Mtu Aero Engines Ag · XETR:MTX
Mtu Aero Engines — Investor Presentation (March 2007)
31 slides from Mtu Aero Engines's investor presentation, Mar 19, 2007
Slide 1: MTU Aero Engines - Company Presentation
MTU Aero Engines - Company Presentation
Slide 2: Agenda
Agenda • Company Overview • Commercial Business • Military Business • Commercial MRO • Financials 2
Slide 3: Company Overview
Agenda • Company Overview • Commercial Business • Military Business • Commercial MRO • Financials 3 Company Overview
Slide 4: MTU is Built on Three Pillars
MTU is Built on Three Pillars Business Fields Strengths • Appr. 30% of active engine fleet with MTU participation Commercial • Well balanced product portfolio Business • Relatively young installed engine Military Commercial base 20% MRO 39% • Participates in key European programs with systems design
Slide 5: Important Partner for All Major OEMs
Important Partner for All Major OEMs Commercial Business Selected Key OEM Partnerships Program Others Program MTU OEM Partners Share 7% GE 27% GP7000 • General Electric 23% • Pratt & Whitney IAE 30% V2500 • Pratt & Whitney 11% • Rolls Royce P&W 36% 2006 Revenues Commercial Business: 994 m€ 5
Slide 6: Limited exposure to delivery cycle due to high portion of aftermarket business
Limited exposure to delivery cycle due to high portion of aftermarket business Market Outlook Implications Comm. New Engine Business CAGR 90-06 06-25 • Appr. 20% of MTU revenues Air Traffic 5.3% 5.1% Passenger Air Traffic • Main driver: Deliveries 600 • Current aircraft orders Fleet 3.7% 3.8% repres
Slide 7: Five MTU Strategic Pillars
Five MTU Strategic Pillars Maintain leadership in technology 1. • Customers require operating cost reduction by 10-15% • Emission requirements: Noise -20-25%, NOx -80-85% Gain access to fastest growing new engine programs • Single-aisle market represents 40% of deliveries 2006-2025 2. • NGSA develop
Slide 8: Commercial Business
Agenda • Company Overview • Commercial Business • Military Business • Commercial MRO • Financials 8 Commercial Business
Slide 9: MTU's Key Competencies Lie within Turbines and Compressors
MTU´s Key Competencies Lie within Turbines and Compressors Simple Engine Schematic Aero Engines Industry Overview HPC HPT LPT High High Low • MTU is a major provider of engine sub- Pressure Pressure Pressure systems for commercial engines Compressor Turbine Turbine • In commercial business MTU speci
Slide 10: Balanced Product Portfolio
Balanced Product Portfolio MTU‘s engine portfolio is well balanced between both young and mature programs, built up from significant R&D investment over the years Life Cycle Revenues of Commercial MTU Engine Population (Illustrative) CF6 JT8D- -50 CF6 200 (Boeing 747, 767, -80A (Boeing CF6 A300,310,
Slide 11: MTU's Engines Cover the Entire Thrust Range
MTU’s Engines Cover the Entire Thrust Range Existing Portfolio and Application JT8D (12.5% Share) PW6000 (18% Share) V2500 (11% Share) PW2000 (21.2 % Share) CF6 Family Boeing MD-80-range Airbus A318 Airbus A320 family Boeing B757 family Boeing B747, B747F, Boeing MD-90 Boeing C-17 B767 Airbus A300F,
Slide 12: With GP7000 and V2500 MTU is Participating in Highest Growth Segments
With GP7000 and V2500 Programs MTU is Participating in the Engine Segments with Highest Growth V2500 for Airbus A320 Family GP7000 for Airbus A380 • Narrowbody segment (20-50k thrust) • Widebody segment (75+ k thrust) • Currently > 2700 engines active worldwide • More than 300 orders • Production ra
Slide 13: Leveraging Latest Technology in New Engine Programs
Leveraging Latest Technology in New Engine Programs Example: Geared Turbofan Technology (GTF) • Joint development between MTU and Pratt&Whitney • Principle: Separation of fan and low pressure turbine enables optimization of both systems • Advantages compared to current technology • appr. 12% lower f
Slide 14: Military Business
Agenda • Company Overview • Commercial Business • Military Business • Commercial MRO • Financials 14 Military Business
Slide 15: High Program Share in Key European Military Projects
High Program Share in Key European Military Projects MTU acts as OEM for its national customer Tornado (RB199) Eurofighter (EJ200) Tiger (MTR390) A400M (TP400) 40% share 30% share 41% share 22% share • Compressor and • Compressor • Turbine (HPT) • Compressor turbine (HPC, IPC (HPC and LPC) • Combust
Slide 16: Military Programs are Profitable from the Beginning of Life Cycle
Military Programs are Profitable from the Beginning of Life Cycle Life Cycle Revenues of Military MTU Engine Population (Illustrative) CF6 JT8D- -50 CF6 200 (Boeing 747, 767, -80A (Boeing CF6 A300,310, DC-10) (A300,310,330 MD-80) -80C Boeing 747,767) (A300,310,330 (Boeing PW Boeing 747,767) RB 757,
Slide 17: Commercial MRO
Agenda • Company Overview • Commercial Business • Military Business • Commercial MRO • Financials 17 Commercial MRO
Slide 18: Market Dynamics and Market Share
Market Dynamics and Market Share Engine MRO Market MTU Market Share 7% 35 6% 30 25 4% 20 15 = CAGR 10 6,7% 5 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2000 2006 2015 E Source: AeroStrategy Forecast Initiative 2005; all commercial jet aircraft above 25 seats; 3,1% escalation (MTU adjustment)
Slide 19: MTU Maintenance Market Coverage
MTU Maintenance Market Coverage Commercial MRO Volume 2005-15: US$233 bn MTU Coverage* 2006 CFM56 51 19 CF6-80C2 32 PW4000 24 US$ 15 bn Others MTU V2500 17 54% 46% RB211 17 Trent 14 JT8D 9 MTU capabilities 2015 CF34 8 No MTU participation PW2000 7 GE906 US$ 29 bn CF6-50 5 GP7000 0,8 Others MTU PW300
Slide 20: Operations Improvement – Flowline Concept
Operations Improvement – Flowline Concept Work Flow Process Time Advantages of Flowline Replace- Traditional Approach Logistics T/D Repair B/U Test ment • Higher predictability 60 Days • More flexibility • Better accuracy • Lower complexity • Faster material flow Flowline Concept • Improved shop flo
Slide 21: MTU Well Positioned to Participate from Strong Market Growth in Asia
MTU Well Positioned to Participate from Strong Market Growth in Asia Engine MRO Market Growth in Asia MTU Positioning • MTU Maintenance Zhuhai: 50% JV with largest Chinese Airline (China Southern = 9.5% Airlines with approx. 400 ac in 2010) GR CA • Main products: V2500, CFM56-3/-5B/-7 • Overhaul cap
Slide 22: Financials
Agenda • Company Overview • Commercial Business • Military Business • Commercial MRO • Financials 22
Slide 23: FY 2006: Revenue Growth 10.7% on Group Level
FY 2006: Revenue Growth 10.7% on Group Level MTU Group Revenues (€ m) Segment Revenues (€m) 2.416 +10.7% +25% 2.183 MRO 955 767 Military -0.4% Business 491 490 +8% *) Commercial Business 994 943 FY 2005 FY 2006 FY 2005 FY 2006 (*) underlying growth w/o ATENA, US$-Effects 23
Slide 24: FY 2006: EBITDA Improved by 33% on Group Level
FY 2006: EBITDA Improved by 33% on Group Level MTU Group adj. EBITDA Segment adj. EBITDA €m €m 600 16% 600 16% 14,7% 13,2% 500 500 10,9% 12% 12% 11,3% 400 400 10,8% +33% 10,1% 300 8% 300 8% 103 200 200 78 318 4% 4% 239 218 100 100 162 0 0% 0 0% FY 2005 FY2006 FY 2005 FY 2006 OEM MRO OEM margin MRO m
Slide 25: FY 2007 Outlook
FY 2007 Outlook Revenues EBITDA adj. (margin) €m €m 3.000 600 13,2% 14,0% 15% + 8% 2.000 400 +15% 10% 2.416 2.600 1.000 200 365 5% 318 0 0 0% FY 2006 Outlook 2007 FY2006 Outlook 2007 Free Cash Flow Net Income / EPS (underlying) €m €m in €/share 150 200 2,6 3 2,3 - 40% 150 100 2 + 15% 100 50 116 140
Slide 26: Three Efficiency Initiatives to Further Improve Cost Position
MTU Has Introduced Three Efficiency Initiatives to Further Improve Cost Position Current Efficiency Initiatives Reduction of Reduction of Reduction of Indirect Cost Direct Labour Cost Procurement Cost • Appr. 2.750 direct • Appr. 933 m € direct • Focus: indirect personnel employees in Germany procur
Slide 27: New Mid-Term Target of 14-15% EBITDA Margin
New Mid-Term Target of 14 - 15 % EBITDA Margin R&D fully No Capitalisation of expensed OE losses Mid Term Target EBITDA Margin 14% -15% Gross revenue recognition (pre concessions) 27
Slide 28: US$ Exchange rate / Hedge portfolio
US$ Exchange rate / Hedge portfolio USD daily average exchange rate from 01/02/2004 to 12/29/2006 1,50 31.12.04 1,40 1,3621 29.09.2006 02.01.04 30.09.05 30.06.04 31.03.06 1,266 1,2592 1,2042 1,30 1,2155 1,2104 31.03.05 29.12.2006 1,20 30.06.2006 30.09.04 1,2964 1,317 31.03.04 30.06.05 1,2713 1,10 1,
Slide 29: R&D
R&D (€ m) 2004 2005 2006 R&D Company Financed 155,9 83,8 80,6 Provision consumption -98,2 -38,1 -16,1 R&D acc. to P&L 57,7 45,7 64,5 R&D Customer Financed 76,9 88,1 89,3 R&D Total 232,8 171,9 169,9 R&D Company Financed R&D Company Financed as (m €) % of Commercial OEM-Sales 200 20% 150 15% 100 10% 5
Slide 30: Contacts
Contacts Inka Koljonen Head of Investor Relations Tel: +49 89 1489 8313 Fax: +49 89 1489 95062 MTU Aero Engines 665 Dachauer Strasse Munich Claudia Heinle Tatiana Villalobos Baum Investor Relations Investor Relations Tel: +49 89 1489 3911 Tel: +49 89 1489 3523 Fax: +49 89 1489 99354 Fax: +49 89 1489
Slide 31: 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
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