Rolls-Royce Holdings plc · LSE:RR.
Rolls-Royce — Paris Airshow 2011 Investor Briefing
86 slides from Rolls-Royce's conference presentation, Jun 21, 2011
Slide 1: Paris Airshow Investor Briefing
Paris Airshow Investor Briefing 21 June 2011
Slide 2: Agenda
Agenda Group overview Defence Aerospace review Civil Aerospace review Summary Q&A
Slide 3: Andrew Shilston, Finance Director
Paris Airshow – June 2011 Andrew Shilston Finance Director
Slide 4: Technology creates opportunities
Technology creates opportunities Delivering complex systems and solutions for our customers Innovation and technology Complex systems skills Consistent power systems strategy
Slide 5: Extending our portfolio
Extending our portfolio Trent 1000 – Boeing 787 TP400 – A400M MT30 – LCS BR725 – G650 PROMAS Trent XWB – A350 XWB Strong positions on new applications
Slide 6: Globalising operational capability
Globalising operational capability Germany Brazil USA UK Singapore Norway Enabling growth and productivity
Slide 7: Growing Group service revenues
Growing Group service revenues 5 4 3 £bn 2 1 0 2000 2002 2004 2006 2008 2010 Growing installed base and evolving services model
Slide 8: Stronger, better balanced
Stronger, better balanced Increasingly resilient Revenue (£bn) UPBFCT (£m) +8% CAGR +9% CAGR 250 10.9 250 1,010 200 Marine 200 Marine 150 Defence Index 150 100 4.6 413 Defence Index 100 Civil 50 50 Civil 0 Energy 0 1999 2010 1999 2010 Energy -50
Slide 9: A broad range of marine capabilities
A broad range of marine capabilities Efficient solutions for complex challenges in the marine industry Integrated power and propulsion solutions Strong niche positions in growth markets Investing in technology capabilities Services – a growing opportunity Naval 30% Offshore O&G 49% 21% Speci
Slide 10: Growth options across energy
Growth options across energy An improving power generation portfolio Strong, well-positioned Oil & Gas portfolio Evolving Distributed Power Generation position Investing in growth sectors Expanding services activities Power Generation 40% 60% Oil and Gas
Slide 11: Tognum accelerates Rolls-Royce growth
Tognum accelerates Rolls-Royce growth Creating a world-class recips portfolio Revenue** £10.9bn Revenue** (incl. Tognum) £13.1bn 20% 26% 24% 19% Civil 17% Defence 45% 11% 38% Marine * Energy Strong partnership and market access Enhance technology and product development Strengthening Marine an
Slide 12: Tognum – PTO status
Tognum – PTO status Offer status Announced 9 March 2011, extended to 20 June 2011 PTO – recommended by Tognum management/supervisory board Strong take-up of tender offer Regulatory approval process ongoing Impact on full-year 2011 Minimal impact on underlying profit before tax Cash i
Slide 13: A resilient order book ~ £59.2bn
A resilient order book* ~ £59.2bn Long-term visibility 60 40 £bn 20 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Europe Americas Asia / Middle East *Firm and announced order book stated on a constant currency basis.
Slide 14: A strong power systems portfolio
A strong power systems portfolio Technology, global access, well-positioned in growing markets Investing to broaden the portfolio, transforming capability & capacity Tognum accelerates growth opportunities in Marine and Powergen Strong balance sheet – flexibility and options Significant ba
Slide 15: Andrew Shilston, Finance Director
Paris Airshow – June 2011 Andrew Shilston Finance Director
Slide 16: Agenda
Agenda Group overview Defence Aerospace review Civil Aerospace review Summary Q&A
Slide 17: Dan Korte, President – Defence
Paris Airshow – June 2011 Dan Korte President – Defence
Slide 18: Agenda
Agenda Overview and market position Market outlook Sector Priorities Summary
Slide 19: Global Defence spending
Global Defence spending Top 10 Defence spenders – Annual spend $1 trillion Australia India O&M Italy 3% 35% 3% 3%South Korea Germany 2% 4% Japan Other 5% 5% 64% 5% France 21% 5% Saudi Arabia 6% 29% 10% Procurement UK Personnel US R&D, training and evaluation Operations & Maintenance spend the most s
Slide 20: A broad Defence portfolio
A broad Defence portfolio 2010 FY underlying revenues ~ £2.1bn UAV / Trainer Development OE Services Transport Combat Over 18,000 engines in service Well-positioned on global fixed Leader in transport sector wing and rotary programmes Significant services activity Unique STOVL capability
Slide 21: Defence continues to perform well
Defence continues to perform well September 2010 September 2010 First Airbus Military Tanker 500k flight hours of MissionCare for RAF takes off support to US Navy T-45 fleet February 2011 March 2011 April 2011 750th Typhoon engine delivered Fire Scout Completes First $8 million contract awarded by U
Slide 22: Agenda
Agenda Overview and market position Market outlook Sector Priorities Summary
Slide 23: Defence market outlook
Defence market outlook Defence budgets continue to tighten in traditional markets Emerging Defence markets growing rapidly Military transport market remains strong Service opportunities arising from sustained deployments Growth in Transport & Intelligence, Surveillance, Reconnaissance mark
Slide 24: Agenda
Agenda Overview and market position Market outlook Sector Priorities Summary
Slide 25: Customer focused Defence solutions
Customer focused Defence solutions From traditional through to integrated service solutions Growing high value service offerings, that leverage group capabilities Increasing coverage, availability & value whilst reducing costs Providing greater global reach and capability Innovation enabli
Slide 26: Emerging technologies
Emerging technologies Adaptive Versatile Engine Technology 25% less fuel burn and CO2 emissions Integrated Vehicle Energy Technology Power & thermal management Highly Efficient Embedded Turbine Engine High pressure ratio core technology
Slide 27: JSF – Long-term growth opportunity
JSF – Long-term growth opportunity Single largest military procurement in history ~ 4,500 aircraft 9 international partners; 2 international security partners Rolls-Royce involvement – STOVL and F136
Slide 28: Unique STOVL technology for JSF
Unique STOVL technology for JSF 50 years STOVL experience 20,000 lbs thrust engine Development contract $1.5bn – Good progress F-35B variant (~ 450 aircraft) is expected to remain in service after 2050
Slide 29: F136 optimised engine design for JSF
F136 optimised engine design for JSF 40:60 Joint Venture with GE Development programme 80% complete Completed over 2,000 hours of testing Reviewing funding options
Slide 30: Leader in the military transport sector
Leader in the military transport sector Global demand for military, humanitarian & peacekeeping support Broad range of engines powering C130 variants, C27J, V22 Osprey and A400M Significant opportunity to upgrade large installed base
Slide 31: TP400 for the A400M
TP400 for the A400M Firm orders for more than 750 engines Over 500 flights completed Engine certified in May 2011
Slide 32: Agenda
Agenda Overview and market position Market outlook Sector Priorities Summary
Slide 33: Defence Aerospace Summary
Defence Aerospace Summary Growth markets shifting, advantaged by portfolio and global access Focus on innovation and cost reduction creating new opportunities Balanced portfolio of customers Well-positioned to grow
Slide 34: Dan Korte, President – Defence
Dan Korte President – Defence
Slide 35: Agenda
Agenda Group overview Defence Aerospace review Civil Aerospace review Summary Q&A
Slide 36: Mark King, President – Civil Aerospace
Paris Airshow – June 2011 Mark King President – Civil Aerospace
Slide 37: Agenda – Hot topics
Agenda Overview and market position Market outlook “Hot topics” - Trent XWB - Trent 1000 - Aftermarket trends Summary
Slide 38: Agenda – Hot topics
Agenda Overview and market position Market outlook “Hot topics” - Trent XWB - Trent 1000 - Aftermarket trends Summary
Slide 39: Today – A broadly based portfolio
Today – A broadly based portfolio Market leader – Widebody and large corporate aircraft Installed base – 13,790 engines 2010 revenues – £4.9bn 14% 13% 28% 25% 58% 62% Small Engines V2500* Trent and RB211 *V2500 installed base at 50%.
Slide 40: A growing global installed base
A growing global installed base Installed thrust 382 m/lbs 26% Europe North America 117 98 Middle East Asia 31% 39 87 Africa Latin American & Caribbean 12 Australasia 16 13 Strong growth in emerging markets
Slide 41: Market leader in large aircraft
Market leader in large aircraft 50% market share on modern widebody platforms Market leader Launch engine Airframe -200/-300 -200/-300 -500/-600 -800 -8/-9 -800/-900/ -1000 Engine Trent 700 Trent 800 Trent 500 Trent 900 Trent 1000 Trent XWB Market share (Aircraft) 56% 40% 100% 44% 40% 100% Market sh
Slide 42: Narrowbody – V2500 (IAE)
Narrowbody – V2500 (IAE) 32.5% partner in IAE since inception (1983) More than 4,000 V2500 delivered Two-shaft – 22k~33k lbs thrust Average age 7 years Circa 2,100 engines in order book, currently 1 delivered each day Increasing delivery rate Represents 14% of the civil installed thrus
Slide 43: Strong Corporate & Regional position
Strong Corporate & Regional position Strong positions across all major airframers No1 in large cabin aircraft More than 55% of Rolls-Royce installed engines Circa 25% of installed thrust and revenue Powering 15 in-service business jets, 6 new aircraft in last 8 years Gulfstream G650 Em
Slide 44: Technology and product innovation
Technology and product innovation World-class research, technology and system integration skills Focus – Customer /market led Technology feedback loop Compelling product offering across all major sectors Investing in operational and service capabilities Delivering world-class technology so
Slide 45: Technology leadership – the future
Technology leadership – the future Capabilities to address ‘middle of the market’
Slide 46: Supporting customers – TotalCare
Supporting customers Adding value through sophisticated service capabilities Technology increasingly complex Less capital and overhead intensive for operator OEMs have significant capability advantage Best positioned to manage risk Investing in capability – EHM, predictive maintenance, fue
Slide 47: Agenda – Hot topics
Agenda Overview and market position Market outlook “Hot topics” - Trent XWB - Trent 1000 - Aftermarket trends Summary
Slide 48: 20 year OE market – 137,000 engines
20 year OE market – 137,000 engines Twice as large as the current global fleet Engine category Turboprops <3,000lb Passenger 3,000-6,000lb Freight 6,000-10,000lb Bizjets 10,000-22,000lb 22,000-45,000lb 45,000-75,000lb >75,000lb 0 50 100 150 200 250 300 Engine value ($bn) $836bn ~ 50% in large aircra
Slide 49: Growing market and improving share
Growing market and improving share Delivering significant growth in installed thrust 2010 FY 700 m/lbs of installed thrust 600 500 382 m/lbs 400 300 200 100 0 1987 1991 1995 1999 2003 2007 2011 2015 2019 RB211 Trent V2500 @ 50% Corporate & Regional
Slide 50: Agenda – Hot topics
Agenda Overview and market position Market outlook “Hot topics” - Trent XWB - Trent 1000 - Aftermarket trends Summary
Slide 51: Technology leadership today – Trent XWB
Technology leadership today Trent XWB Optimised for Airbus A350 XWB family (-800,-900 & -1000) Fastest selling Trent ever – 574 aircraft, 36 customers Six engines currently on test Ready for flight test later this year
Slide 52: Technology leadership today – Trent XWB
Technology leadership today Trent XWB Excellent test results Fuel consumption better than targeted Operated to 100,000lb thrust Most efficient large aero gas turbine ever produced Fleet thrust will be similar to current civil installed thrust
Slide 53: Technology leadership today – Trent 1000
Technology leadership today Trent 1000 Certified to 74k (2007) >110 flights / >3000 hours 330 minutes ETOPS achieved Good market share – Orders agreed for 269 aircraft Over 20 years Trent 1000 installed fleet will double the size of today’s Trent fleet Building on four decades of widebody
Slide 54: Recent aftermarket trends
Recent aftermarket trends TotalCare – a resilient model, T&M recovering Outsourcing model well established >75% deliveries since 2005 on TCA >90% of the installed Trent fleet covered Proved resilient through the recession Circa 60% of total installed thrust in established markets Discret
Slide 55: Agenda – Hot topics
Agenda Overview and market position Market outlook “Hot topics” - Trent XWB - Trent 1000 - Aftermarket trends Summary
Slide 56: Summary
Summary Well-positioned to meet demand from long-term global growth markets Successful customer-focused strategy Broad product offering and growing installed thrust Advantaged by strong technology Major milestones for new programmes, increasing market share Building on the success of our
Slide 57: Mark King, President – Civil Aerospace
Paris Airshow – June 2011 Mark King President – Civil Aerospace
Slide 58: Agenda
Agenda Group overview Defence Aerospace review Civil Aerospace review Summary Q&A
Slide 59: Andrew Shilston – Summary
Paris Airshow – June 2011 Andrew Shilston Summary
Slide 60: A strong power systems portfolio
A strong power systems portfolio Technology, global access, well-positioned in growing markets Investing to broaden the portfolio, transform capability & capacity Tognum accelerates growth opportunities in Marine and Powergen Broad civil portfolio – Long-term growth Defence advantaged by p
Slide 61: Agenda
Agenda Group overview Defence Aerospace review Civil Aerospace review Summary Q&A
Slide 62: Appendices
Paris Airshow – June 2011 Appendices
Slide 63: Consistent power systems strategy
Consistent power systems strategy
Slide 64: Broadening our portfolio
Broadening our portfolio Underpinning long-term growth
Slide 65: Managing challenges
Managing challenges An increasingly resilient portfolio Commodity Financial 9/11 SARS inflation crisis 400 300 Weakening Programme Gulf War US$ delays 200 100 0 -100 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Order book Revenue EPS Avg cash
Slide 66: Investing for growth and productivity
Investing for growth and productivity Underlying revenue per employee* 250 259 233 200 211 194 182 150 169 150 158 £000’s 140 128 100 115 50 0 2000 2002 2004 2006 2008 2010 *Underlying revenue per employee based on three year rolling average.
Slide 67: Consistent strategy
Consistent strategy Transforming the business Revenue per employee* Order book £bn Revenue £bn UPBT £m (£000's/head) 59 +15% CAGR 10 +6% CAGR 920 918.16 916.32 914.48 912.64 910.8 +8% CAGR 237 236 235 +8% CAGR 58 57 908.96 907.12 905.28 903.44 901.6 899.76 897.92 896.08 894.24 892.4 890.56 888.72 88
Slide 68: Balanced business portfolio
Balanced business portfolio 2010 FY £10.86bn underlying revenues Aftermarket services: 51% £5.54bn Energy 6% Civil 18% Marine 16% Defence 9% Original equipment: 49% £5.32bn
Slide 69: Strong portfolio delivering growth
Strong portfolio delivering growth Strong order book (£bn) Strong revenue growth (£bn) Growing underlying profits (£m) + 9% CAGR +12% CAGR 950 +6% CAGR 55 900 850 800 45 59.2 10.9 750 955 45.9 700 800 35 6.6 7.8 650 600 FY 07 FY 10 FY07 FY 10 FY 07 FY 10 Improving average net cash (£m) Growing payme
Slide 70: Segment overview
Rolls-Royce Group Plc Segment overview
Slide 71: Civil Aerospace portfolio
Civil Aerospace portfolio Long and medium haul airlines 22,000 - 95,000Ib thrust Trent 700 ya~ Trent 500 Trent 1000 ww 800 Trent 900 Trent XWB RB211-535 Regional and general aviation 420shp - 21,000Ib thrust AE 3007 BR715 Tay AE 2100 Model 250 Corporate 1,900 - 33,000Ib thrust oe) —_ com = — = 2500
Slide 72: Contract accounting methodology
Contract accounting methodology Margins booked progressively over time reflecting latest view of contract outturn Cash flow reflects: Progress through the contract Lumpy overhaul spend Contract Profits
Slide 73: Rolls-Royce Defence Aerospace
Rolls-Royce Defence Aerospace Delivering innovative military propulsion solutions
Slide 74: Developing the Defence business
Developing the Defence business Tranche 3a Typhoon contract signed EJ200 AirTanker enters awarded UK service Tanker AV-8B enters service contract Deal to power Allison purchase 72 aircraft with brings T-56 & AE EJ200 from 2100 markets Saudi Arabia GE & Rolls-Royce Global Hawk UAV team for JSF Oaklan
Slide 75: Rolls-Royce – Marine system capabilities
Rolls-Royce – Marine system capabilities Underpinning growth 2,500 customers, including 70 navies, around 9,000 employees Equipment ~ 30,000 vessels, sales / service activities in 34 countries Strong positions in offshore, merchant and naval sectors System integration capabilities enabled re
Slide 76: Marine evolution
2008 2010 Marine evolution 2006 acquired 2004 MT30 selected to power Royal Navy’s QE class Rolls-Royce aircraft carriers MT30 & waterjets 2001 designed & to power 10 US powered product Scandinavian Electric Holding Navy LCS tanker Bergen MT30, Kamewa (SEH) acquired Star enters waterjets service sele
Slide 77: Offshore oil & gas vessels
Offshore oil & gas vessels Design & integrate complex system capabilities 100% Steel 1. ‘Mission critical’ products and parts 80 Labour 60 Design Engine 2. Systems offering (pulling through other Commissioning products) 40 Propulsion (azimuth thrusters) 20 Deck Machinery 3. Lifetime service (winches
Slide 78: Rolls-Royce – Energy system capabilities
Rolls-Royce – Energy system capabilities Strong technology portfolio Over 4,000 gas turbines and more than 500 reciprocating engines sold to customers in nearly 120 countries Strong positions in Oil & Gas upstream and midstream markets Growing position in distributed power generation System
Slide 79: Distributed Power Generation
Distributed Power Generation Building a world leading business Tognum Rolls-Royce Liquid high speed reciprocating Gas and liquid medium speed engines 0.1-9MW reciprocating engines 1-9MW Stand-by and emergency power Power plant projects – Base load, generating sets combined-cycle, peaking G
Slide 80: Tognum JV tender offer
Rolls-Royce Group Plc Tognum JV tender offer
Slide 81: Tognum AG
Tognum AG Products for a broad range of applications Business Unit Onsite Energy & Components Business Unit Engines Diesel Gas & Fuel Injection Marine Industrial Defense Oil & Gas Engines Cell Systems & Systems Systems • Emergency Power • Prime Power • Highspeed • Yachts • Rail • C&I • Light and • O
Slide 82: Partners bring complementary skills
Partners bring complementary skills Three strong high quality, innovative, technology led companies Tognum High speed reciprocating engines for the marine propulsion, distributed power generation and industrial markets Rolls-Royce Medium speed multi-fuel reciprocating engines, integration ca
Slide 83: Tognum – Key market trends
Tognum – Key market trends All markets have increasing requirement for: Clean, fuel efficient technologies and systems Distributed power generation systems in emerging markets Customers increasingly demand integrated solutions Through-life support captures value for customers and OEMs Part
Slide 84: Creating a world class franchise
Creating a world class franchise Strength in technology, product and systems capabilities Core Rolls-Royce Tognum Daimler Markets characteristics Medium Speed – High Speed Diesel Engine technology Technology Diesel & Gas and products Hybrid Distributed power gen Systems System integration Fuel injec
Slide 85: Safe Harbour Statement
Safe Harbour Statement This presentation 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
Slide 86: Paris Airshow – June 2011
Paris Airshow — June 2011 Rolls-Royce Rove
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