MTU Aero Engines starts 2015 with rise in revenues and earnings
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 programme 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,” said Winkler. “This is all the more gratifying given that the new engine programmes, 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,” said Winkler.