IR-News details

• Revenue 2022 is expected to be between €5.4 and €5.5 billion
• Adjusted EBIT should increase in the low thirty-percent range
• CCR is projected to be between 60% and 70%

Munich, October 27, 2022 – MTU Aero Engines AG has published its figures for the first nine months of 2022: The company grew revenue by 27% to €3.82 billion (1-9/2021: €3.01 billion). The operating profit increased by 46% from €307 million to €448 million. The adjusted EBIT margin was 11.7% at the end of the first nine months (1-9/2021: 10.2%). Net income developed in line with adjusted EBIT, rising 45% to €319 million (1-9/2021: €220 million).

“Based on this good performance and the current situation, which includes a favorable development of the US dollar exchange rate, we can increase our forecast today,” said Reiner Winkler, CEO of MTU Aero Engines AG. “We now expect revenue for the year to be between €5.4 and €5.5 billion. Adjusted EBIT should rise in the low thirty-percent range. We anticipate that the cash conversion rate will be between 60% and 70% in 2022.” Previously, MTU had forecast revenue of between €5.2 and €5.4 billion for full-year 2022. The increase in adjusted EBIT was expected to be in the mid twenty-percent range. The company still assumes that adjusted net income will develop in line with the operating profit in 2022. MTU previously expected the cash conversion rate, which shows the ratio of free cash flow to adjusted net income, to be in the mid to high double-digit percentage range and is now giving more detailed guidance. MTU’s forecast is based on a US dollar/euro exchange rate of 1.05. So far, the company’s forecast was based on an exchange rate of 1.10.

MTU’s revenue increased  in both commercial maintenance and the commercial engines business in the first nine months.

In commercial maintenance, revenue grew 32% to €2.64 billion, up from €2.01 billion in the first nine months of the prior year. The main revenue drivers were the PW1100G-JM, which is used in the A320neo, and the V2500 for the classic A320 family. Peter Kameritsch, CFO: “So far, Geared Turbofan™ maintenance has been below our expectations but it should pick up in the fourth quarter. Overall we are able to raise our guidance for MRO revenue in 2022.” MTU now expects organic revenue growth in the commercial maintenance business to come in at around 20 percent; previously it had assumed that revenue would increase in the high teen percentage range.

In the commercial engine business, revenue increased by 24% to €946 million in the first nine months (1-9/2021: €765 million). Organic revenue in the commercial series business increased in the mid-single-digit percentage range and organic revenue growth in the spare parts business was in the high-teen percentage range. Kameritsch: “Spare parts are therefore clearly within our expectations for the full year. A positive trend came from narrowbody and cargo aircraft engines, as well as the GEnx for the Dreamliner and engines for business jets. In the series business, we are seeing a rise in GTF deliveries while the recovery of other programs remains slightly weaker.” The main revenue driver in the commercial engine business was the PW1100G-JM.

In the military engine business, revenue was stable compared with the first nine months of 2021 at €309 million (1-9/2021: €310 million). The most important revenue driver was the EJ200 engine for the Eurofighter. “In the military engine business there were slight delays in both production and maintenance,” explained Kameritsch.

The revenue guidance for the OEM business for the full year is unchanged: Revenue in the commercial series business is expected to increase in the mid to high-teen percentage range in 2022. For the commercial spare parts business MTU is forecasting revenue growth in the mid-teen percentage range. For the military engine business, revenue growth in the high single-digit percentage range is assumed. 

The order backlog was €25.96 billion at the end of September (December 31, 2021: €22.24 billion). The majority of orders were for the V2500 and the Geared Turbofan™ engines of the PW1000G family, especially the PW1100G-JM.

The OEM business and the MRO business both posted higher profit in the first nine months: In the commercial maintenance business, adjusted EBIT rose 87% to €196 million (1-9/2021: €105 million) and the adjusted EBIT margin increased from 5.2% to 7.4%. In the OEM business, MTU’s earnings increased by 24% to €251 million, up from €202 million in the first nine months of 2021. The adjusted EBIT margin was 20.0% (1-9/2021: 18.8%). “In both segments, the business mix had a positive impact on earnings. In addition, MTU is benefiting from the present favorable US dollar/euro exchange rate,” said Kameritsch.

At the end of the quarter MTU’s research and development expenses were up 18% year-on-year at €192 million (1-9/2021: €162 million). R&D at MTU focuses on improvements in the performance of the Geared Turbofan™ programs, technology studies for future engine generations, especially hydrogen and flying fuel cells, and digitalization of engine construction. Winkler: "Through our R&D activities we are actively driving forward sustainable, emissions-free aviation and therefore investing in the future of MTU.”

MTU’s free cash flow was €219 million at the end of September, 7% higher than in the comparable prior-year period (1-9/2021: €205 million). “We are therefore clearly within our full-year expectations,” said Kameritsch.

Net capital expenditure on property, plant and equipment increased by 45% to €170 million in the first nine months (1-9/2021: €117 million).

At the end of September, MTU had 11,008 employees, 5% more than at year-end 2021 (December 31, 2021: 10,508 employees). Most of the new hires were at the sites in Munich, Poland and Serbia. Winkler: “The new hires support the digitalization of engine production and expansion of best-cost strategy.”

MTU Aero Engines – Key data for the third quarter of 2022

(Amounts in € million)

Outlook for 2022

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.