Mtu Aero Engines Ag · XETR:MTX
Mtu Aero Engines — Investor Day (November 2014)
62 slides from Mtu Aero Engines's investor day presentation, Nov 25, 2014
Slide 1: Investor & Analyst Day 2014
Investor & Analyst Day 2014 MTU Aero Engines AG Munich, November 25, 2014 25 November 2014 Investor & Analyst Day 1
Slide 2: Agenda – MTU Investor and Analyst Day 2014
Agenda – MTU Investor and Analyst Day 2014 Time Agenda Speaker Michael Röger 11:30 – 11:40 Welcome VP Investor Relations 11:40 – 12:00 Significant Milestones Achieved Reiner Winkler, CEO OEM Business – MTU Well Positioned Michael Schreyögg, 12:00 – 12:40 In The Growing Engine Market Chief Program Of
Slide 3: Agenda – MTU Investor and Analyst Day 2014
Agenda – MTU Investor and Analyst Day 2014 Time Agenda Speaker Shop Tour – Blisk Manufacturing Hall / 14:30 – 15:30 EJ200 Engine Test Cell MRO Business – Ready For A Dr. Stefan Weingartner 15:30 – 16:10 Changing Business Environment President MTU Maintenance 16:10 – 16:50 Financials And Outlook / Su
Slide 4: Significant Milestones Achieved
Significant Milestones Achieved Reiner Winkler, CEO Munich, November 25, 2014 25 November 2014 Investor & Analyst Day 4
Slide 5: The Pure Power Engine Family makes material progress
The Pure Power Engine Family makes material progress 25 November 2014 Investor & Analyst Day 5
Slide 6: Promising outlook for the aerospace market
Promising outlook for the aerospace market • Record airliner order book of over 11,000 aircraft • Record deliveries from Airbus and Boeing of over 1,350 aircraft expected for 2014 • Regional Jet/ Turboprop deliveries up 28% y-o-y • Current airliner engine fleet of almost 40,000 (+4,6 % y-o-y) • Posi
Slide 7: OEM Business
OEM Business • Over 6,000 GTF engines on firm order or optioned • Successful first flight of A320neo in September • V2500-E5 (powering the KC-390) achieved FAA engine certification • Program share of 4% in the GE9X program • Gulfstream G500/G600 powered by PW800 • Deliveries of A400M on track MTU
Slide 8: Success Story GTF
Success Story GTF Over 6,000 engines ordered (incl. options and not announced orders) Roughly 50% market share with A320neo / providing power for 5 platforms 25 November 2014 Investor & Analyst Day 8
Slide 9: Commercial MRO Business
Commercial MRO Business • Broad portfolio covering strongly growing engine types • GE90 ramp-up on track • GEnx MRO contract signed • Record quarter Q3 2014 • Contract wins in first 9 months 20% above prior year MRO engine portfolio well positioned for the future business environment 25 November 2
Slide 10: MTU's agenda for the next years
MTU’s agenda for the next years • Sustain balanced portfolio over all market segments • Strong ramp-up of GTF volumes • Further development of GTF technology • New engine participations with tight time schedule for entry into service • Manage transition to OEMRO aftermarket model 25 November 2014 In
Slide 11: Thank you for your attention!
Thank you for your attention! 25 November 2014 Investor & Analyst Day 11
Slide 12: OEM Business – MTU Well Positioned In The Growing Engine Market
OEM Business – MTU Well Positioned In The Growing Engine Market Michael Schreyögg, Chief Program Officer Munich, November 25, 2014 25 November 2014 Investor & Analyst Day 12
Slide 13: Military Business - Status
Military Business - Status • EJ200 (Eurofighter): - More than 1,100 production engines delivered - Main focus on increasing overhaul services • TP400-D6 (A400M): - Excellent performance in first missions - First aircraft delivered to Air Forces in France, UK, Turkey - First Flight of German A400M to
Slide 14: Military Business - Outlook
Military Business - Outlook 2012 2013 2014 2015 2015 2020 2016 2025 2017 2030 2018 2035 Fighter, Trainer Eurofighter F18 upgrade F15/ F18 NF EU -FCAS EJ200 Transport A400M KC390 TP400 V2500 Helicopter CH-53K UH-60 FTH GE38 25 November 2014 Investor & Analyst Day 14
Slide 15: Commercial Business – Market Outlook Airbus and Boeing
Commercial Business – Market Outlook Airbus and Boeing Active Fleet over 100 PAX 40.000 30.000 20.000 10.000 *) about 70% of all deliveries will be in the Single Aisle Segment: - Boeing: 25,700 a/c - Airbus: 22,000 a/c 0 2014 2033 Source: Dow Jones.de – Sep. 2014 25 November 2014 Investor & Analyst
Slide 16: The next years will require ca. 60,000 commercial aircraft
The next 20 years will require ca. 60,000 com. aircraft, generating $1000bn of engine revenue. Thereof some 85% with NB/WB engines BJ RJ & TP NB WB # A/C (20yr) 30.000 21.500 22.300 20.000 7.600 8.400 10.000 0 Engine rev. US$bn (20yr) $450bn 500 $410bn $90bn $60bn 0 Heavy BJ strong 50% are 90 PA
Slide 17: New Business Jet Product Family
New Business Jet Product Family 2015 2013 2020 2014 2025 • Clean-sheet design Oct 14: presentation of new G500 and • Powered by Pure Power PW800 (GTF core) G600 business jets by Gulfstream • MTU holds a program share of 15% • MTU will be responsible for the LPT, the first Dec 14: expected engine fou
Slide 18: Regional Jet Update
Regional Jet Update 2013 2015 2014 2020 2025 • EIS: Q3 2015 Bombardier CSeries • Flight test program (PW1500G) resumed • Over 1,100 engines ordered*) • EIS: Q2 2017 Mitsubishi MRJ (PW1200G) • First roll out Oct. 25, 2014 • Over 800 engines ordered*) Embraer E-Jet Gen2 (PW1700G/ PW1900G) • EIS: Q2 20
Slide 19: Narrowbody Update
Narrowbody Update 2015 2020 2014 2025 2030 2035 • EIS: Oct 2015 Airbus A320neo • A321 ext. range (PW1100G) launched • PIP launched • Production ramp-up 24-35 klbs thrust • Over 2,600 engines ordered*) Irkut MS-21 • EIS: Q4 2017 (PW1400G) • Same engine as PW1100G • Over 400 engines ordered*) New Ge
Slide 20: Widebody Update
Widebody Update 2015 2020 2025 2030 2035 100 klbs • MTU participation of thrust 4% 777X GE9X • Development launched • New applications in the A330X 70 klbs range expected 70 klbs thrust after 2030 787X • Concept Study 40 klbs thrust 7XX regarding 757/767 (757/767 successor) successor Note: Mid of ai
Slide 21: Massive invest phase of MTU coming to an end
Massive invest phase of MTU coming to an end 2015 2020 2025 2030 • Currently, MTU is in the Business Jets PIP middle of a heavy investment phase in all thrust segments Regional Jets PIP • New engine types in development for all segments Narrowbodies PIP • Reduction of investment towards the end of t
Slide 22: MTU's engine participations show growth with strong momentum
MTU’s engine participations show growth with strong momentum MTU Installed Thrust and Aftermarket Sales Potential • Growth of installed thrust Aftermarket Sales (indicative) accelerating since 2010 Thrust (m lbf) 140 • Main driver for MTU is its strong position in the 120 narrowbody and regional jet
Slide 23: Summary OEM Business
Summary OEM Business • Stable revenues in military business • Strong increase of total market expected • Market share gains in all segments for MTU • Investment phase is expected to come to an end • Increase in installed thrust ensures long term aftermarket growth 25 November 2014 Investor & Analyst
Slide 24: Thank you for your attention!
Thank you for your attention! 25 November 2014 Investor & Analyst Day 24
Slide 25: The Geared Turbofan - A Successful Start Into Future Engine Generations
The Geared Turbofan - A Successful Start Into Future Engine Generations Dr. Rainer Martens, COO Munich, November 25, 2014 25 November 2014 Investor & Analyst Day 25
Slide 26: Technical Milestones GTF Programs
Technical Milestones GTF Programs Engine/ PW1500G/ PW1100G/ PW1200G/ PW1400G/ PW1900G Aircraft CSeries A320neo MRJ MS-21 PW1700G E-Jet 2nd Gen. Q1 2015 First Engine to Test Q2 2015 Q2 2016 Tested in Q2 2015 Flying Testbed N/A Q2 2016 Engine Q4 2015 Certification Q4 2014 Q4 2015 Q3 2015
Slide 27: Production Ramp Up
Production Ramp Up 2009 2014 E 2019 E Turbines 800 1100 2050 Compressors 200 270 1400 TCF 30 400 250 Engine Assembly 30 90 250 Total 1060 1860 3950 +80% +110% Yearly average increase by 14% 25 November 2014 Investor & Analyst Day 27
Slide 28: Key Projects
Key Projects Optimize Rotor and New Blisk Shop Stator Production Lines Status Status Progress 80% Progress 80% Extension of MTU-AE Polska Engine Assembly Status Status Progress 65% Progress 40% Logistics Building Shop Floor Management Status Status Progress 70% Progress 95% Projects are well on thei
Slide 29: Engine Upgrades and Preparation for Series
Engine Upgrades and Preparation for Series • To keep the aircraft attractive, engine upgrades are performed throughout the life of the engine. The purpose of these upgrades can be specific fuel consumption, durability, maintenance, thrust and costs • The changes introduced by an engine upgrade typic
Slide 30: MTU Technology Roadmap - CLAIRE
MTU Technology Roadmap - CLean AIR Engine, CLAIRE GTF – First Step is implemented 25 November 2014 Investor & Analyst Day 30
Slide 31: GE9X Program – The Aircraft
GE9X Program – The Aircraft Boeing 777X Characteristics • 100,000 lb thrust • 355 to 446 seats • Exclusive engine GE9X • Reduction in fuel consumption of 10% compared to 777-300ER • 5% lower fuel consumption than any other twin-aisle engine in service in 2020 • 300 firm orders 25 November 2014 Inves
Slide 32: GE9X MTU Program share
GE9X MTU Program share Flow Path Hardware Hub Strut Case Hub Strut Case Bearing Housing Assembly Turbine Center Frame 25 November 2014 Investor & Analyst Day 32
Slide 33: GE9X Level I Milestones
GE9X Level I Milestones Program Milestones Entry into 2014 2015 2016 2017 2018 Service Start Design „First Engine- Flying GE9X Development Freeze to-Test“ Testbed Engine MTU Certification 25 November 2014 Investor & Analyst Day 33
Slide 34: Summary
Summary • The Geared Turbofan is a very successful product • Production ramp up is well on its way • Projects to enable production are executed according to plan • Technology roadmap for next generation engines is defined and executed • GE9X engine program is launched The GTF has put MTU into an exc
Slide 35: Thank you for your attention!
Thank you for your attention! 25 November 2014 Investor & Analyst Day 35
Slide 36: MRO Business - Ready For A Changing Business Environment
MRO Business - Ready For A Changing Business Environment Dr. Stefan Weingartner, President MTU Maintenance Munich, November 25, 2014 25 November 2014 Investor & Analyst Day 36
Slide 37: Current market trends – per November 2014
Current market trends – per November 2014 • Disappointing Eurozone and emerging market +2.1% +2.3% slowdown delay recovery GDP 2013A 2014E • Faster growth expected in 2015 (+2.9%) Freight traffic +1.4% +3.1% 2013A 2014E • Cargo traffic begins recovery Passenger traffic +5.7% +5.9% 2013A
Slide 38: Passenger traffic and cycles grow strongly and steadily
Passenger traffic and cycles grow strongly and steadily Global traffic & cycles (quarterly) Highlights Global passenger traffic (y-o-y) Airliner cycles (y-o-y) •Global passenger traffic up 5.3% 10% 10% in Q3 8% +5.3% 8% in Q3 •Cycle rebound follows traffic rebound 6% 6% however at a lower growth rat
Slide 39: Market indicators per engine type
Market indicators per engine type Active Park Engine fleet rate Y-O-Y as of Sept. 2014 Ø Airliner engines 39,810 +4.6% 9.5% Continued growth in fleet and hours V2500-A5 4,908 +11% 2% Steady double-digit growth GE90G 1,334 +19% 0% Stable production of 100 aircraft p.a. CFM56-5B/-7 15,786 +9% 1%
Slide 40: MTU Maintenance successfully serves three market segments
MTU Maintenance successfully serves three market segments with distinct characteristics Segment Market characteristics • Decreasing fleet (retirements) Independent 1 old • Customers are Airlines or Lessors • Limited OEM influence • Growing fleet (engines in production) Independent 2 • Customers are
Slide 41: Today: Diversified portfolio with a strong focus on newer engines
Today: Diversified portfolio with a strong focus on newer engines in their growth phase (MTU MRO portfolio only) Newer programs Mature/sunset programs Deliveries and fleet growth Out-phasing and retirements V2500-A5 CF6-80C PW20001 CFM56-7 CFM56-5B CF34-3 V2500-D5 GE90G CF34-8 CF34 -10 CFM56-3 GP700
Slide 42: 2024: MTU's MRO portfolio benefits from growth engines reaching maturity
2024: MTU’s MRO portfolio benefits from today’s growth engines reaching maturity Newer programs Mature/sunset programs Deliveries and fleet growth Out-phasing and retirements GP7000 CF34-8 V2500-A5 GE90G CFM56-7 CF34 -10 GEnx CFM56-5B GTF CF6-80C PW20001 Independent new CF34-3 Independent old CFM56-
Slide 43: MTU's hybrid strategy: served market will grow over-proportionally
Thanks to MTU‘s hybrid strategy and market coverage, its served market will grow over-proportionally at 11.3% over the next 10 years Commercial MRO market [b$]* Remarks CAGR 2014-35 14-24 • The MTU-served market will grow over- 45 Total: 6.7% 8.5% proportionally at 11.3% from 12 to 34b$ - MTU-served
Slide 44: MTU Maintenance Unique Selling Proposition applies to all market segments
MTU Maintenance Unique Selling Proposition applies to all market segments DRIVERS ENGINE OPERATIONS: Measures to defer /avoid shop visits* Operational Procedure On-site Engine Condition Instant power Unscheduled parameters adjustments maintenance cleaning monitoring (e.g. FOD) Cycle length LLP expir
Slide 45: MTU Maintenance has the largest MRO portfolio
MTU Maintenance has the largest MRO portfolio and is the only provider capable of covering/accessing all market segments … Share of MRO Segment 2014 Revenues* • #1 independent for all types served 1 Independent • High market shares… up to market leadership 25% old • High repair depth and margins • #
Slide 46: MTU Maintenance offers custom-tailored products for all market segments
MTU Maintenance has unique abilities to offer both alternative custom-tailored products for all market segments Share of MRO Segment 10 years outlook Revenues* • Niche segment (fast declining market) 1 Independent • Well positioned to gain market share 10% old • Growing role of MRO alternatives (MTU
Slide 47: Summary and Outlook
Summary and Outlook • MTU‘s market coverage grows over-proportionally at 11.3% over the next 10 years • MTU MRO’s organic growth, thanks to its diversified portfolio with a strong focus on newer engines, reaching maturity in the coming decade • MTU Maintenance will remain the MRO provider covering a
Slide 48: Thank you for your attention!
Thank you for your attention! 25 November 2014 Investor & Analyst Day 48
Slide 49: Financials & Outlook
Financials & Outlook Reiner Winkler, CEO Munich, November 25, 2014 25 November 2014 Investor & Analyst Day 49
Slide 50: Financial Highlights 9M 2014
Financial Highlights 9M 2014 Revenues (m€) EBIT adj. / EBIT adj. Margin (m€ / %) 3000 2.660 +6% 2.812 400 10.1% 9.6% 10% 2500 300 268 +1% 271 2000 8% 1500 200 5% 1000 100 3% 500 0 0 0% 9M 2013 9M 2014 9M 2013 9M 2014 Net Income adj. / EPS adj. (m€ / €) * / ** Free Cash Flow (m€) 250 3.50 100 3.33 84
Slide 51: Guidance 2014
Guidance 2014 in m€ FY 2013 adjusted Guidance 2014 Guidance 2014 for MTU Zhuhai July Update October Revenues 3,574.1 ~ 3,650 ~ 3,750 EBIT adj. 373.1 ~ 375 ~ 380 10.4% Net income adj. 235.7 ~ 245 ~ 250 • Series revenues expected to increase in the low teens • Spare parts revenues expected to grow hig
Slide 52: Definition of Free Cash Flow
Definition of Free Cash Flow • Free Cash Flow is determined by combining Cash Flow from Operating Activities and Cash Flow from Investing Activities • Both components of Free Cash Flow are well-defined under IFRS • MTU adjusts items which have a financing character or are related to acquisitions of
Slide 53: MTU's Cash development January – September 2014
MTU’s Cash development January – September 2014 in m€ -11,3 Free Cashflow: +84,3 +183,4 -130,9 +8,0 +17,8 +6,0 -69,2 +5,4 -31,8 Adjusted Non-operating exceptional items +31,8 Cash and CF from CF from Payments Sales Acquisition CF from Translation Adjustments Cash and cash Operating Investing for liq
Slide 54: Status 'Cash for Future' Project – FCF contribution
Status „Cash for Future“ Project – FCF contribution Launched to Limit Impacts due to challenging Business Environment 2014- 2017 • Target to improve capital turnover rate from 3,5 in 2013 to 4,5 by 2017 • Capital turnover rate already expected to be around 4,4 in 2014 Target to limit inventory gro
Slide 55: 'Cash for Future' Project: Examples of Working Capital Optimization
„Cash for Future“ Project: Examples of Working Capital Optimization Integrated planning & Centralized Supply Chain Management Organsiation coordination Improved Lead time reduction 3-4% production in production and assembly flow Reduced provisioning Optimization of inventory range buffer Training &
Slide 56: New IFRS 15: Revenues from Contracts with Customers
New IFRS 15: Revenues from Contracts with Customers • IFRS 15 targets alignment of IFRS and US-GAAP revenue recognition • The new standard was commonly issued by FASB and IASB in May 2014 • In Europe it may be applied after EU endorsement (expected Q2/2015) • Mandatory application in 2017 for EU and
Slide 57: Head- and Tailwinds 2015
Head- and Tailwinds 2015 Revenue Growth Military: Stable New engine Sales (Com. OE): High single digit Spare parts Sales (Com. Spares): Mid single digit Commercial MRO: High single digit Slight tailwind from US$ fx-rate 25 November 2014 Investor & Analyst Day 57
Slide 58: Long term outlook 2014 - 2024
Long term outlook 2014 - 2024 Investment Phase Consolidation Phase 2014-2017 2018-2024 Revenues Military: Military: Com. OE: Com. OE: Com. Spares: Com. Spares: Com. MRO: Com. MRO: EBIT adjusted Moderate progression Margin expansion Net Income Growth stronger than EBIT adj. Growth in line with EBIT a
Slide 59: US$ Exchange Rate / Hedge Portfolio
US$ Exchange Rate / Hedge Portfolio Hedge book as of November 25, 2014 (% of net exposure) (mUS$) 952 (=95%) 720 (=68%) 480 (=43%) 210 (=17%) 2014 2015 2016 2017 Average hedge rate 1.32 1.30 1.32 1.31 (US$/€): EBIT sensitivity +/-1 ct: +/- ~€ 3m +/- ~ € 5m +/- ~ € 7m 25 November 2014 Investor & Anal
Slide 60: Summary
Summary • GE9X participation increases MTU’s footprint in the widebody market • PW800 share strengthens MTU’s position in the future business jet market • R&D program for all GTF platforms on schedule • Projects for production ramp up well on track • Improvements of existing engine technology will e
Slide 61: Thank you for your attention!
Thank you for your attention! 25 November 2014 Investor & Analyst Day 61
Slide 62: 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