Rolls-Royce Holdings plc · LSE:RR.
Rolls-Royce — HY 2011 Earnings Presentation
40 slides from Rolls-Royce's earnings presentation, November 2011
Slide 1: Appendices
Appendices “Trusted to deliver excellence”
Slide 2: Broadening our portfolio
Broadening our portfolio Underpinning long-term growth “Trusted to deliver excellence”
Slide 3: Balanced business portfolio
Balanced business portfolio 2011 HY £5.5bn underlying revenues Aftermarket services: 53% £2.9bn Energy 6% Civil 19% Marine 13% Defence 9% Original equipment: 47% £2.6bn “Trusted to deliver excellence”
Slide 4: Managing challenges: an increasingly resilient portfolio
Managing challenges An increasingly resilient portfolio Commodity Financial 9/11 SARS inflation crisis 400 300 Weakening Programme Gulf War US$ delays Index 200 100 0 -100 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Order book Revenue EPS Avg cash “Trusted to deliver excellence”
Slide 5: Investing for future growth
Investing for future growth “Trusted to deliver excellence”
Slide 6: Investing for growth and productivity
Investing for growth and productivity Underlying revenue per employee* 300 250 259 233 200 211 194 182 £000’s 150 169 140 150 128 115 100 50 0 2001 2003 2005 2007 2009 2011 “Trusted to deliver excellence”
Slide 7: Investing in long-term growth drivers
Investing in long-term growth drivers Trent XWB Seletar test bed Services network Tognum Crosspointe Broadening the portfolio, better balanced “Trusted to deliver excellence”
Slide 8: Globalising operational capability
Globalising operational capability Enabling growth and productivity Germany Brazil USA UK Singapore Norway “Trusted to deliver excellence”
Slide 9: Financial data
Financial data “Trusted to deliver excellence”
Slide 10: A strong balance sheet
A strong balance sheet 1750 1250 £m 750 250 FY 07 FY 08 FY 09 FY 10 HY 11 -250 Cash balance Average net cash “Trusted to deliver excellence”
Slide 11: Debt maturities well spread
Debt maturities well spread Gross facilities of £1.1bn outstanding Gross cash 30 June 11 – £2.6bn 1000 Gross debt 30 June 11 – £1.1bn 900 Undrawn facilities – £1.2bn 800 RCF – £250m 700 £m RCF – £750m 600 EIB – £200m 500 400 300 200 100 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 Draw
Slide 12: Customer finance – delivered
Customer finance – delivered (Contingent liabilities) Not a core activity Gross and net relatively stable since 2002 At 30 June 2011 – gross $959m, net $181m, stressed $313m Credit Backstops – gross $366m, net $89m, stressed $111m - 14 customers and 134 aircraft AVG’s – gross $593m, net $9
Slide 13: Business reviews
Business reviews “Trusted to deliver excellence”
Slide 14: Civil Aerospace portfolio
Civil Aerospace portfolio Broadest civil product range of any manufacturer *The V2500 is manufactured by IAE International Aero Engines AG “Trusted to deliver excellence” (a multinational consortium led by senior shareholders Rolls-Royce and Pratt & Whitney, together with JAEC and MTU Aero Engines)
Slide 15: Civil – well-balanced portfolio
Civil – well-balanced portfolio HY 2011 underlying revenues – £2.6bn Small Engines OE 28% 40% 60% 60% 12% V2500 Services Trent & RB211 Market leader – large Corporate and Growing despite delayed major new Widebody programmes Large and increasing installed thrust Increasing penetration of Tot
Slide 16: Growing market and improving share
Growing market and improving share Delivering significant growth in installed thrust 2011 HY 800 m/lbs of installed thrust 700 600 500 392 m/lbs 400 300 200 100 0 1987 1991 1995 1999 2003 2007 2011 2015 2019 RB211 Trent V2500 @ 50% Corporate & Regional “Trusted to deliver excellence”
Slide 17: TotalCare – a powerful model
TotalCare – a powerful model Adding value for Rolls-Royce and our customers Customers: Rolls-Royce: Predictable costs Expand revenue opportunity Supports outsourcing Manage overhaul load Flexible contract design Incentivise cost reduction Risk transfer Best positioned to manage risk
Slide 18: TotalCare – risk management
TotalCare – risk management Major assumptions Utilisation Material and labour cost assumptions, inflation, FX Frequency and scope of overhaul Contract management Ongoing fleet management Contract reviews on every contract each 6 months Experience over a decade TotalCare for the Wid
Slide 19: 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 “Trusted to deliver excellence”
Slide 20: Defence Aerospace portfolio
Defence Aerospace portfolio “Trusted to deliver excellence”
Slide 21: Defence – a broad portfolio
Defence – a broad portfolio 2011 HY underlying revenues – £1.1bn UAV / Trainer Development OE 10% 8% 38% 40% 54% 50% Services Transport Combat Broadly based portfolio Well-positioned on global programmes >18,000 engines in service Combat, Transport, Helicopters, UAV’s, Trainers “Trusted to d
Slide 22: 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 23: Marine portfolio
Marine portfolio “Trusted to deliver excellence”
Slide 24: Marine capabilities
Marine capabilities Underpinning growth 2,500 customers, including 70 navies, around 9,500 employees Equipment – 30,000 vessels, sales / service activities in 34 countries Strong positions in offshore, merchant and naval sectors System integration capabilities enabled revenue CAGR of around
Slide 25: Leveraging skills into adjacent markets
Leveraging skills into adjacent markets Merchant – opportunities in technology intensive markets 1. ‘Mission critical’ products and parts 2. Systems offering (pulling through other products) 3. Lifetime service revenues “Trusted to deliver excellence”
Slide 26: Marine – continuing strong growth
Marine – continuing strong growth 2011 HY underlying revenues – £1.2bn Naval Services OE 41% 34% 43% 59% 23% Offshore Specialist O&G vessels Integrated propulsion solutions Leading position in Offshore Product on 30,000 vessels Services growing quickly Improving position in Naval - major o
Slide 27: Energy portfolio
Energy portfolio “Trusted to deliver excellence”
Slide 28: Energy capabilities
Energy capabilities Strong O&G position, investing in power generation capability 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 generat
Slide 29: Energy – a growing opportunity
Energy – a growing opportunity Investing in low carbon and power generation technologies Profit * Advantaged by technology Developing low carbon technologies Accessing global demand “Trusted to deliver excellence”
Slide 30: Energy – investing for the future
Energy – investing for the future 2011 HY underlying revenues – £0.6bn Power Services Generation 43% 42% 57% 58% OE Oil and Gas Strong, well-positioned Oil & Gas Growing importance of long-term services support Evolving Power Generation Low carbon – fuel cells, tidal, nuclear “Trusted to del
Slide 31: Tognum AG
Tognum AG “Trusted to deliver excellence”
Slide 32: Tognum ~ A broadly based business
Tognum ~ A broadly based business 2009 FY underlying revenues €2.5bn Defence / Energy Americas Other 16% Asia / 24% 32% RoW 28% 17% 19% Industrial 35% 29% Germany Marine Europe Revenues ~ €2.5bn, services ~ 31%, adjusted EBIT €199m Employees ~ 8,700, circa 85% in Germany Services ~ Provided th
Slide 33: Tognum – extending core capabilities
Tognum – extending core capabilities 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 •
Slide 34: 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 35: Compelling industrial combination
Compelling industrial combination Technology, solutions and services portfolio Complementary product and technology Global access High-Speed and Europe Medium-Speed US Diesel & Gas BRIC Hybrid Asia Systems integration Through life service and support Direct Sales Lo
Slide 36: IAE
IAE “Trusted to deliver excellence”
Slide 37: Current status in the narrowbody sector
Current status in the narrowbody sector Partner in IAE on V2500 for almost 30 years Civil Revenues – 2010 32.5% equity share, similar work share Small Engines including compressor, fans and discs and assembly in Dahlewitz Highest volume engine programme 400+ deliveries p.a. Approx. 4,500 eng
Slide 38: Long-term collaboration with P&W in the mid-size sector
Long-term collaboration with P&W in the mid-size sector Re-engining not seen as compelling proposition for RR Next generation aircraft programmes provide significant opportunity for improved market position and scale JV builds on successful 30 year partnership with P&W Venture to be equally
Slide 39: Restructuring IAE participation
Restructuring IAE participation Restructuring IAE participation to align stakeholders’ interests with the A320 and A320 NEO RR to dispose of 32.5% shareholding and programme share to P&W Consideration of $1.5bn at close, subject to NWC adjustments $/EFH* for each engine in service for 15 yea
Slide 40: 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