Rolls-Royce Holdings plc · LSE:RR.
Rolls-Royce — Corporate Update (July 2015)
15 slides from Rolls-Royce's corporate update, July 2015
Slide 1: Rolls-Royce Holdings plc Guidance Update
Rolls-Royce Holdings plc Guidance Update Warren East, Chief Executive David Smith, Chief Financial Officer Trusted to deliver excellence
Slide 2: Introduction
Introduction • Business with fundamental strengths and outstanding long-term prospects • Period of significant transformation in Aerospace • Market headwinds in offshore • Confidence in the long term
Slide 3: Agenda
Agenda • What’s impacting our outlook • 2015 guidance update and half year preview • Implications for 2016 • Confidence in the long term
Slide 4: What’s impacting our outlook
What’s impacting our outlook Market developments • Trent 700: volumes and pricing • Weaker business jet engine demand and softening regional aftermarket • Weak offshore markets Business review • Rigorous review of planning assumptions • Pulled ahead planning process
Slide 5: 2015 full year guidance update
2015 full year guidance update Original New GROUP Underlying revenue £13.4 – 14.4bn Unchanged Underlying profit before tax £1,400 – 1,550m £1,325 – 1,475m Free Cash Flow £50 – 350m £(150) – 150m SEGMENTS Underlying Marine profit £90 – 120m £0 – 40m Others Unchanged Other: Marine: impairments/restruc
Slide 6: Civil Aerospace update
Civil Aerospace update • Trent 700 rate changes • Reduced business jet engine demand and softening regional aftermarket • Trent 1000 provision reversal ~ £200m • Retrospective TotalCare profitability benefit in 2015 improvements
Slide 7: 2015 half year preview
2015 half year preview 2014 H1 2015 H1 Underlying revenue £6.45bn £6.15 – 6.30bn Including divested Energy business £6.84bn Underlying profit before tax £645m £390 – 430m Including divested Energy business £644m Free cash flow £(347)m £(570) – (620)m Including divested Energy business £(432)m • Furt
Slide 8: Confidence in second half of 2015
Confidence in second half of 2015 • Aerospace • Higher engine deliveries • Continued service growth • Lower R&D charge vs H1 • Retrospective TotalCare profitability improvements / Trent 1000 provision reversal • Restructuring benefits • Land and Sea • Power Systems H2 weighted as in previous years •
Slide 9: Implications for 2016
Implications for 2016 Key factors vs 2015 profit before tax include: Trent 700 ~ £(250)m ( ) Business Jets and Regional Aftermarket ~ £(50)m ( ) ( ) ( ) Improving large engine aftermarket & restructuring offset by likely lower Nil TotalCare and other adjustments • Cash conversion expected to improve
Slide 10: Looking further ahead
Looking further ahead • ~ £76 billion order book
Slide 11: Market share in installed base lags order backlog
Market share in installed base lags order backlog and underpins confidence in long-term cash flow* Achieved 50% order book 50% Translates into 50% installed base over time *Market share of widebody passenger aircraft
Slide 12: Looking further ahead
Looking further ahead • ~ £76 billion order book • Mega trends underpin profitable growth • Significant embedded value as Civil large engines double
Slide 13: Trent XWB creates significant embedded value
Trent XWB creates significant embedded value Total XWB cumulative cash flow around double Trent 700* *In 2015 £
Slide 14: Looking further ahead
Looking further ahead • ~ £76 billion order book • Mega trends underpin profitable growth • Significant embedded value as Civil large engines double • Continuing to strengthen our technology plans • Multi-year industrial transformation programme through end of decade • Long-term model attractive
Slide 15: Summary
Summary • Business with fundamental strengths and outstanding long-term prospects • Period of significant transformation in Aerospace • Market headwinds in offshore • Confidence in the long term