Core Insights - MTU Aero Engines reported record preliminary results for 2025, with revenue of EUR 8.7 billion, adjusted EBIT of EUR 1.35 billion, and all-time high free cash flow of EUR 378 million, driven by strong commercial demand and progress on the geared turbofan (GTF) fleet management plan [5][7][4] Financial Performance - Adjusted net income increased by 27% to EUR 968 million, influenced by higher interest expenses related to new financial instruments [3] - The company plans to propose a dividend of EUR 3.60 per share for 2025, a 64% increase from EUR 2.20 the previous year, with a payout ratio of 20% [2] - For 2026, MTU projects revenue between EUR 9.2 billion and EUR 9.7 billion and adjusted EBIT between EUR 1.35 billion and EUR 1.45 billion, with an improved cash conversion rate of 45% to 55% [14][7] Market Demand and Growth Drivers - Industry demand is expected to continue exceeding available capacity, with passenger traffic growth projected at 5.2% and cargo volume growth at 3.1% for 2025 [1] - The current order book stands at $29.5 billion, indicating that MTU is "sold out for the next three years" [7][8] - The GTF program has commitments for over 13,000 engines, with more than 1,500 engines ordered in 2025 alone [6][8] Operational Developments - MTU is expanding its maintenance, repair, and overhaul (MRO) capacity globally, with significant investments in Poland, China, North America, and Berlin [6][19] - The GTF family has accumulated over 15 million flight hours since 2016, enabling airlines to save more than 2.8 billion gallons of fuel [9] - Management reported improvements in turnaround times and material availability related to the GTF fleet management plan [10] Military and Future Technology - Strong order momentum is noted for the Eurofighter EJ200 program, with over 80 aircraft ordered across multiple countries [11] - MTU is advancing hydrogen fuel cell propulsion technology in collaboration with Airbus, with early tests successfully completed [12]