MTU Aero Engines reports net income of €294 million for 2020

MTU Aero Engines AG has presented its preliminary figures for 2020: revenue was €3,977 million, compared with €4,628 million in 2019. The operating profit was €416 million (2019: €757 million) and the EBIT margin was 10.5% (2019: 16.4%). Net income was €294 million in 2020, compared with €538 million in 2019.

“Our swift and decisive action in the face of the coronavirus crisis has paid off. We managed the challenges due to the coronavirus pandemic well and posted respectable earnings in 2020 despite the crisis,” said Reiner Winkler, CEO of MTU Aero Engines AG. “While our revenue was at the lower end of our target range in 2020 as a result of lower maintenance volumes and the unfavorable development of the dollar exchange rate, earnings were slightly above our forecast.”

Outlook

In 2021, the commercial maintenance business is expected to recover most clearly from the effects of the coronavirus crisis, with revenue growth of around 15 to 25%. Here, the revenue contribution from the Geared Turbofan™ should increase considerably. At the Capital Market Day in November 2020, MTU initially assumed revenue growth in the commercial MRO business in the twenty percent range. The commercial spare parts business is expected to post revenue growth in the low-to-mid-single-digit percentage range. At the Capital Market Day, a slight rise in revenue was forecast for the commercial spare parts business. For the commercial series business, MTU is forecasting slight revenue growth. Until now, it had expected this business to make a stable revenue contribution. The military business has not been affected by the coronavirus crisis and should post further slight growth in 2021. Overall, MTU expects revenue to be between €4.2 and 4.6 billion. The adjusted EBIT margin should be between 9.5 and 10.5%. Adjusted net income is expected to develop in line with adjusted EBIT. The cash conversion rate, which shows the ratio of free cash flow to adjusted net income, is expected to be in the mid double-digit percentage range in 2021 (2020: 36%). (€1.00 = US$1.21 at time of publication.)

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