MTU Aero Engines AG · XETR:MTX
MTU Aero Engines — ESG Presentation (December 2021)
45 slides from MTU Aero Engines's sustainability presentation, December 2021
Slide 1: Our Ideas and Concepts for a Sustainable Future
OUR IDEAS AND CONCEPTS FOR A SUSTAINABLE FUTURE MTU Aero Engines AG Sustainability Presentation December 2021 – Investor Relations
Slide 2: Agenda
AGENDA 1 1 Corporate Governance 2 Conducting Business Responsibility 2 Product Responsibility 3 Technology Roadmap towards Emission-free Flying 3 Environmental Protection in Manufacturing 4 and Maintenance 4 Procurement Practices Responsible Resourcing 5 CORPORATE 5 Responsibility towards Employees
Slide 3: MTU is built on excellence in these three pillars
MTU is built on excellence in these three pillars Commercial OEM business Military OEM business Commercial MRO business* • Revenues: € 1.0 billion (26%)** • Revenues: € 0.5 billion (12%)** • Revenues: € 2.5 billion (62%)** • Decades of partnerships with OEMs • European and U.S. engine programs • Ser
Slide 4: Corporate Governance
1 2 3 4 CORPORATE 5 GOVERNANCE Responsible Business Conduct 6
Slide 5: Our claims – CR strategy goals for corporate governance until 2025
Our claims – CR strategy goals for corporate governance until 2025 • Comprehensive sustainability management • Ensuring the security of information and systems • Protecting personal data in all areas of the company • Compliance as part of the corporate culture • Active commitment to combating corrup
Slide 6: Our sustainability strategy addresses global challenges and stakeholder requirements
Our sustainability strategy addresses the global challenges and stakeholder requirements that MTU’s business faces Corporate Governance Product Manufacturing As a technology leader, we play a decisive role & Maintenance in making aviation sustainable and achieving emissions-free flight through innov
Slide 7: Our CR management team drives sustainability forward within the company
Our CR management team drives sustainability forward within the company CR management at MTU Supervisory Board • Involved in ESG topics via the Non-financial statement and ESG targets for management compensation Supervisory Board Executive Board (Key topics) • Overall responsibility for CR managemen
Slide 8: MTU is committed to the UN Sustainable Development Goals
MTU is committed to the UN Sustainable Development Goals and contributes to 8 goals 5 9 13 17 MTU is committed to Advancing sustainable Climate action through MTU is convinced diversity and equality of aviation – MTU makes sustainable engine that the world-wide opportunity (important major contribut
Slide 9: Sustainability ratings and rankings
Sustainability ratings and rankings – MTU well ranked in some important CR ratings ISS ESG CDP MSCI ESG Research MSCI MTU Aero Engines is rated Prime In this global carbon accounting of the MTU Aero Engines is rated AA. Status (C+) in the overall rating. annual climate footprint, MTU received (from
Slide 10: A company-wide compliance system ensures ethical and correct conduct
A company-wide compliance system ensures ethical and correct conduct • CEO is overall responsible for the company’s business ethics and anti-corruption policy MTU’s compliance organization • Compliance Board and compliance officer are group-wide responsible for ensuring ethical and correct conduct •
Slide 11: Revised risk analysis implemented in 2021
Revised risk analysis implemented in 2021 to identify potential CR risks even earlier General CR Risk management • Internal CR risks are integrated into our opportunity and risk management system acc. COSO II Enterprise Risk management Framework • CR Risks with an impact on third parties are assesse
Slide 12: Executive management Board
Executive management Board Reiner Winkler Chief Executive Officer Entire Executive Board is responsible for sustainability • CEO since Jan. 2014; joined MTU in 2001; • Appointed until 30 Sept. 2024 • Approves sustainability strategy and objectives • Born in 1961; citizenship: German Variable compens
Slide 13: Supervisory Board structure (as of 2021)
Supervisory Board structure (as of 2021) 12 Supervisory Board Members Average Tenure today ~7.9 years • Shareholder Representative average tenure 9.8 years • Employee Representative average tenure 6 years 6 Shareholder 6 Employee Representatives Representatives 3 1 Employee Representative elected by
Slide 14: Supervisory Board tenures – Staggered terms of shareholder representatives
Supervisory Board tenures – Staggered terms of shareholder representatives Clear milestones for change of long-term Supervisory Board Members; Reduced terms for new members: 4 years Year of election Year of termination AGM election December 2021 Sustanability Presentation 2021 14 © MTU Aero Engines
Slide 15: Product Responsibility
1 2 3 4 PRODUCT 5 RESPONSIBILITY Technology Roadmap towards 6 emission-free flying
Slide 16: Our claims – CR strategy goals for product responsibility until 2025
Our claims – CR strategy goals for product responsibility until 2025 • Highest priority for product quality and flight safety • Reducing the climate impact of products • Minimizing the health effects of product use (exhaust and noise emissions) The company’s most significant contribution towards sus
Slide 17: Aviation must reach climate neutrality by 2050
To reach the ambitious goals of the Paris climate agreement aviation must reach climate neutrality by 2050 • In the past, targets in the aviation sector mainly concentrated on • In the future, the focus will be on the entire climate the impact of CO2 emissions. impact. • CLAIRE*) roadmap was focused
Slide 18: Geared turbofan engines are setting new economical standards
Geared turbofan engines are setting new economical standards First geared turbofan (GTF) engine generation GTF engine highlights* ̴ 16% reduction in fuel burn 1.100+ 11 million+ aircrafts in service Flight hours ̴ 75% Fewer reduction of noise emissions footprint CO2/NOX MRO cost savings 2 billion+ 6
Slide 19: New concepts
New concepts Evolutionary Revolutionary Gen2 GTF WET Engine Flying fuel cell CO2 NOx Contrails CO2 NOx Contrails CO2 NOx Contrails -10% -20% -80% -100% -100% -100% SAF -100% SAF -100% -80% December 2021 Sustanability Presentation 2021 19 © MTU Aero Engines AG. The information contained herein is pro
Slide 20: Strategy for sustainable aero engines
Strategy for sustainable aero engines December 2021 Sustanability Presentation 2021 20 © MTU Aero Engines AG. The information contained herein is proprietary to the MTU Aero Engines group companies.
Slide 21: Sustainable aviation fuels are essential for timely emission reductions
Sustainable aviation fuels are essential for timely reductions of aviation-related greenhouse gas emissions on a significant scale Sustainable Aviation Fuels (SAF) Hydrogen (H2) • SAF is the key technology to reach climate neutral aviation • Green hydrogen means zero CO2 • SAF can be used as drop-in
Slide 22: Innovation and sustainable solutions will strengthen our competitiveness
Innovation and sustainable solutions will strengthen our competitiveness and future success Research and Development spending • ~90% of R&D investment targeted at reducing emissions in m€ and in % to sales • Long-term focus is on emission-free flight 214 • Currently ~150 technology projects in the r
Slide 23: Environmental Protection in Manufacturing and Maintenance
1 2 3 4 ENVIRONMENTAL 5 PROTECTION IN 6 MANUFACTURING AND MAINTENANCE
Slide 24: Our claims – CR strategy goals for manufacturing and maintenance until 2025
Our claims – CR strategy goals for manufacturing and maintenance until 2025 • Reducing CO2 emissions at all production sites (scope 1 and 2) • Continuously improving resource efficiency • Efficient management processes have been established • Advanced procedures in site and plant operations • Raisin
Slide 25: All MTU sites aim to be highly efficient in use of energy and resources
All MTU sites aim to be highly efficient in the use of energy and resources, limit emissions and avoid environmental risks 10.0 million Euros Target: 60% investments for environmental less CO2 (scope 1 & 2) by 2030 protection in 2020 at our Munich site (ecoRoadmap) 0 fines 89.5% for environmental in
Slide 26: MTU places high priority on environment-friendly production
MTU places high priority on an environment-friendly production Environmental management Conservation of Resources Emissions • Enshrined in the global Code of Conduct • MRO follows “Repair instead of replace” • Committed to Paris Climate Agreement approach • Responsibility at the Executive Board • E
Slide 27: New ecoRoadmap aims to make Munich operations climate neutral
New ecoRoadmap aims to make MTU Munichʼs operations to be balance sheet – climate neutral by late 2021 Reduction of CO2 emission by 60% by 2030* in Munich How to achieve CO2 reduction at our Munich site • 1st step is MTU Munich facility to be balance sheet – climate neutral by late • Sustainable ope
Slide 28: Procurement Practices
1 2 3 4 PROCUREMENT 5 PRACTICES Responsible Sourcing 6
Slide 29: Our claims – CR strategy goals for procurement practices until 2025
Our claims – CR strategy goals for procurement practices until 2025 • Human and employee rights are central components of our business relationships • In our cooperation with suppliers, we pay attention to a resource- and environment-friendly value chain • CSR is embedded in our contracts and sourci
Slide 30: Commitment to responsible sourcing and supply chain transparency
MTUʼs commitment to responsible sourcing includes environmental and social aspects as well as transparency in the supply chain Global, extensive and complex supply chain Conflict minerals – transparency in the supply chain MTU suppliers 2020 by region • MTU strives for a sustainable and transparent
Slide 31: Sustainable products with supplier cooperation in long-term relations
We want to create sustainable products with the cooperation of our suppliers in long-term relations based on trust Risk management and assessment Outlook 2025 • Suppliers are vetted before accepted to MTU’s supply chain • We intend to integrate the enhanced version of our supplier risk analysis into
Slide 32: Responsibility towards Employees
1 2 3 4 RESPONSIBILITY 5 TOWARDS 6 EMPLOYEES
Slide 33: Our claims – CR strategy goals for employee responsibility until 2025
Our claims – CR strategy goals for employee responsibility until 2025 • Ensuring compliance with human rights at our own sites • Providing active and targeted employee development at all hierarchical levels • Promoting ongoing diversity & equality of opportunity for the workforce • Enabling a work-l
Slide 34: MTU's employees are its most valuable resource (1/2)
MTU’s employees are its most valuable resource Page 1 / 2 Employee Development & Knowledge management Leadership & Commitment Employee Survey • Safeguarding company‘s know-how by • Group-wide MTU Leadership Values • Regular employee surveys are an important investing in training and development (“We
Slide 35: MTU's employees are its most valuable resource (2/2)
MTU’s employees are its most valuable resource Page 2 / 2 Occupational Safety & Human rights & Health management Fair Working Conditions Diversity • MTU places high value on occupational • Zero-tolerance principle for human rights • A diverse workforce bolsters our innovative safety and health manag
Slide 36: A diverse workforce is a good basis for future success
We do believe that a diverse workforce is a good basis for the company’s future success Young & Old Sexual Orientation Cultural Gender & Equality side by side Disability & Inclusion & Identity As a globally active company, We are committed to equality Cross-generational collabo- At our locations in
Slide 37: Getting the next generation passionate about science and technology
Getting the next generation passionate about science and technology • Apprentices accounted for 3.1% (2.7% in 2019) of total workforce in 2020 • Numerous educational projects and initiatives for young people • Multilayered training concept: trainee programs, dual vocational training, work placements
Slide 38: MTU received several attractive employer awards
MTU received several attractive employer awards Employer Awards Employee Benefits at MTU Occupational health management (e.g. company doctor, company sport programs, fitness center) Occupational pensions financed by MTU TOP Employer in TOP Employer in TOP Employer British Employee participation Germ
Slide 39: Motivated and skilled employees are the key for our success
Motivated and skilled employees are the key for our success 10,313 4.2% employees at MTU staff turnover 3.0 million euros 143 million euros invested in employee training investment in social benefits (e.g. company pension scheme) 1.6 training days per employee 2.1 accidents per 1,000 employees (MTU
Slide 40: Commitment to Society
1 2 3 4 COMMITMENT 5 TO SOCIETY 6
Slide 41: Our claims – CR strategy goals for commitment to society until 2025
Our claims – CR strategy goals for commitment to society until 2025 • Research collaborations for joint knowledge building • Corporate citizenship: MTU is part of society and a good neighbor • Employees use the knowledge they have acquired at MTU to play a responsible role in society In all that we
Slide 42: Our strong technology network is key to our responsibility to society
Our strong technology network is a key part of fulfilling our responsibility to society and safeguards our capacity for innovation • Collaboration with universities and research institutes • MTU is co-founder of Bauhaus Luftfahrt e.V. , an internationally oriented think tank, which aims to develop i
Slide 43: Corporate citizenship – MTU supports local and regional organizations
Corporate citizenship – MTU supports local and regional associations, organizations and institutions near company’s sites Donations and sponsorship in 2020 • ~60 projects, institutions or organizations have been (distribution in %) supported in 2020 • Support of various charity organizations with a
Slide 44: Appendix
Appendix • Reporting standard GRI G4 Useful Links • Non-financial statement (see Annual Report 2021) with a limited Sustainability Non Financial Sustainability report Statement in the on the website assurance by independent auditor annual report 2021 https://www.mtu.de/company/c https://www.mtu.de/c
Slide 45: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements Certain of the statements contained herein may be statements of future expectations and other forward- Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of looking statements that are based on