IR News details

| Revenue rose 10% to €3.4 billion, adjusted EBIT up 16% at €470 million

| Guidance for 2024 confirmed, margin now expected to rise to around 13%

Munich, August 1, 2024 | MTU Aero Engines AG grew adjusted revenue by 10% from €3.1 billion to €3.4 billion in the first half of 2024. Adjusted EBIT rose 16% to €470 million (1-6/2023: €405 million) and the adjusted EBIT margin increased from 13.0% to 13.7%. Adjusted net income was 14% higher at €342 million, compared with €300 million in the first half of 2023.

“With this performance, we remain on track for our full-year targets. Our assumption is supported by a sustained positive market environment and progress in the Geared Turbofan fleet management program,” reports Lars Wagner, Chief Executive Officer of MTU Aero Engines AG. “Today, we are confirming our guidance for 2024. We now expect our margin for the full year to be around 13%.” MTU had previously set a target of over 12% for the EBIT margin.

In the first half of 2024, MTU grew revenue in all business segments.

The highest revenue growth was achieved by MTU’s military business: here, revenue rose by 19% to €272 million (1-6/2023: €229 million). “The revenue growth was mainly due to the TP400-D6 engine for the A400M and the New Generation Fighter Engine for the next-generation European fighter jet,” says CFO Peter Kameritsch. The main revenue generator in the military engine business was the EJ200 engine for the Eurofighter.

Revenue in the commercial engines business increased by 5% in the first six months from €863 million to €903 million. The most important revenue generator was the PW1100G-JM engine for the A320neo. Within the commercial engine business, organic revenue growth for commercial series business in the high thirty-percent range was registered on a dollar basis. In the spare parts business, organic revenue growth in US dollars was in the mid-single-digit percentage range. Kameritsch: “In the series business, growth was driven by Geared Turbofan engines and engines for business jets. The rise in the spare parts business was attributable to widebody engines, the V2500 for the classic A320 family and engines for business jets.”

Revenue from commercial maintenance increased by 11% to €2.3 billion in the first six months (1-6/2023: €2.1 billion). Kameritsch: “The main revenue drivers were the GE90 engine for the Boeing 777, the GEnx for the Boeing Dreamliner and our leasing business.” The PW1100G-JM and the V2500 were the main revenue generators in the MRO business. Geared Turbofan maintenance continued to account for around 30% of commercial maintenance. “In view of the lower material intensity in Geared Turbofan shop visits, we now expect Geared Turbofan MRO to be around 35% over the full year,” he adds. So far, MTU had anticipated that the Geared Turbofan would account for 40-45% of MRO.

MTU’s order backlog was €25.2 billion at the end of the first six months, compared with €24.4 billion at year-end 2023. The majority of orders were for Geared Turbofan engines of for the PW1000G family, especially the PW1100G-JM, and the V2500. Wagner: “Thanks to our success at trade shows in recent months, we anticipate a continued good order situation.” At the ILA Berlin in June, the German government indicated a possible order for 20 Eurofighters. At the Farnborough International Airshow in July, MTU received orders worth around U.S.$800 million. Neither of these is included in the order backlog at the end of the first half of 2024.

MTU improved its half-year results in both segments.

In the commercial maintenance business, adjusted EBIT increased by 29% from €141 million to €183 million. The adjusted EBIT margin rose from 6.8% to 7.9%. Kameritsch: “Earnings reflect a profitable revenue mix in independent maintenance and lower material intensity in Geared Turbofan MRO.”

Adjusted EBIT in the OEM business rose 10% to €288 million in the first six months (1-6/2023: €262 million). Kameritsch: “Earnings were supported by higher revenue from the military business, the favorable revenue mix in the series business and higher sales of spare parts.” The adjusted EBIT margin in the OEM business was 24.5%, compared with 24.0% in the prior-year period.

MTU increased its research and development expenses by 14% to €179 million in the first half (1-6/2003: €158 million). Wagner: “We are keeping our investment in the future unchanged. Our top priority is to make a key contribution to more climate-friendly aviation and secure the future of MTU – in keeping with our anniversary motto ‘Passion for engines – 90 years and beyond’.” MTU’s R&D activities focused on raising the efficiency of the Geared Turbofan programs, technology studies for future evolutionary and revolutionary engine generations and expanding its virtual engine capabilities.

The free cash flow was €105 million in the first six months, compared with €135 million in the prior-year period. Kameritsch: “With regard to the free cash flow, the supply chain issues again kept us on our toes. We are continuing to focus on stringent cash management, especially in the areas of working capital and receivables management.”

Net capital expenditure on property, plant and equipment increased by 52% to €171 million in the first six months (1-6/2023: €112 million).

MTU had 12,366 employees at the end of the first six months (December 31, 2023: 12,170 employees).

MTU is confirming its guidance for FY 2024. The company has set a revenue target of between €7.3 billion and €7.5 billion. All business areas should contribute to revenue growth. The highest increase is expected to be in the commercial series business, with organic revenue growth in the low-to-mid twenties percentage range. MTU expects the spare parts business to post organic revenue growth in the low teens percentage range. Organic growth in revenue from commercial maintenance should be in the mid-to-high teens percentage range, with Geared Turbofan MRO accounting for around 35%. MTU anticipates that the military business will grow revenue in the low-to-mid teens percentage range. The adjusted EBIT margin should be 13% in 2024. Adjusted net income is expected to grow in line with adjusted EBIT. MTU anticipates free cash flow in the low triple-digit million euro range in 2024. This forecast is based on a US dollar/euro exchange rate of 1.10.

MTU Aero Engines – Key data for the first half of 2024 

(Amounts in € million)

* Adjusted figures for 2023 and 2024