MTU Aero Engines : Annual Report 2021 (PDF)

21Annual Report

M T U A E R O E N G I N E S A G

F I S C A L Y E A R 0

TO OUR	COMBINED	CONSOLIDATED	RESPONSIBILITY STATEMENT AND	ADDITIONAL
SHAREHOLDERS	MANAGEMENT REPORT	FINANCIAL STATEMENTS	INDEPENDENT AUDITOR'S REPORT	INFORMATION

Key facts and figures with year-on-year comparison

[T1] Selected consolidated financial information and key figures at a glance

							Change against
							previous year
in € million (unless stated otherwise)	2021	2020		in %
Revenue and earnings
Revenue	4,188	3,977	5.3
thereof: commercial engine business1)	1,066	1,052	1.3
thereof: military engine business1)	482	483		-0.2
thereof: commercial maintenance business1)	2,741	2,522	8.7
Gross profit	586	492	19.1
Earnings before interest and taxes (EBIT)	355	262	35.4
Net income	231	147	56.9
Adjusted earnings
Adjusted earnings before interest and taxes (adjusted EBIT)	468	416	12.6
Adjusted EBIT margin (in %)	11.2	10.5
Net income	342	294	16.0
Balance sheet
Total assets	8,304	8,104	2.5
Equity	2,760	2,635	4.8
Equity ratio (in %)	33.2	32.5
Net financial debt	673	781		-13.8
Cash flow
Cash flow from operating activities	567	386	47.1
Cash flow from investing activities	-345			-245		-40.9
Free cash flow	240	105	>100
Cash flow from financing activities	-276	504	<-100
Number of employees at year end
Commercial and military engine business	6,497	6,409	1.4
Commercial maintenance business	4,011	3,904	2.7
Total number of employees	10,508	10,313	1.9
Share indicators
Earnings per share (in €)
Basic earnings per share	4.17	2.63	58.5
Diluted earnings per share	4.09	2.59	57.9

1) Before consolidation.

		ANNUAL REPORT MTU AERO ENGINES AG I FISCAL YEAR 2021		2
/ Key facts and figures

TO OUR	COMBINED	CONSOLIDATED	RESPONSIBILITY STATEMENT AND	ADDITIONAL
SHAREHOLDERS	MANAGEMENT REPORT	FINANCIAL STATEMENTS	INDEPENDENT AUDITOR'S REPORT	INFORMATION

Table of contents

To our shareholders			4
Letter to our shareholders			5
The Executive Board			7
Report of the Supervisory Board			9
The Supervisory Board		15
The MTU share			17
Management compensation report			21
Combined management report			3 3
The MTU Group		34
Economic report		43
MTU AG (disclosures in accordance with the German Commercial Code [HGB])			61
Forecast		66
Risk and opportunity report			70
Internal control and risk management system for the Group accounting process				85
Disclosures under takeover law							87
Other disclosures									92
Consolidated financial statements			1 1 5
Consolidated income statement		116
Consolidated statement of comprehensive income			117
Consolidated balance sheet		118
Consolidated statement of changes in equity		120
Consolidated cash flow statement		121
Consolidated segment report (part of the Notes to the consolidated financial statements)			122
Notes to the consolidated financial statements		124
Responsibility statement and independent auditor's report		2 0 5
Responsibility statement			206
Independent auditor's report			207
Independent auditor's limited assurance report		215
Additional information		2 1 8
Glossary of engine terms			219
Overview of engines		221
Index			222
List of charts and tables		223
Financial calendar and contacts		225

		ANNUAL REPORT MTU AERO ENGINES AG I FISCAL YEAR 2021		3
/ Table of contents

TO OUR	COMBINED	CONSOLIDATED	RESPONSIBILITY STATEMENT AND	ADDITIONAL
SHAREHOLDERS	MANAGEMENT REPORT	FINANCIAL STATEMENTS	INDEPENDENT AUDITOR'S REPORT	INFORMATION

To our shareholders

Letter to our shareholders		5
The Executive Board			7
Report of the Supervisory Board		9
The Supervisory Board			15
The MTU share		17
Management compensation report		21

		ANNUAL REPORT MTU AERO ENGINES AG I FISCAL YEAR 2021		4
/ To our shareholders

TO OUR	COMBINED	CONSOLIDATED	RESPONSIBILITY STATEMENT AND	ADDITIONAL
SHAREHOLDERS	MANAGEMENT REPORT	FINANCIAL STATEMENTS	INDEPENDENT AUDITOR'S REPORT	INFORMATION

Letter to our shareholders

The coronavirus pandemic continued to have a significant impact on the aviation sector in 2021, causing repeated turbulence. As well as operating successfully in this volatile market environment, at MTU we positioned ourselves optimally for the future. The parameters for a sustained recovery of our sector are intact and we intend to secure an above-average share of the upswing.

We returned to a growth trajectory in 2021 and aim to exceed the pre-crisis level of 2019 by 2024.

All business areas at MTU should post organic growth again in 2022. We expect the strongest upward trend to come from commercial maintenance (MRO), where we are benefiting from our wide-ranging market access: We operate in the market as an independent maintenance provider, as a member of the service networks of engine systems producers (OEMs) and in partnership with airlines. In addition, we benefit from our broad portfolio, which covers all thrust and performance classes. It includes a high proportion of engines for short- and medium- haul aircraft, which are in lifecycle phases where high maintenance requirements are likely. Furthermore, our customer focus strengthens our market position: We offer our customers custom-tailored MRO solutions.

Rising demand for maintenance also has a positive impact on our spare parts business. We expect to see an increase here in 2022, especially for the V2500 for the classic A320 family and the Geared Turbofan™ for the A320neo.

Commercial series business should also grow in 2022 and beyond. Thanks to our technological edge, our crisis-resistant portfolio with stakes in leading engine programs in all segments and our broad customer base, we are well-positioned to gain an above-average share of the market growth. We anticipate that the highest growth rates will come from a strong rise in production volumes of short- and medium-haul and regional aircraft. Produc-

tion rates of widebody aircraft should also pick up again. Furthermore, we are well-positioned in the business jets sector, which has proven crisis-resistant with usage rates above the pre-pandemic level.

In the military business, campaigns for the Eurofighter with the EJ200 engine and the Next European Fighter Engine for the next generation of European fighter aircraft open up attractive growth opportunities. There is also growth potential in the service and aftermarket business.

We are convinced that MTU's growth must be sustaina- ble. MTU is a signatory of the UN Global Compact and supports the United Nations' Sustainable Development Goals. We take these goals into consideration in our business activities and pursue them as consistently as our financial targets. As an innovative engine manufactu- rer, MTU is aware that the Paris Agreement can only be achieved through a realistic mix of different propulsion technologies. We are working on this through our Claire (Clean Air Engine) technology agenda. Our focus here is on evolutionary engine concepts, in other words the Geared Turbofan™ programs and their ongoing deve- lopment. The aim is an even greater reduction in their fuel consumption and emissions. An important step towards this is the Pratt & Whitney GTF Advantage™, which will be available from 2024. Our second area of focus is revolutionary propulsion systems, with the aim of developing completely emission-free engines. Here, we are concentrating mainly on hydrogen and flying fuel cells. Together with EASA, we are already working on the licensing requirements for fuel cell technology.

Our evolutionary and revolutionary approaches position us well to obtain stakes in engine programs for new short- and medium-haul and widebody aircraft in order to fuel the sustained growth of MTU. Moreover, we are supporting the industrial production and use of sustainable alternative fuels. Sustainability is also a key issue for us in production: Operations at our Munich

		ANNUAL REPORT MTU AERO ENGINES AG I FISCAL YEAR 2021		5
/ Letter to our shareholders