IR News details

• Revenue and earnings growth in all business areas
• Guidance for 2024: adjusted EBIT of more than €1 billion

Munich, October 24, 2024 | MTU Aero Engines AG increased its adjusted revenue and earnings figures across the board in the first nine months of 2024. Adjusted revenue grew by 14% from €4.6 billion to €5.3 billion. The adjusted operating profit rose by 25% to €744 million (1-9/2023: €597 million), and the adjusted EBIT margin increased from 12.8% to 14.0%. Adjusted net income rose to €541 million, an increase of 23% (1-9/2023: €438 million).

“We seize all the opportunities the market has to offer. We also meet the ongoing challenges presented by the market with appropriate responses,” summarizes Lars Wagner, CEO of MTU Aero Engines AG. “This meant that the first nine months of 2024 were so successful that we can achieve our earnings target of €1 billion one year earlier than originally planned.” MTU had aimed to reach the one-billion target in 2025. The company is now forecasting adjusted EBIT of a slightly over €1 billion for 2024. “We are using this positive momentum to further expand MTU’s future viability,” Wagner continues.

Revenue growth in all business areas

Revenue increased in all MTU business areas in the first nine months of 2024.

The highest revenue growth was achieved in the military business, where adjusted revenue climbed 16% from €367 million to €426 million. The drivers of this growth were the TP400-D6 engine for the A400M, the New Generation Fighter Engine for the next-generation European fighter jet, and the EJ200 engine for the Eurofighter.

In the commercial maintenance business, adjusted revenue increased by 15% from €3.1 billion to €3.6 billion. This revenue growth was primarily attributable to the GE90 engine for the Boeing 777, the V2500 for the classic A320 family, the GEnx for the Boeing Dreamliner, the CF34 aircraft engine for business and regional aircraft, and the engine leasing business.

Adjusted revenue in the commercial engine business was 9% higher at €1.4 billion (1-9/2023: €1.3 billion). Organic revenue in the commercial series business increased in the low-twenties percentage range and organic revenue growth in the spare parts business was in the high single-digit percentage range. The Geared Turbofan and industrial gas turbines were the main drivers in the series business, with the V2500, the PW2000 and GEnx widebody engines, and engines for business jets driving the spare parts business.

Order backlog of €23.4 billion

The order backlog was valued at €23.4 billion at the end of September (December 31, 2023: €24.4 billion). The largest proportion of orders on hand was for Geared Turbofan™ engines for the PW1000G family, especially the PW1100G-JM, and the V2500.

Higher earnings in all segments

MTU achieved higher earnings in the first nine months of 2024 in both the OEM business and the MRO business.

In the commercial maintenance business, adjusted EBIT increased by 35% from €223 million to €300 million. The adjusted EBIT margin in the MRO business rose from 7.2% to 8.4%. “Positive factors in the MRO business included the good mix in independent maintenance and the fact that the share and material intensity of Geared Turbofan maintenance were lower than planned in the first nine months of the year. Earnings were also supported by our leasing business,” says CFO Peter Kameritsch.

The adjusted EBIT of the OEM business increased by 19%, from €374 million to €444 million with an adjusted EBIT margin of 24.7% (1-9/2023: 23.0%). “Earnings in the OEM business reflect the profitable revenue mix, with a high proportion of spare and lease engines, the high demand for spare parts and the increase in the military business,” Kameritsch continued.

14% increase for research and development

Research and development expenses amounted to €254 million in the first nine months of 2024, up 14% from the same period of the previous year (1-9/2023: €224 million). Wagner explains: “We are unwavering in our vision of zero-emission flight. Our R&D activities are developing and realizing innovative propulsion technologies and thus shaping the future of aviation.” 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.

Free cash flow of €213 million

MTU’s free cash flow was €213 million at the end of September 2024, compared with €257 million in the first nine months of 2023. “Free cash flow was affected in particular by the ongoing supply chain bottlenecks and by the Geared Turbofan fleet management plan, which were reflected in the high working capital,” says Kameritsch. “We are meeting these challenges with strict cash management and steps to improve efficiency.”

Net capital expenditure on property, plant and equipment up 30%

Net capital expenditure on property, plant and equipment increased by 30% to €248 million in the first nine months (1-9/2023: €190 million). “This is further evidence of our investment in the future,” says Wagner. “We are expanding our capacities and focusing on digitalization and automation.”

12,634 employees worldwide

MTU’s workforce grew by 4% from the end of 2023 (December 31, 2023: 12,170 employees) to 12,634 the end of September 2024.

Guidance

MTU predicts revenue of between €7.3 billion and €7.5 billion for fiscal year 2024. 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. Adjusted EBIT is expected to be slightly in excess of €1 billion for 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 third quarter of 2024

(Amounts in € million)

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 countries in MTU Aero Engines’ industry and MTU Aero Engines’ ability to retain or increase its market share, the cyclicality of the airline industry, risks relating 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.