MTU Aero Engines AG has presented an initial outlook on its expected business development in 2020.
In the upcoming financial year, the commercial business sectors such as commercial new engine and spare parts business as well as commercial maintenance business are predicted to be the main sources of growth.
The military engine business is expected to remain stable. For 2020, MTU is anticipating an increase in operating profit in the high single-digit percentage range. The cash conversion rate – that is, the ratio of free cash flow to net income adjusted – is expected to be around 70%.
Reiner Winkler, CEO of MTU Aero Engines AG, said: “This puts us on track to maintain our course of profitable growth going forward.”
Commercial maintenance business and commercial new engine business look set to become the fastest growing segments in 2020.
“Our customers greatly appreciate the comprehensive portfolio of services and the high degree of reliability they have come to expect from MTU Maintenance. The volume of orders in 2019 will exceed six billion U.S. dollars, securing capacity utilisation for years to come,” said chief program officer Michael Schreyögg.
MTU anticipates that in 2020 spare part sales for commercial engines will increase by a percentage in the mid-to-high single digits, with the V2500 engine that powers the A320neo being the key revenue driver. The ongoing expansion of the already large GEnx fleet also reflects the growing importance of the GEnx engine for Boeing’s 787 and 747-8 models.