Commercial engines unit drives 15% full-year growth at MTU

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German powerplant specialist MTU Aero Engines increased revenues 15% to a record €3.38 billion ($4.51 billion) in 2012 as the group's manufacturing and maintenance divisions for civilian and military equipment grew their businesses between 13% and 17% over the previous year.

Earnings before interest and tax (EBIT) were up 13.6% to €374 million, while net income grew 18% to €233 million on a comparable basis. But EBIT margins decreased by a tenth of a percentage point to 11.1%, and free cash flow was down 33.6% to €85.7 million.

For the current year, the Munich-based company expects turnover, EBIT and net profits to rise by 10-12%. The main driver should be the serial production of commercial engine subassemblies, which it expects to increase 20-25% on a dollar basis, with the General Electric GEnx and Engine Alliance GP7200 families growing in importance. Manufacturing spare parts for established engines should increase by around 15%.

In the military arena, the company anticipates "stable revenues" for 2013. But MTU says that its defence equipment manufacturing business grew 13% last year - mainly driven by the Eurojet EJ200 engine for the Eurofighter Typhoon - while the maintenance division recorded "unexpectedly high" demand for repair and overhaul work.

The segment with the highest revenue growth last year was the civilian MRO business, which grew nearly 17% to €1.3 billion. The main driver was the International Aero Engines V2500 medium-thrust powerplant, in which MTU is a shareholder. But for 2013, the segment's custom is expected to grow at just a "high single-digit" rate.

Investments in research and development were down 8% to €241 million compared with 2011, and are expected to decrease "slightly" during the current year. Investments in production facilities were also down around 13% to €99.4 million in 2012. But the company's workforce grew 4% to around 8,500 staff members.

MTU expects to issue a dividend to its shareholders, though this must be confirmed by the supervisory board on 13 March.

The manufacturer and MRO provider says that 2012 was the most successful year in its history, placing MTU on-track for its €6 billion revenue target for 2020.