MTU Munich OEM Segment Invoi
Slide 85: Starting 2019 OEM-MRO revenues presented in MRO segment only
Starting 2019 OEM-MRO co-operation revenues will be presented in MRO segment only Segmentation by content instead by legal entity will avoid increase in elimination line Contracting streams PW1100G-JM FHA OEM-MRO shopvisits IFRS consolidated revenue PW1100G-JM Airline MTU Munich OEM Segment Customer
Slide 86: Presentation of OEM-MRO cooperation shopvisits equalized and simplified from 2019
Presentation of OEM-MRO cooperation shopvisits equalized and simplified from 2019 Summary V2500 GTF, GEnx, GP7000 • MTU Zhuhai will directly invoice OEM-MRO shopvisits to IAE • OEM-MRO shopvisits will be presented in MRO segment only • Implementation in 2018 would have lead to ~200 m€ less • Revenue
Slide 87: Guidance 2018: Theoretical restatement would lead to less revenues
Guidance 2018: Thereotical restatement would lead to less revenues, hence higher margin As reported Assuming direct invoicing MTU-Z IAE Total Group Sales ~ 4.4 bn€ ~ 4.2 bn€ Military Stable Stable Commercial OE Up ~ 30% Up ~ 30% Commercial Spares Up low teens Up low teens Commercial MRO Up mid twe
Slide 88: Guidance 2019
Guidance 2019
Slide 89: The year 2019: Tailwinds will overcompensate headwinds from GTF growth
The year 2019: Tailwinds will overcompensate headwinds from GTF growth Ongoing strong growth of aftermarket Total OE losses to stabilize in 2019 despite Capacity ramp-up in both segments requires (Com. Spares & MRO) continuous ramp-up an increase in PPE Military Business‘ growth re-initiated OEM-MRO
Slide 90: The year 2019: Further growth of EBIT adj. and Free Cashflow
The year 2019: Further growth of EBIT adj. and Free Cashflow 2019 Main Drivers Military +10% Commercial OE Low teens Commercial Spares Up mid to high single digit Stable Commercial MRO (Organically high single digit)* EBIT adj. Stable Margin* CCR** ~ 50–60% *) based on equal assumptions with IAE OEM
Slide 91: Long term outlook
Long term outlook
Slide 92: Increase in production rates continue to drive strong growth
Increase in production rates continue to drive strong growth backed by order book MTU Commercial OE Revenue Breakdown • Business Jet shows a higher revenue share with IFRS15 implementation • Regional Jet revenue contribution will gain CAGR importance Com. OE Com. OE Revenues • Assuming rate 70 Reven
Slide 93: Spare parts revenues growth driven by narrowbody engines
Spare parts revenues growth driven by narrowbody engines MTU Commercial Spares Revenue Breakdown • V2500 contributes ~40% of spares revenues today and grows until mid 2020s • PW1100G-JM starts to contribute 2020 onwards CAGR • CF6-80 starts to decline Com. Spares Com. Spares Revenues early 2020s Rev
Slide 94: Increasing likelihood of campaign wins leads to improved military outlook
Increasing likelyhood of campaign wins in military business leads to an improved outlook MTU military OEM revenue breakdown • ~2/3 of today‘s revenues come from fighter engines EJ200 and RB199 • Military Revenue will grow towards ~600 m€ until CAGR 2025 Com. Military Com. Military Revenues • Underly
Slide 95: Both market segments within commercial MRO will continue to grow strongly
Both market segments within commercial MRO business will continue to grow strongly MTU commercial MRO revenue breakdown • Majority of newer engines sold by the OEM with flighthour agreements • OEM-MRO cooperation workload secured through CAGR risk & revenue sharing Com. MRO Com. MRO agreement Revenu
Slide 96: Long-term Outlook 2019–2025 Update
Long-term Outlook 2019–2025 Update Improved Free Cashflow conversion confirmed despite ongoing capacity build-up Net Income adj. Steady growth Growing less than revenues Working Capital • No consumption of prepayments • Inventory turns will improve • More FHAs with preferential Cashflow profile Will
Slide 97: Target balanced leverage ratio; Cash Deployment Strategy
MTU’s target is a balanced leverage ratio in the range of 1 x net Debt/EBITDA MTU’s Cash Deployment Strategy Prio Instrument 2019–2025 Investment in Limited opportunities for new programs I organic growth Ongoing spendings for capacity build-up Dividend II Growth stronger than net income deployment
Slide 98: MTU Financials & Outlook Q&A
MTU Financials & Outlook: Ramp- up of cash conversion continues Q&A
Slide 99: Outlook & Summary
Outlook & Summary Reiner Winkler, Chief Executive Officer
Slide 100: GTF technology well positioned for next generation of narrowbodies
For the potential expansion of Airbus portfolio and the next generation of narrowbodies the GTF technology is very well positioned Today Future A320 Family A321neo stretch? ceo/neo NGSA Airbus A220 A220 stretch? 737NG/MAX NGSA Boeing C919 MS-21 Entry into Service Source: MTU 2018 2030 30.11.2018 Inv
Slide 101: MTU is targeting up to 25% program share for next generation GTF
MTU is targeting up to 25% program share for the next generation of GTF engines Increasing MTU share of narrowbody engine revenues Building on success 10-12% • MTU has succeeded in growing its single-aisle revenues through A320neo, A220 and MS-21 applications 6% • MTU is targeting up to 25% share on
Slide 102: Widebody outlook for CF6-80C, GEnx and GE9X
In the widebody segment, MTU benefits from a positive outlook for CF6-80C, GEnx and GE9X Today Future A380–800 A350–1000 stretch? A350 A330 ceo/neo A330 successor? 747-8I/F 777-9 stretch? 777–300ER 777X 787 787 successor? 767F NMA? C929 Entry into Service Source: MTU 2018 2030 30.11.2018 Investor &
Slide 103: Key Take Aways
Key Take Aways Market indicators continue to outperform Ramp-up continues and requires ongoing historical average investment into capacity and automation Higher OE growth expectation Technology roadmap secures long-term in all thrust segments market position and sustainability Military business Ongo
Slide 104: Outlook & Summary Q&A
Outlook & Summary Q&A
Slide 105: 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 106: 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 written agreement of MTU