MTU Aero Engines - BAADER

MTU Aero Engines
Baader Investment Conference
München - September 24, 2014
Contents
1.
Company Overview
2.
Commercial OEM Business
3.
Military OEM Business
4.
Commercial MRO Business
5.
Financials & Outlook
MTU Investor Relations
2
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
Strong market position
• Narrowbodies: V2500 strong market base, GTF-engines EIS 2015
• Widebodies: GEnx, GP7000 ramp up, GE9x participation secured
• 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
MTU Investor Relations
3
MTU is Built on Three Pillars
Sales*
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
€ 1,891m (53%)
€ 500 m (14%)
€ 1,214 m (34%)
Business
OEM
MRO
EBIT margin*
11.0%
8.9%
MTU Group*
Sales: € 3,574 m / EBIT margin: 10.4%
* FY2013 – figures
MTU Investor Relations
4
Contents
1.
Company Overview
2.
Commercial OEM Business
3.
Military OEM Business
4.
Commercial MRO Business
5.
Financials & Outlook
MTU Investor Relations
5
MTU Well Positioned in the Fast Growing Narrowbody Market
Major Achievements
• GTF success will increase MTU’s share in
the future narrowbody market
Installed Base 2013
• Increased exposure to strongly growing V2500
aftermarket
Firm Orders Of A320neo With PW1100G-JM: 54%
A320ceo
powered by V2500
A320neo powered
by PW1100G-JM
B737MAX
A320 and B737 with CFM56
A320neo with LEAP
* Unannounced
MTU Investor Relations
engine decisions are shared equally
6
GTF Engines will Dominate Future 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
MTU Investor Relations
MRJ70/ 90
2016/2017
(*)
< 140 Seats
EMB175/ 190/ 195-E2
2018/2019
7
Commercial OEM Segment
Strong growth in MTU’s widebody programs
GEnx (B787 / B747-8)
• 50% growth in Genx module deliveries in 2014
• > 1,300 GEnx engines on order
• Current market share of GEnx around 60% (B787)
GP7000 (A380)
• 2014 module deliveries remain stable on high level of 2013
• Current market share of GP7000 is roughly 60%
GE9x (B777x)
• Program share of 4% secured
• 4 bn € revenues expected over whole engine life time
• EIS targeted for 2020
MTU Investor Relations
8
MTU Spare Parts Portfolio
Today
Future (2020)
V2500
• Continuous growth in V2500 aftermarket
• Long term service agreements and T&M spare sales
• Boosted by increased program share
• Peak installed base: 2017 => Peak aftermarket in 2024
MTU Investor Relations
PW2000
• Commercial fleet continuous to decline until 2020
• PW2000 military: stable on lower level
CF6-80C/E programs
• Continuous to provide stable revenues, slight reduction
towards end of decade
9
Key Projects for Ramp up on Track
MTU Investor Relations
10
Contents
1.
Company Overview
2.
Commercial OEM Business
3.
Military OEM Business
4.
Commercial MRO Business
5.
Financials & Outlook
MTU Investor Relations
11
Military OEM Segment
• First two A400M series aircraft delivered to France in 2013,
1rst A400M delivered to Turkey in 2014
• Ramp up of TP400 (A400M) production
• EJ200 Tranche 3a secures production until 2017
• Various EJ200 export campaigns running
• GE38 program (Sikorsky CH53K Heavy Lift Helicopter) on track
MTU Investor Relations
12
Contents
1.
Company Overview
2.
Commercial OEM Business
3.
Military OEM Business
4.
Commercial MRO Business
5.
Financials & Outlook
MTU Investor Relations
13
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
MTU Investor Relations
14
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%
MTU Investor Relations
15
Contents
1.
Company Overview
2.
Commercial OEM Business
3.
Military OEM Business
4.
Commercial MRO Business
5.
Financials & Outlook
MTU Investor Relations
16
Guidance 2014
in m€
•
•
•
•
•
FY 2013
Guidance 2014
Revenues
3,574.1
~3,650
EBIT adj.
373.1
10.4%
~ 375
Net income adj.
235.7
~ 245
Series revenues expected to increase by ~10%
Spare parts revenues expected to grow high single digit
Military business revenues down 5%
Commercial MRO revenues expected to be flat
Slight headwind from FX
MTU Investor Relations
17
Key Take Aways
• MTU continues to invest into the future
-
Today strong deliveries of V2500, GEnX and GP7000
-
From 2015 onwards steep ramp up of GTF family
-
GTF will significantly increase MTUs future market share
-
V2500 drives aftermarket growth in this decade, but also
significant contribution from GP7000 and GEnx by 2020
-
MTU is very well positioned to particpate in future aftermarket
growth for new engine programs via OEM RRSPs
• Key supply chain projects underway to support production ramp up
• Efficiency program „Cash for Future“ on track
MTU Investor Relations
18
Appendix
Appendix
MTU Investor Relations
19
Appendix
Appendix
1.
Financials
2.
Commercial OEM Business:
2.a
- Aero Engine Industry Players,
2.b
- Life Cycle Cash Flow Profile and Key Drivers
2.c
- Engine Schematic and GTF Concept
3.
Overview Engine Program Shares
4.
Top 10 Commerical MRO Provider
MTU Investor Relations
20
6M / 2014: Group Revenues remained stable
MTU Group Revenues
Segment Revenues
in m €
in m €
1.775
1.816
223
954
6M / 2013
6M / 2014
573
613
6M / 2013
Commercial Business
+1%
226
1.033
6M / 2014
Military Business
MRO
* on US$ basis -3%
* US$ basis +6%
** on US$ basis +13%
MTU Investor Relations
21
6M / 2014: Group EBIT adj. Margin at 9.4%
MTU Group EBIT adj.
Segment EBIT adj.
in m €
in m €
9,7%
9,8%
8,9%
9,7%
170
8,4%
9,4%
54
171
+1%
48
123
115
6M / 2013
6M / 2014
Group margin
6M / 2013
OEM
MTU Investor Relations
MRO
6M / 2014
OEM margin
MRO margin
22
US$ Exchange Rate / Hedge Portfolio
Hedge book as of July 24, 2014
Hedging Model
in mUS$
US$ Exposure
• Approx. 75% of US$ revenues
are covered with US$ costs via
procurement (“natural hedging”).
• Company's net US$ exposure
is approx. US$ 1 bn (2014)
807
(=80%)
640
(=60%)
400
(=36%)
Average
hedge rate
(US$/EUR)
20
(=2%)
2014
2015
2016
2017
1.31
1.30
1.32
1.28
Rolling Hedging Model
• Exchange rate analysis and
new hedging contracts on a
quarterly basis
• Hedging period: 12 following
quarters
• For MTU hedging remains an instrument for risk mitigation
• Sensitivity pre hedging: 10 ct move in US$/€ exchange rate has an impact of € ~ 60m on EBIT
MTU Investor Relations
23
Appendix
Revenue Growth Profile until 2020
Growth drivers
Revenue
6.000
Identified new opp.
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
MTU Investor Relations
2019
2020
24
Appendix
Priority List of Cash Flow Use
1) Invest in
Organic Growth
2) Dividend increase
3) M&A transactions
4) Share Buy-back
•
•
•
•
Key focus on new engine programs
MTU sticks to dividend policy
M&A off the table
Share buy-back more long term focus
MTU Investor Relations
25
Appendix
Appendix
1.
Financials
2.
Commercial OEM Business:
2.a
- Aero Engine Industry Players
2.b
- Life Cycle Cash Flow Profile and Key Drivers
2.c
- Engine Schematic and GTF Concept
3.
Overview Engine Program Shares
4.
Top 10 Commerical MRO Provider
MTU Investor Relations
26
Appendix
MTU Investor Relations
27
Appendix
Important Partner for all Major OEMs
Key OEM Partnerships
Main OEM Partners
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%
FY 2013 Commercial
Business Revenues: € ~1,891 m
MTU Investor Relations
28
Appendix
Appendix
1.
Financials
2.
Commercial OEM Business:
2.a
- Aero Engine Industry Players
2.b
- Life Cycle Cash Flow Profile and Key Drivers
2.c
- Engine Schematic and GTF Concept
3.
Overview Engine Program Shares
4.
Top 10 Commerical MRO Provider
MTU Investor Relations
29
Appendix
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
MTU Investor Relations
30
Appendix
Key Drivers in Commercial Series and Spare Parts Business
Narrowbody
Series
Widebody
today
• V2500 (A320)
• PW2000 (B757, C-17)
• GEnx (B787, B747-8)
• GP7000 (A380)
~ 2020
• PW1524 G (C-Series)
• PW1217 G (MRJ)
• PW1133 G (A320neo)
• GEnx (B787, B747-8)
• GP7000 (A380)
• PW1400 G (MS-21)
• PW1700G, PW1900G (E-Jet 2nd Gen.)
Spares
today
• V2500 (A320)
• PW2000 (B757, C-17)
• CF6-80 (A330, B747-400, B767)
~ 2020
• V2500 (A320)
• PW2000 (B757, C-17)
• CF6-80 ( A330, B747-400, B767)
• GP7000 (A380)
• GEnx (B787, B747-8)
MTU Investor Relations
31
Commercial OEM Segment
MTU is well positioned in the fast growing narrowbody market
Increased participation on V2500 growth potential
• Program share increased to 16% in 2012
• Installed base of 5,000 engines, to grow to ~6,500 engines until 2020
• Continued strong growth of spares expected until mid of next decade
Very successful start of GTF-family
• Five airplane makers have chosen the GTF:
Airbus, Embraer, Bombardier, Mitsubishi and Irkut
• Over 6,000 GTF on firm order or optioned
• Market share PW1100G (A320neo) ~50%
• High thrust version on A321neo launched
• GTF on A320neo with additional 2% fuel burn reduction
MTU Investor Relations
32
Appendix
Appendix
1.
Financials
2.
Commercial OEM Business:
2.a
- Aero Engine Industry Players
2.b
- Life Cycle Cash Flow Profile and Key Drivers
2.c
- Engine Schematic and GTF Concept
3.
Overview Engine Program Shares
4.
Top 10 Commerical MRO Provider
MTU Investor Relations
33
Appendix
MTU's Key Competencies Lie Within Turbines and Compressors
Simple Engine Schematic
HPC
High-Pressure
Compressor
HPT
High-Pressure
Turbine
Risk & Revenue Sharing Partnerships
LPT
Low-Pressure
Turbine
Fan
Combustor
LPC
Low-Pressure
Compressor
MTU Investor Relations
• MTU is a major provider of subsystems
for commercial engines – specialized
in Low- Pressure Turbines and High-Pressure Compressors
• The typical share of MTU in the entire
engine is approx. 10–20% – this is determined by the value of the subsystems
provided
• Entry into new engine programs requires
significant upfront investments for R&D
• Revenues are received throughout the
entire life cycle (>30 yrs.) – according to
the program share – for:
– new engine (series) sales
– spare parts sales
34
Appendix
Commercial OEM Segment
Geared Turbofan: A Step Change in Propulsion
PurePower™ GTF engine
Conventional turbofan
Constrained fan speed by Constrained low compressor &
low pressure spool
low turbine speed by fan
Optimized
low-speed fan
Optimized
low compressor & low turbine
Gear
Bypass airflow
Bypass airflow
Incremental improvement
Step-Change improvement
Fuel
MTU Investor Relations
Maintenance
Noise
35
Appendix
The GTF Competitive Advantage
GTF relative to Direct Drive Turbofan:
Direct Drive Turbofan DDTF
 25% less stages
 45% less airfoils
 lower cycle temperature
Config 1-3-10-2-7
78 in Fan Diameter
= lower maintenance cost
 higher propulsive efficiency
 higher low spool component efficiencies
 shorter & lighter
= 3% less fuel burn
81 in Fan Diameter
Config 1-G-3-8-2-3
 3 to 4 dB quieter (EPNdB, cum.)
Geared Turbofan GTF
The GTF concept achieves a significant competitive advantage over the DDTF.
MTU Investor Relations
36
Appendix
Appendix
1.
Financials
2.
Commercial OEM Business:
2.a
- Aero Engine Industry Players
2.b
- Life Cycle Cash Flow Profile and Key Drivers
2.c
- Engine Schematic and GTF Concept
3.
Overview Engine Program Shares
4.
Top 10 Commerical MRO Provider
MTU Investor Relations
37
Appendix
Commercial Engine Fleet
Aircraft Segment Engine
Program Share
Aircraft Application
Widebody
(50 – 120 klb)*
Genx
PW4000G
GP7000
CF6-80E
CF6-80C
CF6-50/80A
6.6%
12.5%
22.5%
n.n.
9.1%
n.n.
B787 Dreamliner, B747-8
B777
A380
A330
B747-400, B767, Boeing MD-11, A310
DC 10-30, B767, A310
Narrowbody
(20 – 50 klb)*
PW1133G
PW1524G
PW1217G
PW2000
V2500
JT8D-200
PW6000
18%
17%
15%
21.2%
16%
12.5%
18%
A320neo
Bombardies C Series,
MRJ
B757, B C-17
A320 family, Boeing MD-90
Boeing MD-80 range
A318
Business &
Regional Jets
(0 – 20 klb)*
PW300
25% (PW305/306)
15% (PW307)
25%
Learjet 60, Do328 JET, Gulfstream G200, Hawker
1000, Dessault Falcon 7X, Cessna Sovereign
Cessna Bravo, Cessna Excel
PW500
* Thrust Range
MTU Investor Relations
38
Appendix
Military Engine Fleet
Aircraft Segment Engine
Program Share
Aircraft Application
Fighter
Aircraft
EJ200
RB199
F414/F404
30%
40%
4.4 / 1.5%
Eurofighter Typhoon
Panavia Tornado
F414: F/A-18 E/F Super Hornet; EA-18G Growler
F404: F/A-18 A/B/C/D, T50 Trainer; JAS-39 (Gripen)
Light Combat Aircraft (LCA)
Transport
Aircraft
TP400
22.2%
A400M
Helicopter
MTR390
GE38
40%
18.4%
Eurocopter Tiger
CH-53K (US-HTH)
MTU Investor Relations
39
Appendix
Appendix
1.
Financials
2.
Commercial OEM Business:
2.a
- Aero Engine Industry Players
2.b
- Life Cycle Cash Flow Profile and Key Drivers
2.c
- Engine Schematic and GTF Concept
3.
Overview Engine Program Shares
4.
Top 10 Commerical MRO Provider
MTU Investor Relations
40
Appendix
Commercial MRO Business:
Top 10 Engine MRO Providers 2012 – Estimated Number of Engines Under Contract
Top 10 providers*
MRO Provider
Market Share
1.
GE Engine Services
2.
Rolls-Royce
3.
MTU Maintenance
4.
Pratt & Whitney
~7%-8%
5.
Lufthansa Technik
~6%-7%
6.
Snecma
~4%
7.
Air France / KLM
~4%
8.
Delta TechOps
~3%
9.
American Airlines
~3%
Standard Aero
~3%
10.
~20%
~10%-11%
8%
* Source: ACAS as of December 2012 – Active engines under contract commercial jets,
excl. Turboprops and Business Jets)
MTU Investor Relations
41
Commercial MRO Business
• Contract volume ~ US$ 5.3 bn
• Ramp up of G90 shop visits at MTU Hanover
• MTU Zhuhai’s capacity increase by 50% to 300 shop visits p.a.
successfully completed and ramp-up ongoing
• MTU Maintenance lease Services B.V. (JV with Sumitomo
Corporation) in operation
• MTUPlus Mature Engine Solutions launched
• World‘s 3rd largest engine MRO service provider with a market
share of 8%
MTU Investor Relations
42
Appendix
Financial Calendar 2014 & IR Contact
February 18, 2014
Conference Call
Full year results 2013
May 08, 2014
Annual General Meeting
for the fiscal year 2013
October 23, 2014
Conference Call
Q3 2014 results
2014
April 29, 2014
Conference Call
Q1 2014 results
July 24, 2014
Conference Call
Q2 2014 results
November 25, 2014
Investor and
Analyst Day
Peter Kameritsch
Claudia Heinle
Alexander Gedler
Vice President Investor Relations
Tel. +49 89 14 89-5714
Fax +49 89 14 89-99155
E-mail: [email protected]
Investor Relations
Tel. +49 89 14 89-3911
Fax +49 89 14 89-95139
E-mail: [email protected]
Investor Relations
Tel. +49 89 14 89-2153
Fax +49 89 14 89-99212
E-mail: [email protected]
MTU Investor Relations
43
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.
MTU Investor Relations
44

Download Report