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Good morning and welcome to our conference call for MTU's preliminary full-year results 2025. We'll begin today's session with Johannes sharing some thoughts on strategic priorities and a business review. Following that, Katja will walk you through the financials of the year 2025 as well as the guidance for 2026. To close the presentation, Johannes will summarize the key takeaways before we open the floor for your questions in the Q&A session. With that, It's my pleasure to hand over to Johannes.

Thank you, Thomas, and a warm welcome to everybody. As already announced during the course of the Q3 call, I would like to share some key priorities of MTU's way forward with you. First of all, MTU has a communicative growth agenda, and I'm completely committed to execute on that one. This means we will expand our footprint internationally and invest in even more technological capabilities. Through our expansion in Hanover, Berlin, China, and especially our new LEAP facility in Fort Worth, Texas, we are leveraging our global presence. With this, we support the growth of our MRO business and increase efficiency to serve our customers even better. With the latest development of the GTF, we have the most efficient engine in the narrowbody market. We developed this technology together with our partners and will continue to enhance this technology even further to be perfectly prepared for the NGSA. My ambition is to provide an even larger share in the upcoming program. As an addition to the conventional engine, we have entered into an agreement with Airbus to develop the flying fuel cell. Due to this, we will be an enabler for our client to emission free flying in the future. Given the significant improved free cash flow generation in 2025 and our planning for the next years, We are committed to focus on shareholder value by increasing the dividend by 64% from 2.20 to 3.60 in 2025, representing a payout ratio of 20%. We are on our way to reach our 40% payout ratio target. Let's have a look on the next slide. Let me walk you through our major achievements in 2025 starting with an overview of our key financial results. In 2025, we delivered on our financial guidance and are pleased to report that the strongest performance in MTU's history has been reached. Revenue reached 8.7 billion euros. EBIT increased to 1.35 billion euros, resulting in a very strong margin of 15.5 percent. Free cash flow rose to 378 million euros, also a new all-time high despite the financial impact of the GTF Fleet Management Plan. Based on this performance, we will propose a dividend of €3.60 per share to the AGM, representing an increase of 64% year-on-year. In addition, we will present our 2026 guidance today and an important next step on our way to achieve our 2030 ambitions. Let's take a look at the market environment in general. In 2025, our industry continued to gain momentum. Demand again exceeded available capacity and despite persistent supply chain challenges and a more uncertain macro environment, airlines were highly resilient. Passenger traffic grew by 5.2% and cargo volumes by 3.1%, reaffirming the sector's strong fundamentals. This performance came despite headwinds from U.S. terrorists and a weaker U.S. dollar factor we managed very successfully. The outlook remains positive. For 2026, IATA expects RPK growth of 4.9% and the cargo traffic to rise by 2.6%, both consistent with long-term structural trends. Robot passenger demand, high-value cargo flows, and expanding global e-commerce continue to support the industry while limited aircraft availability keeps utilization and load factors at an elevated level. This environment plays directly to MTU's strength. Our supply chain is built to support customers on both OEM deliveries and the aftermarket, positioning us well to capture ongoing demand. Overall, the market indicators are fully in line with our Plan 2030. Our current order book stands at $29.5 billion, U.S. dollars, which technically means we are sold out for the next three years. To sum this up, MTU is exceptionally well positioned to benefit from market dynamics in 2026 and beyond. Let's have a look at the commercial OEM side of our business. In 2025, demand from new commercial engine remained exceptionally strong. We recorded more than $2 billion in new orders driven by the GTF, GENX, and GE9X program. For the GTF alone, customer placed orders and committed for more than 1,500 engines. And 2026 also started on a solid note for the GTF. Vietjet selected the PW1100 to power 44 A320neo family aircraft. Customer confidence in the GTF remains high. With commitments for more than 13,000 GTF engines, the order book is now roughly twice the size of the active Weed 2500 fleet. The strong position of the GTF is visible for the program after just 10 years in service. Since 2016, the GTF family has accumulated over 15 million flight hours on more than 2,600 aircraft, safely carrying more than 1.7 billion passengers. Its fuel efficiency has enabled airlines to save more than 2.8 billion gallons of fuel. And the journey continues with the next major milestone, the entry into service of the GTF Advantage later this year. An engine that provides even better performance metrics and will carry the success even further. On the customer side of the GTF program, the feed management plan continues to make solid progress in line with our expectations. Turnaround times are improving, material availability is stabilizing. With RTX reporting significantly higher MRO output and airlines confirming an easing of the AUG cases, we expect the situation to continue to improve throughout 2026. Compensation payments remain on track. We contributed by roughly $360 million in 2025 and expect the remainder of the payments to be settled in the current year. Looking ahead, we continue to invest in the future of propulsion. In November, we reaffirmed our commitment with our partners, Pratt & Whitney and JAIC, to evolve the technologies for engines for the next generation of commercial aircraft. This partnership, which is now in place for more than four decades, will allow us to deliver even higher efficiency, lower emissions, and long-term competitiveness in the future. In short, MTU is taking advantage of the strong demand and is ready to deliver on our customer needs and is set to for a strong and successful future. Let's have a look at the MRO, sorry, at the military OM business. Over the past two years, we have seen strong order momentum for the Eurofighter engine program. The core nations, Spain, Italy, and Germany, together with export customer Turkey, placed engine orders for more than 80 Eurofighter aircraft. This clearly demonstrates the continued relevance of the program for Europe's defense capabilities. In the United States, demand for the heavy-lift helicopter remains high. The U.S. Marine Corps has ordered an additional 99 units. MTU holds an 18% share of the T-408 engine program powering this platform, and we continue to benefit from the program's production ramp-up. At the same time, our OEM business for the TP-400 is secured until 2029. With additional export opportunities offering meaningful upside, the A400M continues to attract international interest. Looking ahead at the future of military propulsion in Europe, we have joined forces with Safran and Avior Aero to develop a potential next-generation helicopter engine. This partnership positions us well to support future European defense platforms with advanced propulsion technologies. And while recent headlines around the FCAS program have been mixed, we remain confident that the partner nations will find a constructive way forward. It is essential for Europe's long-term defense sovereignty to develop their own military products, and MTU is fully committed to do this. In short, through our programs, partnerships, and long-standing expertise, MTU contributes meaningfully to Europe's long-term defense readiness. Now we come to the commercial MRO site on the next page. And here we are continuing to invest in both capacity and the scope of our product portfolio, strengthening our global footprint and supporting the ramp-up across all major engine programs. In Poland, EME Aero has added a second test cell, enabling the site to execute 500 GTF shop visits per year from 2028 onwards. an important expansion of our European GTF capabilities. In China, we opened our second MRO shop, initially focused purely on GTF engines, and we delivered the first overhauled engines just a month after the inauguration. Together with this, our first shop in MTU maintenance Chuhai, the site has now capacity for more than 700 shop visits annually, creating a major capacity hub in one of the world's fastest-growing aviation markets. In North America, we enlarge our Fort Worth portfolio to include the LEAP and the GENX later on, and will invest further to transform the site from an on-site service center into a full disassembly, assembly, and testing facility, significantly strengthening our market position in North America. At MQ maintenance in Berlin, we introduced full MRO capability for the PW800 and are about to increase our industrial gas turbine capacity by around 30%, supported by targeted investments, including the new IGT Hall already under construction. In the broader IGT segment, we have deepened our collaboration with GE Aerospace to expand activities in the marine sector, opening even additional market opportunities. Taken together, These initiatives significantly enhance MTU's global MRO network and technical capabilities. As we execute this expansion, our focus remains clear, supporting the ramp up and enabling sustainable, profitable growth. On the technology side, we reached important milestones in developing further propulsion concepts. First of all, we are proud that the GTF Advantage has received both FAA and EASA certification, positioning it for the market entry in 2026. Aircraft certification is expected soon. With higher thrust, improved fuel efficiency, and enhanced durability, the engine is particularly well-suited for the larger aircraft of the A320neo family. In addition, RTX announced the introduction of a Hot Section Plus retrofit package enabling to benefit from 90% to 95% of the durability improvements on the GTF advantage. As announced earlier, our EIA consortium publicly reaffirmed its commitment to advancing the GTF architecture as a foundation for the next generation engines. We are incorporating all learnings from the first generation of GTF engines, design execution, as well as fleet experience. From today's point of view, the design of future engines will definitely be geared. Building on these advancements in our current product portfolio, we are simultaneously accelerating in the development of next generation propulsion technologies. In June, we signed a memorandum of understanding with Airbus to jointly advance hydrogen fuel cell propulsion. Within our own technology program, the flying fuel cell, we have made significant progress. The design has been finalized, early tests have been successfully passed, and we have commissioned a dedicated flying fuel cell test bed in our Munich site. This marks a major step towards an extensive test campaign for this technology. All of this demonstrates one thing very clearly. We are not only advancing propulsion technology, we are actively shaping what comes next. MTU is preparing the future of aviation step by step and with a very clear long-term vision. Over the past year, we have made strong progress in reducing CO2 emissions across our production sites. Here in Munich, for example, our new geothermal plant has been operating since December 2025 and will cover around 80% of our heating needs, entirely CO2-free. The 71 degrees Celsius thermal water is sourced from a depth of more than 2,100 meters and will provide clean, reliable heat well into the future. Looking ahead, our ambition is clear. Reduce CO2 emissions across all NTU sites by 63% by 2035 compared with 2024. Each location contributes through its own targeted measures. We are driving this ambition through three main levers, improving energy efficiency, expanding onsite renewable energy generation, and, of course, purchasing renewable energy such as green gas and green electricity. Together, these actions ensure that we are progressing credibly towards sustainable decarbonization. In addition to our operational success and progress, our sustainability performance is also externally recognized. has once again received the silver medal in the Ecovades Sustainability Rating. Together, these developments demonstrate that we are on a strong and credible path towards significantly decarbonization. With that one, I will hand over to Katja, and she will walk you through the numbers.

Thank you, Johannes, and welcome from my side as well. Let me begin my part by briefly putting our results into perspectives. For 2025, we achieved our several times upgraded guidance in all financial KPIs. These results are new record highs for MTU and mark the next milestone on our ongoing growth path. Revenues of $8.7 billion were in line with our updated guidance, clearly exceeding our initial guidance despite the weaker U.S. dollar. A headwind we were able to offset through strong operational performance. Adjusted EBIT increased 29% to $1.35 billion, showing a strong margin of 15.5%. This represents a significant step up compared to our expectations. Adjusted net income roughly followed the EBIT growth as expected and grew 27% to $968 million. Free cash flow of $378 million came in significantly better than originally anticipated, and in line with the guidance from October 2025. This marks another record level in recent years, even while carrying the burden of the GTF fleet management program, and it proves our progress in improving our cash conversion. Let's now take a closer look at some details behind this outstanding performance. Group revenues increased by 16% to 8.7 billion euros. In US dollar terms, revenues were up 21%. This strong performance was driven by our commercial OEM business, which benefited from a favorable mix in engine delivery, including a higher share of spare and leased engines, as well as the expected growth in spare parts revenues. We also achieved strong sales growth in the MRO segment, supported by continued momentum across our activities there. Adjusted EBIT rose over-proportionally by 29% to 1.3 billion euros, resulting in a margin of 15.5%. The excellent result was driven by the above-mentioned business effects. Adjusted net income grew by 27% to 968 million euros. Growth was influenced by higher interest expenses associated with new financial instruments. The higher earnings translated into a strong free cash flow of 378 million euros, an all-time high for MTU. This level exceeds the previous peaks of 2019 and 2023, even though the expected impacts from the GTS fleet management plan were fully reflected. Airline compensation payments amounted to roughly 360 million US dollars. Let's now move on to the business segment. Let me begin with the OEM segment. In Q4 2025, total OEM revenues increased by 11% to 817 million euros. Therein, commercial OEM revenues were up 13%, reaching 621 million euros. In Q4, organic growth in commercial OE and US dollar sales increased by a low to mid-teens percentage. As anticipated, Q4 OE sales included a higher share of installed engines. Organic spare part sales in Q4 in U.S. dollar grew in the low to mid-teens range. Drivers were both narrow-body and wide-body engine platforms. Military revenues increased by 6% in Q4, marking the strongest quarter of the year. However, delays in the supply of parts and modules required for the planned delivery limited the level of growth we anticipated, resulting in a stable revenue versus 2025. Adjusted EBIT for the quarter improved by 39% to 234 million euros, resulting in a margin of 28.6%. The margin development was as expected, reflecting the higher share of installed engines as well as lower than expected military revenues. For the full year, total OEM revenues increased by 14% to 2.9 billion euros. Commercial OEM revenues grew by 18%, reaching 2.3 billion euros. Organic commercial OE sales in U.S. dollars were up around 10% for the full year 2025, a bit below our mid-teens guidance as the delivery plans within our various partnerships did not materialize as expected. Organic spare parts U.S. dollar sales for full year 2025 increased in the low teens range. Drivers were both narrow-body amateur white-body platforms. Overall, This performance drew adjusted EBIT up by 43% for the full year to $873 million, delivering an excellent margin of 30.4%, clearly exceeding our expectations for the year. Let us now move on to the commercial MRO business. Commercial MRO revenues in the fourth quarter of 2025 increased by 11% to $1.7 billion, making it the strongest quarter of the year. In U.S. dollar, Q4 revenues were up 22%. Key revenue drivers in the fourth quarter were the GTF, the CF6, and the MLS Leasing and Asset Management business. Revenues from CFM56, CF34, and CF6 platforms also increased compared to Q3 2025. The GTF MRO revenue share in the quarter was around 41%. In Q4, adjusted EBIT decreased by 11% to 123 million, resulting in a margin of 7.4%. The margin reflected the higher share of GTS AMAO revenues, as well as ramp-up costs at MTU Fort Worth. For the full year 2025, commercial revenues rose by 18% to 5.96 billion euros. In U.S. dollar terms, revenues increased 23%. significantly exceeding our four-year guidance of mid- to high-teens growth. Revenue growth in 2025 was broadly spread. The GTF delivered strong performance, while the CF6-80, GE90, V2500, and our IGT business also recorded solid growth. In addition, MLS Leasing and Asset Management delivered the expected operational performance, further supporting overall results. GTS MRO accounted for 40% of total MRO revenues in line with our full-year expectations. Revenue recognition accelerated in the second half of the year, driven by broader work scopes, improved material availability, and shorter turnaround times. Adjusted MRO EBIT increased by 9% to $478 million, resulting in a margin of 8%. Margin development was mainly influenced by the GTS MRO mix, Ramp-up costs for the LEAP MRO at MTU Fort Worth partly compensated from its equity contributions, particularly from MTU 2 High. Overall, the MRO business delivered a strong performance in 2025. Let me now give you an update on our Hatchbook. As you can see, we have further increased our Hatch coverage over the past month since the release of our nine-month results. For 2026, we have now hedged around 80% of our net U.S. dollar exposure at an average hedge rate of 113. Looking further ahead, we continue to build our hedge position at higher average hedge rates, reflecting the currently weaker U.S. dollar. Please keep in mind that the purpose of our hedging strategy is to reduce the impact of U.S. dollar exchange rate fluctuations on our EBIT, a 5 cent movement in the US dollar exchange rate would translate into an EBIT effect of roughly 20 million euros. Overall, our Hatchbook secures a high degree of visibility and stability for 2026, giving us a solid foundation for the year ahead. Before moving to the guidance, let us have a look on our progress on the finance side. Our net debt currently stands at around 1.1 billion euros, resulting in an adapt to EBITDA ratio of below 1. That is a very solid level, fully in line with our midterm guidance of a leverage ratio of 0.5 to 1.5, and gives us the financial headroom we need to execute on our priorities. Our strong balance sheet is also reflected in the credit ratings from Moody's and Fitch, both of which assigned an investment-grade rating to MTU. Moody's upgraded its rating from BAA3 to BAA2 with a stable outlook in August 2025, while Fitch confirmed its BBB rating with a stable outlook in September last year. At the beginning of January, we issued a new convertible bond with a volume of €600 million. We used the proceeds to repurchase our outstanding €500 million convertible bond that would have been due in July 2027. This transaction allowed us to reduce the potential dilution for our shareholders by around 300,000 shares, a clear and tangible benefit. As already stated by Johannes earlier, we intend to propose a dividend of 360 per share at our annual general meeting in May 2026. This represents an increase of €1.40 or by 64% compared with last year and corresponds to a dividend payout ratio of 20%. This is a clear signal of our gradual return to our targeted long-term dividend payout ratio of 40%, a ratio we temporarily suspended due to the GTF fleet management plan. All in all, these measures strengthen the financial flexibility and solid balance sheet that underpin MTU's long-term growth strategy. So let's now come to the key drivers for our guidance 2026. As Johannes already mentioned, the market environment remains highly favorable for the aviation industry, and MTU is well positioned to benefit from this momentum. Overall, we expect engine deliveries to increase in 2026 with a higher share of installed engines. For the GTS, we will support these deliveries in line with our market share, contributing to the production ramp-up while ensuring sufficient spare engine availability for our airline customers. Following RTX's announcement, demand for spare and lease engines remains strong, and on the GTS, we expect this to stay broadly flat in absolute terms compared with 2025. For the GenX, we expect higher volumes driven by Boeing's plans to increase 787 production from currently eight aircrafts per month to around 10 in 2026. Deliveries of the first GE90X are targeted for this year although the official entry into service of the first B777 has been delayed to 2027. Putting this together, we expect organic US dollar OE revenues to grow in the mid to high teens range in 2026. This reflects the current expectations with respect to mix and pricing. Commercial spare parts are expected to remain a strong revenue contributor. The V2500 should be up, supported by higher utilization of the A320 CO fleet and increased material demand and work scopes in shop visits. We expect continued growth in GTF spare parts, driven by the GTF fleet management plan, as well as ongoing durability improvements. Mature engine programs are expected to remain broadly stable or show a slight decline. Overall, this points to low to mid-teens organic spare parts revenues growth in 2026. The military business will benefit from the strong order momentum for the EJ-200, leading to higher deliveries. In addition, we expect a continued ramp-up in T-408 production, which powers the CH-53K heavy-lift helicopter used by the U.S. Marines. The development contract for the next-generation fighter engine runs until September this year, and we remain optimistic that the governments will find a solution for the FCAS program. The phase-out of the German Tornado fleet will result in a gradual decline in RB199 revenue over the coming years. Due to some supply chain disruptions in 2025, we expect certain spillover effects into 2026. Altogether, this should result in an accelerated revenue growth in the mid-teens range. Commercial MRO will continue to benefit from strong air traffic which drives high demand for mature engine programs in our independent MRO business. We also expect rising GE90 MRO volumes from our freighter customers. Our MLS leasing and asset management business will continue its growth trajectory. In 2025, we generated roughly €600 billion in revenues, marking steady progress towards our €1 billion revenue target for 2030. For GTS MRO, we expect a revenue share of 40% to 45% in 2026. Key drivers will be the growing fleet and service, ongoing execution of the GTS fleet management plan, and further durability improvements. Together, these factors should translate into low- to mid-teens U.S. dollar revenue growth and MRO. Across all business segments, we expect continued growth in 2026. another important step towards achieving our midterm revenue target of 13 to 14 billion euros. The business drivers I've just outlined, with growth across all our segments, translate into expected total group revenues in the range of 9.2 to 9.7 billion euros, based on a US dollar exchange rate of 120. Adjusted EBIT is expected to come in between 1.35 and 1.45 billion euros above the 2025 levels. Positive contributions will come from continued strong spare engine sales, partially offset by a higher share of installed engines. The spare parts business and the military segment will also contribute and support absolute EBIT expansion. The 40% to 45% GTS MRO share will have some impact, as will our investments in Fort Worth and the ramp-up of MTU maintenance gen 1. At the same time, the ongoing strength of our independent MRO business and further growth in our MLS leasing and asset management activities will drive the margins. Overall, the group margin guidance for 2026 remains well within the corridor of our midterm guidance. For net income adjusted, we expect growth broadly in line with adjusted EBITs. With regards to our cash conversion rate, we expect further improvement to 45% to 55% mainly driven by lower GTFAOG compensation payments and stronger earnings. As you can see, we are well on track to deliver our 2030 ambition across all key performance indicators. Our 2026 revenue outlook of $9.2 to $9.7 billion is broadly in line with the revenue CAGR implied by our 2030 ambition. Our 2026 adjusted EBIT target of $1.35 to $1.45 billion also implies the margin within our guided 2030 corridor of 14.5% to 15.5%. Our cash conversion rate is set to improve significantly, from 39% in 2025 to 45% to 55% in 2026, representing another step towards our 2030 ambition of reaching a high double-digit level. As you know, our midterm 2030 ambition remains unchanged. Since the future development of the U.S. dollar exchange rate cannot be predicted, we have included our well-known U.S. dollar sensitivity, noting that our 2030 ambition is based on an exchange rate assumption of 110. This concludes my presentation, and I would now like to hand over to Johannes for the closing remarks.

Thank you, Katha. Let me close our presentation with some key takeaways for you. has delivered an excellent performance in 2025, despite all the headwinds that we were facing and have been reaching new record heights. The GTF fleet management plan is on track financially and technically, and the financial burden will start to ease. We continue to execute on our technology roadmap to support our customers worldwide on their ambitions. The market environment remains positive for the entire industry, and MTU is extremely well-positioned to benefit from this growth all around the world. We have provided a strong guidance for 2026, fully aligned with our growth plan towards our midterm target for 2030. This will translate also into improved free cash flow, allowing us to even further strengthen shareholder value. MTU continues to represent a highly attractive investment with exposure to long-term profitable growth. So thank you for your attention so far, and now we are happy to take your questions.

Thank you very much. We will now begin the question and answer session. If you'd like to ask a question, please press star 1, 1 on your touchtone telephone. The operator will announce your name when it's your turn to ask a question. In case you wish to cancel your question, please press star 1, 1 again. Mr. David Perry from JP Morgan, may we have your question?

Yes, thank you. Good morning or good afternoon, I think, for you, Johannes and Katja. Can I ask one question of each of you, please? Johannes, I think you've been in the role now maybe six to eight months, I think. So I'm just curious whether you see any real scope for operational improvement. I know MTU is a well-run company already. But in particular, I'm thinking about the FX headwind that the company could face and whether there's anything operationally you could do to offset that. And then I'll catch a few. And thanks for the comments on the free cash flow bridge to 26. And you talked about lower GTF compensation payments. Just can you talk about some of the other moving parts, please? I think some of the feedback I've heard from investors was they thought it could be a little bit better than your guidance in 2026. So maybe just some of the puts and takes on the cash flow would be helpful. Thank you.

Yeah, improvements of operations are, of course, a topic that we're dealing with every time. And I think the expansions that we talked about, especially in 2025, also showed already that we have a really steep learning curve on existing facilities and building up new facilities with even better processes combining what we have learned in other parts. And that our operational performance is in at least some areas second to none proves with the GTF the moment we are best in class in the network with the shortest turnaround times and that's of course what we also want to provide as a service level for our customers in the other sites. And that is what we are working on. It's a lot of work, of course, that is done in the different facilities, but I see progress there and a strong willingness of our colleagues to improve that even further. And with the inductions coming in, of course, that also helps, because if you have volume, the repetitiveness is increasing, and by that, the learning curve is even fostered further.

Okay, David, and then I would take over here to talk about the cash flow topic. So overall, despite the fact that we do see less impact from the GTF fleet management plan on the AOG side with approximately expected 250 billion US dollars still impacting our pre-cash flow for 2026, we're also facing still an increase in the GTF receivables for the pre-financed shop visits. As you remember, we also elaborated on that during our nine-month call stating that we will see further increase in those pre-finance job visit receivables over the next couple of years before we start to see that turning rather later in the end of this decade. Another topic that is a headwind, so to say, for our free cash flow is the ramp-up of our facility in Fort Worth and Texas where we expect to see a high double impact on our free cash flow, building up the inventory to operate the facility.

Thanks. It's very clear. Thank you.

You're welcome. Thank you. We will take our next question. Mr. Christoph Menard from Deutsche Bank, may we have your question?

Yes, good afternoon. Thank you for taking my question. I had actually two. The first one is on the OE commercial guidance in 2026. Your guidance, could you detail the, in terms of volumes, what you intend to, the growth in Gen X and in GTF because it seems to be a higher number than what Airbus has been guiding us to. And I would have been keen to, I mean, you mentioned several times IGT on this call. Could you tell us what is the contribution both to OE and MRO at this point in time and where you see this going forward in terms of contributing to earnings and sales? Thank you.

Hello, Christophe. So first of all, with regards to the OE commercial guidance, there are a couple of moving parts, so to say, in this OE commercial guidance. And it's not just the GTF. So we have the GTF. We have the GenX that is growing. We do see first deliveries in the GE9X that is moving. So these are figures. But also some other smaller, Pratt & Whitney Canada, engines will contribute to the growth and that's why our figure is more a blend and a mix of the different programs that we are in compared to what Pratt has communicated. The IGT part is part of our MRO segment, so this is where you can find that. The expectation is that this is a very profitable business that is continuing to grow. We are investing in the Berlin Plan to be able to support the growth and also the customer demand that is out there, which is partially driven by a law in Germany, for example. There we do see more business coming around the corner, but also internationally due to the peaks in power supply and the increase in the artificial intelligence area, there's more need for short-term peak power supply. And therefore, this is a business expansion that we do expect.

Thank you very much.

Thank you. We will take our next question. Mr. Robert Salad from Vertical Research, may we have your question?

Thanks so much. Good morning. Good morning. Morning. I just wanted to follow up on that last question on your guidance versus Airbus, and in particular, those comments that Airbus made on the GTF. I was wondering if you could elaborate on this situation and what is causing this disagreement between you and your customer here, or at least Pratt & Whitney's customer. And then secondly, on the V2500, I was wondering if you could give us your latest thoughts on the trajectory for shop visits on this engine and also work scope as you work through 2026. Thank you.

Okay, thanks. Yeah, I mean, the discussions on the deliveries between President Whitney and Airbus are still ongoing, and all of you read that Guillaume commented on it, so obviously we have not come to a conclusion so far, but the two partners are negotiating, and so that's what I think we will have to wait for. And I'm pretty sure that they will find a solution. So the orders, of course, have been placed. And we, in the consortium, have discussed what we can deliver as a total. And now Brett is discussing with Airbus how we deal with this in the relationship to Airbus and our other customers. That's from our side. Or we can comment on that one. On the V2500. I think the numbers speak for itself. We have around 15%, roughly 15% that have not even seen the first shop visit. We have another 35% in operation that has not seen the second shop visit. So that means half of the installed fleet is well into the lifespan of the engine itself. So from that perspective, we still plan with induction of the MRO sites for the V2500 to be ongoing for quite a while. And this is something with the growth of the overall aviation market that we discussed earlier on. I think something that is shared by a lot of our colleagues and market participants. And that's why we are also in the MRO shops still preparing for further reductions of the V2500 for the coming years. Did that answer the question?

Yeah, just on the work scope, sorry.

The work scope, of course, that's with the further you go down the road, the work scopes get heavier, of course. So that means the second work scope is normally heavier than the first one and so on. And that's, of course, something that is helpful for the MRO business and that will drive our numbers and also the work scopes inside the shops. And that is, I think, the normal behavior that we have seen on engines also for many years.

Okay, that's great. Thank you very much.

Thank you. We will take our next question. Mr. Ian Douglas Pennant from UBS, may we have your question?

Thanks very much. Yes, Ian Douglas Pennant at UBS. So the first is on cash flow, please. So you mentioned pre-finance short visits, which I think is the imbalance payments line on your balance sheet. Could you just help us uh size uh how you see that effect i mean first you just remind us the 2025 uh impact on cash flow from that and then also you just help us think about sizing that in 2026 2027 uh as well please either qualitatively or quantitatively is useful now my second question is on uh the error derivative or the igt uh business are you um worried or thinking about here the possibility of increased competition from aircraft engines being converted to be used as aero derivatives, as we've seen one of your peers talking about. And have you looked at doing that yourself, given that you have, I mean, almost unrivaled expertise here? Thank you.

Well, I think I take the first part in. So we don't specifically provide numbers on the growth of our aftermarket compensation payments. What I can say is that we expect that to continue to grow year over year and therefore still have an impact on our cash flow development over the next couple of years. We expect that to turn rather later in the decade and you can see the position itself under other financial assets in our balance sheet. And these are receivables and no compensation payments. So currently we're still building up those receivables for the pre-finance shop visits. But sorry, I cannot share any details on the coming year.

Maybe you take... Yeah, I'll take the second part. I'm pretty sure you relate to the F-Type Power announcement some time back. And, of course, the conversion of aviation engines into power generation units could be an attractive opportunity. adjacent business for MTU. So it's for the LM2500, the CF6-6 and the 6000 and the 6-80. That's a business we are in for already a long time and have deepened our collaboration with GE Aerospace. So that's something that we are of course seeing good market opportunities into. That said, the attractiveness of the conversion into power generation ultimately also depends on the scale of the addressable market and availability of feedstock for these engines, of course. And we certainly have the potential that we are observing, and we have, as we are active on both sides, I think we have also a good visibility of what is more attractive for us, and that path we will then follow with the customer demand being on the side.

Thank you. We will take our next question. Ms. Chloe Lemaire from Jefferies, may we have your question?

Yes, good afternoon, Alice and Katia. If I could start with actually a follow-up on your comments on inventories. First, could you comment on the driver for the growth in 2025, and in particular in Q4, where typically you actually unload a little bit of those inventories? And where should we assume this stabilizes going forward in terms of days of sales, please? The second question is on OE sales. Could you share maybe what's the impact of mix on top of the 10% organic growth that you report? And on your 2026 guide, did I understand well that your current guide for mix to high teen actually also includes the impact for mix? Or does that come on top? Thank you.

Okay, so let me start with the inventory question first. You remember that I said, for example, in the military business, we were not able to fulfill all the deliveries that we originally anticipated for the quarter, despite the fact that it was the strongest quarter in deliveries. So that also had us stay with more inventories than originally anticipated, let me say it like this. And I'm sorry. I didn't get the second question entirely about the mix in the guidance, Chloe. I'm sorry.

Yeah. So in 2025, you talk about 10% organic growth in OE. But obviously, the spares mix and the overall pricing mix, I guess, is additive to that. So if you could maybe share just you know, what kind of roughly if you could scale this and how it impacts 2026 as well.

So, as you know, our organic growth rates does not account for any changes on pricing or on or on share between spare and installed engines overall. So what we've done now for 2026 is that 2026 reflects the current expectation with regards to mix and pricing, and this is what we've laid out.

Okay. If you can just follow up on the inventory question. So you said that in 2026 you expect a high double-digit headwind from working capital from the Fort Worth ramp, I guess, but overall for inventory, is that the total amount that we should assume, or is it going to be like a higher headwind yarnier?

That was a specific headwind that I would like to point out because we never quantified the amount that specifically before, so that was why I mentioned the MTU Fort Worth inventory step-up. Overall, as you know, that with the growth of the business, we will also face some increase on the inventory side, despite the fact that we do our very best to manage our inventories as efficiently as we can.

Perfect. Thank you very much.

Thank you. We will take our next question.

Mr. Rory Smith from Oxcab Analytics, may we have your question?

Hi, it's Rory from Oxcap. Thank you for taking my questions. I just wanted to come back to that point on spares. And I was hoping you'd be able to give a number for spare engines actually shipped in Q4 and what that was in the first nine months of 2025. And then the second question is, In terms of the MRO segment and the guide for the GTF share there, 40% to 45% in 2026, is it possible to get any sort of sensitivity on margins, whether it comes in at 40% versus 45%, what we can kind of get some guide rails around that? And then my third and final question is just on the GE9X. You've obviously called that out. It's delayed. Entering services is 2027 now. How does that actually impact your financial statements? If you could just frame that for us financially, that would be really helpful. Thank you.

Okay, so with regards to the split between spare and installed engines, you know that as those information are also not disclosed by our partners in the network, there is also no way that we will disclose those details. I think what is clear when you look at the fourth quarter of last year, we said that there was a higher share of installed engines and that that had, for sure, an impact on the margin of the OEM segment. The MRO guide for 2026, so there is no way we break down the 40% to 45%, but what you need to see is that the GTS, just from a pure construction of the contracts, is rather dilutive to the margin, the higher the share is. So if we have a higher share on the GTF and our revenues, there is an impact on the margin side. And for the GE9x, I think there are two important topics to keep in mind. The GE9x delivery was already postponed a couple of times, and we had built up inventory in our facilities to support the original ramp up, and that still is with us to the largest extent.

That's very clear. Thank you very much.

Thank you. We will take our next question. Mr. Samuel Burgess from Goldman Sachs, please may we have your question.

Good afternoon both and thanks for taking the questions. Just a couple of questions from me please. Just a follow up on the Fort Worth point. I mean, you talked about the impact of working capital from the inventory ramp up. I think the first induction of LEAP at Fort Worth is expected at the end of this year. As we go beyond that to 27, should we expect that to unwind and become a bit of a tailwind cash rather than a headwind? So just thinking through how Fort Worth starts to contribute would be really helpful. And then just secondly on R&D, how do you see that evolving next year and beyond? That would be really helpful. Thank you.

Okay. So with regards to footwork, first of all, let me correct one assumption. So the first induction of an engine is foreseen already for July of this year. Okay. the induction, like to ramp up the facility itself for the first induction already comes with the headwind, so with the built up in inventory. As we will continue to ramp up that facility over the next couple of years until 2030, you can expect further impacts coming from this ramp up on the inventory side. So we expect a similar impact year over year, more or less. So that's a big topic. And on the R&D side for 2026, that is a bit of a two-answer question. So there is the capitalized R&D we rather expect to decrease during the course of the next year compared to the 2025 level. And the self-financed R&D we expect to maybe increase a little bit compared to prior year's levels. But that is more or less what we do see. And I think it's clear as we continue to follow our technology agenda, there's more development work to be done in that area.

OK, that's very helpful.

Overall, I would say, yeah. And if you look at the midterm ambition that we have, it's rather a decrease in R&D expected until 2030 overall.

OK, very helpful. Thank you very much.

Thank you. We will take our next question. Mr. Sashtusa from Agency Partners, may we have your question?

Good afternoon. You stated in the section on military OEM that a constructive way forward on the FCAS project is expected. I wonder if you could just elaborate a bit on that. What do you see as being a constructive way forward And presumably you are thinking about contingencies for if the program as currently configured does not continue past the end of Q3. What would you do with all these engineers?

Well, okay, I take that one. As you mentioned, the Phase 1b is ongoing until end of September this year. and we are delivering together with our partners, Safran and ITP, they are according to the time plan and according to what the deliverables are. So that means in our pillar, Pillar 2, in the entire EFKAS program, we have a very stable and good working relationship that we are also willing to continue whatever the solution the politicians in Europe might take. So that's something where we have aligned. And the question is now, what do the politicians decide? And that's not in our hand. I think we need guidance from politics, which direction they want to go, how the system should look like. And then we as an industry, and then in our share with the engine, of course, can join forces. And depending on these decisions, the consortium stays as it is. for Pillar 2 or might need to be adjusted, but that's something for us only now to guess. So that's nothing that we can elaborate on in detail as we don't know these facts. We are waiting for a decision. What I'm really confident on that at least the German politicians who I'm in contact with, they have understood that a decision has to be taken soon and there is a strong will to do so. But of course, it's a European program, and that's why several governments need to come together and make a decision, and that's what we are waiting for.

Great.

Thank you very much.

Thank you. We will take our next question. Benjamin Healan from Bank of America, please may we have your question?

Yeah, thank you. I hope you guys are well. So first question for me. So you've guided for 135 to 145 from an EBIT perspective. My interpretation of your comments is the spare engine ratio, which is somewhat of the swing factor as to why you would be towards the bottom end or the upper end. Is that a fair assessment or is there something else going on that could move through the year? If there's any color of kind of what drives you to the top or the bottom of that range? Secondly, obviously, spare engine ratio, I appreciate you're not going to give any numbers, but qualitatively, how should we be thinking about that into 2027 and potentially beyond? Is there any color that you can provide around that? Because I think my view in particular is it is clearly elevated right now, so understanding how long it's going to remain at an elevated level. And then third question, obviously Ebers are very unhappy based on the comments that they made on their conference call. Is there any, can you talk a little bit through like what are the bottlenecks, like what has driven this shift? over the past couple of months. Are there new bottlenecks in production that we need to be thinking of? Is it a stickier AOG situation? Just can you help frame a little bit as to what has driven the need to shift the deliveries from Airbus over the past couple of months? Thank you.

Maybe I start with the financial questions and then I hand over to Johannes for the Airbus comments. So overall, What we have pointed out on page 20 of our presentation is that there are a couple of drivers that will influence our margin also on the commercial OE side. We will see an increase in new engine deliveries overall and a growing share of installed engines. Just to really remind you once again, it's not only all about the GTS. There are also a lot of other engines that we supply and also in there we do have spare and installed engines that we do supply. The GTF definitely is a driver but also the B787 for the GenX engine or also the B777 that will start will have an influence. So it's not only the topic of the GTF spare engine ratio or total number that lifts that. When you look at the Overall development, I think it's clear that we're currently operating at an elevated level with regards to the spare and lease engines in the GTF program. But also there, I would like to make one comment. In the newer engine programs, we do expect to see an elevated level for a much longer time. moving forward because of the fact that those engines overall are being operated under much harsher conditions than engines had been operated in the past. And that's not only true for the PW11 or for the TTF, but it's also true for other engine programs. So overall, we do not expect to move back to a historic level of maybe 10% of spare in these engines in the market. We rather expect that to remain elevated. the current levels will not be sustainable for the longer future. For this year, and this is also a comment that we have made in absolute terms, we expect the delivery of spare and lease engines to be pretty much in line with what we've seen in 2025. But due to the increase in install, there will be a reduction in the overall ratio. Maybe, Johannes, with that, I hand over to the Airbus part of the question.

Of course. Yeah, of course, Guillaume obviously is not happy with the actual status of the negotiations. As a matter of fact, there is no new Nottelberg, nothing at all. We have, I think, proven that, especially in Q4 last year, that we have made progress on the MRO side and the throughput turnaround times, so in order to decrease the AOG situation for the airlines. And then all things come together. There is a mixture of requests from Airbus, what they want to get delivered. As you know, GTF is for the A220, the sole engine, and for the A320, it's a mixture between LEAP and the GTF. And in that overall setup, of course, there needs to be a solution that Pratt is negotiating with Airbus. But we can't further comment on that one. We're also not familiar with all the details that are on the table there, but I'm very confident that they will find a solution and think that Jung is not happy with the message that he sent and we're aware of that one.

Very clear. Thank you both. Appreciate it.

Thank you. We will take our next question. Mr. Amarek Poulin from Kepler Chevrolet, please may we have your question?

Yes, thank you for taking my question. Most have been answered, but maybe a few more call-ups on the turnaround time. You said there was some improvement in 2025 and you're now best in class. So what is the turnaround time now and how much more room for improvement do you see in the years to come? And then your competitor mentioned that given the low retirement rate, the number of shop visits should stay pretty flat. up to 2028 before starting their descent. Do you see the same phenomenon for the V2500 or do you see a higher retirement rate coming now?

So on the turnaround times, that's always a mixture of different numbers. Of course, the work scopes are different depending on how long the engines have been running, environment they have been operated so the average turn time has come down, material availability, supply chain issues have been reduced or at least calmed down and that's of course helpful for the turnaround time in the shops and within the network so the partners that are performing MRO we are sharing these information so that's nothing that we keep for us of course we want to support our customers to the best possible And MTU, Hannover especially, has contributed last year a lot there because turnaround times and developments have developed in a very nice way to reduce that. On the V25, we still see quite a big portion of engines coming in. 15% are still waiting for a shop visit, 35% second, and then, of course, the remaining 50% are third or even further and that's something of course that will go on for quite a while so we have quite heavy workload in our shops with that and with the increased work scopes life limited parts coming out of the engine of course due to the later shop visits that's something that is positive for the development of our business an engine that we know very well and where we have great capabilities also on the repair side and that's why this will remain for the foreseeable time quite good and stable business for us.

Okay, thank you. Thank you. We will take our final question. Mr. George Mitwitter from Berenberg, please may we have your question.

Good afternoon, thank you for taking my questions. In the military business, can you just provide a bit more detail around the supply chain issues that you are experiencing? and your confidence that this will be less of an issue this year? And the second question is on your expectations for when the first in-service GTF engines will receive the GTF hot section plus retrofit package. And when do you think you will be able to complete the retrofit of the whole fleet? Thank you.

As you know, all military programs run into consortiums and of course that also has seen the difficulties that we are facing on the commercial side. Volumes are much smaller, so that means the impact of single disturbances is a bit bigger. And so that's something that is coming down as the overall supply chain is coming down. And we have seen slight drag that led to the slightly reduced numbers, but we are also confident that we can compensate on that one this year and the years after. So we don't see any real problems that are remaining and are hindering us from increasing the military site now for the time to come. The hot section plus from President Whitney is of course interesting for the installment in the already delivered engines on the GTF side and it covers for around 90-95% of the durability issues for the existing fleet and that is of course something that we will install during the course of the normal shop visits. An assumption on how long that takes is a bit difficult, but all customers that opt for this Hot Section Plus thing, we can install it in the normal shop event, and then this comes in. It's not mandatory, so the customer has a choice, and that's why any guess on any timeline is difficult, but we are confident that customers will make use of it. To what extent? remains to be seen and maybe when we have a little more time down the road then we can elaborate on these numbers.

Thank you.

This concludes today's question and answer session. I'll now hand the call back to Mr. Thomas Franz for closing remarks.

Yes, thank you. This indeed marks the end of today's call. Thank you Johannes, thank you Katja for your presentation and thank you all participants for the interest in the questions. As usual, for further information and details, reach out to the IR team. Beyond that, have a great day. And, yeah, hear you soon.