MTU Maintenance Hannover World of Finance meets business4school

Alexander Engel – May 27th, 2019 Boasting comprehensive system expertise, MTU focuses on five core engine competencies - three core components and on unique manufacturing and maintenance processes

High-pressure 1 compressor (HPC)

4 Manufacturing Low-pressure 2 turbine (LPT) 5 Maintenance

Turbine center 3 frame (TCF)

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 3 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. „The IPO is only the beginning: a new „product“ and new „customer“ are now owners of MTU“ (Goldman Sachs in 2005)

YE 2018 158,40

Going public June 1st, 2005

21,0

Dez 05 Dez 06 Dez 07 Dez 08 Dez 09 Dez 10 Dez 11 Dez 12 Dez 13 Dez 14 Dez 15 Dez 16 Dez 17 Dez 18

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 4 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. MTU looks back on many important names from the German industrial history – from 1934 to date

1934 1969 2005 BMW Flugmotorenbau GmbH MTU MTU goes public is founded 50% Daimler Benz 50% MAN

1965 1989 Today MAN takes over MTU becomes an affiliate of Shareholder structure BMW Triebwerkbau Deutsche Aerospace, later 93% Institutional investors renamed DaimlerChrysler 6% Private shareholders Aerospace (DASA) 1% MTU-owned shares

Focus on commercial applications

Focus on military applications

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 5 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. Our track record: partners and customers appreciate MTU’s excellence

Commercial OEM business Military OEM business Commercial MRO business

Share of total revenues ca. 33 % Share of total revenues ca. 9 % Share of total revenues ca. 58 % European and U.S. engine programs Services: maintenance, leasing and Balanced product portfolio in all thrust asset management categories Full system capability Global network Decades of partnership with OEMs Leading partner of the German Armed Forces Direct customer business, partner of OEMs and airlines

MTU group fiscal year 2018: Revenue € 4.57 billion / EBIT € 0.67 billion

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 6 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. Top 10 commercial engine MRO providers*

~22%

~11% ~10% ~8%

~6-7%

~4-5%

~4%

~3%

~2-3%

~2%

* Estimate based on active commercial jet engines under contract per ACAS as of 06/2015, add-on for minority/equal JVs, IAE workload equally distributed among network partners

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 7 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. A balanced portfolio and products in all thrust categories ensure MTU’s long-term success

CF6-80, LM6000 + V2500 747, 767, IGT, Entry into service A320, MD-90, A300, A310, A330 KC-390

PW300, PW500 Latitude, Sovereign, Citation, Learjet, G200, Bravo, PW2000, Falcon 7X PW4000 757, C-17, 777 0 GEnx 40 787, 747-8 PW800 G500, G600,

Cumulated cash flow Cumulated cash Falcon 6X GP7000 A380 Calendar years after GE9X market launch - PW1000G-family 777X A320neo, E2-Jet, A220, MC-21, MRJ

ProductionProduction Technology R&D Aftermarket

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 8 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. MTU Maintenance 100 % 1979 ~ 550 ~ 2.300 Hannover GmbH Affiliate of MTU Aero Engines AG Founded Shop visits 2018 employees

Portfolio MTU Maintenance Hannover is the centerpiece of the MTU Maintenance group. It is responsible for the maintenance of medium- and large-size commercial engines. These include the GE CF6-50, CF6-80C2 and GE90, Pratt & Whitney PW1100G-JM, PW2000 and PW6000, International Aero Engines V2500, Engine Alliance GP7000 and CFMI CFM56-7.

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 9 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. The engine maintenance business model

Operations: 5-7 years1

start of service on-wing service engine removal delivery of servi-ceable engine customized ‘better than new’3 Repair & overhaul: 50-70 days2 workscoping

assembly & test parts repair disassembly & inspection

1 depending on engine model, age and operational environment; 2 depending on engine type and workscope; 3 SBs, mod’s and new repairs

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 10 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. 11 27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 11 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. COGS EBIT Value Cash Flow from Added operating activities Sales Net debts „Rohertrag“ S,G&A NPV deferred EBITDA R&D Cash Flow from indirect taxes investing activities operating costs Working Gross Profit EBIT adj. Capital Capital employed Free Cash Net CAPEX Flow Income ROCE Cash Flow Cash Flow from Return on PoC HGB & financing activities Sales (ROS) IFRS/IAS

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 12 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. MTU Maintenance

Personnel Indirect Material Outside Capex shareholder, state costs operating Vendor financier costs

© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. The financial key figures are regarding the earning and financial power of the MTU as well as the ability to meet our liquidity needs

EBIT adj. Earnings Before Interest, Taxes and PPA depreciation

shows Company`s operational result that is disclosed in the income statement („GuV“) and is eleminating the effects of financing and accounting decisions

is commonly used by management, analysts and investors to evaluate, assess and benchmark the profitability of a company and to compare companies within and across industries and countries; - tax regulations - credit terms

Free Cash Flow (payments in ./. payments out) that a company generates through running its Cash Flow „normal“ operational business minus investments in future growth, that is available for:

- pay back claims for loans - devidends for equity

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 14 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. “Our Financial Playing Field“ – MTU Maintenance Hannover Act. 2018

Sales X M€ Gross Profit Cost of Goods EBIT adj. – Sold (COGS) X M€ Free Cash Flow Selling, General & – X M€ material + Administration Depreciation outside vendor + Research & personnel cost – Development ∆ WOC (incl. leased staff) – Others others – ∆ accruals (change in WIP, – (w/o PPA Depr.) devaluation etc.) – Capex

+ Others

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 15 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. What was the final score? ball possession passing quote shots at goal entering opposing field cross balls goals

T E A M 52% 86% 18 78 17 ? A

T E A M 48% 85% 14 72 8 ? B

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 16 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. “A typical development of a 10 years engine Fly by Hour contract”

$ Accumulated $ Cost per Shopvisit

TOTAL Sales FhA Revenue (cum.)

FhA Cash In (cum.)

FhA Cost (cum.)

Shopvisit (SV)

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Increase OWT (On Wing Time) TOTAL Costs Reduce SV Cost

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 17 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. 27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 3418 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. MTU Finance understands & manages the complexity of the MTU business model and is the commercial partner within the MTU group

We provide important steering impulses and take on responsibility for MTU`s success

27.05.2019 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. We create a common We develop and understanding of the evaluate alternative commercial inter- actions and solutions dependencies underlying our business activities

We focus on attaining We align our products to optimal outcomes for customer needs MTU both on an inter- departmental level and across all locations

We live continuous We develop our human improvement and foster resource potential through a culture of innovation setting challenges and enabling growth

Our knowledge is always MTU Finance is an state of the art attractive employer

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 20 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. AH JB DK AC PK AKS PB

FW BH UR PS KM SM LW

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© MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. Was machen wir im Finanzbereich Hannover?

Wir gestalten und begleiteten den Managementprozess der Zielfindung, Planung & Steuerung und tragen damit Mitverantwortung in der Zielerreichung von EBIT und Free Cash Flow! Wir sind „Wegweiser“ zur Sicherung des Gesamterfolges. Zu unseren Basisfunktionen gehören: • Rechnungslegung der MTU Maintenance Hannover GmbH entsprechend den Auflagen des Gesetzgebers und des Gesellschafters • Formulierung der wirtschaftlichen Einzelziele für Jahres-, Mittelfrist- und Langfristplanungen (OP/SP) sowie Erstellung, Koordination und Konsolidierung der operativen Teilplanungen • Sicherstellung des Einsatzes einheitlicher Richtlinien, Methoden und Instrumente zur Gestaltung der Betriebswirtschaft der MTU Maintenance Hannover • Bereitstellung von Beurteilungskriterien zur Zielfindung, Definition von Steuerungsgrößen und Bereitstellung von Steuerungsinstrumenten • Berichterstattung intern sowie an Gesellschafter und Aufsichtsrat • Unterstützung und Beratung von Operations, Programm & Sales in allen betriebswirtschaftlichen Sachverhalten • Risk Management und Durchführung von Abweichungsanalysen & Wahrnehmung von Sonderaufgaben

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 22 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. MTU Finance Hannover – Zahlen / Daten / Fakten ….. oder: Was liefern wir jährlich ab?

• 285 Angebots-/Business Case Kalkulationen für 32 • Viel Planung, Forecast, Berichterstattung & mehrmals Risk- Customer Management Einschätzungen • 33 Contract Business Reviews • Belegbuchungen für Lieferantenrechnungen 90.000, • 14.100 betreute Kontierungen & 900 „SK“ Blätter für Kundenrechnungen 9.000 & Reisekosten 5.000 unsere Kunden; 71 Airline-Engines, 79 Parts Customer, • 136.000 betreute Part Nr. (zzgl. 16 Bewertungsstufen) & 9 e-pool, 8 IC, 67 Services, AOG, 33.000 Hilfs-Materialien in der Materialbuchhaltung Sales Material • 23.000 betreute Anlagen und 12.000 Toolings in der • 90 betreute Kostenstellen Anlagenbuchhaltung • 55 VV-Bewertungen mit 1.300.000€ Einsparung • Fuhrparkmanagement • 20 Wirtschaftlichkeitsrechnungen für • SAP Betreuung (CO & FI) Investitionsvorhaben • Support MRO Standorte kfm. Prozesse & Systeme • 43 Make or Buy Bewertungen Parts Repair

• 20 Repair Business Cases (S-Gates) .... & ungezählte Analysen, • 30 Repair Linien Reviews Bewertungen & • 30 Fokusbauteile-Bewertungen im Produktkosten- Entscheidungsvorlagen .... Controlling 27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 23 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. Finance in Hannover – More than facts & figures!

MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies. Alexander Engel MTU Maintenance Hannover GmbH Many thanks! Kaufmännischer Leiter Muenchner Str. 31 Tel. +49 511 7806 2529 30855 Langenhagen – Germany Mobile +49 171 5718473 May 27th, 2019 [email protected] www.mtu.de Proprietary notice

This document contains proprietary information of the MTU Aero Engines AG group companies. The document and its contents shall not be copied or disclosed to any third party or used for any purpose other than that for which it is provided, without the prior written agreement of MTU Aero Engines AG.

27.05.2019 MTU Maintenance Hannover World of Finance meets business4school - Leibniz Universität Hannover 26 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.