Mtu Aero Engines Ag · XETR:MTX
Mtu Aero Engines — Investor Day (November 2011)
69 slides from Mtu Aero Engines's investor day presentation, Nov 22, 2011
Slide 1: Investor and Analyst Day 2011
Investor and Analyst Day 2011 MTU Aero Engines London, November 22, 2011
Slide 2: Agenda I – MTU Investor and Analyst Day 2011
Agenda I – MTU Investor and Analyst Day 2011 Time Agenda Speaker Peter Kameritsch 11:00 – 11:05 Welcome VP Investor Relations 11:05 – 11:35 The MTU Story Egon Behle, CEO Roadmap 2020: € 6bn Revenue Klaus Müller, 11:35 – 12:05 Target SVP Corporate Development Dr. Anton Binder 12:05 – 12:45 Geared Tur
Slide 3: Agenda II – MTU Investor and Analyst Day 2011
Agenda II – MTU Investor and Analyst Day 2011 Time Agenda Speaker 14:15 – 14:45 Commercial MRO Growth Platforms Dr. Stefan Weingartner 14:45 – 15:15 Financials Dr. Maximilian Brandl 15:15 – 15:30 Summary and Wrap up Reiner Winkler, CFO 15:30 – 17:00 Get together with Refreshments 22 November 2011 In
Slide 4: The MTU Story
The MTU Story Egon Behle, CEO London, November 22, 2011
Slide 5: The market scenario
The market scenario Some statements out of Airbus • 28,000 new aircraft until 2030 • Production ramp up + 40% during next 5 years Why? • 1 billion people today live in an environment (Europe / North America) of regular use of aircraft • 6 billion people started to use aircraft (Asia, South America,
Slide 6: MTU on track for € 6bn revenue target in 2020
MTU on track for € 6bn revenue target in 2020 Business Overview MTU Group Commercial OEM • Strong growth due to V2500 and potential out of IAE-restructuring • Very successful start of GTF-family with increased MTU-share • Steep ramp-up of GENX deliveries in 2012 Military OEM • Downward trend to turn
Slide 7: Strong V2500 growth potential due to IAE restructuring
Strong V2500 growth potential due to IAE restructuring V2500 / IAE • Market base of 4,000 engines for spares and MRO (strong growth of spares expected in 2013 due to LLPs) • Strong growth of fleet to ~6,500 engines until 2020 • Module deliveries +10% in 2012 • New opportunities due to IAE restructur
Slide 8: Very successful start of GTF-family with increased MTU-share
Very successful start of GTF-family with increased MTU-share GTF • So far 1,400 A320neo aircraft sold (> 1,800 including options) • Engine decision taken for ~950 A320neo aircraft (market share PW1133G > 50%) • 18% program share secured on PW1133G for A320neo (Strong share increase by more than 60%
Slide 9: MTU is well positioned in the fast growing narrowbody market
MTU is well positioned in the fast growing narrowbody market Narrowbody Total Market – 2012-2020 (no. of engines) ~33,200 00 + 8,3 ~24,900 22 November 2011 Investor and Analyst Day 2011 9
Slide 10: Strong growth in MTU's widebody programs
Strong growth in MTU’s widebody programs Widebody GEnx: • First Turbine Center Frame module delivered to GE in Aug 11 • ~200 modules to be delivered in 2012 by MTU GP7000: • Further ramp-up of modules in 2012 CF6/LM6000: • Increase in module deliveries in 2012 22 November 2011 Investor and Analyst D
Slide 11: MTU participation in growing widebody programs
MTU participation in growing widebody programs based on MTU core competences and TCF Widebody total market – 2012-2020 (no. of engines) ~15,700 00 + 4,2 ~11,500 22 November 2011 Investor and Analyst Day 2011 11
Slide 12: Downward trend in military programs to turn into growth starting 2013
Downward trend in military programs to turn into growth starting 2013 Military Business • Recently announced closure of military bases does not affect MTU further • Various export campaigns running in order to offset defense budget cuts • Ramping up of the A400M and U.S. programs will provide future
Slide 13: Growth potential through entry into GE90-MRO market
Growth potential through entry into highly attractive GE90-MRO market MRO • Highly attractive GE90 Growth MRO market entered; secured contract value of 550 m US$ with 3 launch customers • MTU is planning to enter new fast growing MRO programs; GP7000 started 2010, GENX pending and PW1000G to come •
Slide 14: MTU expenses for R&D reach peak in 2011
MTU expenses for R&D reach peak in 2011 Company expensed R&D in m€ 180 160 140 120 100 80 60 40 20 0 2005 2006 2007 2008 2009 2010 2011 2012 (exp.) (exp.) 22 November 2011 Investor and Analyst Day 2011 14
Slide 15: Market outlook still positive
Market outlook still positive Global GDP and air traffic growth Highlights Growth Rate • Global GDP expected to grow 12% Passenger by 2.1% in 2012 Air Traffic 7,3% 8% • China’s economy slowing but 5,9% 4,6% 4,8% 4,7% 4,6% 4,6% growth remains at a 4% reasonable level (+8.2%) GDP 2,9% 3,1% 3,1% 2,5% 2
Slide 16: MTU on track for €6bn revenue target in 2020
MTU on track for €6bn revenue target in 2020 Business summary - Outlook • Strong position in narrowbody market • V2500 with continuing strong marketbase • Industrialization of GTF consuming cash next 2 years • Increasing position in widebody (GENX growing) • MRO expanding further into widebody • Mil
Slide 17: Roadmap 2020: € 6bn Revenue Target
Roadmap 2020: € 6bn Revenue Target Klaus Müller SVP Corporate Development London, November 22, 2011
Slide 18: € 6bn revenue with an EBIT adjusted margin >12% in 2020
November 2010 target: Growing faster than the market € 6bn revenue with an EBIT adjusted margin >12% in 2020 Revenue Growth drivers 7.000 Target corridor 6.000 € 6bn Target Identified new n.n. Opportunities 5.000 GEnx, New business CSeries / MRJ 4.000 V2500 (OEM/MRO) Existing GP7000 3.000 business C
Slide 19: Positive long term outlook for market demand
Positive long term outlook for market demand Passenger traffic / orders and deliveries • Demand for global mobility is World revenue passenger kilometers (bn) 12000 4000 far from being saturated 11000 Passenger traffic forecast 2011-30 Number of civil transport jet aircraft Passenger traffic 1980-20
Slide 20: Climate change and environmental requirements accelerate demand for efficient equipment
Climate change and environmental requirements accelerate demand for efficient equipment Sustains long term growth Highly efficient products (e.g.: GTF and Leap) • Reduced operating cost and exposure to fuel price volatility • Lower noise restrictions and exhaust CO2 Continued liberalisation of air t
Slide 21: Cumulative cash flow
Today MTU serves 7 programs delivering profitable cumulative cash flow in spares with sustainable growth potential 7 Programs: Engine fleet 11,200 engines Entry into service + CF6-80A JT8D-200 CF6-50 CF6-80C (Boeing (Boeing 747, 30% of World (A300, 310, 330; Boeing MD-80) 767, A300, AirlinerFleet wi
Slide 22: Cumulative cash flow
In 2020 MTU serves 10 profitable Programs Strong potential to come: GP7000, GEnx and GTF programs 10 Programs: Engine fleet 14,700 engines CF6-80A CF6-50 Entry into service + CF6-80C JT8D-200 PW2000 V2500 PW4000G Cumulative cash flow PW306 CF6-80E PW500 Avg. RSP Share: Nxt. gen. NB PW307 15% engine?
Slide 23: N/B Strategy: Roadmap based on LPT-/HPC- and IBR technology
N/B Strategy: Roadmap based on LPT- / HPC- and IBR(Blisks)- technology to support strong growing market Today 2020 2025 CF6-80A OEM: 11% + X% Fleet in 2020 V2500 MRO: >30% + Y% ~6,500 engines Fleet in 2020 CFM56 MRO: ~6% ~20,000 GTF Prog. OEM: 17-18% Fleet in 2020 (PW1500, PW1200, MRO: tbd ~4.000 PW
Slide 24: V2500: Sustained aftermarket growth for the next decade
V2500: Sustained aftermarket growth for the next decade 2 MRO shops 4-5 MRO shops 5-7 MRO shops Active engines 7.000 8 V2500 2 9 4 5 6.000 2 9 4 6 2 9 4 7 # of shop visits since start1 5.000 4.000 3 3.000 V2500 V2500 (2011): SelectOne TM ~45% (-A5) 1st Run Engines 2.000 Spare parts No 2nd SV (LLP) f
Slide 25: Current N/B models give way to re-engined variants
Current N/B models give way to re-engined variants with three new entrants to come = demand for efficient equipment 2001 - 2010 2011 - 2020 Aircraft deliveries • BBD challenge(d)s duopoly 10.000 New Entrants • ~15% better fuel burn A320neo & 737MAX A320 and 737NG Families stimulate demand for new 8.
Slide 26: W/B strategy based on classical MTU core competences complemented by TCF
W/B strategy based on classical MTU core competences comple- mented by TCF: four strong growing programs support our revenue stream Today 2020 2025 OEM: ~6% Fleet in 2020 CF6-80 MRO: ~10% ~2,500 engines Fleet in 2020 GE90 MRO: >10% ~2,000 engines OEM: 22% Fleet in 2020 GP7000 MRO: >10% ~1,000 engine
Slide 27: Military Strategy: Expansion beyond european programs
Military Strategy: Expansion beyond european programs Today 2020 2025 RB199 OEM: 30% Fleet in 2020 + Others MRO: 30% ~500 engines OEM: 30% Fleet in 2020 EJ200 MRO: 30% ~1,200 engines OEM: 20% Fleet in 2020 TP400 MRO: tbd ~800 engines OEM: 18% Fleet in 2020 GE38 MRO: tbd ~250 engines Next OEM: ?% H/C
Slide 28: We are developing our global footprint
We are developing our global footprint to win market shares in attractive and growing market segments Global footprint: Roadmap 2020 Ceramic Coating Center SAS.* MTU Maintenance Hannover GmbH MTU Aero Engines** MTU Maintenance Berlin-Brandenburg GmbH P&WC Customer Service Centre (CSC) Europe GmbH* M
Slide 29: The € 6bn portfolio
The € 6bn portfolio Revenue Growth drivers Target corridor Identified new IAE restr., Next opportunities WB, H/C engine… € 6bn Target A320neo, MS-21, New business CSeries, MRJ, GEnx, GE38, GTF (contracted) GE90 MRO NEO V2500 CF6-50/80 PW2000 Existing LM-Series business GP7000 CFM56 and CF34 MRO ÉJ20
Slide 30: Summary Roadmap 2020
Summary Roadmap 2020 • We won all accessible PW/GE engine programs in the last 10 years • Develop and ramp-up existing and contracted programs • IAE restructuring: Upgrade Share • Entry into attractive MRO programs and win large source fleets / develop parts repair • Expand our global footprint in
Slide 31: Geared Turbofan Dynamics
Geared Turbofan Dynamics Dr. Anton Binder SVP Commercial Programs London, November 22, 2011
Slide 32: Geared turbofan: A step change in propulsion
Geared turbofan: A step change in propulsion Conventional turbofan PurePower™ GTF engine Constrained fan speed by Constrained low compressor & Optimized Optimized low pressure spool low turbine speed by fan low-speed fan low compressor & low turbine Gear Bypass airflow Bypass airflow Incremental imp
Slide 33: 73% reduction in noise footprint – LaGuardia airport
73% reduction in noise footprint – LaGuardia airport (LGA) Existing turbofan PurePower® PW1000G engine Potential 2-3% reduction in cash operating cost: lower noise fees • direct flight tracks • curfew operation SEL Contour Source: Wyle Laboratories FAA INM Version 6.2a 22 November 2011 Investor and
Slide 34: More than 1000 test hours completed
More than 1000 test hours completed MRJ engine ground test CSeries engine ground runs CSeries engine flight test PW1200G engines PW1500G engines 1st engine, 300+ hours 1st engine ground test & ice test completed 2nd engine running ground test, Florida 2nd engine over 100 hours flight time
Slide 35: Over 2000 firm / option engines on order
Over 2000 firm / option engines on order (>50% share on neo) PW1100G PW1100G PW1200G PW1200G PW1400G PW1400G PW1500G PW1500G A320neo A320neo MRJ MRJ Irkut MS-21 Irkut MC-21 CSeries CSeries Rostekhnologii Rostekhnologii Undisclosed (1) Undisclosed (1) Undisclosed (3) Undisclosed (3) 22 November 2011
Slide 36: PurePower PW1000G engine benefits
PurePower PW1000G engine benefits Fuel burn -15% CO2/NOx - 3,600 tonnes/CAEP6-50% Noise - (15-20) dB to stage 4 Maintenance cost stages/airfoils/LLP Schedule Earliest EIS 22 November 2011 Investor and Analyst Day 2011 36
Slide 37: MTU's involvement in the engine programs
MTU’s involvement in the engine programs MRJ CSeries A320neo MTU Share 15% 17% 18% LPT LPT 4 HPC LPT Products 4 HPC Brush Seals 4 HPC Brush Seals 2 Nickel Blisk A&T Share Services Prog. share Prog. share Prog. share 22 November 2011 Investor and Analyst Day 2011 37
Slide 38: MTU's product strategy
MTU’s product strategy Engine controls hardware & software Compressors Turbine frames Low pressure turbines 22 November 2011 Investor and Analyst Day 2011 38
Slide 39: Key enabler - high pressure compressor
Key enabler - high pressure compressor EJ200 HPC • Efficiency well above 90% PW6000 HPC • 10% weight reduction … maintaining operability ATFI II HPC NGSA HPC-Rig MRJ HPC sc al z CSeries HPC AAD482 15/16 AAD506 22/24 AAD507 31/30 AAD508 38/40 ed AAD482 15/16 AAD506 22/24 AAD507 31/30 AAD508 38/40 HPC
Slide 40: Optimized high speed LPT for GTF
Optimized high speed LPT for GTF • Similar shaft power • 60% higher speed • 3 stages vs 5 or (6, 7) HPT LPT HPT LPT • 60% less airfoils • 30-40% less weight 22 November 2011 Investor and Analyst Day 2011 40
Slide 41: We execute our promise
We execute our promise PW1524G first flight June 21, 2011 22 November 2011 Investor and Analyst Day 2011 41
Slide 42: Future Military Growth Potential
Future Military Growth Potential Michael Schreyögg SVP Defense Programs London, November 22, 2011
Slide 43: MTU's assumptions on future German military structure confirmed
MTU’s assumptions on future German military structure confirmed. Main changes: Savings of “5.1 billion Euros” • Closure of 31 military bases does not affect MTU • Phasing out of Phantom F4 & Bo-105 helicopter confirmation of MTU capacity & budget planning • Procurement of A400M confirmed • Trans
Slide 44: Entry into service of new MTU powered air systems for GAF
Entry into service of new MTU powered air systems for GAF boost OEM & MRO sales GAF Engine Flight Hours [EFH] 350.000 300.000 250.000 200.000 New OEM Programs (TP400, EJ200) 150.000 100.000 Programs in Service (RB199, RR250, T64, Tyne, J79) 50.000 0 2000 2005 2010 2015 2020 22 November 2011 Investor
Slide 45: MTU military growth strategy
MTU military growth strategy A400M OEM Typhoon T3b national programs FTH services extended services and logistics 2008 2010 2012 2014 2016 2018 2020 A400M Export Typhoon international M&A MEPC continued M&A activities Future OEM CH53K, new programs OEM programs 22 November 2011 Investor and Analyst
Slide 46: Positive outlook for MTU military business
Positive outlook for MTU military business Summary • MTU expectations on German defense budget adjustments have been confirmed. • Existing military business will remain at stable level. • Opportunities for our military business will result from • providing our national customer with extended service
Slide 47: Commercial MRO Growth Platforms
Commercial MRO Growth Platforms Dr. Stefan Weingartner President Commercial MRO London, November 22, 2011
Slide 48: Commercial MRO market expected to double to US$ 35bn in 2021
Commercial MRO market expected to double to US$ 35bn in 2021, MTU market coverage grows over-proportionally Commercial engine MRO revenues (bn US$)1 Remarks 35 CAGR 2011-2021: 7.5% • Commercial engine MRO revenues 30 to double until 2021 from US$ 17bn to 35bn (7.5% CAGR) 25 • Excellent MTU position:
Slide 49: Well-balanced MRO portfolio with focus on newer engines
Well-balanced MRO portfolio with a strong focus on newer engines in their growth phase New / in production fleets Mature fleets Sunset fleets MRO demand +/++ +++ ++ CF6-80E V2500-D5 GE90B CFM56 RB211 T500 PW20001 -5C CF34-8 -535 CF34-3 V2500-A1 T700 PW4-112 PW4 T800 -94´´ CFM56-5A PW4 CF6-80C2 AE300
Slide 50: Outstanding MRO portfolio by 2021
Outstanding MRO portfolio by 2021: Growth driven by most served engine models reaching maturity New / in production fleets Mature fleets Sunset fleets MRO demand +/++ +++ ++ CF6-80E GE90G T800 T700 CFM56-7 GE90B PW20001 SaM146 CF34 CF34 CF6- -8 T500 80C2 -10 V2500-A5 GP7 PW4-112 PW4 PW4-100 V2500-D5
Slide 51: MTU successfully enters highly attractive GE90 Growth MRO market
MTU successfully enters highly attractive GE90 Growth MRO market Secured contract value of US$ 550m in September 2011 GE90 MRO market overview Remarks Mio. US$ • GE90 Growth exclusive powerplant for B777-200LR / -300ER 4.000 CAGR 2011-2021 • Fast growing GE90 Growth market GE90 growth 17.3% 3.500 GE
Slide 52: MTU is the market leader for V2500 MRO services
MTU is the market leader for V2500 MRO services Further MRO market growth expected for V2500-A5 at 11% V2500 MRO market overview Remarks Mio. US$ • Fast growing V2500-A5 active fleet with another 2,000 engines to be delivered 4.000 CAGR 2011-2021: 11% within next 5 years 3.500 • MTU market share: 32
Slide 53: MTU serves the largest MRO program – the CFM56
MTU serves the largest MRO program – the CFM56 Approx. 20,000 engines and US$ 8.5bn MRO revenues by 2021 for MTU-served market CFM56 MRO market overview Remarks Mio. US$ • CFM56-5/-7 largest and fastest growing narrow-body MRO program 10.000 CAGR 2011-2021: 10% 9.000 • MTU market share: 6% in 20111
Slide 54: CF34 is growth program for MTU Maintenance Berlin-Brandenburg
CF34 is growth program for MTU Maintenance Berlin-Brandenburg Program grows from 44% of total RJ engine MRO market to 63% by 2021 CF34 MRO market overview Remarks • Relatively stable CF34-3 program in Mio. US$ 50-seater segment 2.000 CAGR 2011-2021 : 11% • Fast growing market for larger 70+ seats re
Slide 55: MTU is planning to enter new fast growing MRO programs
MTU is planning to enter new fast growing MRO programs GP7000 started as LPT MRO in 2010, GEnx and PW1000G pending New/targeted programs MRO market overview Remarks # active • Approx. 1,000 GP7000s expected on Mio. US$ engines A380 by 2021 3.500 8.000 CAGR 2011-2021 • Over 2,000 GEnx, mainly on 787
Slide 56: Commercial MRO global footprint targets
Commercial MRO global footprint targets to secure and win market shares Global market access MTU Maintenance Hannover GmbH MTU Aero Engines MTU Maintenance Berlin-Brandenburg GmbH 522 ~1,000 442 ~825 P&WC Customer Service Centre (CSC) Europe GmbH* (30%) (25%) MTU Aero Engines Polska Ceramic Coating
Slide 57: Summary
Summary MRO growth platforms • Strong overall growth of commercial engine MRO market: 7.5% CAGR • Well-balanced future-oriented MTU portfolio grows at 10.4% CAGR • Market coverage increasing from 50% to 65% by 2021 • MTU-served fleet significantly younger than average • Growth platforms: • V2500,CFM
Slide 58: Financials
Financials Dr. Maximilian Brandl SVP Finance & Accounting London, November 22, 2011
Slide 59: Continuous improvement of net financial debt
Continuous improvement of net financial debt Net financial debt (in m€)* Remarks 931 • Repayment of Senior Facility Agreement 838 in 2004/2005 • Continuous reduction of net financial debt over the past years • Optimization of the financial structure • Currently net financial debt reduced to zero • S
Slide 60: Redemption of the Convertible Bond
Redemption of the Convertible Bond Convertible Bond facts: Possibilities of redemption • Outstanding amount of € 152.7m Conversion takes place: • Maturity date February 1, 2012 • Share price > conversion price + interest rate + buffer • Interest rate 2.75% • MTU will deliver 3.1 million treasury sha
Slide 61: Foreseeable cash outflow in the next years
Foreseeable cash outflow in the next years: • R&D still on a high level (decreasing trend) • Ramp up of new engine programs requires capex, inventories and payments • Increase of participation in IAE / V2500 program • Significant decrease of military prepayments • Merger & Acquisitions? 22 November
Slide 62: Free cash flow policy
Free cash flow policy • 2004 -2011 period of deleveraging • MTU enters phase of investments in future growth • Steady dividend policy • No special dividends intended • No share buy back program intended • Keep strong balance sheet in volatile markets 22 November 2011 Investor and Analyst Day 2011 62
Slide 63: Restructuring net income adjusted
Restructuring net income adjusted Net income adjusted for mark-to-market Remarks valuations (US$, Nickel, options) New Old (m€) 9M 2011 9M 2011 • High volatility of the financial result due to mark-to-market valuations of US$, nickel and options EBIT reported 212.5 212.5 • New calculation of net inc
Slide 64: Net income new – w/o valuations in the financial result
Appendix Net income new – w/o valuations in the financial result 2009 Q1 10 Q2 10 Q3 10 Q4 10 2010 Q1 11 Q2 11 Q3 11 EBIT adj. 292.3 68.8 75.4 82.0 85.2 311.3 80.5 83.5 80.3 Interest result -13.4 -1.2 -4.4 -2.8 -5.2 -13.6 -4.5 -2.9 -2.3 Interest for pension provisions -24.5 -5.8 -5.6 -4.6 -8.4 -24.4
Slide 65: Summary Wrap-up / Indications 2012
Summary Wrap-up / Indications 2012 Reiner Winkler, CFO London November 22, 2011
Slide 66: Key messages
Key messages • € 6bn revenue target will be achieved with current product portfolio • V2500 main driver for aftermarket revenues until 2020 • Increased program share on GTF platforms provide for future growth • Strongly growing widebody programs support future revenue stream • MRO business will grow
Slide 67: Guidance 2011 confirmed
Guidance 2011 confirmed (m€) FY 2010 Guidance 2011 Revenues 2,707 7-8% increase EBIT adj. 311 325 EBIT adj. margin 11.5% Net income adj. 182 slight increase 22 November 2011 Investor and Analyst Day 2011 67
Slide 68: Head- / Tailwinds 2012
Head- / Tailwinds 2012 • Commercial series sales up 10%-15% • Commercial spare parts up 5%-10% • Commercial MRO up 5% -10% • Military business stable • Decrease in research & development (€ 10m -15m) • No major US$ - impact on EBIT adj. • Target is to keep EBIT margin stable 22 November 2011 Investo
Slide 69: 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