MTU Aero Engines AG

Earnings Release • Sep 26, 2008

News Details

Corporate | 26 September 2008 08:01

MTU Aero Engines to cut costs: 50 million euros annually

MTU Aero Engines Holding AG / Strategic Company Decision

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MTU Aero Engines to cut costs: 50 million euros annually
• 2008 outlook reaffirmed
• MRO restructuring on track

Munich, September 26, 2008 – MTU Aero Engines has launched a new
cost-reduction initiative intended to save 50 million euros annually, the
bulk of it already in 2010. This follows from an annnouncement MTU CEO Egon
Behle made at today's Analyst and Investor Day the company held in Munich.
Behle reaffirmed the company's 2008 forecast and expects MTU to remain on
its profitable growth track even in a troubled market environment.

The new cost reduction program, dubbed Challenge 2010, is designed to
enhance MTU's competitive position and prepare the company for a difficult
market. By 2010, the initiative is expected to initially yield 25 to 30
million euros in savings; and as from 2011, 50 million euros a year. Behle
explained: 'This initiative will enduringly secure our competitiveness and
cushion the impact of a slump, if it comes, and of volatile exchange rates.
It will also offset additional research and development expenditures as
well as the cost of ramping up production of some new programs.'

The MTU CEO emphasized that the cost savings primarily related to the
entire production chain. The focus of the effort was to optimize product
costs across MTU's major engine programs. Behle said: 'Our focus is on
simplifying product design, optimizing processes, improving technologies
and materials, and trimming purchasing costs.' He explained that currently
these areas were being analyzed thoroughly. By year-end, a concrete roadmap
would be in place. Implementation of the various measures would begin next
year. Additionally, all MTU areas would contribute to cost optimization
under the company's intensified continuous improvement program (CIP).

Behle further noted that the ongoing organizational and process-related
adjustments in the company's MRO segment proceeded on schedule. 'Its
performance has stabilized and further improvements are being pursued.'

MTU Aero Engines is Germany's leading engine manufacturer and ranks among
the global players in the business. It operates affiliates in all
significant markets and regions worldwide. In commercial engine
manufacturing, MTU closely cooperates with the world's major engine
manufacturers, General Electric, Pratt & Whitney, and Rolls-Royce. In the
military arena, it is Germany's industrial lead company for practically all
engines flown by the country's armed forces and an important partner in all
major military programs in Europe. MTU is the largest independent provider
of commercial aircraft engine maintenance services worldwide. Having carved
out leading positions in engine technologies, MTU excels in high-pressure
compressors, low-pressure turbines and engine control units, as well as
manufacturing and repair techniques. In fiscal 2007, it had about 2.6
billion euros in sales. The company has a workforce of some 7,100
employees.

Cautionary note regarding forward-looking statements
Certain of the statements contained herein may be statements of future
expectations and other forward-looking statements that are based on
management’s current views and assumptions and involve known and unknown
risks and uncertainties that could cause actual results, performance or
events to differ materially from those expressed or implied in such
statements. Actual results, performance or events may differ materially
from those in such statements due to, without limitation, competition from
other companies in MTU Aero Engines’ industry and MTU Aero Engines’ ability
to retain or increase its market share, the cyclicality of the airline
industry, risks related to MTU Aero Engines’ participation in consortia and
risk and revenue sharing agreements for new aero engine programs, risks
associated with the capital markets, currency exchange rate fluctuations,
regulations affecting MTU Aero Engines’ business and MTU Aero Engines’
ability to respond to changes in the regulatory environment, and other
factors. Many of these factors may be more likely to occur, or more
pronounced, as a result of terrorist activities and their consequences. MTU
Aero Engines assumes no obligation to update any forward-looking
statement.

Contact for media representatives:
Eckhard Zanger
Senior Vice President, Corporate Communications and Investor Relations
Tel.: + 49 89 14 89-91 13
Fax: + 49 89 14 89-21 72

Eva Simon
Press Officer Finances
Tel.: +49 89 14 89-43 32
Fax: +49 89 14 89-87 57

Contacts for investors and analysts:
Inka Koljonen
Director Investor Relations
Tel.: + 49 89 14 89-83 13
Fax: + 49 89 14 89-9 50 62

Claudia Heinle
Investor Relations
Tel.: + 49 89 14 89-39 11
Fax: + 49 89 14 89-9 93 54

26.09.2008 Financial News transmitted by DGAP

Language: English
Issuer: MTU Aero Engines Holding AG
Dachauer Straße 665
80995 München
Deutschland
Phone: +49 (0)89 14 89-8313
Fax: +49 (0)89 14 89-95062
E-mail: Inka.Koljonen@muc.mtu.de
Internet: www.mtu.de
ISIN: DE000A0D9PT0
WKN: A0D9PT
Indices: MDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Düsseldorf, Hamburg, München, Stuttgart

End of News DGAP News-Service

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