Rolls-Royce Holdings plc · LSE:RR.

Rolls-Royce — Investor Presentation (March 2024)

81 slides from Rolls-Royce's investor presentation, March 2024

Slide 1: Investor Presentation
ROLLS ROYCE WM RESENTATION
Slide 2: Rolls-Royce Proposition
ROLLS-ROYCE PROPOSITION 1. HIGH PERFORMING, COMPETITIVE AND RESILIENT BUSINESS 2. GROWING SUSTAINABLE CASH FLOWS 3. STRONG BALANCE SHEET AND GROWING SHAREHOLDER RETURNS © 2024 Rolls-Royce Not Subject to Export Control 2
Slide 3: Differentiated Group Strengthened Through Transformation
DIFFERENTIATED GROUP STRENGTHENED THROUGH TRANSFORMATION …TRANSFORMING INTO … BUILDING ON…. ▪ A more resilient and efficient business with ▪ Civil Aerospace | Leading positions in Business Aviation, and − Quality of earnings – cash expansion focused exclusivity on the latest Airbus widebody aircraft
Slide 4: Differentiated and Advantaged Technologies
DIFFERENTIATED AND ADVANTAGED TECHNOLOGIES Advantaged technologies UltraFan Nuclear Systems integration Leading technologies for Trusted and proven next generation aircraft reactor design Advanced manufacturing Vertically integrated Control systems Next generation technology Electrical systems © 202
Slide 5: Capturing Performance Improvement Opportunities
CAPTURING PERFORMANCE IMPROVEMENT OPPORTUNITIES Strategic framework High performing 1. Portfolio choices & partnerships Operating profit Competitive 2. Advantaged businesses & strategic initiatives Operating margin Growing 3. Efficiency & simplification Sustainable cash flow Resilient 4. Lower carbo
Slide 6: Mid-Term Targets
MID-TERM TARGETS Based on 2027 timeframe Operating profit Operating margin Free cash flow Return on capital £2.5bn-£2.8bn 13-15% £2.8bn-£3.1bn 16-18% £2.8-3.1bn 16-18% £2.5-2.8bn 13-15% 11.3% £1.6bn 10.3% £1.3bn 5.1% 4.9% £0.65bn £0.5bn 2022 2023 2024 Mid- 2022 2023 Mid-term 2022 2023 2024 Mid-term
Slide 7: Divisional Mid-Term Targets
CAPTURING PERFORMANCE IMPROVEMENT OPPORTUNITIES Divisional mid-term targets Divisional operating margin, % CIVIL AEROSPACE DEFENCE POWER SYSTEMS +12-14 pts +2-4pts +4-6pts 15-17% 13.8% 14-16% 12-14% 11.6% 11.8% 8.4% 10.4% 2.5% 2022 2023 Mid- 2022 2023 Mid- 2022 2023 Mid- term term term © 2024 Rolls-
Slide 8: Portfolio Choices & Partnerships
1. PORTFOLIO CHOICES & PARTNERSHIPS Focused and granular approach Key investment areas for performance and growth Partnerships Exits Focused on CIVIL AEROSPACE ▪ Non-core businesses ▪ Valued higher outside portfolio Business Aviation Widebody Narrowbody DEFENCE Electrical – Advanced Air Mobility Tra
Slide 9: Advantaged Businesses & Strategic Initiatives
2. ADVANTAGED BUSINESSES & STRATEGIC INITIATIVES Positioned in attractive and growing markets 2022-2030 annual market growth rates1 COMMERCIAL AVIATION DEFENCE POWER SYSTEMS 3-5% Business Aviation 0-2% Combat & Transport 5-7% Power Generation 5-7% UK & AUKUS 4-6% Widebody Submarines Mobile Applicati
Slide 10: Strategic Initiatives Driving Margin Improvements
2 ADVANTAGED BUSINESSES & STRATEGIC INITIATIVES Strategic initiatives driving margin improvements Strategic initiatives driving margin improvements CIVIL AEROSPACE 15-17% Mid-term operating margin target £2.5bn-£2.8bn 2022 Business Efficiency & Portfolio Mid- Widebody Aviation simplification & other
Slide 11: Efficiency & Simplification
3. EFFICIENCY & SIMPLIFICATION Sustainable cost efficiency to improve competitiveness and resilience Key drivers Total Cash Cost / Gross Margin (TCC/GM) (40-50)% Right-sizing the organisation 0.80x ▪ Reduction of 2,000-2,500 roles proposed worldwide ▪ Focus on efficiency, simplification and enterpri
Slide 12: Lower Carbon & Digitally Enabled Businesses
4. LOWER CARBON & DIGITALLY ENABLED BUSINESSES Transition to lower carbon, supporting our customers on their journey to net zero ENGINE Y ENGINE AEROSPACE EFFICIENCY SUSTAINABLE AVIATION FUEL & DEFENCE Committed to 2050 net zero ambition ALTERNATIVE BATTERY ENERGY POWER FUELS AND STORAGE All in-prod
Slide 13: Lower Carbon & Digitally Enabled Businesses: Customer Experience
4. LOWER CARBON & DIGITALLY ENABLED BUSINESSES Differentiated customer experience and greater operational efficiency CUSTOMER DESIGN MANUFACTURE PEOPLE Differentiated service Digitally-integrated Improved operational Digitally connected and experience design, build and performance workforce operate
Slide 14: Long-Term Growth Momentum
LONG-TERM GROWTH MOMENTUM Continued material growth opportunities beyond mid-term Rolls-Royce long-term growth prospects New business Additional upside potential from narrowbody and nuclear micro-reactors SMR Poised to play major role in the civil nuclear market Power Systems Grow in line with marke
Slide 15: Transforming the Business for Sustainable Growth
TRANSFORMING THE BUSINESS FOR SUSTAINABLE GROWTH OUR TRANSFORMATION STRATEGIC FRAMEWORK ▪ Portfolio choices & partnerships ▪ Advantaged businesses & strategic initiatives 1. HIGH PERFORMING, COMPETITIVE AND RESILIENT BUSINESS ▪ Efficiency & simplification ▪ Lower carbon & digitally enabled businesse
Slide 17: Step-Change in Performance
STEP-CHANGE IN PERFORMANCE • Building a high-performing, competitive, resilient and growing business • Significant performance improvement and a record year • New mindset underpinning new ways of working • Granular strategy in place and owned across the Group • Continued progress guided in 2024 • St
Slide 18: Record Financial Performance in 2023
RECORD FINANCIAL PERFORMANCE IN 2023 Operating profit Operating margin Free cash flow Return on capital £1.6bn 10.3% £1.3bn 11.3% + 143% yoy + 5.2pts yoy + 154% yoy + 6.4pts yoy £2.8-3.1bn 16-18% £2.5-2.8bn 13-15% 11.3% 10.3% £1.6bn £1.3bn 5.1% 4.9% £0.65bn £0.5bn 2022 2023 Mid-term 2022 2023 Mid-te
Slide 19: Strong Delivery of Transformation
STRONG DELIVERY OF TRANSFORMATION Group operating profit improvement Strategic initiatives driving margin improvements £1.6bn CIVIL AEROSPACE 11.6% +9.1pts DEFENCE £0.65bn 13.8% +1.9pts POWER SYSTEMS 10.4% 2022 Civil Defence Power New Markets Portfolio 2023 +2.0pts Aerospace Systems & other Year-on-
Slide 20: Delivering Strategic Progress
DELIVERING STRATEGIC PROGRESS 1. PORTFOLIO CHOICES 2. ADVANTAGED & PARTNERSHIPS BUSINESSES & STRATEGIC INITIATIVES • UltraFan tested to maximum power • Time on wing: Trent 7000 improvement 20% installed, Trent • Pearl 700 certification milestone for G700 and G800 1000 improvement expected to be cert
Slide 21: Delivering Strategic Progress
DELIVERING STRATEGIC PROGRESS 3. EFFICIENCY & 4. LOWER CARBON & SIMPLIFICATION DIGITALLY ENABLED BUSINESSES • Around £150m cost efficiencies delivered across the Group • 100% SAF tests completed on Trent and business aviation • £130m reduction in gross third party costs engines • Strategically align
Slide 22: 2023 Full Year Underlying Results
2023 FULL YEAR UNDERLYING RESULTS Underlying results £m 2023 2022 Organic Change1 Organic Change %1 RECORD RESULTS WITH STRONG Revenue 15,409 12,691 +2,630 21% PERFORMANCE ACROSS THE GROUP Gross profit 3,231 2,477 +732 30% Gross margin % 21.0% 19.5% +1.4pts Operating profit 1,590 652 +933 143% COMME
Slide 23: Civil Aerospace
CIVIL AEROSPACE Underlying results 2023 2022 Organic Change Organic Change % £m KEY POINTS Revenue 7,348 5,686 +1,645 29% • Higher widebody aftermarket profits Gross profit 1,394 853 +540 63% • Higher business aviation profits Gross margin % 19.0% 15.0% +4.0pts • Efficiency and strategic actions dri
Slide 24: Defence
DEFENCE Underlying results 2023 2022 Organic Change Organic Change % £m KEY POINTS Revenue 4,077 3,660 +428 12% • Double digit revenue growth Gross profit 804 726 +78 11% • Commercial optimisation with the implementation of value based pricing Gross margin % 19.7% 19.8% (0.1)pts • Efficiency and str
Slide 25: Power Systems
POWER SYSTEMS Underlying results 2023 2022 Organic Change Organic Change % £m KEY POINTS Revenue 3,968 3,347 +539 16% • Strong revenue growth led by power generation Gross profit 1,050 918 +111 12% • Commercial optimisation benefits in all segments Gross margin % 26.5% 27.4% (0.9)pts • Cost efficien
Slide 26: Summary Funds Flow
SUMMARY FUNDS FLOW £m 2023 2022 Change Operating profit 1,590 652 938 Operating profit from discontinued operations - 86 (86) KEY DRIVERS OF HIGHER YEAR ON YEAR FCF Net investments1 82 279 (197) • Stronger operating profit across all divisions Movement in Civil LTSA balance, net of RRSAs 1,079 784 2
Slide 27: Building Resilience
BUILDING RESILIENCE TCC/GM Net Debt 0.88x £5.2bn KEY POINTS 0.80x • TCC/GM improved to 0.59x • Net debt reduced to £2.0bn £3.6bn 0.59x £3.3bn • £7.2bn liquidity with £3.7bn cash and cash equivalents £2.0bn • £2bn undrawn facilities retired • Progress towards investment grade profile £1.0bn 2019 2022
Slide 28: Guidance Delivers >50% of Mid-Term Improvement by 2024
GUIDANCE DELIVERS >50% OF MID-TERM IMPROVEMENT BY 2024 Operating profit Operating margin Free cash flow Return on capital £2.8-3.1bn 16-18% £2.5-2.8bn 13-15% £1.7-2.0bn £1.7-1.9bn 2022 2023 2024 Mid- 2022 2023 Mid-term 2022 2023 2024 Mid-term 2022 2023 Mid-term term 2024 guidance based on … Civil la
Slide 29: Achieving the Rolls-Royce Proposition
ACHIEVING THE ROLLS-ROYCE PROPOSITION OUR TRANSFORMATION ▪ SAFE AND EFFICIENT OPERATIONS 1. HIGH PERFORMING, COMPETITIVE AND RESILIENT BUSINESS ▪ ADVANTAGED PRODUCTS AND TECHNOLOGIES ▪ CLEAR STRATEGY AND CHOICES 2. GROWING SUSTAINABLE CASH FLOWS ▪ NEW MINDSET AND DISTINCTIVE PERFORMANCE CULTURE 3. S
Slide 31: Capital Framework
CAPITAL FRAMEWORK Driving shareholder value Strong balance sheet and Committed to growing Disciplined investment investment grade credit profile shareholder returns Improved net debt/EBITDA Rigorous capital allocation process Once strong balance sheet Reduced gross debt and investment grade profile
Slide 32: Sustainable and Growing Free Cash Flow
SUSTAINABLE AND GROWING FREE CASH FLOW Driven by higher operating profit and stronger balance sheet £2.8bn-£3.1bn mid-term Free Cash Flow (FCF) Improvement in FCF to mid-term driven by +£2.3bn-£2.6bn FCF growth Operating profit growth (£1.8bn-£2.1bn) £2.8bn-£3.1bn with an operating margin of 13-15%
Slide 33: Civil LTSA Balance Growth
CIVIL LTSA BALANCE GROWTH £0.8bn-£1.2bn per annum growth Civil LTSA balance growth1 Growing cash receipts ahead of shop visits costs driven by Growth Widebody EFH growth reaching 120-130% of 2019 levels Business Aviation growth Higher average EFH rate Time on wing improvements Legacy hedge book cons
Slide 34: Working Capital Optimisation
WORKING CAPITAL OPTIMISATION c.£2bn of sustainable improvements more than offset the impact of headwinds Net Working Capital1 management Disciplined working capital management Receivables & Portfolio 2022 Inventories Payables Concessions Growth & Other Mid-term INVENTORIES ▪ Significant improvement
Slide 35: Revenue by Business and Geography
REVENUE BY BUSINESS AND GEOGRAPHY Full year 2023 Business Geography RoW 6% Power Systems Civil Europe £3,968m Aerospace Asia/Middle 37% £7,348m East 26% Defence North £4,077m America 31% Our New Markets business contributed £4m The Group’s revenue by destination underlying revenue to the Group of th
Slide 37: Civil Aerospace: Advantaged Products and Services in Growing Markets
CIVIL AEROSPACE Advantaged products and services in growing markets Underlying revenue (2023) AVIATION WIDEBODY REGIONAL / V2500 £7,348m Market leading position Capitalise on Power of the Trent Strength in legacy programmes ~70% Aircraft in service market share1 ~55% Widebody delivery share4 ~2,000
Slide 38: Leading Products in Growing Markets
LEADING PRODUCTS IN GROWING MARKETS MARKET LEADING LEGACY LARGE ENGINE 35% MARKET SHARE SOLE-SOURCE SOLE-SOURCE SOLE-SOURCE ** Legacy large engine fleet also includes: WIDEBODY PORTFOLIO RB211, Trent 500, Trent 800 & Trent 900 (~1850 engines in service or stored) Airbus A330 Boeing 787 Airbus A350-9
Slide 39: Capturing Performance Improvement Opportunities
CAPTURING PERFORMANCE IMPROVEMENT OPPORTUNITIES Strategic initiatives driving margin improvements Civil Aerospace operating profit improvements (£bn) BUSINESS AVIATION 15-17% Grow market share, aftermarket growth and commercial optimisation Mid-term operating margin targets WIDEBODY Keep Engines Ear
Slide 40: Business Aviation
BUSINESS AVIATION Strategic initiatives driving margin improvements GROW MARKET ▪ Leaders in resilient and growing market ▪ Pearl is today’s engine family of choice 8-9% SHARE WITH PEARL ▪ Won the last three major campaigns Annual growth of Rolls-Royce powered aircraft deliveries1 SIGNIFICANT ▪ High
Slide 41: Widebody
WIDEBODY Strategic initiatives driving margin improvements Powering KEEP ENGINES ▪ Improve engine performance and earning through extensions, transitions and passenger 80% of A330 EARNING to freighter conversions committed freighter conversions1 ▪ Drive contractual rigour Drive towards COMMERCIAL OP
Slide 42: Widebody
WIDEBODY Strategic initiatives driving margin improvements EXTEND TIME ▪ Improve product durability ▪ Extend life and component limits ~40% ON WING ▪ Optimise aircraft operations and maintenance Time on Wing increase over mid-term 1 REDUCE SHOP ▪ Greater control workscope ▪ Optimise MRO build/strip
Slide 43: Transition to Lower Carbon
TRANSITION TO LOWER CARBON Supporting our customers on their journey to net zero Maximise efficiency All in-production engines UltraFan technologies of current fleet compatible for current and next with 100% SAF generation widebody and narrowbody aircraft © 2024 Rolls-Royce Not Subject to Export Con
Slide 45: Defence: Advantaged and Resilient Business
DEFENCE Advantaged and resilient business operating in attractive markets Underlying revenue (2022) TRANSPORT COMBAT1 SUBMARINES NAVAL HELICOPTER £4,077m Versatile core Global solutions with Full value chain Power-dense Decades of small leading technology capability engines engine experience 25-30%
Slide 46: Products Stay in Production for Decades
ONCE SOLD OUR PRODUCTS STAY IN PRODUCTION FOR DECADES AND OUR CUSTOMERS USE THEM FOR DECADES Lifecycle Development Growth Maturity Product Development Production Services • Customer funding • ~38% of product revenues from • ~62% of product revenues from Services available for Original Equipment • De
Slide 47: Capturing Performance Improvement Opportunities
CAPTURING PERFORMANCE IMPROVEMENT OPPORTUNITIES Strategic initiatives driving margin improvements Defence operating profit improvements (£bn) TRANSPORT 14-16% Continuing support for a growing Transport & Patrol fleet Operating margin mid-term target COMBAT Pursuing new, funded Combat programmes SUBM
Slide 48: Key Drivers of Operating Profit Improvements
CAPTURING PERFORMANCE IMPROVEMENT OPPORTUNITIES Key drivers of operating profit improvements Defence operating profit improvements (£bn) VOLUME & MIX 22% 14-16% Operating margin mid-term target ▪ Moving from legacy to new, funded programmes ▪ Profitable aftermarket volume growth Increase in AE shop
Slide 49: Long-Term Growth Momentum
LONG-TERM GROWTH MOMENTUM Recent wins underpin long-term growth in Transport, Combat and Submarines Recent wins Future opportunities Future Long Range Assault Grow market share by leveraging FLRAA TRANSPORT Aircraft (FLRAA) position for additional Transport & Patrol opportunities © Crown copyright G
Slide 51: Power Systems: Resilient Business Model
POWER SYSTEMS Resilient business model in attractive growth markets Revenue split (2022)1 POWER GENERATION GOVERNMENTAL MARINE INDUSTRIAL £3,986m Mission-critical power Stable, high-power Complete integrated Efficient, long-lasting solutions systems engines Power Gen – 39% 15-20% Market share >30% M
Slide 52: Capturing Performance Improvement Opportunities
CAPTURING PERFORMANCE IMPROVEMENT OPPORTUNITIES Strategic initiatives driving margin improvements Power Systems operating profit improvements (£bn) Granular Strategic Initiatives 12-14% Operating margin mid-term POWER GENERATION Strengthen position with increased profitability in growing market targ
Slide 53: Power Generation Performance Improvement
POWER GENERATION PERFORMANCE IMPROVEMENT Strategic initiatives driving margin improvements Power Generation operating profit improvements (£bn) LEVERAGE HIGH GROWTH MARKETS >20% AI-related data Build on strong position in data centre centre spend market and focus on growth with growth p.a. strategic
Slide 54: Profitable Governmental Growth
PROFITABLE GOVERNMENTAL GROWTH Strategic initiatives driving margin improvements Governmental operating profit improvements (£bn) CAPTURE MARKET GROWTH Leverage technology leadership and >10% close customer relationships to capture Mid-term revenue current market dynamics and growth per annum servic
Slide 55: Profitable Marine Growth
PROFITABLE MARINE GROWTH Strategic initiatives driving margin improvements Marine operating profit improvements (£bn) EXPAND SOLUTION OFFERING Grow integrated propulsion 2x solution offering in line with Sales potential Bridge to Propeller strategy SECURE LEADING Sustainable PORTFOLIO POSITION fuel-
Slide 56: Transition to Lower Carbon
TRANSITION TO LOWER CARBON Supporting our customers on their journey to net zero ALTERNATIVE FUELS BATTERY ENERGY Further advance engines STORAGE SOLUTIONS certified for alternative fuels to support energy transition Strengthen existing portfolio and expand offering into additional markets HYBRID OF
Slide 58: New Markets
NEW MARKETS Underlying results 2023 2022 Organic Change Organic Change % £m KEY POINTS • SMR 2023 cash costs covered by third party funding Revenue 4 3 1 33% • First power planned in early 2030s Gross profit/(loss) 1 (1) 2 nm • Electrical (AAM) partnership/exit announced Operating loss (160) (132) (
Slide 59: New Markets: Electrical and SMR
NEW MARKETS Rolls-Royce Electrical Rolls-Royce SMR • Complete power and propulsion systems for all-electric and • Small Modular Reactors are 470MW, 50Hz, nuclear power hybrid-electric applications. stations designed to help decarbonise global power • Our research and portfolio stretches from electri
Slide 60: Safety, Ethics & Sustainability
SAFETY, ETHICS & SUSTAINABILITY © 2024 Rolls-Royce Not Subject to Export Control
Slide 61: Our Sustainability Approach
OUR SUSTAINABILITY APPROACH We focus on areas where we can make the most material contributions to a sustainable future, informed by our impacts as a business, supported by global frameworks such as the United Nations Sustainable Development Goals, and the expectations of our all stakeholders. We lo
Slide 62: Safety
SAFETY Rolls-Royce provides mission critical products that people’s lives depend on. Our commitment to the safety of our products is therefore at the heart of our ‘Operate Safely’ core value. The Rolls-Royce Product Safety Policy sets out the five principles which we have established to ensure we ke
Slide 63: Our People
OUR PEOPLE HEADCOUNT BY BUSINESS 0% PROGRESS ON GENDER DIVERSITY (% FEMALE 3% REPRESENTATION) We are focused on the areas required to step change our culture and performance, enabling our transformation 24% 50% 44% Our priorities: • Safety, health and wellbeing of our people; 29% Board level Tri rat
Slide 64: Ethics
ETHICS We are committed to maintaining high ethical standards underpinned by our values and behaviours to create a working environment where everyone at Rolls-Royce and those we work with can be at their best. Our code of conduct (Our Code) and associated Group policies guide our actions and decisio
Slide 65: State of the Art Facilities
STATE OF THE ART FACILTIES We continue to invest in developing state of the art manufacturing and production environments that enable us to reduce the environmental impact of our operations. Energy Total solid and Recycling & consumption liquid waste recovery (mwh/£m) (t/£m) rate (%) -50% 2023 vs 20
Slide 67: Financial Results Summary
FINANCIAL RESULTS SUMMARY FINANCIAL PERFORMANCE FOR PAST 5 YEARS £m 2023 2022 2021 2020 2019 Underlying revenue 15,409 12,691 10,947 11,430 15,450 Underlying operating profit/(loss) 1,590 652 414 (2,008) 808 Profit/(loss) for the year from continuing operations 1,050 158 10 (3,997) 306 Group FCF 1,2
Slide 68: Guidance
GUIDANCE GROUP GUIDANCE FOR MID-TERM (BASED ON 2027) Mid-term guidance Operating profit £2.5bn-£2.8bn Operating margin 13-15% Free cash flow £2.8bn – £3.1bn Return on capital 16-18% DIVISIONAL GUIDANCE FOR MID-TERM (BASED ON 2027) Operating margin Mid-term guidance Civil Aerospace 15-17% Defence 14-
Slide 69: FY 2024 Guidance
FY 2024 GUIDANCE Operating profit £1.7bn-£2.0bn Free cash flow £1.7bn-£1.9bn Significant cash flow items: LTSA creditor growth low end of the guided mid term range (£0.8bn to £1.2bn) Over-hedge costs £146m Civil Aerospace drivers: OE deliveries 500-550 ~50% large engines, large spares broadly unchan
Slide 70: Mid-Term Group Guidance
MID-TERM GROUP GUIDANCE Group Operating profit £2.5bn-£2.8bn Operating margin 13-15% Free Cash flow £2.8bn-£3.1bn Return on Capital 16-18% TCC/GM 0.4-0.5x Gross disposal proceeds £1.0bn-£1.5bn over 5 years Net investments Investments > D&A in the mid-term vs. £300m below in 2022 Working capital c.£2
Slide 71: Mid-Term Divisional Guidance
MID-TERM DIVISIONAL GUIDANCE Civil Aerospace Operating margin mid-term target 15-17% Market growth: Widebody 5-7% (CAGR 2022 – 2030) Market growth: Business Aviation 3-5% (CAGR 2022 – 2030) Large engine deliveries 300-350 Business Aviation deliveries 250-300 Large engine refurbs 700-750 Large engine
Slide 72: Transactional Foreign Exchange
TRANSACTIONAL FOREIGN EXCHANGE Rolls-Royce hedges transactional FX % cover of forecast net US$ income % £/$ exchange rate • Transactional exposure arises when revenue currencies differ from cost 100% 1.60 currencies • Achieved rate is not typically affected by short-term spot rate movements unless n
Slide 73: Translational Foreign Exchange
TRANSLATIONAL FOREIGN EXCHANGE The impact of translational foreign exchange is driven by period average spot rates ROLLS-ROYCE DOES NOT HEDGE AGAINST THE IMPACT OF TRANSLATIONAL FX Period average rates 2023 2022 USD 1.24 1.24 • Translational exposure varies by source of revenues and profits EUR 1.15
Slide 74: Drivers of Civil LTSA Balance Change
DRIVERS OF CIVIL LTSA BALANCE CHANGE Deferred revenue reflects difference between invoiced EFH receipts and P&L revenues traded INVOICED EFH RECEIPTS - Reflects invoiced EFH receipts on long-term P&L LTSA LTSA contracts across entire Civil LTSA-covered fleet revenue contract FX & other Invoiced catc
Slide 75: Civil Aerospace Revenues by Engine Type
CIVIL AEROSPACE REVENUES BY ENGINE TYPE £m 2023 2022 Organic change1 Original Equipment 2,703 1,982 36% Large engine 2,039 1,516 34% Business aviation 657 447 44% V2500 7 19 (63)% Service 4,645 3,704 25% Large engine 3,299 2,492 33% Business aviation 790 721 9% Regional 264 229 15% V2500 292 262 11%
Slide 76: Trent Engine Products
TRENT ENGINE PRODUCTS Engines in Engines on Airframe Market share* service order Trent 7000 Airbus A330neo 100% 220 332 Trent XWB-84 Airbus A350 100% 952 778 Trent XWB-97 Airbus A350 100% 162 435 Trent 1000 Boeing 787 27% 738 87 Trent 900 Airbus A380 48% 300 0 Trent 800 Boeing 777 40% 224 0 Trent 70
Slide 77: Civil Aerospace Engine Deliveries
CIVIL AEROSPACE ENGINE DELIVERIES By engine 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Trent 500 - - - - - - - - - - - Trent 700 181 184 140 88 110 63 10 2 2 1 1 Trent 800 - - - - - - - - - - - Trent 900 42 35 6 30 67 44 34 15 1 2 - Trent 1000 59 79 106 122 109 125 126 82 12 5 38 Trent X
Slide 78: Civil Aerospace In-Service Installed Fleet
CIVIL AEROSPACE IN-SERVICE INSTALLED FLEET* By engine 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 RB211 22B 6 3 3 3 3 3 3 3 3 3 - - RB211 524 530 455 352 302 278 266 242 210 82 80 85 79 RB211 535 1,028 1,026 1,012 908 868 826 850 824 576 658 682 716 RB211 Total 1,564 1,484 1,367 1,21
Slide 79: Civil In-Service Thrust Base (Millions lbs)
CIVIL IN-SERVICE THRUST BASE (MILLIONS LBS)* Thrust per engine (lbs) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 RB211 22B 60,000 - - - - - - - - - - - - RB211 524 60,000 32 27 21 18 17 16 15 13 5 5 5 5 RB211 535 40,000 41 41 40 36 35 33 34 33 23 26 27 29 RB211 Total 73 69 62 55 52 4
Slide 80: Definitions and Calculations
DEFINITIONS AND CALCULATIONS Return on Capital: RoC = net operating profit after tax / average invested capital Net operating profit is defined as underlying operating profit after tax (where the tax charge reflects the group tax charge after removing the estimated tax shield on net financing costs)
Slide 81: Safe Harbour Statement
SAFE HARBOUR STATEMENT This announcement contains certain forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. In particular, all statements that express forecasts, expectations and projections with re

Rolls-Royce Holdings — Investor Presentation (March 2024) on 6ix

Rolls-Royce — Investor Presentation (March 2024)

Slide 1: Investor Presentation

Slide 2: Rolls-Royce Proposition

Slide 3: Differentiated Group Strengthened Through Transformation

Slide 4: Differentiated and Advantaged Technologies

Slide 5: Capturing Performance Improvement Opportunities

Slide 6: Mid-Term Targets

Slide 7: Divisional Mid-Term Targets

Slide 8: Portfolio Choices & Partnerships

Slide 9: Advantaged Businesses & Strategic Initiatives

Slide 10: Strategic Initiatives Driving Margin Improvements

Slide 11: Efficiency & Simplification

Slide 12: Lower Carbon & Digitally Enabled Businesses

Slide 13: Lower Carbon & Digitally Enabled Businesses: Customer Experience

Slide 14: Long-Term Growth Momentum

Slide 15: Transforming the Business for Sustainable Growth

Slide 16: FY 2023 Results

Slide 17: Step-Change in Performance

Slide 18: Record Financial Performance in 2023

Slide 19: Strong Delivery of Transformation

Slide 20: Delivering Strategic Progress

Slide 21: Delivering Strategic Progress

Slide 22: 2023 Full Year Underlying Results

Slide 23: Civil Aerospace

Slide 24: Defence

Slide 25: Power Systems

Slide 26: Summary Funds Flow

Slide 27: Building Resilience

Slide 28: Guidance Delivers >50% of Mid-Term Improvement by 2024

Slide 29: Achieving the Rolls-Royce Proposition

Slide 30: Financials

Slide 31: Capital Framework

Slide 32: Sustainable and Growing Free Cash Flow

Slide 33: Civil LTSA Balance Growth

Slide 34: Working Capital Optimisation

Slide 35: Revenue by Business and Geography

Slide 36: Civil Aerospace

Slide 37: Civil Aerospace: Advantaged Products and Services in Growing Markets

Slide 38: Leading Products in Growing Markets

Slide 39: Capturing Performance Improvement Opportunities

Slide 40: Business Aviation

Slide 41: Widebody

Slide 42: Widebody

Slide 43: Transition to Lower Carbon

Slide 44: Defence

Slide 45: Defence: Advantaged and Resilient Business

Slide 46: Products Stay in Production for Decades

Slide 47: Capturing Performance Improvement Opportunities

Slide 48: Key Drivers of Operating Profit Improvements

Slide 49: Long-Term Growth Momentum

Slide 50: Power Systems

Slide 51: Power Systems: Resilient Business Model

Slide 52: Capturing Performance Improvement Opportunities

Slide 53: Power Generation Performance Improvement

Slide 54: Profitable Governmental Growth

Slide 55: Profitable Marine Growth

Slide 56: Transition to Lower Carbon

Slide 57: New Markets

Slide 58: New Markets

Slide 59: New Markets: Electrical and SMR

Slide 60: Safety, Ethics & Sustainability

Slide 61: Our Sustainability Approach

Slide 62: Safety

Slide 63: Our People

Slide 64: Ethics

Slide 65: State of the Art Facilities

Slide 66: Appendix

Slide 67: Financial Results Summary

Slide 68: Guidance

Slide 69: FY 2024 Guidance

Slide 70: Mid-Term Group Guidance

Slide 71: Mid-Term Divisional Guidance

Slide 72: Transactional Foreign Exchange

Slide 73: Translational Foreign Exchange

Slide 74: Drivers of Civil LTSA Balance Change

Slide 75: Civil Aerospace Revenues by Engine Type

Slide 76: Trent Engine Products

Slide 77: Civil Aerospace Engine Deliveries

Slide 78: Civil Aerospace In-Service Installed Fleet

Slide 79: Civil In-Service Thrust Base (Millions lbs)