MTU Aero Engines increased revenue by 27 per cent to €5.3 billion in 2022, compared to the previous year.
Operating profit increased by 40 per cent from €468 million to €655 million. The adjusted EBIT margin rose from 11.2 per cent in 2021 to 12.3 per cent in 2022. Net income developed in line with the operating profit and rose 39 per cent to €476 million in 2022.
“These figures highlight the profitable growth path of MTU Aero Engines in 2022,” said CEO Lars Wagner. “After the first nine months, we were able to raise our guidance and at year-end we significantly exceeded our earnings forecast and fully achieved our cash flow forecast.”
At the end of October, MTU forecast group revenue to be between €5.4 billion and €5.5 billion. “Our revenue for the year was €5.3 billion, which was slightly below our target, because revenue in both the OEM and the MRO business fell slightly short of our expectations as a result of the volatility of supply chains,” Wagner stated.
The guidance for adjusted EBIT was an increase in the low thirty-percent range. MTU forecast that adjusted net income would develop in line with the operating profit. “Based on the current market outlook, the supply-side situation and the development of exchange rates, we are revising the 2023 revenue and earnings targets issued at our Capital Market Day in November,” said Wagner.
MTU expects to report revenue of between €6.1 billion and €6.3 billion in 2023. In November 2022, it forecast that revenue would be between €6.4 billion and €6.6 billion. “The revised guidance is mainly due to a change in our assumption on the US dollar exchange rate,” explained Wagner.
MTU’s forecast is now based on a US dollar/euro exchange rate of 1.10 per euro instead of the previous assumption of 1.05. Commercial series business is expected to post the highest revenue increase, with organic revenue growth being up around 30 per cent. In the spare parts business, organic revenue growth should be in the high teens- to low twenty-per cent range in 2023. In the commercial maintenance business, organic revenue growth is expected to be in the high teens percentage range. All three forecasts are unchanged.
Detailing the mid-term outlook, Wagner said: “We want to continue to grow beyond 2023. Our target formula is 8–1–25, in other words: revenue of €8 billion and earnings of €1 billion in 2025.”
MRO leads the way
MTU’s highest revenue growth in 2022 was 32 per cent to €3.6 billion in commercial maintenance. Around 70 per cent of the revenue mix was work in MTU’s core MRO business and around 30 per cent comprised maintenance work on the Geared Turbofan.
“On a dollar basis, MRO reported a 17 per cent rise in revenue, which was not quite as strong as had been anticipated. That was due to longer turnaround times in commercial maintenance,” reported CFO Peter Kameritsch. MTU had expected organic revenue growth of around 20 per cent in the commercial maintenance business. The main revenue drivers in this business were the PW1100G-JM engine for the A320neo and the V2500, which is used in the classic A320.
At year-end 2022, MTU’s order backlog was at the prior-year level at €22.3 billion. The majority of orders were for Geared Turbofan engines for the PW1000G family, especially the PW1100G-JM, and the V2500. Wagner said: “This renewed high level is further evidence of the sustained demand for our products. In commercial maintenance, we secured new order wins worth U.S.$3.6 billion in 2022. That reflects the pick-up in air traffic and the confidence placed in us by our customers.”
In 2022, MTU posted a hike in earnings in the commercial maintenance business. Adjusted EBIT increased by 80 per cent from €149 million to €268 million. The adjusted EBIT margin in the MRO business rose from 5.4 to 7.4 per cent.
