MTU Aero Engines Company Presentation

MTU Aero Engines - Company Presentation
13th GCC Frankfurt, Germany, 20.01.2014
Michael Schreyögg
Member of the BoM, Programs
Contents
1.
Company Overview
2.
Commercial OEM Business
3.
Military OEM Business
4.
Commercial MRO Business
5.
Financials & Outlook
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Key Investment Highlights
Attractive Growth outlook
• Revenue expected to double by 2020
• Well underpinned by a strong order book and a passenger traffic
growth trend
• Long term EBIT margin target of 12%-14%
Strong market position
• Narrowbodies: V2500 strong market base, GTF-engines EIS 2015
• Widebodies: GEnx, GP7000 ramp up
• World’s largest independent MRO provider
High barriers to entry
• Leading technology (in design & manufacturing)
• Certification requirements and regulatory approvals
• Substantial up-front investment required
• Long term contracts
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MTU is Built on Three Pillars
Commercial Business
Military Business
Commercial MRO
• Risk and revenue sharing partner
with all major OEMs
• Focus on Low-Pressure Turbines
and High-Pressure Compressors
• Approx. 30% of active aircraft with
MTU participation
• Capability to develop and manufacture entire engines
• R&D is typically customer financed
• MTU has high shares in key
European military programs
• World's largest independent
engine MRO provider (Maintenance,
Repair and Overhaul)
• Exposure to highest growth engines
(V2500, CFM56, CF34, GE90)
• Strong presence in Asia
Sales*
Business
EBIT margin*
MTU Group*
€ ~1,850 m (49%)
€ ~500 m (13%)
€ ~1,400 m (38%)
OEM
MRO
~11%
~ 8%
Sales: € ~3,700 m / EBIT margin: ~10%
* Estimates FY2013 – figures
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Overview of Aero Engine Industry Players
Key Market Participants in Large Engine Business
OEMs
Engine sub-system
(module) providers
Engine component
suppliers
Material
suppliers
Aero Engine Industry Characteristics
• Industry players are specialized
in different modules/ technologies
• Oligopolistic structure of market
• High barriers to entry
–
–
–
–
–
High technology expertise required
Substantial up front investment (R&D, Concessions) required
Long term contracts
Structurally captive spare parts business
Certification requirements and regulatory approvals
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Strategic Revenue Target of € 6 bn
Growth drivers
Revenue
6.000
Identified new opp.
€ 6bn Target
5.000
New business
(contracted)
thereof GTF
4.000
3.000
Existing
business
2.000
1.000
Next WB, H/C,
Embraer 2nd gen
Upshare V2500,
GEnx, GE90 MRO
GTF (A320neo
MS-21, CSeries,
MRJ)
V2500
GP7000
CF6-50/80
PW2000
LM-Series
CFM56 and CF34
MRO
EJ200 and diverse
military programs
0
2012
2013
2014
2015
2016
2017
2018
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2019
2020
6
Commercial Business – Narrowbody Market
Major Achievements
• GTF success will increase MTU’s share in
the future narrowbody market
• Increased exposure to strongly growing V2500
aftermarket
Installed Base 2013
Firm Orders Of A320neo With PW1100G-JM: 54%
A320ceo
powered by V2500
A320neo powered
by PW1100G-JM
24%
33% *
39%
76%
B737MAX
A320 and B737 with CFM56
28% *
A320neo with LEAP
* Unannounced
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engine decisions are shared equally
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Commercial Business – Regional Jet Market
(*)
Market change towards PW1000G engines
Deliveries:
PW1000G: 90%
CF34: 91%
Other Jets
Other Jets
Today: CF34 dominated
CRJ700/ 900
EIS:
2001/2004
Future: PW1000G dominated
EMB170/ 190/ 195
2004/2006
CSeries
today
2014
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MRJ70/ 90
2016/2017
(*)
< 140 Seats
EMB175/ 190/ 195-E2
2018/2019
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Contents
1.
Company Overview
2.
Commercial OEM Business
3.
Military OEM Business
4.
Commercial MRO Business
5.
Financials & Outlook
MTU Investor Relations
9
Important Partner for all Major OEMs
Main OEM Partners
Key OEM Partnerships
in %
Program
share
GP7000
• General Electric
• Pratt & Whitney
22.5%
V2500
• Pratt & Whitney
16%
GEnx
• General Electric
6.6%
Program
Others
3%
GE
IAE
MTU
OEM Partners
31%
41%
P&W
25%
2013 Commercial (FY Estimate)
Business Revenues: € ~1,850 m
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Balanced Product Portfolio
MTU‘s engine portfolio is well balanced between young and mature programs
Life Cycle Cash Flow Profile of Commercial MTU Engines
Boeing
MD-80
cumulative Cash Flow
EntryIntoService
CF6
-80A
BreakEven
JT8D200
747, 767
A300, A310
DC-10
CF6
-50
757, C-17
A300, A310,
A330, 747 & 767
PW
2000
CF6
-80C/E
V2500
PW
500
PW
306
PW
1100 &
1400
PW
12/1500
A320neo 17/1900
GEnx
MS-21
MRJ,
Cseries,
Embraer E2 787 &
747-8
PW
4000G
GP
7000
PW
6000
A380
A318
PW
307
A320 family,
Boeing MD-90
Cessna XLS,
Cessna Bravo
40
G200, 328JET,
Cessna
Sovereign
Years
B777
Falcon
7X
Phase-out
Series production
R&D
Aftermarket
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Contents
1.
Company Overview
2.
Commercial OEM Business
3.
Military OEM Business
4.
Commercial MRO Business
5.
Financials & Outlook
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Military Business
Major Achievements
Current Export Campaigns Typhoon
• Oman Contract 12 EF Typhoon a/c
• A400M Entry Into Service
• Long term support contract RSAF
•
•
•
•
•
United Arabian Emirates
Saudi Arabian Royal Air Force
Qatar
South Korea
Malaysia
Revenue Outlook Military Programs
Typhoon Export
Production CH-53K
Revenues
A400M Delivery
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Key drivers for changes in future revenues
+
- Export A400M/ Typhoon
- Services
-
- A400M Reduction EU
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Contents
1.
Company Overview
2.
Commercial OEM Business
3.
Military OEM Business
4.
Commercial MRO Business
5.
Financials & Outlook
MTU Investor Relations
14
Commercial MRO Business
Commercial MRO market expected to double to US$ 38bn in 2023,
MTU market coverage grows over-proportionally
Commercial engine MRO revenues (bn US$)1
CAGR
World (total):
MTU coverage3
Other
40
35
2013-23
7.4%
9.6%
3.9%
• Commercial engine MRO revenues
to double until 2023 from US$ 19bn
to 38bn (7.4% CAGR)
30
68%
25
proportionally at 9.6% CAGR
• Market coverage grows from 56% to
15
68% in 2023
1056%
• Growth programs: GE90 Growth,
Key drivers:
• Increasing Ø cost/SV and escalation
0
2013
1
• Excellent MTU position:
• MTU-served market grows over-
20
5
Remarks
2014
2015
2016
2017
2018
V2500-A5, CFM56-5B/-7, GP7000,
2019
2020
2021
2022
2023
GEnx and PW1000G
WB, NB & RJ (TP and BJ excluded); 2 3.6% escalation included
current and planned product portfolio (e.g. GEnx, GTF)
2 including
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Market Access Options
Independent
MRO
Airline
Joint Venture
CF6
CFM56
GE90
PW2000
V2500
CFM56
V2500
OEM cooperation
RSP
Network
V2500
GP7 LPT
GEnx TCF
PW1000
CF34
PWC
Other services
On-site services
Parts repair
Spare engine support
LRU Mgmt
2013 Sales:
60 %
12 %
23 %
5%
2023 Sales:
40 %
15 %
40 %
5%
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MTU on track for 2020
Milestones
€ 6bn Revenue Target
2020
201x
New Widebody (e.g. B777 succ.)
2016
2015
2013
2012
GTF MRO
A320neo First Delivery
Embraer selects GTF for 2nd Gen
IAE Upshare (16%)
2012 Extension MTU Maintenance Zhuhai
2011
2011
2011
GE90 MRO success
GEnx First Delivery
GTF Milestone (18%)
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Contents
1.
Company Overview
2.
Commercial OEM Business
3.
Military OEM Business
4.
Commercial MRO Business
5.
Financials & Outlook
MTU Investor Relations
18
EBIT adj. Head- and Tailwinds 2014
• New engines sales up in the mid teens
• Spare parts up mid single digit
• Commercial MRO up high single digit
• Military revenues at lower end of € 450m - € 500m range
• R&D stable
• FX: Slight headwind
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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. In addition to statements that are forward-looking by reason of
context, the words “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “forecast,” “believe,” “estimate,” “predict,” “potential,” or “continue”
and similar expressions identify forward-looking statements.
Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) competition from other
companies in MTU’s industry and MTU’s ability to retain or increase its market share, (ii) MTU’s reliance on certain customers for its sales, (iii) risks
related to MTU’s participation in consortia and risk and revenue sharing agreements for new aero engine programs, (iv) the impact of non-compete
provisions included in certain of MTU’s contracts, (v) the impact of a decline in German or other European defense budgets or changes in funding
priorities for military aircraft, (vi) risks associated with government funding, (vii) the impact of significant disruptions in MTU’s supply from key
vendors, (viii) the continued success of MTU’s research and development initiatives, (ix) currency exchange rate fluctuations, (x) changes in tax
legislation, (xi) the impact of any product liability claims, (xii) MTU’s ability to comply with regulations affecting its business and its ability to respond
to changes in the regulatory environment, (xiii) the cyclicality of the airline industry and the current financial difficulties of commercial airlines, (xiv)
our substantial leverage and (xv) general local and global economic conditions. Many of these factors may be more likely to occur, or more
pronounced, as a result of terrorist activities and their consequences.
The company assumes no obligation to update any forward-looking statement.
Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”),
and may not be offered or sold without registration thereunder or pursuant to an available exemption therefrom. Any public offering of securities of
MTU Aero Engines to be made in the United States would have to be made by means of a prospectus that would be obtainable from MTU Aero
Engines and would contain detailed information about the issuer of the securities and its management, as well as financial statements.
Neither this document nor the information contained herein constitutes an offer to sell or the solicitation of an offer to buy any securities.
These materials do not constitute an offer of securities for sale in the United States; the securities may not be offered or sold in the United States
absent registration or an exemption from registration.
No money, securities or other consideration is being solicited, and, if sent in response to the information contained herein, will not be accepted.
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Thank you for your attention!
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