Munich - MTU Aero Engines AG has published its figures for the first nine months of 2023.
* Guidance adjusted for the impact of the Geared Turbofan inspection program
* Growth in adjusted revenue and earnings in all business segments as of September
* Figures affected by exceptional charges for the Geared Turbofan inspection program
Based on the adjusted figures - especially the adjustments for the exceptional charges of around EUR1.0 billion relating to the Geared Turbofan inspection program - there were improvements across the board: Adjusted revenue1 grew by 21% to EUR4.6 billion (1-9/2022: EUR3.8 billion). Adjusted operating profit2 rose by 33% from EUR448 million to EUR597 million. The adjusted EBIT margin was 13.0% at the end of the first nine months (1-9/2022: 11.7%). Adjusted net income3 was EUR438 million at end-September, an increase of 37% (1-9/2022: EUR319 million).
'The good performance based on the adjusted figures is testimony to MTU's excellent market position and operational capability,' said Lars Wagner, CEO of MTU Aero Engines AG, commenting on the business figures. 'MTU posted organic growth in all business segments. However, exceptional charges for the Geared Turbofan inspection program affected our figures.' Without adjustments, MTU's reported revenue was EUR3.7 billion at the end of the first nine months and reported EBIT was -EUR410 million. In the interests of comparability, MTU's established practice is to make adjustments for matters of an exceptional nature. The adjusted revenue and earnings figures are reported in addition to the regulated, unadjusted revenue and earnings data. 'We are continuing this long-term practice in the interests of the consistency of our figures,' explained CFO Peter Kameritsch. Wagner: 'In view of this, we are today confirming our guidance for the full year, which has been adjusted for the charges of around EUR1 billion arising from the Geared Turbofan inspection program.' On this basis, MTU expects adjusted revenue for the year to be between EUR6.1 and EUR6.3 billion. Adjusted EBIT is expected to be slightly above EUR800 million in 2023, while free cash flow is expected to be slightly higher than the previous year's figure. MTU released an ad hoc statement on the possible effects of the Geared Turbofan inspection program on September 11 and on September 13 it communicated the adjustment of its guidance for this exceptional effect.
Adjusted revenue increased in all MTU business segments in the first nine months of 2023.
The highest revenue growth came from the commercial engine business, where adjusted revenue climbed 29% from EUR946 million to EUR1.2 billion. Organic revenue in the commercial series business grew by a percentage in the thirties while organic revenue in the spare parts business grew by a percentage in the twenties. Kameritsch: 'That is in line with our expectations for the full year.' The main revenue generator in the commercial engine business was the PW1100G-JM for the A320neo.
Revenue from commercial maintenance rose by 18% to EUR3.1 billion (1-9/2022: EUR2.6 billion). The most important revenue generators were the PW1100G-JM for the A320neo and the V2500 for the classic A320 family. 'Revenue increased across all platforms. The GTF MRO was mainly supported by the further ramp-up of MTU Maintenance Zhuhai and EME Aero,' reported Kameritsch.
Revenue in the military engine business increased by 19% from EUR309 million to EUR367 million in the first nine months. The most important revenue driver was the EJ200 engine for the Eurofighter.
The order backlog was valued at EUR22.0 billion at the end of September (December 31, 2022: EUR22.3 billion). The majority of orders were for the V2500 and the Geared Turbofan engines of the PW1000G family, especially the PW1100G-JM.
On an adjusted basis, MTU improved its earnings in both the OEM and the MRO business in the first nine months. Adjusted EBIT in the OEM business grew by 49% from EUR251 million to EUR374 million. The adjusted EBIT margin was 23.6%, compared with 20.0% in the prior-year period. 'In addition to the positive revenue mix and a good cost base, favorable exchange rate effects provided a tailwind for earnings,' said Kameritsch. At the end of September, adjusted EBIT in the commercial maintenance business was up 14% year-on year at EUR223 million (1-9/2022: EUR196 million). The adjusted EBIT margin in the MRO business was 7.2%, compared with 7.4% in the prior-year period.
Research and development expenses amounted to EUR224 million in the first nine months of 2023, up 17% from the same period of the previous year (1-9/2022: EUR192 million). Wagner: 'Geared Turbofan technology is vital for the transition to sustainable, emissions-free aviation. Within our technology agenda, the evolutionary development activities have a clear focus on improving the performance of the Geared Turbofan.' On the revolutionary side, MTU's R&D activities center on technology studies for future-generation propulsion systems, especially hydrogen and flying fuel cells.
MTU's free cash flow was EUR257 million at the end of September, 17% higher than in the first nine months of 2022 (1-9/2022: EUR219 million). Kameritsch: 'The Geared Turbofan inspection program should mainly affect our liquidity in the period from 2024 to 2026. To limit the impact as effectively as possible, we will be systematically enhancing our stringent cash management and continuing our clear focus on safeguarding the future of MTU.'
Net capital expenditure on property, plant and equipment amounted to EUR190 million in the first nine months, which was 12% higher than in the comparable prior-year period (1-9/2022: EUR170 million).
MTU had 12,004 employees at the end of September, 6% more than at year-end 2022 (December 31, 2022: 11,273 employees).
MTU Aero Engines - Key data for the third quarter of 2023: See full details at https://www.mtu.de/newsroom/press/latest-press-releases/press-release-detail/nine-month-results-2023-mtu-aero-engines-ag-confirms-its-adjusted-guidance-for-2023/
MTU AERO ENGINES AG 
