In the first nine months of 2015, MTU Aero Engines boosted its revenues by 16% to €3,257.0 million (1-9/2014: €2,811.6 million). The group’s operating profit grew by 23% to €333.1 million (1-9/2014: €270.9 million), while the EBIT margin rose from 9.6% to 10.2%. Net income increased by 30% to €231.4 million (1-9/2014: €178.3 million).
“The favorable U.S. dollar exchange rate has again acted as a tailwind for both our revenues and our earnings. Based on the nine month results, and given the persistently positive market environment and currency situation, we are in a position to reaffirm the targets we set for the full financial year,” said Reiner Winkler, CEO of MTU Aero Engines AG. “In other words, 2015 is likely to be yet another record-breaking year for MTU.”
MTU’s commercial maintenance business recorded the highest increase in revenues for the nine-month period, which rose by 25% to €1,148.4 million (1-9/2014: €920.8 million). The main source of these revenues was the V2500 engine for the Airbus A320.
In the commercial engine business, revenues increased by 15%, from €1,563.9 million to €1,792.8 million. Together, the V2500, the GP7000 engine for the A380 and the GEnx for the Boeing 787 and 747-8 accounted for the major part of these revenues.
Revenues in the military engine business amounted to €345.9 million, compared with €351.7 million in the same period of 2014. The EJ200 Eurofighter engine was the main source of these revenues.
MTU’s order backlog amounted to €11,126.8 million (31.12.2014: €11,176.5 million), which corresponds to a production span of around two-and-a-half years. The majority of these orders relate to the V2500 engine for the Airbus A320 and the PW1000G family of geared turbofan engines, most notably the PW1100G-JM for the A320neo. “In recent months, Airbus has won a significant number of major contracts for its A320 and A320neo airliners,” added Michael Schreyögg, Chief Program Officer of MTU Aero Engines. “This presents good opportunities for the engine programs on these aircraft in which MTU is a partner.”
MTU’s operating profit grew substantially in the first nine months of 2015, especially in the commercial maintenance business, where MTU registered an increase of 41% to €112.4 million (1-9/2014: €79.9 million). The EBIT margin in the MRO segment rose by 1.1 percentage points to 9.8%. In the OEM segment, adjusted EBIT increased by 16% to €220.4 million (1-9/2014: €189.4 million). This raised the EBIT margin in this segment to 10.3%, compared with 9.9% in the equivalent period of 2014.
MTU’s R&D expenditure increased by 25% to €155.8 million (1-9/2014: €124.8 million) in the first nine months of 2015. Stepped-up development work on new engine programs, for which the costs are capitalized, accounted for a large part of this expenditure. Consequently, the expense for company-funded R&D recognized in the income statement decreased from €58.0 million to €46.2 million. The geared turbofan programs and the GE9X for the Boeing 777X were the main focus of the group’s R&D activities.
MTU’s free cash flow at the end of September amounted to €119.4 million, which is 42% higher than in the previous year (1-9/2014: €84.3 million). “Our free cash flow is continuing to develop positively,” reported Winkler. “Taking into account the anticipated 4th-quarter cash outflows, we expect to achieve a year-end result in the upper two-digit million range. This is almost double last year’s result.”
At €68.7 million, MTU’s capital expenditure on property, plant and equipment was 7% higher than in the first nine months of 2014 (€64.3 million). As COO Dr. Rainer Martens explains, “We are intensively ramping up our production capacity to prepare for the imminent series-production phase of the geared turbofan™ programs, which has necessitated the purchase of new plant and machinery.”
At the end of September 2015, MTU had 8,388 employees on its payroll, which is roughly the same number as at the end of 2014 (December 31, 2014: 8,333).
MTU maintains its outlook for the financial year 2015. The group expects to generate revenues in the region of €4,600 million (2014: €3,913.9 million). It expects adjusted EBIT to increase to around €430 million (2014: €382.7 million) and earnings after tax to approximately €295 million (adjusted net income 2014: €253.3 million).