MTU Maintenance Hannover World of Finance meets business4school

Alexander Engel – May 27th, 2019

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

Boasting comprehensive system expertise, MTU focuses on five core engine competencies -

three core components and on unique manufacturing and maintenance processes

3

1

2

3

High-pressure

compressor (HPC)

Low-pressure

turbine (LPT)

Turbine center

frame (TCF)

4

5

Manufacturing

Maintenance

MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover27.05.2019

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

YE 2018

158,40

Going public

June 1st, 2005

21,0

„The IPO is only the beginning: a new „product“ and new „customer“ are now owners of MTU“

(Goldman Sachs in 2005)

Dez 06 Dez 07 Dez 08 Dez 09 Dez 10 Dez 11 Dez 12 Dez 13 Dez 14 Dez 15 Dez 16 Dez 17Dez 05 Dez 18

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 4

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

MTU looks back on many important names from the German industrial history

– from 1934 to date

1934BMW Flugmotorenbau GmbH

is founded

1965MAN takes over

BMW Triebwerkbau

1989MTU becomes an affiliate of Deutsche Aerospace, later renamed DaimlerChrysler

Aerospace (DASA)

TodayShareholder structure

93% Institutional investors

6% Private shareholders

1% MTU-owned shares

1969 MTU

50% Daimler Benz

50% MAN

2005MTU goes public

Focus on military applications

Focus on commercial applications

527.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

Our track record: partners and customers appreciate MTU’s excellence

Revenue € 4.57 billion / EBIT € 0.67 billion

Share of total revenues ca. 33 %

Balanced product portfolio in all thrust

categories

Decades of partnership with OEMs

Share of total revenues ca. 9 %

European and U.S. engine programs

Full system capability

Leading partner of the German Armed

Forces

Share of total revenues ca. 58 %

Services: maintenance, leasing and

asset management

Global network

Direct customer business, partner of

OEMs and airlines

MTU group fiscal year 2018:

627.05.2019

Commercial OEM business Military OEM business Commercial MRO business

MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 7

Top 10 commercial engine MRO providers*

~22%

~11%

~8%

~6-7%

~4-5%

~4%

~3%

~2-3%

~2%

~10%

* Estimate based on active commercial jet engines under contract per ACAS as of 06/2015, add-on for minority/equal JVs, IAE workload equally distributed among network partners

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

A balanced portfolio and products in all thrust categories ensure MTU’s long-term success

27.05.2019 8

PW1000G-family

A320neo, E2-Jet,

A220, MC-21, MRJ

GP7000

A380

GEnx

787, 747-8

Cu

mu

late

d c

ash

flo

w

40

+

-

Calendar years after

market launch

Entry into service

GE9X

777X

V2500

A320, MD-90,

KC-390

PW2000,

PW4000

757, C-17,

777

CF6-80, LM6000

747, 767, IGT,

A300, A310, A330

0

Production

Technology R&D Aftermarket

Production

PW800

G500, G600,

Falcon 6X

PW300, PW500

Latitude, Sovereign, Citation,

Learjet, G200, Bravo,

Falcon 7X

MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 9

100 %Affiliate of MTU Aero Engines AG

1979Founded

~ 550 Shop visits 2018

~ 2.300employees

PortfolioMTU Maintenance Hannover is the centerpiece of the MTU Maintenance group. It is responsible for the maintenance of medium- and large-size commercial engines.

These include the GE CF6-50, CF6-80C2 and GE90, Pratt & Whitney PW1100G-JM, PW2000 and PW6000, International Aero Engines V2500, Engine Alliance

GP7000 and CFMI CFM56-7.

MTU Maintenance

Hannover GmbH

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

1 depending on engine model, age and operational environment; 2 depending on engine type and workscope; 3 SBs, mod’s and new repairs

customized workscoping

delivery of servi-ceableengine ‘better than new’3

engine removalstart of service on-wing service

assembly & test parts repair disassembly

& inspection

Operations: 5-7 years1

Repair & overhaul: 50-70 days2

The engine maintenance business model

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 10

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 1111

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

Sales

COGS

S,G&A

EBIT

Gross

Profit EBIT adj.

Net

Income CAPEXFree Cash

Flow

Capital

employed

ROCE

„Rohertrag“

Working

Capital

PoCHGB &

IFRS/IAS

Cash Flow from

operating activities

Cash Flow from

financing activities

Cash Flow from

investing activitiesindirect

operating costs

Net debts

Return on

Sales (ROS)

deferred

taxes R&D

Value

Added

Cash Flow

EBITDA

NPV

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 12

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

Outside

Vendor

Material CapexIndirect

operating

costs

shareholder,

financier

statePersonnel

costs

MTU

Maintenance

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

The financial key figures are regarding the earning and financial power of the MTU as well as

the ability to meet our liquidity needs

Earnings Before Interest, Taxes and PPA depreciationEBIT adj.

Company`s operational result that is disclosed in the income statement („GuV“) and is eleminating the

effects of financing and accounting decisions

shows

by management, analysts and investors to evaluate, assess and benchmark the profitability of

a company and to compare companies within and across industries and countries;

- tax regulations

- credit terms

is commonly used

Cash Flow (payments in ./. payments out) that a company generates through running its

„normal“ operational business minus investments in future growth, that is available for:

- pay back claims for loans

- devidends for equity

Free

Cash Flow

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 14

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

“Our Financial Playing Field“ – MTU Maintenance Hannover Act. 2018

Sales

X M€ Gross

Profit EBIT adj.

X M€ Free Cash Flow

X M€

Cost of Goods

Sold (COGS)–

material +

outside vendor

personnel cost

(incl. leased staff)

others

(change in WIP,

devaluation etc.)

–

–

–

Selling, General &

Administration

Research &

Development

Others

(w/o PPA Depr.)

+ Depreciation

∆ WOC

∆ accruals

Others

–

–

+

Capex–

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 15

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

27.05.2019

ball possession shots at goalpassing quote entering opposing field cross balls goals

What was the final score?

52% 86% 18 78 17 ?

T

E

A

M

A

48% 85% 14 72 8 ?T

E

A

M

B

MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 16

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

“A typical development of a 10 years engine Fly by Hour contract”

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

$ Accumulated

$ Cost per Shopvisit

TOTAL Sales

TOTAL CostsIncrease OWT

(On Wing Time)

Reduce SV Cost

Shopvisit (SV)

FhA Cash In (cum.)

FhA Cost (cum.)

FhA Revenue (cum.)

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 17

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 3418

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

MTU Finance understands & manages the complexity

of the MTU business model and is the commercial

partner within the MTU group

We provide important steering impulses and take on

responsibility for MTU`s success

27.05.2019

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

27.05.2019 20MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover

We focus on attaining

optimal outcomes for

MTU both on an inter-

departmental level and

across all locations

We create a common

understanding of the

commercial inter-

dependencies underlying

our business activities

We align our products to

customer needs

We develop and

evaluate alternative

actions and solutions

We live continuous

improvement and foster

a culture of innovation

Our knowledge is always

state of the art

We develop our human

resource potential through

setting challenges and

enabling growth

MTU Finance is an

attractive employer

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

AH JB DK AC PK AKS PB

FW BH UR PS KM SM LW

UQ SW AJ FK MB AB JEL

SM AK MT TB IS JM AE

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

Wir gestalten und begleiteten den Managementprozess der Zielfindung, Planung & Steuerung und tragen damit

Mitverantwortung in der Zielerreichung von EBIT und Free Cash Flow! Wir sind „Wegweiser“ zur Sicherung des

Gesamterfolges. Zu unseren Basisfunktionen gehören:

• Rechnungslegung der MTU Maintenance Hannover GmbH entsprechend den Auflagen des Gesetzgebers und des

Gesellschafters

• Formulierung der wirtschaftlichen Einzelziele für Jahres-, Mittelfrist- und Langfristplanungen (OP/SP) sowie Erstellung,

Koordination und Konsolidierung der operativen Teilplanungen

• Sicherstellung des Einsatzes einheitlicher Richtlinien, Methoden und Instrumente zur Gestaltung der Betriebswirtschaft

der MTU Maintenance Hannover

• Bereitstellung von Beurteilungskriterien zur Zielfindung, Definition von Steuerungsgrößen und Bereitstellung von

Steuerungsinstrumenten

• Berichterstattung intern sowie an Gesellschafter und Aufsichtsrat

• Unterstützung und Beratung von Operations, Programm & Sales in allen betriebswirtschaftlichen Sachverhalten

• Risk Management und Durchführung von Abweichungsanalysen & Wahrnehmung von Sonderaufgaben

27.05.2019

Was machen wir im Finanzbereich Hannover?

22MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

• 285 Angebots-/Business Case Kalkulationen für 32

Customer

• 33 Contract Business Reviews

• 14.100 betreute Kontierungen & 900 „SK“ Blätter für

unsere Kunden; 71 Airline-Engines, 79 Parts Customer,

9 e-pool, 8 IC, 67 Services, AOG,

Sales Material

• 90 betreute Kostenstellen

• 55 VV-Bewertungen mit 1.300.000€ Einsparung

• 20 Wirtschaftlichkeitsrechnungen für

Investitionsvorhaben

• 43 Make or Buy Bewertungen Parts Repair

• 20 Repair Business Cases (S-Gates)

• 30 Repair Linien Reviews

• 30 Fokusbauteile-Bewertungen im Produktkosten-

Controlling 27.05.2019

MTU Finance Hannover – Zahlen / Daten / Fakten ….. oder: Was liefern wir jährlich ab?

23MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover

• Viel Planung, Forecast, Berichterstattung & mehrmals Risk-

Management Einschätzungen

• Belegbuchungen für Lieferantenrechnungen 90.000,

Kundenrechnungen 9.000 & Reisekosten 5.000

• 136.000 betreute Part Nr. (zzgl. 16 Bewertungsstufen) &

33.000 Hilfs-Materialien in der Materialbuchhaltung

• 23.000 betreute Anlagen und 12.000 Toolings in der

Anlagenbuchhaltung

• Fuhrparkmanagement

• SAP Betreuung (CO & FI)

• Support MRO Standorte kfm. Prozesse & Systeme

.... & ungezählte Analysen,

Bewertungen &

Entscheidungsvorlagen ....

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

Finance in Hannover – More than facts & figures!

MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover

Many thanks!MTU Maintenance Hannover GmbH

Muenchner Str. 31

30855 Langenhagen – Germany

May 27th, 2019

Alexander Engel

Kaufmännischer Leiter

Tel. +49 511 7806 2529

Mobile +49 171 5718473

Alexander.Engel@mtu.de

www.mtu.de

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.

This document contains proprietary information of the MTU Aero Engines AG group companies. The document and its

contents shall not be copied or disclosed to any third party or used for any purpose other than that for which it is provided,

without the prior written agreement of MTU Aero Engines AG.

27.05.2019

Proprietary notice

26MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover