2017 last year of MTU Aero Engines' investment phase

At its Investor and Analyst Day 2017, MTU Aero Engines AG provided an outlook for the period to 2025. 2017 marks the end of the company’s most substantial investment phase, from which it emerged with an increased adjusted EBIT margin. In 2018, MTU will move into a consolidation phase during which the company expects a continuing rise in earnings and substantially higher free cash flows. Between now and 2025, the company aims to boost its average cash conversion rate into the high double digits through the combined effect of a moderate increase in working capital and a decrease in the cash flow from investing activities. The cash conversion rate measures the proportion of net income converted into free cash flow. MTU Aero Engines AG CEO Reiner Winkler comments: “During the consolidation phase, we expect to see more stable growth in the new engine business, accompanied by improved profit margins. The strong growth in our highly profitable spare parts sales and commercial maintenance business is likely to continue, even though margins in our commercial MRO business will remain under pressure. There are signs of potential growth in our military business as of 2020.” Looking ahead to a next investment phase, Winkler says: “Our long-term objective is to acquire higher shares in future engine programs than before.”