The MTU share
The MTU share held up well against an extremely volatile market environment in 2011. Over the financial year as a whole, its quoted price decreased by just 2 %, whereas the MDAX lost 12 % over the same period. MTU’s shareholders will profit from the company’s earnings-oriented dividend policy. In view of the good business performance, the Board of Management and the Supervisory Board intend to propose a dividend of € 1.20 per share at the 2012 Annual General Meeting.
Volatile capital markets
2011 was a year of volatility on capital markets. The first six months saw for the most part a sideways trend, with European stock markets rising marginally. During the first quarter, European stock markets came under pressure in the wake of both the political unrest in North Africa, which stoked investors’ fears of an oil crisis, and the earthquake in Japan. Stock markets recovered rapidly in the second quarter, with the German DAX index reaching its peak for the year in May at 7,527 points. The cooling global economy and the sovereign debt crisis in a number of European countries began to take their toll on capital markets in the third quarter. As a result, the DAX lost just under 2,500 points in August and September. The volatile trend persisted until the end of 2011. The DAX closed the year on 5,898 points, 15 % below the previous year-end figure.
The MDAX German mid-cap index, on which the MTU share is listed, tracked the overall market’s sideways trend in the first six months of 2011, consistently maintaining its high level of more than 10,000 points. It reached its peak for the year in July with a figure of 11,187, falling substantially after that. The MDAX’s low for the year came in October, when it touched 7,783 points. The volatility continued until the end of 2011, with the MDAX finishing the year at 8,898 points on December 31, 2011, 12 % down on the 2010 year-end figure of 10,128 points.
Aviation industry stocks tracked the overall market trend in 2011, experiencing strong fluctuations. However, they did benefit from the positive outlook for the aviation industry as a whole. Last year, Airbus and Boeing posted record order levels, a trend driven mainly by new aircraft models with fuel-efficient engines. The high oil price was a burden on the market. Still, the Dow Jones
Aerospace & Defense Index – which includes companies such as Rolls-Royce, EADS and BAE Systems as well as MTU – remained stable (+1 %) over the year.
MTU share performance
The MTU share opened the year on a positive note, and followed the overall fluctuations as 2011 wore on, reaching its highest quoted price for the year (€ 55.63) in July. In the third quarter, the uncertainty triggered in capital markets by the sovereign debt crisis and the weakening economy began impacting the MTU share, which reached its lowest quoted price for the year (€ 42.07) in August.
Despite the highly volatile market environment in 2011, the MTU share was relatively steady, losing just 2 % over the year. It thus outperformed the MDAX and fell just short of the level achieved by the Dow Jones Aerospace & Defense Index. On December 30, the last day of trading in 2011, the MTU share price reached € 49.44.
MTU’s market capitalization stood at € 2,571 million at the end of 2011. The MTU share improved its position in the German Stock Exchange’s MDAX rankings from 8th to 7th position.
The average number of MTU shares traded in Xetra trading and on the German stock exchanges was slightly lower than in the previous year, falling from 300,000 to 255,000. The daily trading volume stood at around € 13 million (2010: € 13 million) and is evidence of the MTU share’s continuing high level of liquidity. In terms of trading volume, the MTU share ranked 14th in 2011 (2010: 9th) among the 50 that comprise the MDAX.
Broadly diversified shareholder base
On December 31, 2011, MTU held 6.1 % of its stock capital in the form of treasury shares. Consequently, the free float (as defined by the German Stock Exchange) accounted for 93.9 % of MTU shareholdings at year end. Institutional investors held about 87 % of the shares, while some 7 % were held by retail investors. MTU has a broadly diversified shareholder base: 86 % of its institutional investors are based outside Germany – mainly in the U.S., the U.K., Canada, Switzerland and other western European countries. At December 31, 2011, the stock market authorities were in possession of notifications from the following investors, each of whom holds more than 3 % of the company’s voting rights: Capital Research (10.22 %), Ameriprise Financial, Inc. (3.12 %), and Gryphon International Investment Corporation (3.02 %). Fidelity funds from the U.S. and the U.K. together hold 6 % of MTU’s shares.
High profile among analysts
The high degree of interest in the MTU share shown by analysts underscores its status as an attractive investment proposition. Currently, 25 analysts report on MTU. At year end 2011, 18 financial institutions maintained a ‘buy’ recommendation for MTU shares, while five rated them ‘hold.’ Only two analysts recommended selling (2010: 13 ‘buy’, 8 ‘hold’, 1 ‘sell’). The average upside target is € 57.
Proposed dividend per share of € 1.20
At the Annual General Meeting on May 3, 2012, the Board of Management and the Supervisory Board intend to propose a dividend payment of € 1.20 per share for the financial year 2011. The company’s positive operating performanceenables MTU to maintain the dividend at an attractive level (2010: € 1.10). The dividend is expected to be paid out on May 4, 2012. Based on the share price of € 49.44 prevailing on December 30, 2011, this is equivalent to a dividend yield of 2.4 %. The dividend payout ratio calculated as a percentage of MTU’s net profit available for distribution is 60.5 %.
Investor relations work pays off
In 2011, MTU maintained its close dialog with investors and analysts, presenting MTU’s business model and its potential as a company in around 220 personal meetings.
Both management and the investor relations team took part in numerous road shows and investor conferences across Europe and the U.S. Many discussions took place at the Paris Air Show in Le Bourget, the leading event of its kind in the world, in June 2011. On November 22, MTU staged its annual Investor and Analyst Day in London. It was attended by 50 analysts and investors, who gained an overview of the company’s current business situation and growth strategy.
A key platform for a direct dialog with shareholders was the MTU Annual General Meeting, which was held in Munich on May 5, 2011 and was attended by shareholders representing 52 % of the share capital with voting rights (previous year: 51 %).
The accolades for MTU’s Annual Report 2010 are proof of the positive feedback for the company’s investor relations work: the MTU Annual Report ranked sixth in manager magazin’s „Best Annual Reports“ category for MDAX companies.
More detailed information can be found under Investor Relations on the MTU website (www.mtu.de). The Investor Relations office in Munich can be contacted on the following number: +49 89 1489-5714.