MTU Aero Engines AG (MTX) Earnings Call Transcript & Summary

Ladies and gentlemen, I hereby open this year's ordinary Annual General Meeting of MTU Aero Engines AG. It will again be held as a virtual Annual General Meeting. However, we can already announce by way of an outlook for next year that in 2026, we shall be holding an in-person meeting. On behalf of the Supervisory Board, I'd like to welcome you most cordially. And I'd like to extend a warm welcome to all members of the Executive Board, in particular, our new member Ms. Katja Garcia Vila as well as the members of the Supervisory Board who are participating in the Annual General Meeting online. We are delighted that you have accepted our invitation and are thus demonstrating your interest in and commitment to our company. For our shareholders, in non-German speaking countries, we offer simultaneous interpretation into English, which you can switch to via the language settings on the website or the InvestorPortal. Let me now explain the formalities regarding this Annual General Meeting. The company has set up an InvestorPortal that allows shareholders to exercise their shareholder rights in electronic form, the access data for which you received with your invitation documents. The Annual General Meeting will be broadcast on the company's website until the end of the CEO speech and will be available as a video on the same website after the end of the event. The entire general meeting is only accessible to duly registered shareholders or their authorized representatives via the company's InvestorPortal. If you as a shareholder are currently following the Annual General Meeting via our freely accessible broadcast, we ask you to switch to the InvestorPortal as it can only exercise your shareholder rights if you're locked in there. Let me note that the entire Executive Board of the Company and I as the Chairman of the Supervisory Board and Chairman of the Meeting are present here at the meeting venue. The other members of the Supervisory Board participate in the Annual General Meeting for its entire duration by means of video and audio transmission. The minutes of today's Annual General Meeting will be taken by notary public, Dr. Henning Schwarz, whose offices are located in Munich and whom I'd also like to welcome. The Annual General Meeting was convened in due time by publishing the agenda in the Federal Gazette on the 27th of March 2025. A specimen copy of the published agenda is available to the notary public. Information about the invitation to the Annual General Meeting and the notification in accordance with Section 125 of the German Stock Corporation Act was also sent to all shareholders, who were entered in the company's share register at the beginning after 21st day before the Annual General Meeting. The register of attendance is being drawn up right now. As soon as it is finalized, I shall inform you about the attendance figures. The register of attendance will be available to shareholders via the InvestorPortal at the latest before the start of the first vote. Shareholders who duly registered for the Annual General Meeting or their authorized representatives have the right to submit written statements by the 2nd of May 2025. We have not received any such statements. The company has not received any countermotions to the agenda in advance of today's Annual General Meeting. You had and still have the opportunity to cast your votes via the password-protected InvestorPortal by absentee voting or to authorize and instruct the company's proxies to exercise your voting rights. If you have registered in due time, you may exercise your voting rights or change your vote in the InvestorPortal until I announce the end of the voting period. Shareholders who have joined the Annual General Meeting online, have the opportunity to object to resolutions adopted by the Annual General Meeting electronically via the company's InvestorPortal until the closing of today's Annual General Meeting. Following the Executive Board's report, we shall hold a general debate. In this general debate, all shareholders and shareholder representatives can have their say and ask questions on all items on the agenda. In my capacity as Chairman of the Meeting, I hereby order that the right to speak, the right to submit motions and the right to information, including any queries or follow-up questions may only be exercised by means of video communication. It was not possible to submit questions by electronic or other means of communication prior to the Annual General Meeting, nor is this possible during this AGM. The company published Mr. Wagner's speech and my speech today on the InvestorPortal a week ago before today's meeting to give shareholders the opportunity to prepare for the meeting. The Executive Board will answer your questions following the speech by the CEO. I would therefore ask anyone who'd like to speak to register via the virtual registration desk in the InvestorPortal. Once you've registered, you will be asked to enter a virtual waiting room where the functionality of the video communication will be checked and where you can continue to follow the AGM until you are connected to the meeting for your contribution. Please note that there is currently a technical delay of 20 to 60 seconds in the live stream of the Annual General Meeting. Once you enter the virtual waiting room, you switch to real-time video communication with the management and the shareholders' meeting. This means that you make a "time jump" of around 20 to 60 seconds and cannot follow the AGM for this period of time. In the virtual waiting room, you will be looked after by our service staff who will explain the exact procedure to you and assist you in case of technical questions. If you'd like to speak at the meeting or ask questions, please submit your request to speak via the InvestorPortal as early as possible. Just for the sake of good order, I would like to point out that the company assumes no responsibility for the functionality of video communication and reserves the right to reject speakers whose video communication does not work smoothly. This concludes my introductory remarks on the formalities. Ladies and gentlemen, we're now coming to the agenda. The full text of which has been made available to you all. Let me now call Item 1 on the agenda. Presentation of the adopted annual financial statements, the approved consolidated financial statements, the combined management report for the company and the group and the report of the Supervisory Board, including the explanatory report of the Executive Board on the statements pursuant to Sections 289a and 315a of the German Commercial Code, each for fiscal year 2024. I'd like to state the following: the aforementioned documents have been made available on the company's website since the Annual General Meeting was convened. I would now like to present the report of the Supervisory Board. In this context, I'm referring to the report of the Supervisory Board printed on Pages 9 and the following pages of the annual report. Ladies and gentlemen, MTU can look back on an extremely successful fiscal year. MTU is excellently positioned in the market and highly efficient in operational terms. This is reflected in the company's strong organic growth in 2024. MTU has achieved its forecast and set new records. The adjusted operating result already exceeded the EUR 1 billion mark in 2024, 1 year earlier than originally planned. Thanks to its technological edge, its balanced portfolio and the broad customer base, MTU is well positioned to further increase revenue and earnings on an adjusted basis in 2025 too and to go on growing beyond 2025. The Supervisory Board will continue its close and trusting cooperation with all stakeholders in 2025 too. On behalf of the entire Supervisory Board, I would like to thank the Executive Board and all employees for their successful work and their high level of commitment in 2024, which was yet again another year that presented challenges. We would also like to thank the Works Council for their constructive cooperation and in particular, the shareholders for the trust they have placed in the company in the past and the current year. Let me now comment on the Supervisory Board's activities in detail. The Supervisory Board fully performed the duties of oversight and advice entrusted to it by law, the Articles of Association and its rules of procedure with [indiscernible] 2024. The Supervisory Board regularly advised the Executive Board on the management of the company, continuously supported and monitored the management of the business activities and assured itself that the Executive Board's dealings were proper and lawful. The Supervisory Board was informed and consulted in a direct and timely manner on all decisions of consequence for the company. The Executive Board provided the members of the Supervisory Board with regular, prompt and comprehensive information on the company's situation. The Supervisory Board received monthly written reports on the company's net assets, financial position and results of operations. At its meetings, the Supervisory Board also discussed the business performance of all companies affiliated with MTU. Together with the Executive Board, the Supervisory Board discussed the strategy and all important projects. After careful examination and deliberation, the Supervisory Board endorsed the company's strategic direction with its focus on sustainable and profitable growth. The Supervisory Board passed resolutions on all transactions requiring approval after reviewing and discussing them with the Executive Board, if necessary, prepatory -- proprietary meetings are also held without the Executive Board. Moreover, the Supervisory Board regularly schedules meetings without the Executive Board. As in previous years, the Supervisory Board examined and oversaw MTU's internal control mechanisms. The main focus was on the risk management system, internal auditing and the legally compliant corporate governance. With the support of the Audit Committee and in dialogue with the Executive Board, the Supervisory Board address these systems on a regular basis as well as the appropriateness and effectiveness. Furthermore, the Supervisory Board looked extensively at the company's compliance. In the reporting period, there were no transactions with related parties requiring consent or disclosure. In fiscal 2024, the Supervisory Board held 5 regular in-person meetings and 2 extraordinary meetings. All members attended all meetings. The attendance rate was 100%, accordingly. In addition to strategic planning, the Supervisory Board discussed the status of the implementation of the EU's corporate sustainability reporting directive in detail at its meetings as part of regular sustainability reporting. The requirements of which were fully taken into account for the first time in the nonfinancial reporting for the 2024 fiscal year. During the fiscal year, the Supervisory Board also authorized the conclusion of a promissory note loan in the amount of EUR 300 million and the issue of a corporate bond with a nominal value of up to EUR 750 million, which was successfully placed during the course of the year. The Supervisory Board was also informed about the cooperation between MTU and Safran helicopter engines and the establishment of the 50-50 joint venture EURA, as well as the further development of the technologies and the results of several weeks of tests on a liquid hydrogen fuel system for the flying fuel cell, what is generally referred to as FFC. The Executive Board also provided information on the conceptualization and the launch of a long-term transformation project for the company, which is intended to prepare the entire MTU for growth in the coming years in order to maintain competitiveness at all locations and the company's excellent market position. The Executive Board also reported on the progress of MTU's geothermal energy project. Commissioning is scheduled for next winter. MTU expects this to reduce its CO2 emissions at the Munich site by 80%. At all meetings since May, the Supervisory Board has dealt with the PW1100 fleet management plan and the resulting aircraft on ground times for the airlines as well as its impact on MTU. The Supervisory Board also dealt with the commissioning of a new factory building in Munich and the progress of the construction of the second plant of the MTU joint venture in China, as well as the developments in the project for the engine of the future European fighter aircraft. At all its meetings, the Supervisory Board discussed the company's situation. I was also regularly briefed on the current situation, important business transactions and important pending decisions. To this end, I was in regular contact with the Executive Board and discussed the company's strategy, planning, business development, risk situation, risk management and compliance with them. The Supervisory Board discussed the operational planning and the budget for 2025 in detail. Another focus was the Executive Board remuneration for 2024 and '25. In particular, the qualitative and quantitative target criteria and values for the long-term performance-related remuneration and the annual performance-related remuneration of the Executive Board including the target criteria for the strategic multiplier. In 2024, too, the Supervisory Board, again, dealt in detail with the application and implementation of the German Corporate Governance Code. And in this process, reviewed the efficiency of its activities with the support of an external consultant. Finally, the Supervisory Board dealt with changes in the Executive Board on which I would like to provide you some background information. At the end of October, CEO, Lars Wagner, informed the Supervisory Board that he did not wish to extend this contract, which runs until the 31st of December 2025. He has decided to accept the offer from Airbus to become CEO of their Commercial Aircraft Division. We have taken note of this decision with great regret. I would like to take this opportunity to thank Mr. Wagner on behalf of the Supervisory Board for his outstanding work over the past few years. He will be succeeded as Chairman of the Executive Board by Dr. Johannes Bussmann in the course of this year. Mr. Bussmann is currently Chairman of the Executive Board of TÜV SÜD AG. With a Doctorate in Aerospace Engineering, he can look back on more than 20 years of experience in aviation, including 7 years as Head of the Maintenance Specialist Lufthansa Technik. And Mr. Bussmann is no stranger to you either because you elected him as a member of the Supervisory Board at the 2024 Annual General Meeting. Mr. Bussmann has now resigned from this position as part of his move to the top of the company at the end of this Annual General Meeting. We are delighted that in Dr. Bussmann, we have been able to recruit an outstanding aviation expert with extensive management experience at the highest level as Chairman of the Executive Board. We are convinced that he will continue the transformation of the company that has been initiated and lead MTU successfully into the future. CFO, Peter Kameritsch has also decided not to stand for a third term of office. We also learned this with great regret. Peter Kameritsch will retire at the end of June. And we would like to take this opportunity to thank him as early as today. He played a key role in shaping the company's profitable growth path for many years and earned MTU a great deal of trust on the capital market. The Supervisory Board appointed Katja Garcia Vila to the Executive Board with effect from the 1st of April 2025, the transition period, so as to ensure a smooth succession on the 1st of July 2025. She will take over the role of CFO in full. Katja Garcia Vila brings with her many years of operational group experience and proven financial expertise. She worked at Continental AG for 27 years in various roles, most recently as Board Member for Finance, Controlling and IT. With her expertise and personality, she will make a decisive contribution to MTU's long-term success. In March of this year, we finally extended Dr. Silke Maurer's contract by 5 years until the end of January 2031. Mrs. Maurer has been Chief Operating Officer of MTU since February 2023. We are delighted that she will continue to use her cross-industry management experience and her consistent striving for innovation and quality for the benefit of MTU and thus contribute to MTU's profitable growth with her department. As the Supervisory Board, we are aware that this accumulation of changes to the Executive Board is very unusual for MTU. Our aim is, of course, to ensure continuity again and thus continue to support the successful development of the company. This also means that we continuously analyze the terms of Executive Board contracts and long-term succession planning for the Executive Board. In addition to the Nomination Committee, which met twice last year, the Supervisory Board has 3 committees with equal representation, that is the Personnel Committee, the Audit Committee and the Mediation Committee. The full Supervisory Board receives regular reports on their work. The Personnel Committee held 5 meetings last year, 3 of which were extraordinary meetings. The attendance rate also was 100%. Among other things, it dealt with the Executive Board's annual performance-related remuneration for 2023, the determination of the targets for the Executive Board's annual performance-related remuneration for 2024, the determination of the targets and ranges for the Executive Board's long-term performance-related remuneration, i.e., the performance share plan 2024, including the targets and ranges for the ESG criteria. The committee also held intensive discussions on the successor to CEO, Lars Wagner. The Audit Committee met 7 times last year. The attendance rate was 100%, too. The Audit Committee dealt specifically with the annual financial statements, the consolidated financial statements and the combined management report, including the nonfinancial statement of the group and the AG as well as the net assets, financial and earnings positions, the annual and half year reports and quarterly statements. The Audit Committee oversaw the quality of the audit and the independence of the auditor. In addition, the Audit Committee determined the key audit areas for the 2024 consolidated and annual financial statements and reviewed and approved the budget for nonaudit-related services while also reviewing and confirming the procedure for commissioning the auditor to provide nonaudit-related services. The Audit Committee received reports on the auditor's audit strategy, audit approach, audit process and the quality assurance concept at 6 of its meeting in 2024 as well as in direct discussions with the auditor outside of the meetings. As a result of its audit, the committee recommended that the Supervisory Board adopt the annual financial statements, approve the consolidated financial statements, authorize the combined management report and the nonfinancial statement and approve the Executive Board's proposal for the appropriation of the net profit. The Audit Committee monitored the accounting process and the related internal control and risk management system as well as the compliance management system. Furthermore, the Audit Committee dealt with the CSRD implementation, this stands for Corporate Sustainability Reporting Directive, at MTU and received regular updates on the status of the project to prepare sustainability reporting in accordance with the requirements laid down in CSRD. The development of a concept for adjusting key financial figures was also discussed. The Audit Committee also discussed the status of corporate financing, in particular with regard to the group financing instruments placed in the fiscal year, the promissory note loan and the corporate bond and dealt with the MTU's quarterly financial statements. After examining the annual financial statements, which were issued with an unqualified audit opinion by the auditor, the consolidated financial statements, the combined management report, the nonfinancial statement and the compensation report, the Supervisory Board did not raise any objections. The presented annual financial statements and the consolidated financial statements for the 2024 fiscal year were approved at the Supervisory Board meeting on the 18th of March 2025. So that means the annual financial statements are thus adopted. The Supervisory Board approved the Executive Board's proposal for the appropriation of net profits after weighing the interest of the shareholders and the company. With regard to the changes in the company's governing bodies, I have already explained the changes in the Supervisory Board. There was one change to the Supervisory Board in 2024. On the shareholder representative side, the term of office of Dr. Joachim Rauhut ended at the end of the ordinary Annual General Meeting on the 8th of May 2024. The Supervisory Board would like to take this opportunity to thank Dr. Joachim Rauhut once again for his many years of service and his great commitment. Dr. Johannes Bussmann was elected to the Supervisory Board of MTU at the Annual General Meeting on the 8th of May 2024 with 97.83% of the votes, but as already mentioned, has resigned from office due to his move to the Executive Board. There were no changes on the employee representative side. So much for now from my side. I now give the floor to Lars Wagner, our CEO, for him to present the report of the Executive Board. Over to you, Mr. Wagner.

Shareholders, shareholder representatives, ladies and gentlemen, I too would like to wish you a very warm welcome to our Annual General Meeting. You may be wondering where I'm standing right now. I've chosen a very special place for beginning my presentation today. So I can give you a valuable insight into our company. This spot is a very good illustration of what I want to talk to you about today. Responsibility. What could better symbolize taking responsibility these days than the aircraft that is making a significant contribution to Germany's and Europe's sovereignty, the Eurofighter. And the engine that powers this European fighter is exactly here tested for its performance. I'm standing in the test cell of the so-called EJ200 engine. It has 20,000 pounds of thrust, that is up to 100,000 horsepower, and the Eurofighter has 2 of those engines. MTU has a share of around 30% in the development and production of this engine, which is being built in cooperation with our European partners. And we also take care of the maintenance of this engine. Right here at the Munich side, we at MTU take responsibility and make our contribution to defending our values, our liberal democratic constitution and our teams are, of course, already hard at work developing the engine for the fight of the future. More about that later. Defense power and, closely linked to that, sovereignty are topics that move all of us a lot at the moment as a society, a company and as a private individual. At MTU, we accept our responsibility and we provide responses and not only in defense. We also take responsibility for ecological sustainability for safe flying, for our employees. And of course, we have a responsibility to be a highly profitable company in the long term and that is today's focal point. This is why I want to answer one of the decisive questions right now. Did MTU Aero Engines AG deliver what we promised to you for 2024? Yes, we did. And even much more. We have set ourselves the midterm objective of 8-1-25, i.e., EUR 8 billion in revenue and EUR 1 billion in profit for the year 2025. We are clearly on track with revenue, which at EUR 7.5 billion in 2024 was at the upper end of our target range of EUR 7.3 billion to EUR 7.5 billion. We will achieve our target of EUR 8 billion for 2025 this year. More on that later. Despite headwinds, we even achieved our earnings target a year earlier than planned. We closed 2024 with record earnings of EUR 1 billion. This represents a substantial increase of 28% compared to the previous year, and that, in a truly challenging environment. And adjusted net income was also at a record high. This puts us clearly on track for success. After achieving 8-1-25, we intend to present a new midterm forecast this year despite the continuing highly volatile environment. It was by no means a foregone conclusion that we would end the year 2024 with such records. A year ago, I explained to you how we were going about turning the geared turbofan engines for airlines back into the durable engines they expect. The background was a manufacturing problem in the component produced by our partner, Pratt & Whitney. As a result, engines have to visit the workshop sooner than planned. I also announced a year ago that this issue would continue to occupy us both operationally and financially over a longer period of time. We are feeling the effects, especially in our free cash flow. All partners in the Geared Turbofan, GTF for short, have to pay compensation to the airlines because obviously, the impact on customers is significant. There is no sugar coating that. But unlike last year, we are no longer talking about an acute crisis situation. We are now successfully and step-by-step executing an effective package of measures jointly with our partners. In this process, MTU plays a critical role in the GTF's international maintenance network. Especially because we lead by example, and we show how quickly the engine can be turned around in the workshop and handed back to the customer. So following the COVID crisis, MTU has therefore demonstrated once again that we can handle even the most demanding situations. Our company is resilient and crisis-resistant. Our share price clearly demonstrates the high level of confidence in this strength and stability. After news of the GTF issue had spread, our share price dropped to around EUR 160 in September '23. At the time of last year's Annual General Meeting, it had already recovered to more than EUR 200. Since then, it headed steadfastly towards EUR 300 and even far beyond. We have passed the EUR 350 mark. We have, however, seen repeated significant share price fluctuations in recent weeks. Among other things, the U.S. tariff policy decisions are causing considerable uncertainty worldwide. The high volatility on the global stock markets is naturally also affecting our company. Looking at the picture over the long term, it becomes clear that since MTU was first listed on the stock exchange almost exactly 20 years ago, our share price has increased approximately by a factor of 15, in defiance of all crises. I want to express my heartfelt thanks to my Executive Board team at this point. The past year was a special bond for the 4 of us, too. A special word of thanks goes to Peter Kameritsch. For the CFO of many years, this extremely positive share price performance, despite COVID and despite the GTF challenge, is also a reflection of his successful work. He has helped shape the company's profitable growth trajectory for many years in a key position and he earned enormous trust for MTU in the capital market. Thank you, Peter. And also thank you for preparing such a smooth handover to your successor, Katja Garcia Vila before you step down at the end of June. Let me take this opportunity, Katja, to say welcome on board. And welcome to the Executive Board of MTU Aero Engines AG. On the 1st of July, you will take over officially from Peter Kameritsch as the new CFO. Welcome to team MTU, that has grown into a team of over 12,000 aviation enthusiasts, committed day in, day out to our customers around the globe in the future of aviation, always in keeping with our motto, Passion For Engines. This passion is deeply embedded in our DNA. It drives us all to maximum performance. All our successes are possible only thanks to the dedication and hard work of our global MTU team. We say a very sincere thank you for that. You are MTU. Ladies and gentlemen, our successful '24 fiscal year will allow us to distribute a higher dividend. We are proposing a dividend of EUR 2.20 per share. This is 10% more than last year. And thank you for your trust even in challenging moments. At the same time, under the influence of the GTF issue, this dividend proposal strikes a balance between the current interest of shareholders and future interest. We invest in our sites, in technologies, in digitalization, necessary investments to secure the future of the company. Your company because it is our responsibility to make sure that your trust in MTU also pays off in the future. We associate the world responsibility with other meanings as well. I had touched on that at the beginning. MTU is meeting its corporate responsibility. So more about that now. Now let's start with what has been dominating the headlines for some time, Europe's sovereignty. And the question of how we can achieve it. I am personally pleased but we have reached consensus on one thing now. The Bundeswehr, the armed forces in Germany have to be fully ready to deploy and Germany must be able to defend itself. Responsibility for us means making our contribution. We have been a partner of the Bundeswehr for over 6 decades. In the German Air Force, virtually nothing takes off without MTU, from the engine for the Eurofighter to the A400M military transporter. And what is more, almost all Bundeswehr engines undergo maintenance at MTU. We are proud of that, but we do not rest here. We are currently developing the engine for the next European fighter. Together with partners from France and Spain, Europe's future combat aircraft system or FCAS for short is absolutely key to securing Europe sovereignty and air supremacy for the long term. And that's not all. From the 2040s onward, Europe's armed forces will also need the next generation of modern, purely European military helicopters. We want to develop this engine jointly with our French partner, Safran. In 2024, we established a joint venture dedicated to this purpose. What Germany and Europe now need in the area of defense is politically recognized. The necessary budget is available. It must now be put to use with strategy, speed and resolution. What's important? The investments will really have to arrive in the European aviation industry or simply put, if you want European sovereign team, you have to buy European products, especially in the area of defense. The mere promise of sovereignty is not enough. We need clear decisions for Europe's independence. In our industry, in particular, with its long development and production cycles, companies need planning security and planning security means in concrete terms, orders. This is how the aviation sector, this is how we at MTU can fulfill our responsibility and create added value in the process. What do I mean by that? We are putting high technologies into the air for the first time here in the new military engines. But ultimately, they will also benefit the commercial aviation sector, namely through technology transfer. We want to and we have to strengthen Germany and Europe as a high-tech location. In the end, this is not just about sovereignty in foreign policy, but also about industrial independence. With its contributions to the Eurofighter, the A400M and the next military aircraft, MTU can provide answers. We are aware of our responsibility, especially on a day like today. The 80th anniversary of the end of the second world war. We feel the precious value of security, freedom and pace, particularly keenly. Without a doubt, my second topic today, environmental sustainability is just as important for future generations. Commercial aviation is facing a particular challenge. From a global perspective, more and more people are boarding planes. The number of flights worldwide is going up. At the same time, aircraft are responsible for around 2% to 3% of global CO2 emissions. Now for us, responsibility means therefore providing solutions that reduce these emissions. What drives us in this process is the vision of emission-free flying, that will definitely not be a walk in the park. But we are already today working on concrete ways of how we want to fly in 25 years' time. One thing is certain. Bans are not a solution. Innovation is what creates sustainability. Sustainable flying is too complex and multi-layered for everything to be changed with just a single solution. For engines, there are 2 key levers. Sustainable fuels as well as evolutionary and revolutionary technologies. First, fuel. The aim here is to gradually reduce traditional kerosene. Theoretically, we can do it already today with sustainable aviation fuels, SAFs. These sustainable fuels are absolutely essential on the road to climate-neutral aviation. They are made either from plant or animal-based oils or fat or from renewable sources of energy and CO2. For example, using wind or solar power, hydrogen can be turned into SAF with CO2. The logic behind these types of -- 2 types of SAF is that the CO2 emitted during the flight is consumed again when the fuel is produced, it's removed from the atmosphere. And in this way, something approaching a closed cycle is created. The good news is our engines can already today burn 50% of this sustainable fuel. And we have even tested 100% successfully. So why is it highly being used? There is not enough production capacity. In 2024, SAF accounted for only 0.3% of global aviation fuel production. For as long as the quantities of SAF produced are so small, the fuel will remain too expensive. We urgently need incentives for producers and investors. After all, sustainable fuels are the simplest and quickest way at present to reduce CO2 emissions in aviation. In addition, we have a second lever, highly efficient engines, thanks to new technologies. In terms of evolution, we are enhancing our Geared Turbofan in 3 steps. We have been building the so-called GTF for over 10 years with our U.S. partner, Pratt & Whitney. In 2024, we delivered the 1,000 GTF assembled at MTU. All thanks for that go to our Chief Operating Officer, Silke Maurer, on behalf of the entire team. In particular, in view of the major challenges posed by a volatile supply chain, this was certainly no easy task. Thank you, Silke, to you and your entire team. And this is how it goes on. In 2024 alone, customers ordered over 950 GTF engines. And that shows the huge trust in this technology. No wonder. Already today, the GTF is adding benchmarks in efficiency and emissions, offering the lowest fuel consumption and the lowest CO2 emissions for short- and medium-haul aircraft. And it noticeably reduces the noise footprint and the formation of contrails. The first development step is the GTF advantage. The first aircraft with this enhanced engine will lift off at the beginning of next year, with even higher fuel efficiency and even fewer emissions. Everything we learned in recent years on longevity, efficiency and thrust went into this engine, making it the best engine we've ever had on the market. With our development and technology expertise, we, at MTU, are making a significant contribution to this next step, something that makes us very proud and confident. Of course, the GTF advantage also stands for the close ties between Pratt & Whitney and MTU. Our joint successes in the past and without a doubt -- without a doubt, also in the future are based on this long-standing partnership. Because in the next step, the next generation of the GTF is again intended to cut fuel consumption and emission significantly. We are already working toward that together with our partners. By the way, as a third step, we're also thinking about hybridized engines, similar to automobile manufacturing. A highly efficient engine is supported by an electric motor, especially during peak performance. In parallel, we are working on completely revolutionary propulsion systems, such as the fuel cell to enable electric flight. A fuel cell converts liquid hydrogen into electricity, which powers the electric engines of the aircraft. This MTU concept is called the Flying Fuel Cell. It produces no CO2, no nitrogen oxides and no particles. The only mission that remains is water. And the climate impact is reduced to near 0. MTU is at the forefront of this technological development throughout Germany and Europe. Our top priority is to take the Flying Fuel Cell to technological maturity. That means to demonstrate that this system can also work in larger aircraft. Our Flying Fuel Cell is initially intended to be used on shorter routes in regional air traffic and later also on short- and medium-haul flights, that would cover up to 70% of all intra-European flight routes. So let's assume you will then take a flight from Munich to Paris. The aircraft emissions will be nothing but water. And will in this example save almost 3.5 tonnes of CO2. To turn this vision into reality, we are consistently driving its implementation. In Munich, for example, we are in the process of building dedicated test cells for our Flying Fuel Cell. As you can see, despite the undoubtedly significant challenges, for example, in terms of infrastructure, hydrogen remains for us a key foundation for climate-neutral propulsion in the future. In all this, an entrepreneurial sound judgment is needed. We are investing in the future of aviation and that of MTU. At the same time, we are making sure that we can earn enough money for the here and now. We take all our decisions and actions with a view to getting this important balance right. The climate targets for the year 2050 are ambitious. No question about it, but we accept this responsibility, and we offer responses. Also to ensure that air travel remains affordable for everyone. At the same time, we need the clear political will to guarantee that Europe stays at the forefront of aircraft manufacture with sustainable engines. I considered it Europe's duty to create a reliable framework that will give our industry strength for the next 20, 30 years, and that includes the infrastructure for hydrogen. Ladies and gentlemen, from Grand Vision to near reality. We take responsibility for sustainability, not only in the air, but also on the ground, below the ground to be precise. With our geothermal energy system in Munich, we take hot water at a temperature of 71-degree Celsius from a depth of over 2,000 meters. This will allow us to heat our site in the future with virtually no emissions. As it will cover around 80% of our heating demand. At our other global sites, we are also working along our so-called ecoRoadmap to cut our emissions worldwide. Ladies and gentlemen, so far, we've spoken about our new commercial and military engine business. In doing our work, we take responsibility in as many as 3 ways in the maintenance business. Our global teams make sure that aircraft travel safely at all times, safely even after long periods above the cloud. And it is also significantly more resource conserving to repair engine parts than to replace them with new ones. In 2024, the maintenance business accounted for almost 70% of our revenue. I'm sure you're aware that the supply chains in our industry continue to be strained. This is why fewer new aircraft are coming on to the market right now. And this leads airlines to using older aircraft for longer than planned and therefore, sending them to the workshop more often. And that, in turn, boost our maintenance, spare parts and leasing business. MTU is able to meet this demand because we have been systematically expanding our maintenance skills and capacity for 45 years, an incredible success story that manifests not only the sheer volume of the more than 25,000 workshop visits that we processed during this time. Worldwide from Vancouver in Canada to Perth in Australia. This is where I want to thank my Executive Board colleague, Michael Schreyögg. Alongside the commercial and military programs, he has also been driving the maintenance business for over 10 years with great foresight with tremendous commitment and with tremendous success. Michael, thank you. It is due to the performance of the entire maintenance team that MTU is one of the largest maintenance providers in the world and our services enjoy an excellent reputation around the world. The more global aviation expands, the faster demand for maintenance increases. And we are fully prepared for this. Specifically, just a few weeks ago, we announced that we will strengthen our presence in North America with new licenses so that we can provide even more services for engines with an expanded site in Texas to offer our customers even greater capacity. In addition, in March, we opened our second facility in China. After the ramp-up, the 2 facilities in China together will be able to offer more than 700 shop visits a year in the Asia region. With this step, by the way, we intend to turn our Chinese site into the world's largest maintenance location for aircraft engines. To show you how we work on site in China, we will now cross to our site manager Gert Wagner in Jinwan. Welcome to Jinwan, our newest facility in the MTU maintenance family. Jinwan is located in Southern China, about 20 kilometers from our main plant, MTU Maintenance Zhuhai, in this direction. We built the site because the Southeast Asian market is growing extremely fast. In the maintenance business, we have roughly tripled our revenues over the past 10 years. I'll show you around. Please follow me into the plant. Good morning. In Jinwan, we have brought together the best of the MTU world to ensure that our customers get the quality they expect from MTU because when it says MTU, it has to be MTU. Here, you can see the new Geared Turbofan engine. We have now maintained more than 11,000 engines. With this volume, it makes sense to focus 1 location on this engine. We have hired 280 new employees in the last 2 years. When fully ramped up, we will employ more than 600 people here. I don't want to bore you with technical details. I'd like to show you something very special. The inner workings of our test cell. After all, every engine has to be tested at the end. So here we are, inside the test cell. This is where the engines are upgraded, i.e., prepared for the test run. Every engine undergoes a test run after it has been overhauled by us. This is because we have to ensure that the engine works perfectly on the wing. Everything is good with the engine, it's pretty good. It's ready for delivery. It's a nice one here. Thanks a lot. Have a nice day. Behind this huge iron gate is the test cell. Even after many years in the business, it's still a special moment to walk into a test cell like this. This one is designed for the GTF, with 60,000 pounds. That's a little bigger than what we actually need for the GTF, but maybe the GTF will grow, you never know. Thank you, Gert. I'm sure this gave you a very good impression of our important work in China. Responsibility for safe flying, our response to that is clear. Our customers get the best possible service and top quality, worldwide. MTU is expanding in all 3 major geo regions; in China, in the United States, in Europe. We are strategically well positioned and are expanding where the market for our products and services is growing. There, where it helps to be close to the customer. This global balance ensures maximum resilience in these especially challenging geopolitical times. The responsibility we have to our employees is, of course, just as important. To us, this responsibility means being a secure, reliable and attractive employer. Now and in the decades to come. That is why we invest in the future of our company and in that of our sites. We've already talked about North America and China. But the majority of MTU's team works in Germany, we are also making investments here to ensure that our sites remain competitive and to secure their future. In Hanover and in Ludwigsfelde, close to Berlin, we are converting or expanding our workshops for the growing maintenance demand. Large parts of our engineering and production or development in production are based in Munich. Here, we are also heading into the future. Our new facility for disk manufacturing is the world's most modern rotor production facility, and the new data center will be ready before the end of this year. The construction of our new state-of-the-art development center is progressing, and I've already told you about our geothermal energy system. Particularly in Munich, you can see historic brick buildings and highly innovative production facilities site by site, buildings that are many decades old, directly next to a new state-of-the-art buildings. The transformation of our company is becoming increasingly more visible and tangible even in our day-to-day activities. In response to our responsibility as an employer, we are literally building our future, on the foundations of our successful past. Because ultimately, responsibility also means earning the trust others have placed in us. With everything we do, we want to earn the trust that our customers and our employees have placed in us, MTU. Investing. It means spending capital today to reaping the rewards tomorrow. We can do so from a position of great strength because aviation will remain a growth market. To date, only around 1/4 of the world's population has ever taken a plane. This number is set to rise, especially because of the growing middle class in China and in India. With this in mind, we asked ourselves, how can we, as a company, best take advantage of this growing market trend? In which direction do we want to head? And how does MTU need to be set up to get there? For this reason, we as the Executive Board team have developed a clear target picture. In 2030, MTU will still be resilient, independent and highly successful. We have expanded our new commercial and military engine business and will have had strong worldwide growth, especially in our maintenance activities. By 2030, we will work as an international network with operational excellence efficiently, profitably fueled by innovation, today for tomorrow. Because from all the seeds we are sowing and the strategic preparations we are making now, we want to reap the benefits in 2030. So that means making another considerable leap forward in revenue, earnings and margin. To prepare MTU for this strong growth, we launched our transformation program called UPLIFT last year. UPLIFT will make MTU fit for the future. We aim to be even better, above all in 4 key areas. First, in the harmonization of processes and the associated digitalization because growth requires scalability. Second, in strengthening our global presence and cross-site collaboration. We want to work even more cohesively as a network across all sites. Third, in our financial performance. We want to generate our growth from our own strength. And fourth, in these processes, we aim to retain our particular unique MTU culture, which has made us successful for decades. Now the ultimate goal is to find the right balance between change and continuity. And it's clear to me that growth, change and values are linked together. Values give us direction in a time of change. We want to change from a position of strength and drive the transformation of the company. And this is why we want to grow with UPLIFT, together, and grow closer together in the process. Now let's come from this long-term perspective to our immediate future. This year, we will set course for new records across all business units. Our just published figures for the first quarter of 2025 have already confirmed this direction. Overall, we expect our adjusted revenue in '25 to rise to between EUR 8.3 billion and EUR 8.5 billion, and that's an increase of almost 14%. There are not many players in our environment that can achieve that. In addition, our adjusted EBIT is anticipated to go up in the mid-teens percentage range. We base this forecast on an exchange rate of $1.10 to the Euro. For adjusted free cash flow, we expect a figure between EUR 200 million and EUR 300 million. This again reflects compensation payment under the GTF inspection program and the volatile supply chains. Free cash flow will, therefore, remain a topic of discussion in '25 and even in '26. That's one of the reasons that we continue to work with a particular focus on cost and efficiency. Now this success is not a given. In a time when many industries are fighting for survival, our industry as well as our company are seeing stable growth. But we are, of course, closely observing the geopolitical and economic changes taking place around us, and we are finding responses to the new challenges. We are, of course, working on measures to cushion the highly volatile global tariffs policy in our worldwide corporate network as effectively as possible. Direct and potential indirect effects have not yet been included in our annual guidance. Our goal is clear. MTU shares should remain a reliable, long-term and, above all, highly attractive investment. Ladies and gentlemen, as I just said, growth goes hand-in-hand with change. That also applies to MTU. In our company, we are going through more change than we had been used to in the past decade. This also includes my personal decision to leave MTU after 3 years as the CEO, 8 years on the Executive Board and a total of 10 years with the company. Because I will take over as CEO, the Commercial Aircraft Division at Airbus in January '26 at the latest. To shape Europe aviation industry from such prominent position is a challenge. I'm really looking forward to. There is also my personal connection, of course. 30 years ago, I started my training as an aircraft construction technician on the wing of an Airbus. And now I return as CEO. The decision to leave MTU was not an easy one. I am incredibly proud of what we have achieved together over the past few years. I joined MTU in 2015. We have not only been admitted to the DAX since then, revenue has gone up by around 70%. Profit by almost 140%. So we have become more profitable. And our share price has increased more than threefold during this period. At the same time, I'm fully convinced that this successful journey on which MTU has embarked is far from over. Over 9 years ago, BMW's aircraft engine manufacturing division gave rise to MTU and now MTU has evolved into a globally recognized expert for commercial and military aircraft engines. Every third commercial aircraft in the world flies with an engine that bears our signature. Now we have paved the way for an even more successful future. MTU is working. It's functioning in its current setup today and in its new one tomorrow. I will hand my successor, Johannes Bussmann, a company in perfect order with excellent growth prospects. And that is my personal responsibility until my last working day here at our MTU. My Executive Board colleagues and the Supervisory Board can rely on that. And the MTU team can rely on that and you can rely on that. Ladies and gentlemen, we have talked a lot about the many aspects of responsibility today and what responses MTU is giving today and will give in the future. For a sovereign Germany and Europe that can defend themselves, for a sustainable aviation industry, for safe flying, for our employees and for you, of course, as a company with long-term success. And trust is a term that was used several times over today. And now it is for me to express my personal thanks for that to you, for your trust in MTU. Please continue to give your trust to MTU. Over 13,000 people work here every day with passion for your company's success. As a team, we are making our contribution to dealing with the major challenges of our time. We take responsibility. Thank you.

Mr. Wagner, let me thank you most cordially for your statements. I believe it's been impressive what MTU has been able to do over the past few years. So we wish you the best of success for your future career. At this point, we shall end the public broadcast of the Annual General Meeting. We're saying goodbye to everyone who has watched us via the public live stream, and thank you for your interest. From now on, the live stream will only be accessible to shareholders who are locked in via the InvestorPortal. [Statements in English on this transcript were spoken by an interpreter present on the live call.]