Rolls-Royce Holdings plc · LSE:RR.
Rolls-Royce — Investor Presentation (April 2015)
25 slides from Rolls-Royce's investor presentation, Apr 24, 2015
Slide 1: Better Power for a Changing World
WHO WE ARE OUR BETTER BUSINESSES POWER FOR OUR A CHANGING PRIORITIES WORLD
Slide 2: Who We Are
WHO WE ARE
Slide 3: We are a power systems and services group
WE ARE A POWER SYSTEMS AND SERVICES GROUP AIR SEA REVENUE PROFIT £14.6 bn £1.6 bn LAND ORDER BOOK £74 bn
Slide 4: Better power for a changing world
BETTER POWER FOR A CHANGING WORLD OUR VISION IS TO DELIVER BETTER POWER FOR A CHANGING WORLD A CHANGING WORLD BETTER POWER • Growing population and • Cleaner and more global growth creating sustainable energy demand for more power • More fuel-efficient • Greater affluence leading systems on land, to
Slide 5: How we are structured
HOW WE ARE STRUCTURED AEROSPACE LAND & SEA GAS TURBINES RECIPROCATING NUCLEAR ENGINES CIVIL DEFENCE POWER MARINE NUCLEAR AEROSPACE AEROSPACE SYSTEMS CUSTOMER SERVICES
Slide 6: Complementary technologies and business cycles
COMPLEMENTARY TECHNOLOGIES AND BUSINESS CYCLES AEROSPACE LAND & SEA RECIPROCATING GAS TURBINES POWER SOURCE ENGINES NUCLEAR LARGE & GLOBAL CUSTOMER BASE LARGE & GLOBAL GLOBAL HIGH BARRIERS TO ENTRY MEDIUM/HIGH HIGH HIGH INVESTMENT REQUIRED LOW/MEDIUM LOW/MEDIUM 5-20 YEARS DEVELOPMENT TIME 2-8 YEARS
Slide 7: Benefits of a balanced portfolio
BENEFITS OF A BALANCED PORTFOLIO COMMERCIAL Different business and investment cycles support strong balance sheet Scale provides resilience and helps to fund R&D Breadth increases market access INDUSTRIAL STRATEGIC High technology and advanced Address attractive, long-term markets engineering applie
Slide 8: A robust and long-term growth business
A ROBUST AND LONG-TERM GROWTH BUSINESS REVENUE PROFIT 36%% 25%% 36 11 % 25 25%% 28 75 % 64% 89 % 75% 10 CAGR % 16% CAGR 2004: £5.9bn 2014: £14.6bn 2004: £0.4bn 2014: £1.6bn Aerospace Land & Sea BALANCED REVENUE STREAMS 52 % ORIGINAL EQUIPMENT 48 % CUSTOMER SERVICES
Slide 9: Our Businesses
AEROSPACE CIVIL AEROSPACE DEFENCE AEROSPACE LAND & SEA POWER SYSTEMS MARINE OUR NUCLEAR BUSINESSES
Slide 10: Civil Aerospace
CIVIL AEROSPACE OVERVIEW GROWTH DRIVERS MARKET OUTLOOK • 13,000 engines in service • Continuous investment • Global market for powering 35 aircraft types in applied R&D allows equipment and services • Leading engine supplier us to maintain strong estimated at $1,900 billion in widebody aircraft mark
Slide 11: Defence Aerospace
DEFENCE AEROSPACE OVERVIEW GROWTH DRIVERS MARKET OUTLOOK • World’s second largest • Long-term requirement • Equipment market supplier of defence for global security worth up to $150 billion aero engines • Leading position in over next 20 years • Presence in all major military transport aircraft • Se
Slide 12: Power Systems
POWER SYSTEMS OVERVIEW GROWTH DRIVERS MARKET OUTLOOK • World leader in fuel- • Major growth potential • Total market for efficient, high-speed in fuel-efficient engines reciprocating engines diesel technology for marine and estimated at £500 billion • Specialises in power markets over next 20 years
Slide 13: Marine
MARINE OVERVIEW GROWTH DRIVERS MARKET OUTLOOK • 4,000 customers • Long-term requirement • Equipment market worldwide with for marine support to worth up to £170 billion equipment installed offshore oil and gas over next 20 years on 25,000 vessels markets • Services market • Strength in three key • E
Slide 14: Nuclear
NUCLEAR OVERVIEW GROWTH DRIVERS MARKET OUTLOOK • More than 50 years’ • Security of supply, • Long-term UK MoD experience in nuclear environmental submarine programme industry through UK requirements and rising provides stable, ongoing submarine programme demand drive need for service revenue stream
Slide 15: Importance of customer services across the Group
IMPORTANCE OF CUSTOMER SERVICES ACROSS THE GROUP GROUP REVENUE MIX 52% ORIGINAL EQUIPMENT 48% SERVICES TOTAL SERVICES REVENUE: £7 bn SERVICES REVENUE BY DIVISION 72% AEROSPACE 28% LAND & SEA GROWING INSTALLED ADDING VALUE FOR ENGINE BASE CUSTOMERS AND Drives service revenues SHAREHOLDERS Provides gr
Slide 16: Our Priorities
FIX THE BASICS THE 4Cs CUSTOMER CONCENTRATION COST CASH CHANGE OUR CULTURE STRATEGIC INVESTMENT WIDEBODY AIRCRAFT NARROWBODY AIRCRAFT OUR MEDIUM-SPEED RECIPROCATING PRIORITIES ENGINES
Slide 17: Fix the basics: the 4Cs
FIX THE BASICS THE 4Cs FIX THE BASICS THE 4Cs CUSTOMER CONCENTRATION COST CASH CUSTOMER Place the customer at CHANGE OUR the heart of our business CULTURE CONCENTRATION Focus on where we add value COST Ensure our costs are competitive CASH For shareholder returns and to invest in future growth
Slide 18: Fix the basics: change our culture
FIX THE BASICS CHANGE OUR CULTURE FIX THE BASICS THE 4Cs CUSTOMER CONCENTRATION COST CASH Customer requirements CHANGE OUR driving innovation CULTURE Lean philosophy creating value for our customers High Performance Culture enabling employees to be at their best Strong ethics guiding standards and b
Slide 19: Our priorities: strategic investment
OUR PRIORITIES STRATEGIC INVESTMENT WIDEBODY AIRCRAFT Defend and build market share NARROWBODY AIRCRAFT Re-enter single aisle market STRATEGIC RECIPROCATING ENGINES INVESTMENT Grow capability in WIDEBODY medium-speed market AIRCRAFT NARROWBODY AIRCRAFT MEDIUM-SPEED RECIPROCATING ENGINES
Slide 20: Widebody aircraft: defend and build market share
WIDEBODY AIRCRAFT DEFEND AND BUILD MARKET SHARE STRONG MARKET CUSTOMER SERVICES GROWTH DRIVEN BY POTENTIAL CUSTOMER DEMAND • Service and support worth up to • Rolls-Royce has more than 50% four times the value of original equipment share of engines on order for over the lifetime of the engine new wi
Slide 21: Narrowbody aircraft: re-enter single aisle market
NARROWBODY AIRCRAFT RE-ENTER SINGLE AISLE MARKET SIGNIFICANT AND SUPPORTS FULL PRODUCT RANGE GROWING SEGMENT OF REQUIRED BY CUSTOMERS CIVIL AEROSPACE MARKET • Strengthens customer relationships • 70% of all deliveries by volume, and 50% by value PREPARE TO EQUIP • Technology transfer from expertise
Slide 22: Medium-speed reciprocating engines: grow capability in market
MEDIUM-SPEED RECIPROCATING ENGINES GROW CAPABILITY IN MARKET GROWING MARKET CUSTOMER BENEFITS FOR MEDIUM-SPEED ENGINES • Latest medium-speed engine: less fuel, • Marine and land power lower emissions, 20% more power market anticipated to grow per cylinder than previous product to £35 billion by 2023
Slide 23: Confidence in the Future
CONFIDENCE IN THE FUTURE
Slide 24: Confidence in the future
CONFIDENCE IN THE FUTURE R&D COMMITMENT Investing more than £1 billion per year in innovation and technology STRONG ORDER BOOK to address new markets and meet current and future customer needs Original equipment and long-term GROWTH MARKETS service contracts give us visibility of revenues and demons
Slide 25: Trusted to deliver excellence
TRUSTED TO DELIVER EXCELLENCE
Rolls-Royce Holdings — Investor Presentation (April 2015) on 6ix