Rolls-Royce Holdings plc/media/Files/R/Rolls-Royce/... · 2015. 11. 5. · 6000 EJ200 flying hours achieved 24/7 support High operational demand – 7hr average sortie Engine support

Rolls-Royce Holdings plc John Rishton Chief Executive Officer

“Trusted to deliver excellence”

Consistent power systems strategy


Delivering growth


Strong revenue growth (£bn)

+12% CAGR

Strong order book (£bn)

+ 9% CAGR

Growing underlying profits (£m)

+6% CAGR

Improving average net cash (£m) Growing payments to shareholders (p/share)

+7% CAGR +610m

Further growth 2011 – guidance confirmed

Extraordinary visibility of growth

Record order book

Trebling Trent installed thrust

P&W mid-size collaboration

Tognum growth acceleration


In summary

Winning strategy

Increasingly resilient financial performance

Extraordinary visibility of growth

Focus on execution

Growth enablers – technology, operations and services


Rolls-Royce Holdings plc John Rishton Chief Executive Officer


Operations “Delivering on the promises made” Alain Michaelis President – Gas Turbine Supply Chain


A record order book – £61.4bn Provides operational scale and investment confidence

£bn


Operational objectives Two foundation stones

Deliver the order book

Ramp up of current products

Launch new products

Support of installed fleet

Drive operational performance

Cost, quality and responsiveness


An integrated approach Developing and executing our operational strategy

Tailored market approach

Introducing new products

Delivering component strategies

Managing cost and reducing

waste

Working with partners & suppliers

Managing globally

Deliver the order book

Drive operational performance


Tailored market approach Adapting to the needs of the market and customers

Petrobras to invest $225bn in Brazil over the next 5 years


Introducing new products Core of our business model

Working in a global collaborative

model

Delivering through a structured

process

Proven programme delivery


Delivering component strategy Discs – implementing new process technology

University partners

Manufacturing

Research centre

Crosspointe

Sunderland


Managing cost and reducing waste Addressing all areas of opportunity on a multi-year basis

IMPROVEMENTS

HEADWINDS

Optimising

design, materials

& process

Driving

operational

efficiency

Investing in

supply chain

design


Working with partners & suppliers Make-Buy – a solid foundation for growth

Joint VentureRolls-Royce Supplier

Co

mp

eti

tiv

en

es

s

Business criticality

MakeControl

ProtectBuy

Make-Buy (illustrative)


Working with partners & suppliers Managing performance – 5 key elements


Managing globally Global teams, standard processes, robust supply chains

EMEA

Asia

Americas

UK

2010 activity

2015 activity


Making good progress Driving growth and operational performance in the last 3 years

Civil aero engine deliveries +30%

3 year CAPEX investment £1.2bn

Revenue per employee +25%

New facilities in implementation 14

Major product programmes 40+

Graduate and apprentice intake Doubled


Summary

We are focused on delivering the order book and driving

operational performance

Our integrated approach addresses both of the above

We are already making good progress


Operations “Delivering on the promises made” Alain Michaelis President – Gas Turbine Supply Chain & Deputy COO


Services “Adding value, every day” Tony Wood President – Services


Rolls-Royce Services £5.5bn p.a. and growing

Record order book of £61.4bn

c. 60,000 power and propulsion systems in service

c. 2,000 new engine deliveries in 2011

30+ years product life

Unique position to offer competitive long term service contracts

Through-life availability promise


Significant growth of the installed base

Uniquely position as OEM to exploit our knowledge of the product

Long-term relationships with customers

Aligned service packages

Mission critical support in all market sectors

10% CAGR in last decade


The customer’s first choice for services Leveraging our unique knowledge as the OEM

•14,000 engines

•500 airlines

•1,700 bizjets

•90% Trent TCA

•60%

CorporateCare

Civil

Aerospace

•18,000 engines

•160 armed

forces

•40% of revenues

under

MissionCare

Defence

Aerospace

•25,000 power &

propulsion units

•75,000 deck

units

•30,000 vessels

•2,500 customers

•45% LTSAs for

Naval Marine

GTs

Marine

•200 plants

operating

•11 submarines

•20 countries

•25% Naval

LTSAs

Nuclear

•4,000 power

systems

•1,600 customers

•80 countries

•45% Trent LTSAs

Energy

Services across the Group A broad base of programmes and installed products

Global services presence Comprehensive network of Service Delivery Centres

Field Services Repair & Overhaul

Centres

Marine Service

Centres

`̀

14 R&O Service Centres

6 On-Wing Care Centres

18 Component Repair Centres

4 Data Centres (OSyS)

36 Marine Service Centres

9,000 employees + 3,300 in JV’s


Services Centres World-leading integrated capability to deliver availability

High quality

service data

Data Centres

Operations Centres

Hubs to maximise

fleet availability

Delivery of

maintenance

repair and overhaul

Service Delivery Centres

Business Centres

Services policy and

business

management


Services strategy A common strategy across sectors

Time &

Material

offerings

Long-Term

Service

Agreements

Asset

management Process &

Systems

Toolkit

Scope of Service offering

Value

proposition

Uncertain Reactive Planned

$ per engine

operating

hour

Maintenance,

Repair & Overhaul

Services

TotalCare,

CorporateCare,

MissionCare

OEM

Services

Confidence in the long-term reliability of our products

High Low


Benefits of TotalCare® Predictable and planned operations for customers

Unique IP and capability of OEM:

Operations Centres

Data collection and analysis

Comprehensive offering

Improved reliability through:

TotalCare planning

Investment in technologies

Equipment Health Monitoring

Trent fleet doubled, disruption

halved


Predictable maintenance planning Underpinning reliable support and availability for our customers

Aircraft schedule and maintenance plan

Spare engine availability

Shop capacity

Engine Health Register

Customer alignment

Optimised timing

Optimised workscope


Mission critical services in practice Predict and prevent – application of bio science


Engine Health Management Reducing disruption and cost for our customers

1. Airline experienced lightning

strike on departure

2. Operations Centre notified via

health monitoring system

3. Technical data analysed and

approval given to continue

4. Necessary people, information

and approvals in place to meet

aircraft

5. Normal turn-around schedule

maintained

Los Angeles

1 2

3 4

5

Singapore


Galveston (Texas)

Rio de Janeiro (Brazil)

West Africa

Singapore

Hamburg

Gdynia

Marine services Evolution of the strategy

Global investment in capability close to our customers


6000 EJ200 flying hours achieved

24/7 support

High operational demand – 7hr

average sortie

Engine support through

MissionCare

ZERO engine rejections

throughout campaign

Defence services – RAF in Libya High performance of the EJ200 engine for Typhoon


Well-established 10-year

relationship

Platform support with deployed

personnel

All Rolls-Royce on-board teams

are Brazilian

Energy services Supporting Petrobras in Brazil


Increasing LTSA market penetration LTSA growth over last 5 years

Percentage of Fleet under Long-Term Service Agreements (LTSAs)

%

0

10

20

30

40

50

60

70

80

Civil Defence Energy Marine

2005

2010


£5.5bn p.a. sales and

growing

Growing market share and

installed base

Market leading strategy and

business model

Unique capabilities as the

OEM

In summary

Aligned strategy with sustainable growth

0

1

2

3

4

5

6

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

£b

n

Underlying Services Revenue

10% CAGR

51% of underlying

revenue in 2010


Services “Adding value, every day” Tony Wood President – Services


Technology “Creating competitive advantage” Peter Price Director of Engineering & Technology, Civil Aerospace


High pressure turbine blade


R&D investment Long-term investment in technology and intellectual property

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

0

100

200

300

400

500

600

700

800

900

1,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Gross Net % sales


Gross R&D investment breakdown Full-year 2010 spend – £923m

Sustaining

Engineering

Product Development

Research &

Technology


R&D process Coordinated research

1

2

3

4

5

6

7

8

9

Technology readiness level

Project

System demonstration

Applied research

Basic

research


Global research network Access to a wealth of talent & creativity

19

North America

UTC* at Purdue

Asia

UTC in Korea

Research Centres in China, Singapore, Japan

Europe

UTCs in Germany, Sweden, Norway, Italy and

the UK

*UTC = University Technology Centre “Trusted to deliver excellence”

Engineering centres Harvesting capability from around the World

19

Bilbao (ITP)

•Turbines

Dahlewitz

•Twin shaft engines

Indianapolis

•Corporate jets

•Defence Aero

•Helicopters

Derby

•Large Engines

Bristol

•Defence Aero

Montreal

•Industrial GT

Mount Vernon

•Pumping

•Integrated systems

Walpole

•Waterjets

Portsmouth

•Electrical systems

Scandinavia

•Marine integration

•Propulsors

•Recips.

Bangalore

•Engineering support

Singapore

•Advanced Tech Centre


Network of manufacturing research centres Creating an infrastructure for the future

Advanced Manufacturing Research Centre (AMRC); Rotherham

Advanced Forming Research Centre (AFRC); Glasgow

National Composites Centre (NCC); Bristol

Manufacturing Technology Centre (MTC); Coventry

Nuclear Advanced Manufacturing Research Centre (NAMRC); Rotherham

Commonwealth Centre for Advanced Manufacturing (CCAM); Virginia

Advanced Remanufacturing & Technology Centre (ARTC); Singapore


Building blocks of technology The importance of people and tools

Systems, processes and tools

World-class engineers

Competitive technology


Trent 1000 Long-term investment in advanced technologies

Trent 1000

programme

launched


Trent XWB Leading technologies for today

Excellent test results

Fuel consumption better

than specified

Most efficient large aero gas

turbine ever produced


Continuous improvement Capitalising on our investment

Technology transfer across product range


Future middle of the market Leading technologies for the future

Lightweight composites Advanced shroudless High

Pressure Turbine blade and liner

Advanced sealing

and externals

Lightweight

Low

Pressure

Turbine

Advanced blisked High

Pressure Compressor

Advanced

combustor


Vision 20 Technologies for a 20-year horizon


Technology across the Group World-class reciprocating engines


Technology across the Group Leading low carbon technologies

Open Rotor Engine

Tidal Stream Civil Nuclear

PROMAS


Summary

Continuous investment leading to high barriers to entry

At the forefront of the next generation of products and

integrated services

A clear focus on returns


Technology “Creating competitive advantage” Peter Price Director of Engineering & Technology, Civil Aerospace


Financial summary Andrew Shilston Finance Director


Agenda

Delivering the growth agenda

Tognum – update

Narrowbody – IAE restructuring

Summary


Technology creates opportunities Delivering complex systems and solutions for our customers

Significant barriers to entry

Innovation and technology

Complex systems skills


Globalising operational capability Underlying revenue per employee*

182

115 128

140 150 169

194 211

233

259

*Underlying revenue per employee based on

three year rolling average.

Investing for growth and productivity

0

50

100

150

200

250

300

2001 2003 2005 2007 2009 2011

£000’s 182

115 128

140 150 169

194 211

233

259

8% CAGR


Growing Group service revenues

182

115 128

140 150 169

194 211

233

259

Growing installed base and evolving services model

0

1

2

3

4

5

2000 2002 2004 2006 2008 2010

£bn

10% CAGR


Disciplined and consistent strategy Transforming the business Revenue (£bn) UPBFCT (£m)

-50

0

50

100

150

200

250

1999 2010

Ind

ex

0

50

100

150

200

250

1999 2010

Index Defence

Civil

Marine

Energy

Defence

Civil

Marine

Energy

4.6

10.9

413

1,010

+8% CAGR +9% CAGR


Tognum – making solid progress 24 June

94.17%

acceptance

announced

6 April

Offer

launched

9 March

Intent to

offer

announced

Offer period

March 2011 July 2011 December 2011

Regulatory approvals

Consolidate

December 2012

Joint Public

Tender Offer

Rolls-Royce

accounting

Equity accounted

August / September

Completion &

settlement

Approx £1.4bn


45%

20%24%

11% 38%

19%26%

17%*

Tognum accelerates Rolls-Royce growth Creating a world-class recips portfolio with Daimler and Tognum

Revenue** £10.9bn Revenue** (incl. Tognum) £13.1bn

Marine

Civil

Energy

Defence

*Includes £0.4m relating to off-highway /

industrial activities

**2010 FY Underlying Revenue

Strong partnership and market access

Enhance technology and product development

Strengthening Marine and Energy powerplant capabilities

Significant long-term growth opportunities


Positioned for future mid-size market

C&R

NB

Large a/c

Civil Revenues – 2010

Today – narrowbody is a modest civil contributor

Significant opportunity – market position/scale

Future collaboration builds on 30 year partnership

Focus on high-bypass geared technologies

Restructure IAE – expected to close in 2012

$1.5bn cash proceeds at close

Ongoing industrial and financial involvement

Significantly value and earnings accretive


Strong portfolio and financial strength Technology, global access, well-positioned in growing markets

Investing to broaden the portfolio, transforming capability & capacity

Tognum accelerates growth opportunities in Marine and Powergen

Positioned to compete in next generation mid-size sector

– extending collaboration with P&W

Strong balance sheet – flexibility/options in an uncertain environment


Financial summary Andrew Shilston Finance Director


Documents

Rolls-Royce Holdings plc/media/Files/R/Rolls-Royce/... · 2015. 11. 5. · 6000 EJ200 flying hours achieved 24/7 support High operational demand – 7hr average sortie Engine support