MTU Aero Engines set to reach its targets for 2010
MTU Aero Engines nine-month results 2010 show the company is well on its way to achieving its targets for the year as a whole.
Revenues increased by 2% to € 1,992.3 million after € 1,954.9 in the previous year. MTU boosted its earnings by 7% to € 226.1 million (1-9/09: € 210.8 million). At 11.3%, the EBIT margin was up 0.5 percentage points compared with the same period in 2009, while the company's net income improved by 7% to € 99.6 million (1-9/09: € 93.4 million).
As Egon Behle, CEO of MTU Aero Engines Holding AG, summed it up: "These results demonstrate that MTU is well on track to achieve its targets for the year, and enable us to confirm our forecast for 2010 – even if the revised forecast in July was based on a more favorable U.S. dollar-euro exchange rate than actually materialized. We particularly expect our OEM segment to grow in the fourth quarter 2010."
In the first nine months of 2010, revenues in the commercial engine business increased by 4%, reaching € 821.6 million at the end of the quarter after a figure of € 790.9 million for the same period in 2009. “In U.S. dollar terms, revenues in the commercial engine business have remained stable. The same goes for new commercial engine and spare parts business," explained CFO Reiner Winkler.
The biggest revenue earners for new engine and spare parts business were the V2500 of the Airbus A320 family, the PW2000 for the Boeing 757, and the C-17 and CF6-80C engines used to power the Boeing 747, Airbus A310 and Airbus A330 aircraft. The GP7000, which is deployed in the Airbus A380, is gaining in importance. "This is a trend that is going to continue," commented Winkler. "Alongside the V2500 engine for the Airbus A320, the GP7000 and programs such as the GEnx engine for the Boeing 787 Dreamliner and Boeing 747-8 will make up a big share of our series business volume going forward, markedly boosting growth in the commercial OEM segment as early as 2011. In the coming year, series business is likely to perform very positively in U.S. dollar terms, growing faster than spare parts business."
The company's revenues from military engine business grew by 3% to reach € 378.3 million (1-9/09: € 366.7 million), mainly on the back of sales of the EJ200, the Eurofighter engine. Planned cuts in the German defense budget are likely to lead to lower revenues from military MRO business in 2011. "We expect to be able to compensate this in the medium term however, as new international programs begin to kick in," said Behle.
MTU's research and development spending rose by 9% to a figure of € 162.0 million (1-9/09: € 149.0 million). This was mainly due to a substantial boost in company-funded R&D, which at € 103.8 million was 30% higher than in 2009 (1-9/09: € 80.0 million). R&D work focused on new development programs such as the PW1000G engine destined for the Mitsubishi Regional Jet and Bombardier CSeries as well as the GE38 engine for the Sikorsky CH-53K heavy-lift cargo helicopter. "This has enabled us to keep these programs running to schedule, and to enhance our position in the market. In the coming year, we will continue to promote R&D in order to underpin our growth strategy," commented Behle.