Press Archive 2016

MTU Aero Engines provides more precise guidance at half-year

  • 2016 revenues expected to reach around €4.7 billion
  • MTU expects earnings of around €480 million and net income of circa €330 million

Munich, July 26, 2016 – MTU Aero Engines AG generated revenues of €2,299.2 million in the first six months of 2016, an increase of 4% (1-6/15: €2,202.0 million). The group’s operating profit improved by 19% to €254.1 million (1-6/15: €212.8 million), raising the EBIT margin for the six-month period from 9.7% to 11.1%. Earnings after tax increased by 20% to €176.1 million (1-6/15: €147.2 million), in line with operating profit.

“The successful results for the first half year have enabled us to provide a more precise outlook to the end of 2016,” said Reiner Winkler, CEO of MTU Aero Engines AG. With around €4.7 billion in 2016, revenues for the MTU group are now expected to reach the upper end of the originally forecast range of between €4.6 and 4.7 billion. The company expects to achieve an operating profit of around €480 million (adjusted EBIT, 2015: €440.3 million). The original outlook was for a stable EBIT margin of around 10%. Earnings after tax are expected to reach around €330 million (adjusted net income, 2015: €306.9 million) – a growth rate in line with operating profit. These forecasts are based on an assumed exchange rate of U.S. $1.10 to the euro.

In the first half-year, MTU’s revenues increased in both the commercial maintenance business and the military engine business, while revenues in the commercial engine business contracted slightly.

The highest growth was registered by the commercial maintenance business (MRO segment), where half-year revenues, at €893.3 million were up 18% (1-6/15: €754.2 million). The principal source of MRO revenues was the V2500 engine for the Airbus A320 family. “Second-quarter revenues in the MRO segment amounted to €464.5 million, making this the third successive quarter with record figures,” emphasized Chief Program Officer Michael Schreyögg.

Revenues in the military engine business increased by 12% to €240.2 million (1-6/15: €215.3 million). The EJ200 Eurofighter engine was the main source of these revenues.

Revenues in the commercial engine business decreased by a modest 4% from €1,251.8 million to €1,200.9 million. “Above all, these figures reflect the delays of the PW1100G-JM for the A320neo,” Schreyögg explained. “We expect revenues to pick up in the second half of the year, when the ramp up of this program is scheduled.” The V2500, the GP7000 engine for the A380 and the GEnx for the Boeing 787 and 747-8 accounted for the greater part of the revenues in this business unit.

At the end of June 2016, MTU’s order backlog stood at €11,544.6 million (Dec. 31, 2015: €12,493.7 million). The majority of these orders are for the V2500 and the geared turbofan engines of the PW1000G family, especially the PW1100G-JM for the Airbus A320neo. “At the Farnborough International Airshow two weeks ago, we were particularly successful with the geared-turbofan programs, the V2500 and the GEnx engine for widebody airliners,” said Winkler. The orders acquired during the airshow, with a total value of around €1 billion, are not yet included in the order backlog.

In the first six months of 2016, MTU’s earnings improved in both operating segments. In the OEM segment, adjusted EBIT grew by 22% to €169.5 million (1-6/15: €139.2 million), pushing up the EBIT margin by 2.3 percentage points to 11.8%. In the MRO segment (commercial maintenance business), operating profit increased by 15% to €84.5 million (1-6/15: €73.5 million), resulting in an EBIT margin of 9.5% (1-6/15: 9.7%).

Research and development expenditure in the first half of 2016 amounted to €113.6 million, or 11% more (1-6/15: €102.0 million). The focal areas of MTU’s R&D activities during this period were existing and future geared-turbofan programs, the GE9X engine for the Boeing 777X long-haul airliner, and various technology studies and R&D projects relating to next-generation engines.

MTU’s free cash flow at the end of June 2016 amounted to €69.8 million (1-6/15: €86.7 million). “For the full year, we expect a similar level of free cash flow, with a year-end result of around €70 million,” said Winkler.

At €62.3 million, MTU’s capital expenditure on property, plant and equipment in the first six months of 2016 was 61% higher (1-6/15: €38.7 million). This money was spent on new plant and machinery needed to ramp up production capacity for the geared-turbofan programs and to prepare facilities for the maintenance of these engines, as well as on replacements of existing plant and machinery.

MTU had 8,362 employees on its payroll at June 30, 2016 (December 31, 2015: 8,334 employees)

MTU Aero Engines – Key financial data for January through June 2016

(Figures quoted in € million, calculated on a comparable basis. Statements prepared in accordance with IFRSs)

MTU Aero Engines

 

H1 2015

 

H1 2016

 

Change

Revenues

2,202.0

2,299.2

+ 4.4%

   of which OEM business

1,467.1

1,441.1

- 1.8%

   of which commercial engine business

1,251.8

1,200.9

- 4.1%

      of which military engine business

215.3

240.2

+ 11.6%

   of which commercial MRO business

754.2

893.3

+ 18.4%

EBIT (calculated on a comparable basis)

212.8

254.1

+ 19.4%

   of which OEM business

139.2

                169.5

+ 21.8%

   of which commercial MRO business

73.5

84.5

+ 15.0%

EBIT margin (calculated on a comparable basis)

9.7%

11.1%

 

   for OEM business

9.5%

11.8%

 

   for commercial MRO business

9.7%

9.5%

 

Net income (calculated on a comparable basis)

147.2

176.1

+ 19.6%

Net income (reported)

104.0

158.6

+ 52.5%

Earnings per share (undiluted, reported)

€2.04

€3.10

+ 52.0%

Free cash flow

86.7

69.8

- 19.5%

Research and development expenditure

102.0

113.6

+ 11.4%

   of which
   company-funded R&D

79.1

91.2

+ 15.3%

   of which
   customer-funded R&D

22.9

22.4

- 2.2%

Company-funded R&D recognized as expense

24.3

38.5

+ 58.4%

Capital expenditure on property, plant and equipment

38.7

62.3

+ 61.0%

 

Dec. 31, 2015

June 30, 2016

Change

Order backlog

12,493.7

11,544.6

- 7.6%

   of which OEM business

6,830.6

6,140.8

- 10.1%

   of which commercial MRO business

5,663.1

5,403.8

- 4.6%

Employees

8,334

8,362

+ 0.3%

  

MTU Aero Engines – Key financial data for Q2 / 2016

(Figures quoted in € million, calculated on a comparable basis. Statements prepared in accordance with IFRSs) 

MTU Aero Engines

 

Q2 2015

 

Q2 2016

 

Change

Revenues

1,102.5

1,201.3

+ 9.0 %

   of which OEM business

740.4

760.6

+ 2.7 %

          of which commercial engine business

616.3

644.9

+ 4.6 %

          of which military engine business

124.1

115.7

- 6.8 %

   of which commercial MRO business

370.3

464.5

+ 25.4 %

EBIT (calculated on a comparable basis)

115.1

122.8

+ 6.7 %

   of which OEM business

81.1

80.7

- 0.5 %

   of which commercial MRO business

35.4

42.2

+ 19.2 %

Net income (calculated on a comparable basis)

79.0

84.6

+ 7.1 %

Net income (reported)

83.0

68.2

- 17.8 %

Free cash flow

25.5

-23.8

 

Research and development expenditure

50.0

55.0

+ 10.0 %

   of which company-funded

35.8

40.7

+ 13.7 %

   of which outside-funded

14.2

14.3

+ 0.7 %

 

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 cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, competition from other companies in MTU Aero Engines’ industry and MTU Aero Engines’ ability to retain or increase its market share, the cyclicality of the airline industry, risks related to MTU Aero Engines’ participation in consortia and risk and revenue sharing agreements for new aero engine programs, risks associated with the capital markets, currency exchange rate fluctuations, regulations affecting MTU Aero Engines’ business and MTU Aero Engines’ ability to respond to changes in the regulatory environment, and other factors. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences. MTU Aero Engines assumes no obligation to update any forward-looking statement.

Thomas Franz
Vice President Investor Relations
Phone: +49 (0) 89 1489 4787
thomas.franz@mtu.de
Claudia Heinle
Senior Manager Investor Relations
Phone: +49 (0) 89 1489 3911
claudia.heinle@mtu.de
Matthias Spies
Senior Manager Investor Relations
Phone: +49 (0) 89 1489 4108
matthias.spies@mtu.de