This article first appeared on GuruFocus .
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Revenue:EUR8.7 billion, a 16% increase from the previous year.
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EBIT:EUR1.35 billion, up 29%, with a margin of 15.5%.
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Free Cash Flow:EUR378 million, a new all-time high.
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Dividend:Proposed EUR3.60 per share, a 64% increase from the previous year.
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Adjusted Net Income:EUR968 million, a 27% increase.
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Commercial OEM Revenue:EUR2.3 billion, an 18% increase.
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Commercial MRO Revenue:EUR5.96 billion, an 18% increase.
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Order Book:USD29.5 billion, indicating being sold out for the next three years.
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Net Debt:Approximately EUR1.1 billion, with a net debt to EBITDA ratio below 1.
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Hedge Coverage:80% of net US dollar exposure hedged for 2026 at an average rate of 1.13.
Release Date: February 24, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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MTU Aero Engines AG ( MTUAF ) reported record financial performance in 2025, with revenues reaching EUR8.7 billion and EBIT increasing to EUR1.35 billion, resulting in a strong margin of 15.5%.
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The company achieved significant free cash flow generation of EUR378 million, marking an all-time high despite challenges.
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MTU Aero Engines AG ( MTUAF ) plans to increase its dividend by 64% from EUR2.20 to EUR3.60 per share, reflecting a commitment to shareholder value.
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The company has a robust order book of USD29.5 billion, indicating strong demand and a solid market position for the next three years.
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MTU Aero Engines AG ( MTUAF ) is expanding its global footprint with new facilities in Fort Worth, Texas, and China, enhancing its MRO capabilities and efficiency.
Negative Points
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The company faces persistent supply chain challenges and a more uncertain macro environment, impacting operations.
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There are ongoing negotiations and disagreements between Pratt & Whitney and Airbus regarding engine deliveries, which could affect future operations.
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MTU Aero Engines AG ( MTUAF ) anticipates continued cash flow impacts from the GTF fleet management plan and pre-financed shop visits.
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The ramp-up of the Fort Worth facility is expected to create a high double-digit impact on free cash flow due to inventory build-up.
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The GE9X engine program has experienced delays, impacting inventory and financial planning.
Q & A Highlights
Q: Johannes, you've been in the role for 6 to 8 months. Do you see any scope for operational improvement, especially regarding FX headwinds? A: Johannes Bussmann, CEO: We are continuously working on operational improvements. Our expansions in 2025 have shown a steep learning curve, and we are best in class in the GTF network with the shortest turnaround times. We aim to provide high service levels for our customers, and with increased volume, our learning curve is further enhanced.
Q: Katja, regarding the free cash flow bridge to 2026, you mentioned lower GTF compensation payments. Can you elaborate on other factors affecting cash flow? A: Katja Garcia Vila, CFO: Despite reduced GTF fleet management impact, we still face increased GTF receivables for pre-financed shop visits. Additionally, the ramp-up of our Fort Worth facility will impact free cash flow due to inventory build-up.
Q: Can you detail the growth in Gen X and GTF volumes for 2026, and the contribution of IGT to OE and MRO? A: Katja Garcia Vila, CFO: Our OE commercial guidance includes growth from GTF, Gen X, and GE9X, among others. The IGT part is within our MRO segment and is a profitable business expected to grow, driven by increased demand for short-term peak power supply.
Q: On the V2500, what is the trajectory for shop visits and work scope through 2026? A: Johannes Bussmann, CEO: About 15% of V2500 engines have not had their first shop visit, and 35% have not had their second. This indicates ongoing demand for MRO services, with heavier work scopes expected as engines age.
Q: Regarding cash flow, can you size the impact of pre-financed shop visits in 2025 and expectations for 2026-2027? A: Katja Garcia Vila, CFO: We expect aftermarket compensation payments to grow year over year, impacting cash flow. These receivables are still building up and will turn later in the decade.
Q: On the GE9X delay to 2027, how does this impact your financials? A: Katja Garcia Vila, CFO: The GE9X delay has led to inventory build-up, which remains with us. This impacts our financials as we had prepared for an earlier ramp-up.
Q: Can you elaborate on the turnaround time improvements and the V2500 retirement rate? A: Johannes Bussmann, CEO: Turnaround times have improved due to better material availability and reduced supply chain issues. For the V2500, we still see significant shop visit demand, with a stable business outlook due to increased work scopes.
Q: What are the supply chain issues in the military business, and when will the GTF hot section plus retrofit be completed? A: Johannes Bussmann, CEO: Military supply chain issues are similar to commercial ones but are improving. The GTF hot section plus retrofit will be installed during normal shop visits, with timelines depending on customer uptake.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
