MTU Aero Engines (ETR:MTX) detailed record preliminary results for 2025 and issued its 2026 outlook, highlighting strong commercial demand, continued progress on the geared turbofan (GTF) fleet management plan, and ongoing investments to expand global maintenance, repair and overhaul (MRO) capacity.
2025 results set new highs; dividend proposed up 64%
Management said 2025 marked “the strongest performance in MTU’s history,” with revenue of EUR 8.7 billion, adjusted EBIT of EUR 1.35 billion and an adjusted EBIT margin of 15.5%. Free cash flow rose to EUR 378 million, which MTU described as an all-time high, even after reflecting the financial impact of the GTF fleet management plan.
Based on the year’s performance, MTU said it intends to propose a dividend of EUR 3.60 per share at its annual general meeting in May 2026—an increase of 64% from EUR 2.20 the prior year—representing a payout ratio of 20%. Management reiterated a longer-term target payout ratio of 40% and said it is working back toward that level after a temporary suspension linked to the GTF fleet management plan.
Demand backdrop and order book remain supportive
CEO Johannes Bussmann said industry demand continued to exceed available capacity in 2025 despite supply chain challenges and macro uncertainty. He cited 2025 passenger traffic growth of 5.2% and cargo volume growth of 3.1%, adding that the company managed headwinds from U.S. tariffs and a weaker U.S. dollar.
For 2026, MTU referenced IATA expectations for 4.9% RPK growth and 2.6% cargo growth. Management said limited aircraft availability is keeping utilization and load factors elevated, which supports aftermarket demand. MTU also reported a current order book of $29.5 billion, which it said implies it is “sold out for the next three years.”
Program updates: GTF, Eurofighter momentum, and technology initiatives
On the commercial OEM side, MTU said it recorded more than $2 billion in new orders in 2025, driven by the GTF, GEnx and GE9X programs. For the GTF, management said customers placed orders and commitments for more than 1,500 engines in 2025, and that the program has commitments for more than 13,000 engines overall. MTU also highlighted VietJet’s selection of the PW1100 to power 44 A320neo family aircraft early in 2026.
MTU said the GTF family has accumulated more than 15 million flight hours on more than 2,600 aircraft since 2016, carrying more than 1.7 billion passengers, and enabling airlines to save more than 2.8 billion gallons of fuel, according to management. Bussmann said the next milestone will be the entry into service of the GTF Advantage later “this year,” while later in the call MTU said the engine has received FAA and EASA certification and is positioned for market entry in 2026, with aircraft certification expected soon.
Regarding the GTF fleet management plan, management said turnaround times are improving and material availability is stabilizing. MTU reported airline compensation payments of roughly $360 million in 2025 and said it expects the remainder of the payments to be settled in 2026.
In military engines, management pointed to strong order momentum for the Eurofighter EJ200 program, citing orders for more than 80 Eurofighter aircraft across Spain, Italy, Germany and export customer Turkey. MTU also discussed U.S. demand for the CH-53K heavy-lift helicopter, noting an additional 99 units ordered by the U.S. Marine Corps and MTU’s 18% share of the T408 engine program. MTU said its TP400 OEM business is secured until 2029, with additional export opportunities possible.
On future propulsion technology, MTU discussed a memorandum of understanding with Airbus to advance hydrogen fuel cell propulsion and provided an update on its “Flying Fuel Cell” technology program. Management said the design has been finalized, early tests have been passed, and a dedicated test bed has been commissioned at the Munich site.
MRO expansion and segment performance
MTU emphasized continued investment in capacity expansion across multiple regions to support MRO growth. Highlights included:
- Poland (EME Aero): a second test cell added, enabling execution of 500 GTF shop visits per year from 2028.
- China (Zhuhai): a second MRO shop opened focused on GTF engines, with first overhauled engines delivered months after inauguration; combined capacity at the site exceeds 700 shop visits annually.
- North America (Fort Worth): portfolio expansion to include LEAP and GEnx later on; planned investment to transform the site into a full disassembly, assembly and testing facility.
- Berlin: full MRO capability introduced for the PW800 and plans to increase industrial gas turbine (IGT) capacity by about 30%.
Financially, MTU reported full-year 2025 OEM revenue of EUR 2.9 billion (up 14%) and OEM adjusted EBIT of EUR 873 million, with a margin of 30.4%. Commercial MRO revenue rose to EUR 5.96 billion (up 18%), and adjusted MRO EBIT increased to EUR 478 million for an 8% margin. Management attributed MRO margin dynamics to a higher GTF mix and ramp-up costs at Fort Worth, partly offset by an equity contribution, “particularly from MTU Maintenance Zhuhai.”
2026 guidance: higher revenue and EBIT, improving cash conversion
For 2026, MTU guided to revenue of EUR 9.2 billion to EUR 9.7 billion (based on a U.S. dollar exchange rate of 1.20) and adjusted EBIT of EUR 1.35 billion to EUR 1.45 billion. Management said net income is expected to grow broadly in line with EBIT. MTU also forecast an improved cash conversion rate of 45% to 55%, up from 39% in 2025, driven mainly by lower GTF AOG compensation payments and stronger earnings.
In Q&A, management provided additional detail on cash flow headwinds, including continued growth in receivables tied to “pre-finance shop visits” for the GTF, which it said could continue for the next couple of years before turning later in the decade. MTU also pointed to Fort Worth ramp-up as a working-capital headwind, citing a “high double-digit” free cash flow impact from inventory build as the site prepares for inductions; management clarified that the first engine induction is foreseen for July.
MTU also discussed foreign exchange hedging, stating it has hedged around 80% of 2026 net U.S. dollar exposure at an average rate of 1.13, and noted that a five-cent exchange-rate movement would translate into an EBIT impact of roughly EUR 20 million.
Separately, management addressed investor questions regarding Airbus and Pratt & Whitney discussions on GTF deliveries, saying negotiations were ongoing and MTU could not comment further on details. On the V2500 engine, Bussmann said roughly 15% of the installed fleet has not yet seen a first shop visit and about 35% has not seen a second shop visit, supporting continued inductions and heavier work scopes over time.
About MTU Aero Engines (ETR:MTX)
MTU Aero Engines AG, together with its subsidiaries, engages in the development, manufacture, marketing, and maintenance of commercial and military aircraft engines, and aero-derivative industrial gas turbines in Germany, other European countries, North America, Asia, and internationally. It operates through two segments: Original Equipment Manufacturing (OEM Business); and Maintenance, Repair, and Overhaul (MRO Business). The company offers commercial aircraft engines for wide body jets, narrow body and regional jets, business jets, and turboprops; military aircraft engines for fighter jets, helicopters, and transporters; and industrial gas turbines.
