Spare Part Sales Support Margins as MTU Aero Raises Cash Flow Guidance

Wide-moat MTU Aero Engines raised its full-year free cash flow guidance to a high-double-digit conversion, from mid- to high double digits previously, as free cash flow growth of 41% to EUR 205 million tracks ahead of expectations. The top end of previous revenue guidance of EUR 4.3 billion to EUR 4.5 billion was lowered to EUR 4.4 billion, as maintenance, repair and overhaul work came in lower than expected, while EBIT margin guidance was raised to the top end of the prior 10% to 10.5% range, which compares with an EBIT margin of 16.4% in precoronavirus 2019.