Rolls-Royce Holdings plc · LSE:RR.
Rolls-Royce — Corporate Update (November 2019)
12 slides from Rolls-Royce's corporate update, Nov 7, 2019
Slide 1: Trent 1000 and trading update
Trent 1000 and trading update Accelerating efforts to return Trent 1000 fleet to full health Trent 1000 Update © Rolls-Royce
Slide 2: Continuous progress in resolving Trent 1000 challenges
= fix is designed IP Compressor IP Turbine HP Turbine = fix is certified & being fitted to in-service fleet Trent 1000 Package B Trent 1000 Package C 240 Trent 1000 TEN Continuous progress been made in resolving Trent 1000 challenges TEN high pressure turbine blade last of these issues to resolve 2
Slide 3: High pressure turbine issue and engineering review
• The HPT receives airflow directly from the combustion chamber • HPT blades are subject to temperatures High pressure far above the melting point of the metal turbine issue from which they are made and • As a result, HPT blade degradation is engineering inevitable in all engine types review What is
Slide 4: Increasing visibility and maturity around the final major Trent 1000 fix
• Detailed engineering review carried out with the following conclusions: 1. Initial planned HPT blade redesign (expected early 2020) would not deliver Increasing sufficient durability improvement visibility and maturity 2. Lessons learned provide clear pathway to an improved redesign. New HPT aroun
Slide 5: Providing certainty to our customers
1. 2. 3. Providing Accelerate design Invest in spare Maximise MRO certainty to Additional resources engines Bring forward planned MRO our customers dedicated to development of product fixes Significant one-off near term capacity expansion, improve throughput in the current investment in additional s
Slide 6: Financial guidance update
Financial guidance update 6 Trent 1000 Update © Rolls-Royce
Slide 7: Financial review undertaken of Trent 1000 and 7000
• Detailed financial review undertaken. Factoring in: Financial 1. Revised timing for HPT blade introduction review undertaken of Trent 1000 & 2. More conservative view of ultimate HPT blade durability 7000 3. Detailed financial review of customer contracts Exceptional charge & revised in-service ca
Slide 8: Trent 1000 in service cash costs
Trent 1000 in 2017A 2018A 2019F 2020F 2021F 2022+ service cash Significant costs Current £119m £431m c.£550m £450-550m £450-550m decline H1 19 £119m £431m £450-500m £50-100m Significant Updated expectations decline decline for cash costs on across all Trent 1000 • Costs now updated to include all Tr
Slide 9: c.£1.4bn exceptional P&L charge
Trent 1000 exceptional charge principally comprised of: c.£1.4bn exceptional 1. Additional cash costs to cover customer disruption and remediation shop visit costs P&L charge Significant profit impact expected to 2. Up-front recognition of future contract losses on a very small number of customer be
Slide 10: 2019 Outlook
• Civil Aerospace: continued growth in engine flying hours; progress on OE loss reduction. Modest impact on profit from additional engineering investment on Trent 1000 2019 Outlook • Defence: continue to expect stable sales; investment in future programmes continuing to drive higher self funded R&D
Slide 11: Q&A
Q&A 11 Trent 1000 Update © Rolls-Royce
Slide 12: Safe harbour statement
Safe harbour This announcement contains certain forward-looking statements. These forward- looking statements can be identified by the fact that they do not relate only to statement historical or current facts. In particular, all statements that express forecasts, expectations and projections with r
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