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MTU Aero Engines starts 2015 with rise in revenues and earnings
- Full-year forecast maintained
Munich, April 28, 2015—In the first quarter of 2015, MTU Aero Engines AG increased its revenues by 20% to €1.099,5 billion (1-3/14: €913.0 million). The group’s operating profit rose by 10% to €97.7 million (1-3/14: €89.0 million). The EBIT margin amounted to 8.9%, compared with 9.7% for the same period in the previous year, and earnings after tax increased by 22% to €68.2 million (1-3/14: €56.0 million).
“The strong dollar has acted as a forceful tailwind for our revenues and earnings in the first quarter,” said Reiner Winkler, CEO of MTU Aero Engines AG. “This has placed us in a good starting position for the rest of the year. From this basis, we expect to set new records in 2015. We therefore maintain our original forecasts, which we will, as in the past, review with the half-year results.”
MTU’s revenues increased significantly in both the commercial engine business and the commercial maintenance business, mainly as a result of the favorable U.S. dollar exchange rate.
Revenues in the commercial engine business increased by 27% to €635.5 million (1-3/14: €500.5 million). The key drivers of those revenues were the V2500 for the Airbus A320 family, the GP7000 engine for the A380, and the GEnx for the Boeing 787 and 747-8.
The V2500 program was the main source of revenues in the commercial maintenance business, which saw its revenues climb by 26% from €303.6 million to €383.9 million.
Revenues in the military engine business followed a downward course, decreasing by 22% to €91.2 million (1-3/14: €116.6 million). The EJ200 Eurofighter engine accounted for the greater part of these revenues.
At the end of March 2015, MTU’s order backlog stood at €12,681.1 million, which corresponds to a production span of approximately three years. “At €7,715.6 million, our order backlog in the OEM segment reached yet another all-time high,” reported Winkler. “This is all the more gratifying given that the new engine programs, on which we base our future growth, figure prominently in the order backlog.” The majority of these orders are for the V2500 and the Geared Turbofan™ engines of the PW1000G family, especially for the Airbus A320neo.
MTU’s earnings in the MRO segment made strong progress. Adjusted EBIT for the first quarter grew by 41% to €38.1 million, up from €27.0 million for the same period in 2014, pushing the EBIT margin up one percentage point to 9.9%. In the OEM segment, adjusted EBIT amounted to €58.1 million, compared with €60.8 million in the first quarter of 2014, with an EBIT margin of 8.0% (1-3/14: 9.9%).
MTU spent €52.0 million on research and development in the first quarter of 2015 (1-3/14: €43.3 million). Company-funded R&D expenditure recognized as an expense in the income statement declined to €15.6 million (1-3/14: €21.7 million) due to higher capitalization for new programs. The Geared Turbofan™ programs and the GE9X for the Boeing 777X were the central focus of MTU’s R&D activities.
MTU’s free cash flow multiplied, rising from €0.9 million in the first quarter of 2014 to €61.2 million. “We expect to be able to maintain our free cash flow at this level through to the end of the year, and achieve a year-end result close to that of 2014,” said Winkler.
Capital expenditure on property, plant and equipment in the first quarter of 2015 amounted to €16.4 million, compared with €22.8 million in the same period of 2014. “Now that we have completed our major construction projects for Geared Turbofan™ facilities, we are focusing on new equipment and machinery,” Winkler explained.
MTU had 8,338 employees at the end of March 2015, which is about the same number as at the end of the previous year (Dec. 31, 2014: 8,333).
MTU’s projections up to December 2015 still put the group’s year-end revenues in the region of €4.4 billion (2014: €3,913.9 million), with an operating profit (adjusted EBIT) of around €420 million (2014: €382.7 million) and an adjusted net income of around €285 million (2014: €253.3 million). These forecasts are based on an exchange rate of U.S. $1.20 to the euro.
1Adjusted EBIT = Earnings before interest and tax, calculated on a comparable basis
2Adjusted net income = Earnings after tax, calculated on a comparable basis
MTU Aero Engines – Key financial data for January through March 2015
(Figures quoted in € million, calculated on a comparable basis. Statements prepared in accordance with IFRS).
MTU Aero Engines | Q1 2014 | Q1 2015 | Change |
Revenues | 913.0 | 1,099.5 | + 20.4% |
of which OEM business | 617.1 | 726.7 | + 17.8% |
of which commercial engine business | 500.5 | 635.5 | + 27.0% |
of which military engine business | 116.6 | 91.2 | - 21.8% |
of which commercial maintenance business | 303.6 | 383.9 | + 26.4% |
EBIT (calculated on a comparable basis) | 89.0 | 97.7 | + 9.8% |
of which OEM business | 60.8 | 58.1 | - 4.4% |
of which commercial MRO business | 27.0 | 38.1 | + 41.1% |
EBIT margin (calculated on a comparable basis) | 9.7% | 8.9% | |
for OEM business | 9.9% | 8.0% | |
for commercial MRO business | 8.9% | 9.9% | |
Net income (calculated on a comparable basis) | 56.0 | 68.2 | + 21.8% |
Net income (reported) | 46.8 | 21.0 | - 55.1% |
Earnings per share (undiluted, reported) | 0.92 | 0.42 | - 54.3% |
Free cash flow | 0.9 | 61.2 | |
Research and development expenditure | 43.3 | 52.0 | + 20.1% |
of which | 33.6 | 43.3 | + 28.9% |
of which | 9.7 | 8.7 | - 10.3% |
Company-funded development costs recognized as expense | 21.7 | 15.6 | - 28.1% |
Capital expenditure on property, plant and equipment | 22.8 | 16.4 | - 28.1% |
Dec. 31, 2014 | Mar. 31, 2015 | Change | |
Order backlog | 11,176.5 | 12,681.1 | + 13.5% |
of which OEM business | 6,763.6 | 7,715.6 | + 14.1% |
of which commercial MRO business | 4,412.9 | 4,965.5 | + 12.5% |
Employees | 8,333 | 8,338 | + 0.1% |
About MTU Aero Engines
MTU Aero Engines is Germany's leading engine manufacturer and has been a key player in the global engine industry for 80 years. It engages in the development, manufacture, marketing and support of commercial and military aircraft engine modules and industrial gas turbines. The company is a technological leader in low-pressure turbines, high-pressure compressors, manufacturing processes and repair techniques. Figuring significantly among MTU's core competencies are the maintenance, repair and overhaul (MRO) of commercial engines and the service support it provides for industrial gas turbines. These activities are combined under the roof of MTU Maintenance, which is one of the world's largest providers of commercial engine MRO services. MTU operates affiliates around the globe; Munich is home to its corporate headquarters.
Geared Turbofan is a trademark application of Pratt & Whitney
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.
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Senior Manager Investor Relations
Senior Manager Investor Relations