OutlookMTU stays on a growth track
In 2006, MTU expects to benefit from the positive development of the global air traffic in all of its businesses. The airlines are feeling the effects of their restructuring and consolidation efforts undertaken to recover or increase their profitability after a decade of turbulence in the industry. The generally anticipated stabilization of fuel prices will also help the aviation industry regain its footing.
In the commercial engine business, the company has a well-balanced portfolio of products. In 2006 production of the GP7000 engine for the Airbus A380 and the PW6000 engine for the Airbus A318 will kick off, so that these programs will generate revenue for the first time. Proven engines, such as the JT8D-200 for the Boeing MD-80 series and the CF6 for various Airbus and Boeing aircraft, are the backbone of further growth. The company can also count on a number of programs that will remain in production for a protracted period of time; here, the installed base of engines will generate an increasing demand for spare parts. These include the V2500 for the Airbus A320 family and the Boeing MD-90, the PW2000 for the Boeing 757 and C-17, the PW4000Growth for the Boeing 777 and the PWC programs for business and regional jets. MTU expects revenues and earnings from the commercial engine business to stay on a positive track.
MTU expects the military engine business to remain stable. With a basic workload secured, this segment should make an appropriate contribution to earnings. Production deliveries of the first tranche of EJ200s for the Eurofighter are underway. The contract for the second tranche has been signed, and production preparations have begun. Following Austria’s decision to buy the Eurofighter, other countries, too, are expressing interest in the EJ200. MTR390 production is on schedule. The contract for the development and production of the uprated version, the MTR390 Enhanced, has been signed, so that additional engines will be delivered once the development is completed. The development of the TP400-D6 for the Airbus A400M is progressing as planned. First contracts for the engine have been inked with export customers. The signing of the agreement on the expansion of the Cooperative Model with the German Air Force in late November 2005 marked a major milestone in MTU’s military business. Beginning in 2006, this contract will yield additional revenues and earnings. These activities will to some degree soften the impact of the partial retirement of the Tornado fleet and its RB199 engine.
In the commercial MRO business, the successful acquisition of new customers in 2005 should result in capacity utilization continuing to run at a high level, increasing revenues and improving earnings. Following the IPO and major repayments of debts, MTU is financially well positioned for the anticipated growth. A revolving credit facility which is presently debited with €17 million and guarantees, provides the flexibility needed to cover the company’s financing needs for 2006 and beyond.
Expected revenues and earnings
Against the background of the development in all three business segments, MTU expects an increase in sales and again an earnings improvement for fiscal year 2006.
Events after the end of the financial year
There were no substantial events affecting the company’s assets, finances and earnings after the accounting date. On February 2, 2006, the fonds managed by KKR sold their remaining 29.3% share in MTU to institutional investors.
Munich, February 20, 2006
   
Udo Stark Bernd Kessler Dr. Michael Süß Reiner Winkler | 