Mtu Aero Engines Ag · XETR:MTX
Mtu Aero Engines — Q3 2016 Earnings Presentation
23 slides from Mtu Aero Engines's earnings presentation, Oct 25, 2016
Slide 1: Q3 2016 Results
Q3 2016 Results Conference Call with Investors and Analysts 10/25/2016 – Investor Relations
Slide 2: Business Highlights Q3 2016
Business Highlights Q3 2016 • Market environment remains encouraging • GTF order book at 8,200 engines • Flawless entry of “golden engines” for A320neo • First final assembled GTF engine @ MTU delivered to Airbus • GTF operated on two aircraft applications by 7 customers • MoU for a potential MRO JV
Slide 3: Financial Highlights 2016
Financial Highlights 2016 Revenues (m€) EBIT adj. / EBIT adj. Margin (m€ / %) 11,6% 4.000 500 12% 4% 10,2% 3.500 400 10% 3.000 3.401 +18% 3.257 394 8% 2.500 300 333 2.000 6% 1.500 200 4% 1.000 100 2% 500 0 0 0% 9M 2015 9M 2016 9M 2015 9M 2016 Net Income adj. / EPS adj. (m€ / €) Free Cash Flow (m€) 3
Slide 4: US$ Exchange Rate / Hedge Portfolio
US$ Exchange Rate / Hedge Portfolio Hedge book as of October 25 2016 ( % of net exposure) (in m US$) 919 (=90%) 809 (=68%) 450 (=37%) 2016 2017 2018 Average hedge rate (US$/€) 1.22 1.19 1.14 25.10.2016 Conference Call with Investors and Analysts 4 © MTU Aero Engines AG. The information contained her
Slide 5: OEM Business Highlights in Q3 2016
OEM Business Highlights in Q3 2016 • Ongoing strong momentum for GTF order activity • First modified PW1100G-JM shipped to airline customers • PW1100G-JM engines are flown by 6 customers in 5 different countries • CSeries entered into service in July with launch customer Swiss Air • MRJ starts fligh
Slide 6: OEM Segment
OEM Segment Order book 31/12/2015 30/09/2016 Change Order book (m€) 6,830.6 5,842.9 -14% Commercial Business (mUS$) 6,888.5 6,123.4 -11% Military Business (m€) 503.3 356.5 -29% (m€) 9M 2015 9M 2016 Change Revenues 2,138.7 2,095.1 -2% Commercial Business 1,792.8 1,738.3 -3% Military Business 345.9 35
Slide 7: Commercial MRO Business Highlights in Q3 2016
Commercial MRO Business Highlights in Q3 2016 • New contract wins of around US$ 1.6 bn • 10-year MRO contract worth US$ 250m signed with Sky Regional Airlines • Lufthansa Technik and MTU are exploring setting up a joint maintenance company • Fourth consecutive quarter with record sales 25.10.2016 Co
Slide 8: Commercial MRO Segment
Commercial MRO Segment (mUS$) 31/12/2015 30/09/2016 Change Order book 6,165.4 5,926.6 -4% (m€) 9M 2015 9M 2016 Change Revenues 1,148.4 1,368.3 19% EBIT adj. 112.4 129.0 15% EBIT adj. Margin % 9.8% 9.4% • Organic revenues up high teens based on higher workload and material consumption • EBIT margin a
Slide 9: Guidance 2016 Update: Tailwind from lower OE deliveries and stronger Military and MRO performance
Guidance 2016 Update: Tailwind from lower OE deliveries and stronger Military and MRO performance Military: Slightly up (ex stable) New engine Sales (Com. OE): Flat (ex mid single digit) Spare parts Sales (Com. Spares): Mid single digit Commercial MRO: Mid to high teens (ex ~10%) Revenues ~ 4.7 bn €
Slide 10: Appendix
Appendix 25.10.2016 Conference Call with Investors and Analysts 10 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.
Slide 11: Profit & Loss
Appendix Profit & Loss (m€) Q3 2015 Q3 2016 Change 9M 2015 9M 2016 Change Revenues 1,055.0 1,102.1 4% 3,257.0 3,401.3 4% Total Cost of Sales -898.3 -930.7 -2,829.0 -2,896.0 Gross Profit 156.7 171.4 9% 428.0 505.3 18% Gross Profit Margin 14.9% 15.6% 13.1% 14.9% R&D according to IFRS -21.9 -14.6 -46.2
Slide 12: Reconciliation to adjusted Key Performance Indicators
Appendix Reconciliation to adjusted Key Performance Indicators (m€) Q3 2015 Q3 2016 Change 9M 2015 9M 2016 Change EBIT reported 106.7 127.2 19% 291.9 356.2 22% Adjustment (PPA Depreciation & Amortization) 6.0 5.2 18.1 15.8 Adjustment (IAE Upshare) 7.6 7.3 23.1 21.8 EBIT adj. 120.3 139.7 16% 333.1 39
Slide 13: Segment Revenues and EBIT adj.
Appendix Segment Revenues and EBIT adj. (m€) Q3 2015 Q3 2016 Change 9M 2015 9M 2016 Change Revenues Group 1,055.0 1,102.1 4% 3,257.0 3,401.3 4% OEM Commercial 541.0 537.4 -1% 1,792.8 1,738.3 -3% OEM Military 130.6 116.6 -11% 345.9 356.8 3% MRO 394.2 475.0 20% 1,148.4 1,368.3 19% Consolidation -10.8
Slide 14: Research & Development
Appendix Research & Development (m€) Q3 2015 Q3 2016 Change 9M 2015 9M 2016 Change Total R&D 53.8 44.3 -18% 155.8 157.9 1% Customer funded R&D -8.0 -8.4 -5% -30.9 -30.8 0% Company expensed R&D 45.8 35.9 -22% 124.9 127.1 2% thereof OEM 44.2 35.1 120.9 123.4 thereof MRO 1.6 0.8 4.0 3.7 Capitalization
Slide 15: Financial Result
Appendix Financial Result (m€) Q3 2015 Q3 2016 Change 9M 2015 9M 2016 Change Interest Income 0.9 0.2 -78% 1.8 0.6 -67% Interest Expense -0.7 -2.7 -286% -2.6 -6.8 -162% Interest Result* 0.2 -2.5 <-300% -0.8 -6.2 <-300% Financial Result on other items -7.3 -4.5 -51.2 -13.2 thereof interests for pensio
Slide 16: MTU’s Cash development January – September 2016
Appendix MTU’s Cash development January – September 2016 345.4 Free Cashflow: +75.0 22.9 398.5 247.9 -0.4 260.1 -162.2 -37.7 9.0 5.8 53.1 Adjusted Non-operating exceptional items: -22.9 Cash and CF from CF from Payments for Sales Acquisition CF from Translation Adjustments Cash and cash Operating In
Slide 17: Cash Flow
Appendix Cash Flow (m€) 9M 2015 9M 2016 Change Net Income IFRS 151.8 242.4 60% Depreciation and amortization 118.0 131.7 Change in provisions 68.7 123.9 Change in Working Capital -120.8 -196.7 Taxes 13.4 -10.6 Interest, derivatives, others 27.9 -30.6 Cash Flow from operating activities 259.0 260.1 0
Slide 18: Net financial debt at 863 m€
Appendix Net financial debt at 863 m€ (m€) 31/12/2015 30/09/2016 Change Bonds and notes 353.2 350.8 Convertible bond 0.0 473.4 Financial liabilities to bank 149.2 30.0 thereof Revolving Credit Facility 119.1 0.0 thereof Note Purchase Agreement 30.1 30.0 Loans from related companies 0.0 0.9 Finance l
Slide 19: Working Capital
Appendix Working Capital (m€) 31/12/2015 30/09/2016 Change Change in % Gross inventories 894.0 940.5 46.5 Prepayments -373.8 -316.2 57.6 Receivables 1,065.8 1,077.0 11.2 Payables -861.9 -780.5 81.4 Working Capital 724.1 920.8 196.7 27% 25.10.2016 Conference Call with Investors and Analysts 19 © MTU
Slide 20: Balance Sheet
Appendix Balance Sheet (m€) 31/12/2015 30/09/2016 Change Intangible Assets 2,214.0 2,236.0 Property, Plant, Equipment 632.0 647.9 other Non-current assets 298.4 341.8 Total Non-Current assets 3,144.4 3,225.7 3% Current assets 2,043.9 2,424.2 19% Total assets 5,188.3 5,649.9 9% Equity 1,300.6 1,438.4
Slide 21: PPA Depreciation / Amortization (in m€)
Appendix PPA Depreciation / Amortization (in m€) (in m€) Q3 2015 Q3 2016 9M 2015 9M 2016 Total depreciation / amortization OEM 31.9 35.8 96.9 103.7 MRO 7.8 9.0 23.9 25.9 MTU total 39.7 44.8 120.8 129.6 PPA depreciation / amortization & IAE Upshare amortization (EBIT adjustments) PPA OEM 5.4 4.6 16.3
Slide 22: 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 23: 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