Mtu Aero Engines Ag · XETR:MTX
Mtu Aero Engines — FY2017 Earnings Presentation
26 slides from Mtu Aero Engines's earnings presentation, Feb 21, 2018
Slide 1: Preliminary Full Year Results 2017
Preliminary Full Year Results 2017 Conference Call with Investors & Analysts 21 February 2018 – MTU Aero Engines – Investor Relations
Slide 2: Business Highlights FY 2017
Business Highlights FY 2017 • Guidance achieved - New record year for MTU • Market key indicators in excellent shape • 2017 GTF engine delivery target achieved • MTU prepared for further GTF ramp up in OEM and MRO • Strong order wins for independent MRO • EME Aero – 50:50 JV founded with Lufthansa T
Slide 3: Update on Geared Turbofan Engines
Update on Geared Turbofan Engines • 374 GTF engines delivered in 2017 • >135 aircraft with GTF in service • ~500,000 GTF engine flight hours • Upgrade on carbon oil seal and improved combustor liner in production • HPC knife edge seal issue under assessment • MRJ flight testing with GTF on track for
Slide 4: Financial Highlights 2017
Financial Highlights 2017 Revenues (m€) EBIT adj. / EBIT adj. Margin (m€ / %) 12.0% 5,000 +6% 700 12% 10.6% 5,036 4,733 600 +21% 10% 4,000 607 500 8% 3,000 400 503 6% 2,000 300 4% 200 1,000 2% 100 0 0 0% FY 2016 FY 2017 FY 2016 FY 2017 Net income adj. / EPS adj. (m€ / €) Free Cash Flow (m€) 500 8.34
Slide 5: Guidance 2017 achieved
Guidance 2017 achieved Guidance 2017 Actuals 2017 Revenues ~ 5.1 bn€ 5,036 m€ EBIT adj. ~ 600 m€ 607 m€ Net Income adj. ~ 420 m€ 429 m€ Free Cash Flow ~ 140 m€ 151 m€ 21 February 2018 Preliminary Full Year Results 2017 - Investor Relations 5 © MTU Aero Engines AG. The information contained h
Slide 6: OEM Segment
OEM Segment Order book 31/12/2016 31/12/2017 Change Order book (m€) 7,246.0 5,814.8 -20% Commercial Business (mUS$) 7,113.6 6,617.7 -7% Military Business (m€) 497.5 296.8 -40% (m€) FY 2016 FY 2017 Change Revenues 2,905.2 2,873.7 -1% Commercial Business 2,401.2 2,469.4 3% Military Business 504.0 404.
Slide 7: Commercial MRO Business
Commercial MRO Business (mUS$) 31/12/2016 31/12/2017 Change Order book 7,300.9 8,886.6 22% (m€) FY 2016 FY 2017 Change Revenues 1,914.4 2,285.3 19% EBIT adj. 181.5 194.4 7% EBIT adj. Margin % 9.5% 8.5% • Order book increased by 22% • Organic MRO revenues up 23% • EBIT margin at 8.5% 21 February 2018
Slide 8: IFRS 15 @ MTU – Implications on MTU Accounts
IFRS 15 @ MTU – Implications on MTU Accounts Main accounting issues Current accounting Future accounting Payments to customer (OEM) Cost of goods sold Reduction in revenue 1 to compensate program expenses, e.g. concessions Capitalized program entry fee Amortization of capitalized Amortizatio
Slide 9: IFRS 15 @ MTU – Estimated Reconciliation based on Results FY 2017
IFRS 15 @ MTU – Estimated Reconciliation based on Results FY 2017 Pre IFRS15 Post (as reported) IFRS15 1 2 3 4 FY2017 FY2017 -1,4 Revenues in € bn -0,05 -0,01 0,00 -1,33 5,04 ~3,65 -35 EBIT adj. in € mn 0 -35 607 ~570 12.1% ~16 % Margin Margin 21 February 2018 Preliminary Full Year Results 2017 - In
Slide 10: Guidance 2018
Guidance 2018 Organic Growth: Military: Stable Commercial OE: Up ~30% Commercial Spares: Up mid single digit Commercial MRO: Up in the high teens EBIT adj. Moderate progression Net income adj. Growth in line with EBIT adj. CCR* Low to mid double digit * Cash Conversion Rate = Free Cash Flow/Net Inco
Slide 11: Appendix
Appendix 21 February 2018 Preliminary Full Year Results 2017 - Investor Relations 11 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.
Slide 12: US$ Exchange Rate / Hedge Portfolio
Appendix US$ Exchange Rate / Hedge Portfolio Hedge book as of February 21, 2018 (% of net exposure) (in m US$) 1,074 (=97%) 1,030 (=77%) 650 (=46%) 90 (=6%) 2017 2018 2019 2020 Average hedge rate (US$/€) 1.18 1.15 1.16 1.24 21 February 2018 Preliminary Full Year Results 2017 - Investor Relations 12
Slide 13: Profit & Loss
Appendix Profit & Loss (m€) Q4 2016 Q4 2017 Change FY 2016 FY 2017 Change Revenues 1,331.4 1,290.9 -3% 4,732.7 5,036.3 6% Total Cost of Sales -1,178.8 -1,075.9 -4,074.8 -4,266.4 Gross Profit 152.6 215.0 41% 657.9 769.9 17% Gross Profit Margin 11.5% 16.7% 13.9% 15.3% R&D according to IFRS -18.0 -27.1
Slide 14: Reconciliation to adjusted Key Performance Indicators
Appendix Reconciliation to adjusted Key Performance Indicators (m€) Q4 2016 Q4 2017 Change FY 2016 FY 2017 Change EBIT reported 96.6 143.1 48% 452.8 555.3 23% Adjustment (PPA Depreciation & Amortization) 5.3 5.3 21.1 21.1 Adjustment (IAE Upshare) 7.3 7.6 29.1 30.2 EBIT adj. 109.2 156.0 43% 503.0 606
Slide 15: Segment Revenues and EBIT adj.
Appendix Segment Revenues and EBIT adj. (m€) Q4 2016 Q4 2017 Change FY 2016 FY 2017 Change Revenues Group 1,331.4 1,290.9 -3% 4,732.7 5,036.3 6% OEM Commercial 662.9 648.0 -2% 2,401.2 2,469.4 3% OEM Military 147.2 132.8 -10% 504.0 404.3 -20% MRO 546.1 557.8 2% 1,914.4 2,285.3 19% Consolidation -24.8
Slide 16: Research & Development
Appendix Research & Development (m€) Q4 2016 Q4 2017 Change FY 2016 FY 2017 Change Total R&D 50.7 37.3 -26% 208.6 199.7 -4% Customer funded R&D -9.8 -5.6 43% -40.6 -31.9 21% Company expensed R&D 40.9 31.7 -22% 168.0 167.8 0% thereof OEM 39.5 30.0 162.9 163.5 thereof MRO 1.4 1.7 5.1 4.3 Capitalizatio
Slide 17: Financial Result
Appendix Financial Result (m€) Q4 2016 Q4 2017 Change FY 2016 FY 2017 Change Interest Income 0.2 1.5 >300% 0.8 5.8 >300% Interest Expense -5.9 -6.0 -2% -12.7 -13.0 -2% Interest Result* -5.7 -4.5 21% -11.9 -7.2 39% Financial Result on other items -12.1 -11.6 -25.3 -32.8 thereof interests for pension
Slide 18: MTU's Cash Development January – December 2017
Appendix MTU’s Cash Development January – December 2017 -216.3 Free Cashflow: +151.1 -362.4 482.5 10.1 -25.0 45.9 -332.9 322.4 -3.5 -31.0 Adjusted Non-operating exceptional items: +31.0 106.1 Cash and CF from CF from Payments for Sales Acquisition CF from Translation Adjustments Cash and cash Operat
Slide 19: Cash Flow
Appendix Cash Flow (m€) FY 2016 FY 2017 Change Net Income IFRS 312.6 381.8 22% Depreciation and amortization 177.5 196.2 Change in provisions 189.4 192.5 Change in Working Capital -291.6 -206.2 Taxes -43.1 -14.5 Interest, derivatives, others 13.2 -67.3 Cash Flow from operating activities 358.0 482.5
Slide 20: Net Financial Debt at 827 m€
Appendix Net Financial Debt at 827 m€ (m€) 31/12/2016 31/12/2017 Change Bonds and notes 353.6 100.0 Convertible bond 474.6 478.5 Financial liabilities to bank 30.1 108.2 thereof Revolving Credit Facility 0.0 78.1 thereof Note Purchase Agreement 30.1 30.1 Loans from related companies 0.0 0.0 Finance
Slide 21: Working Capital
Appendix Working Capital (m€) 31/12/2016 31/12/2017 Change Change in % Gross inventories 1,022.7 997.9 -24.8 Prepayments -344.2 -321.9 22.3 Receivables 1,148.2 1,261.4 113.2 Payables -811.0 -700.4 110.6 Working Capital 1,015.7 1,237.0 221.3 22% 21 February 2018 Preliminary Full Year Results 2017 - I
Slide 22: Balance Sheet
Appendix Balance Sheet (m€) 31/12/2016 31/12/2017 Change Intangible Assets 2,234.2 2,290.1 Property, Plant, Equipment 681.5 763.4 other Non-current assets 390.7 516.2 Total Non-Current assets 3,306.4 3,569.7 8% Current assets 2,538.2 2,479.8 -2% Total assets 5,844.6 6,049.5 4% Equity 1,500.5 1,989.8
Slide 23: PPA Depreciation / Amortization (in m€)
Appendix PPA Depreciation / Amortization (in m€) (in m€) Q4 2016 Q4 2017 FY 2016 FY 2017 Total depreciation / amortization OEM 38.0 47.0 141.7 158.8 MRO 10.0 9.0 35.9 37.4 MTU total 48.0 56.0 177.6 196.2 PPA depreciation / amortization & IAE Upshare amortization (EBIT adjustments) PPA OEM 4.7 4.6 18
Slide 24: Guidance for PPA and IAE Upshare Amortization; R&D Amortization
Guidance for PPA and IAE Upshare Amortization (in m€) 2016 2017 2018E 2019E 2020E 2021E 2022E PPA depreciation / 21.1 21.1 ~21 ~21 ~21 ~21 ~20 amortization IAE Upshare 29.1 30.2 ~30 ~30 ~30 ~30 ~30 Adjustments ~50 ~51 ~51 ~51 ~51 ~51 ~50 Guidance R&D Amortization (in m€) 2016 2017 2018E 2019E 2020E
Slide 25: 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 26: 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