100 % more pressure - MTU Aero Engines

To our shareholders Corporate Governance
» The enterprise MTU
Group management report
Consolidated Financial Statements Additional information
Free cash flow
in € million 2011 2010 2009 2008 2007
Cash flow from operating activities 287.9 251.3 252.7 405.8 236.2
Cash flow from investing activities -126.7 -173.2 -132.5 -282.2 -104.5
Cash flow from investing activities in
financial assets
-32.2
Free cash flow 129.0 144.8 120.2 123.6 131.7
Working capital is a decisive factor. It is the balance that remains after trade payables, construction
contract payables and other liabilities have been deducted from the value of inventories, trade
receivables, construction contract receivables and other assets. In order to ensure that these
principles are firmly anchored in the group’s organizational structure, senior management has
delegated the immediate responsibility for operating profit, working capital optimization and capital
expenditure to the managers of the operating segments.
Free cash flow does not include investments in financial assets that are not measured at fair value
through profit or loss, because these are held as a liquidity reserve and can be sold at any time.
As an incentive to operating segment managers to focus their attention on achieving sustainable
improvements in the results of operating activities, senior management has decided that the
performance related portion of managers’ pay shall be linked to the development of operating
profit and free cash flow.
1.4. researcH and development
ecOnOmic envirOnment and GOals
Growing mobility demands, limited raw materials and pressing environmental challenges call for
MTU has established innovative solutions – also when it comes to aircraft engines. MTU has established technological
technological leadership in
leadership in its core competencies of low-pressure turbines, high-pressure compressors, and
its core competencies.
high-tech manufacturing processes and repair techniques. This provides a solid basis for making
further improvements to existing engines and designing and implementing new engine concepts.
MTU’s medium-term goals with respect to the development of new commercial engines fully reflect
the European aviation industry’s voluntary commitment that forms the basis of the ACARE 2020
targets (Advisory Council for Aeronautical Research in Europe). These targets challenge the aviation
industry to halve noise emissions, reduce NOx by 80 % and reduce CO2 emissions by 50 %. Engines
will be required to play a key role in achieving these reductions. MTU’s Clean Air Engine (Claire)
technology program not only meets the goals of ACARE 2020, but also addresses long-term future
requirements for engines such as cutting CO2 emissions by up to 30 percent by the year 2035.
The future performance requirements of engines for military applications are largely dictated by the
need for propulsion systems for unmanned aerial vehicles (UAV). Such aircraft, required to operate
at long range with fuel-efficient engines capable of generating high thrust while flying close to the
ground, demand innovative approaches. Here, MTU has positioned itself as a key player in national
and European studies, including the European Technology Acquisition Programme (ETAP).
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