Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on MTU AERO ENGINES AG. We currently have 9 research reports from 2 professional analysts.
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MTU AERO ENGINES AG
MTU AERO ENGINES AG
Large order backlog not at risk!
10 Jan 17
According to the latest news, the two large aircraft producers Boeing and Airbus are facing some cancellations or delivery delays/postponements from the airline industry. Around 180 aircraft were cancelled at Boeing in 2016 and 190 at Airbus. In general, single-aisle aircraft such as A320 and 737 are less effected than larger aircraft. The economic performance of the airline industry was pretty strong in 2016 according to IATA. Revenues declined 2.4% to US$701bn but the operating margin remained stable at around 8.3%. Net profits increased marginally from US$35.3bn to US$35.6bn. The net margin improved from 4.9% to 5.1% in 2016. In the current financial year, IATA is expecting revenues to increase by 5% to US$736bn but net profits will decline 16.3% to US$29.8bn. The net margin will reach 4.1% and the EBIT margin 6.6%. An increase in fuel expenses, however, are only one part of the story. Fuel expenses are expected to increase by 4% and will contribute 18.8% to total expenses (previously 19.3%). Non-fuel expenses will increase by 7.7% and contribute 81.4% to total operating costs compared to 80.7% in 2016.
Strong performance even based on real numbers
28 Oct 16
The company reported Q3 16 results. Revenues increased 4.5% to €1.1bn and the order backlog declined 8% to €11.15bn. The gross margin improved from 14.9% to 15.6%. Real EBIT increased 19.1% to €117.4m and the EBIT margin improved from 9.3% to 10.7%. Also, the EBITDA margin increased from 13% to 13.6%. Adjusted EBIT according to the company rose 16.1% to €139.7m and the adjusted EBIT margin increased from 11.4% to 12.7%.
Guidance marginally increased
26 Jul 16
In Q2 16, revenues increased 9% to €1.2bn and the gross profit jumped 12.6% to €164.2m. The gross margin increased from 13.2% to 13.7%. EBITA improved 3.4% to €146.7m and the EBITDA margin declined from 12.6% to 12.2%. The EBIT margin also declined from 8.9% to 8.6% but EBIT increased 6.3% to €103.7m. Adjusted EBIT grew 6.7% to €122.8m and the adjusted EBIT margin declined from 10.4% to 10.2%. Net income plummeted 17.8% to €68.2m. Real EPS declined 17.3% from €1.62 to €1.34, whereas adjusted EPS increased 6.5% from €1.55 to €1.65. The total order backlog before consolidation reached €11,544m representing a two and a half years production workload. The majority of the backlog is orders for the V2500 and the PW1000G-JM (Airbus 320neo).
MRO business is driving the performance
29 Apr 16
MTU reported Q1 16 results. Revenues remained stable at around €1.1bn. Revenues of the high margin MRO business, however, grew 11.7% to €428.8m. Revenues of the OEM commercial business division declined 12.5% to €556m but increased 36.5% to €124.5m in the OEM Military business division. The order backlog before consolidation declined 4.9% to €11.88bn. The order backlog for the commercial engine business declined 6.6% to €5.9bn, representing a workload of up to 2.5 years. In the aviation industry, the total order backlog of Airbus and Boeing reached 13,200 aircraft representing a workload of 7 to 8 years.
Nothing new from the AGM!
15 Apr 16
At the AGM (14 April 2016) management discussed the capacity increase for producing turbines, compressors and other modules for the new A320neo. The total number of modules, not engines, will increase from 2,000 in 2015 to 4,000 in 2020. This information, however, is not new and was already discussed last year. In August 2015, Airbus reported an order backlog for the A320neo of around 4,100 aircraft (8,200 engines). Pratt & Whitney reported a total order backlog of 7,000 GTF (geared turbofan) orders, of which around 2,800 will be used for the A320neo platform.
MRO business is driving the performance
16 Feb 16
The company reported preliminary results ending in December 2015. Revenues increased 13.3% to €4.44bn compared to €3.98bn in 2014. The order backlog rose 11.8% to €12.49bn. Adjusted EBIT increased 15.1% to €440.3m. EBIT of the OEM business division improved 7.1% to €285m and the commercial MRO (maintenance, repair, overhault) business 33.4% to €155.2m. Consequently, the EBIT margin of the OEM business declined from 10.1% to 9.8% and in the MRO business the adjusted EBIT margin increased from 9% to 9.8%. Net adjusted income increased 21.2% to €306.9m. Real net income, however, only rose 11.4% to €217.6m (estimate: €257.4m). The gap between virtual reality and the real world has widened further. The company is adding back all unpleasant cost items such as purchase price allocation write-downs, capitalised R&D costs and impairments even on a net income level.
20 Feb 17
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The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
N+1 Singer - Small-cap quantitative research - New quality style screen + 11 quality focus stocks
09 Feb 17
We introduce our fourth and final style screen representing “quality”. This screens for stocks with the best combination of high returns on capital/equity, EBIT margins and operating cash-flow conversion rates. These criteria should help us monitor how strong underlying returns translate into share price performance over time and under varying market conditions. The screen selects the “best” 25 stocks from our universe of just over 500 stocks and, as usual, we focus on a shorter list of stocks we cover or otherwise know and believe to be particularly interesting. We provide brief investment summaries on these focus stocks on pages 4 – 9. We will monitor performance and refresh the screen in approximately 3-4 months time.
Emerging from the clouds
16 Feb 17
Rolls-Royce’s underlying performance in FY16 was ahead of both its own and market expectations. Media focus on the non-cash £4.4bn headline FX loss is missing what looks to be the basis for optimism. As the civil model starts to move from investment in engines for the A350 and A330neo into the aftermarket delivery phase over the remainder of the decade, we think cash flow is likely to improve, particularly if supported by an eventual recovery in Marine.
15 Feb 17
At the current market capitalisation of £29m, we believe the shares are significantly undervalued. We estimate that the highly profitable Maritime business is alone worth at least £40m. With net cash of £9m at end-2016, this implies that the market is currently ascribing a combined negative value of £17m to the rest of the group, which together account for c.54% of group revenues. This is very harsh given the management actions to transform TP Group to a profit-driven Tier 2 specialist services and engineering company are bearing fruits across the divisions. TPG Managed Solutions is expected to more than double its profits in 2017, while TPG Engineering and Design & Technology are on course to deliver sustainable profits from 2019. Even if we ascribe zero value to Engineering, Design & Technology and Managed Solutions, the shares are worth 9.5p a share, a 38% upside from the current share price. BUY.
Small Cap Breakfast
16 Feb 17
Saffron Energy—Schedule One update. Raising £2.5m, expected Mkt Cap £7.7m. Admission due 24 Feb. Italian Oil & Gas Play Guinness Oil & Gas Exploration—Publication of prospectus. Seeking to raise £50m and invest in 15 exploration companies at launch, with plans to grow the portfolio to 30 positions during its lifetime. Issue closing 23 Feb. Arix Bioscience — Intention to float on the main market from the global healthcare and life science Company supporting medical innovation. Raised £52m in Feb 16 with investors including Woodford Investment Management