Rolls-Royce Holdings plc · LSE:RR.
Rolls-Royce — Investor Day (November 2011)
66 slides from Rolls-Royce's investor day presentation, November 2011
Slide 1: Rolls-Royce Holdings plc – John Rishton, CEO
Rolls-Royce Holdings plc John Rishton Chief Executive Officer “Trusted to deliver excellence”
Slide 2: Consistent power systems strategy
Consistent power systems strategy “Trusted to deliver excellence”
Slide 3: Delivering growth
Delivering growth Strong order book (£bn) Strong revenue growth (£bn) Growing underlying profits (£m) + 9% CAGR +12% CAGR +6% CAGR Improving average net cash (£m) Growing payments to shareholders (p/share) +610m +7% CAGR Further growth 2011 – guidance confirmed “Trusted to deliver excellence”
Slide 4: Extraordinary visibility of growth
Extraordinary visibility of growth Record order book Trebling Trent installed thrust P&W mid-size collaboration Tognum growth acceleration “Trusted to deliver excellence”
Slide 5: In summary
In summary Winning strategy Increasingly resilient financial performance Extraordinary visibility of growth Focus on execution Growth enablers – technology, operations and services “Trusted to deliver excellence”
Slide 6: Rolls-Royce Holdings plc – John Rishton
Rolls-Royce Holdings plc John Rishton Chief Executive Officer “Trusted to deliver excellence”
Slide 7: Operations: Delivering on the promises made
Operations “Delivering on the promises made” Alain Michaelis President – Gas Turbine Supply Chain “Trusted to deliver excellence”
Slide 8: A record order book – £61.4bn
A record order book – £61.4bn Provides operational scale and investment confidence £bn “Trusted to deliver excellence”
Slide 9: Operational objectives
Operational objectives Two foundation stones Deliver the order book Ramp up of current products Launch new products Support of installed fleet Drive operational performance Cost, quality and responsiveness “Trusted to deliver excellence”
Slide 10: An integrated approach
An integrated approach Developing and executing our operational strategy Tailored market approach Introducing new products Delivering component strategies Deliver the order book Managing cost and reducing waste Working with partners & suppliers Drive operational performance Managing glob
Slide 11: Tailored market approach
Tailored market approach Adapting to the needs of the market and customers Petrobras to invest $225bn in Brazil over the next 5 years “Trusted to deliver excellence”
Slide 12: Introducing new products
Introducing new products Core of our business model Working in a global collaborative model Delivering through a structured process Proven programme delivery “Trusted to deliver excellence”
Slide 13: Delivering component strategy
Delivering component strategy Discs – implementing new process technology Sunderland Crosspointe Manufacturing Research centre University partners “Trusted to deliver excellence”
Slide 14: Managing cost and reducing waste
Managing cost and reducing waste Addressing all areas of opportunity on a multi-year basis IMPROVEMENTS Investing in Driving Optimising supply chain operational design, materials design efficiency & process HEADWINDS “Trusted to deliver excellence”
Slide 15: Working with partners & suppliers: Make-Buy
Working with partners & suppliers Make-Buy – a solid foundation for growth Make-Buy (illustrative) Control Make Competitiveness Buy Protect Business criticality Rolls-Royce Joint Venture Supplier “Trusted to deliver excellence”
Slide 16: Working with partners & suppliers
Working with partners & suppliers Managing performance – 5 key elements “Trusted to deliver excellence”
Slide 17: Managing globally
Managing globally Global teams, standard processes, robust supply chains UK EMEA Americas Asia 2015 activity 2010 activity “Trusted to deliver excellence”
Slide 18: Making good progress
Making good progress Driving growth and operational performance in the last 3 years Revenue per employee +25% Civil aero engine deliveries +30% Major product programmes 40+ New facilities in implementation 14 3 year CAPEX investment £1.2bn Graduate and apprentice intake Doubled “Trusted to deliver e
Slide 19: Summary
Summary We are focused on delivering the order book and driving operational performance Our integrated approach addresses both of the above We are already making good progress “Trusted to deliver excellence”
Slide 20: Operations: Delivering on the promises made
Operations “Delivering on the promises made” Alain Michaelis President – Gas Turbine Supply Chain & Deputy COO “Trusted to deliver excellence”
Slide 21: Services: Adding value, every day
Services “Adding value, every day” Tony Wood President – Services “Trusted to deliver excellence”
Slide 22: Rolls-Royce Services
Rolls-Royce Services £5.5bn p.a. and growing Record order book of £61.4bn c. 60,000 power and propulsion systems in service c. 2,000 new engine deliveries in 2011 30+ years product life Unique position to offer competitive long term service contracts Through-life availability promise “Tr
Slide 23: The customer's first choice for services
The customer’s first choice for services Leveraging our unique knowledge as the OEM Significant growth of the installed base Uniquely position as OEM to exploit our knowledge of the product Long-term relationships with customers Aligned service packages Mission critical support in all mark
Slide 24: Services across the Group
Services across the Group A broad base of programmes and installed products Civil Defence Aerospace Aerospace Marine Energy Nuclear •14,000 engines •18,000 engines •25,000 power & •4,000 power •200 plants propulsion units systems operating •500 airlines •160 armed •75,000 deck •1,600 customers •11 s
Slide 25: Global services presence
Global services presence Comprehensive network of Service Delivery Centres `` 14 R&O Service Centres 6 On-Wing Care Centres 18 Component Repair Centres 4 Data Centres (OSyS) 36 Marine Service Centres 9,000 employees + 3,300 in JV’s Repair & Overhaul Marine Service Field Services Centres Centres “Tru
Slide 26: Services Centres
Services Centres World-leading integrated capability to deliver availability Business Centres Operations Centres Services policy and Hubs to maximise business fleet availability management Delivery of High quality maintenance service data repair and overhaul Data Centres Service Delivery Centres “Tr
Slide 27: Services strategy
Services strategy A common strategy across sectors Uncertain Reactive Planned TotalCare, CorporateCare, MissionCare Time & Long-Term Asset Value Process & Material Service management proposition Systems offerings Agreements Toolkit $ per engine operating hour Maintenance, Repair & Overhaul OEM Servi
Slide 28: Benefits of TotalCare
Benefits of TotalCare® Predictable and planned operations for customers Unique IP and capability of OEM: Operations Centres Data collection and analysis Comprehensive offering Improved reliability through: TotalCare planning Investment in technologies Equipment Health Monitoring Tr
Slide 29: Predictable maintenance planning
Predictable maintenance planning Underpinning reliable support and availability for our customers Aircraft schedule and maintenance plan Spare engine availability Shop capacity Engine Health Customer Optimised Optimised Register alignment timing workscope “Trusted to deliver excellence”
Slide 30: Mission critical services in practice
Mission critical services in practice Predict and prevent – application of bio science “Trusted to deliver excellence”
Slide 31: Engine Health Management
Engine Health Management Reducing disruption and cost for our customers 1. Airline experienced lightning strike on departure 2. Operations Centre notified via 3 4 health monitoring system 5 Los Angeles 3. Technical data analysed and 2 approval given to continue 1 4. Necessary people, information Sin
Slide 32: Marine services
Marine services Evolution of the strategy Hamburg Galveston (Texas) Gdynia Singapore Rio de Janeiro (Brazil) West Africa Global investment in capability close to our customers “Trusted to deliver excellence”
Slide 33: Defence services – RAF in Libya
Defence services – RAF in Libya High performance of the EJ200 engine for Typhoon 6000 EJ200 flying hours achieved 24/7 support High operational demand – 7hr average sortie Engine support through MissionCare ZERO engine rejections throughout campaign “Trusted to deliver excellence”
Slide 34: Energy services
Energy services Supporting Petrobras in Brazil Well-established 10-year relationship Platform support with deployed personnel All Rolls-Royce on-board teams are Brazilian “Trusted to deliver excellence”
Slide 35: Increasing LTSA market penetration
Increasing LTSA market penetration LTSA growth over last 5 years Percentage of Fleet under Long-Term Service Agreements (LTSAs) 80 70 60 50 % 40 2005 2010 30 20 10 0 Civil Defence Energy Marine “Trusted to deliver excellence”
Slide 36: In summary
In summary Underlying Services Revenue 6 10% CAGR £5.5bn p.a. sales and 5 growing 51% of underlying revenue in 2010 4 Growing market share and installed base £bn 3 Market leading strategy and 2 business model 1 Unique capabilities as the OEM 0 2001 2002 2003 2004 2005 2006 2007 2008 2009
Slide 37: Services: Adding value, every day
Services “Adding value, every day” Tony Wood President – Services “Trusted to deliver excellence”
Slide 38: Technology: Creating competitive advantage
Technology “Creating competitive advantage” Peter Price Director of Engineering & Technology, Civil Aerospace “Trusted to deliver excellence”
Slide 39: High pressure turbine blade
High pressure turbine blade “Trusted to deliver excellence”
Slide 40: R&D investment
R&D investment Long-term investment in technology and intellectual property 1,000 7.0% 900 6.0% 800 700 5.0% 600 4.0% 500 3.0% 400 300 2.0% 200 1.0% 100 0 0.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Gross Net % sales “Trusted to deliver excellence”
Slide 41: Gross R&D investment breakdown
Gross R&D investment breakdown Full-year 2010 spend – £923m Sustaining Research & Engineering Technology Product Development “Trusted to deliver excellence”
Slide 42: R&D process
R&D process Coordinated research Technology readiness level 9 8 Project 7 6 System demonstration 5 Applied 4 research 3 Basic 2 research 1 “Trusted to deliver excellence”
Slide 43: Global research network
Global research network Access to a wealth of talent & creativity Europe North America UTCs in Germany, Sweden, Norway, Italy and UTC* at Purdue the UK 19 Asia UTC in Korea Research Centres in China, Singapore, Japan *UTC = University Technology Centre “Trusted to deliver excellence”
Slide 44: Engineering centres
Engineering centres Harvesting capability from around the World Scandinavia Derby •Marine integration Montreal •Large Engines •Propulsors •Industrial GT •Recips. Walpole •Waterjets Dahlewitz •Twin shaft engines Indianapolis •Corporate jets •Defence Aero •Helicopters Bangalore Bristol •Engineering su
Slide 45: Network of manufacturing research centres
Network of manufacturing research centres Creating an infrastructure for the future Advanced Manufacturing Research Centre (AMRC); Rotherham Advanced Forming Research Centre (AFRC); Glasgow National Composites Centre (NCC); Bristol Manufacturing Technology Centre (MTC); Coventry Nuclear Ad
Slide 46: Building blocks of technology
Building blocks of technology The importance of people and tools Systems, processes and tools World-class Competitive engineers technology “Trusted to deliver excellence”
Slide 47: Trent 1000
Trent 1000 Long-term investment in advanced technologies Trent 1000 programme launched “Trusted to deliver excellence”
Slide 48: Trent XWB
Trent XWB Leading technologies for today Excellent test results Fuel consumption better than specified Most efficient large aero gas turbine ever produced “Trusted to deliver excellence”
Slide 49: Continuous improvement
Continuous improvement Capitalising on our investment Technology transfer across product range “Trusted to deliver excellence”
Slide 50: Future middle of the market
Future middle of the market Leading technologies for the future Advanced shroudless High Lightweight composites Pressure Turbine blade and liner Lightweight Low Pressure Turbine Advanced combustor Advanced sealing Advanced blisked High and externals Pressure Compressor “Trusted to deliver excellence
Slide 51: Vision 20
Vision 20 Technologies for a 20-year horizon “Trusted to deliver excellence”
Slide 52: Technology across the Group: reciprocating engines
Technology across the Group World-class reciprocating engines “Trusted to deliver excellence”
Slide 53: Technology across the Group: low carbon technologies
Technology across the Group Leading low carbon technologies PROMAS Open Rotor Engine Civil Nuclear Tidal Stream “Trusted to deliver excellence”
Slide 54: Summary
Summary Continuous investment leading to high barriers to entry At the forefront of the next generation of products and integrated services A clear focus on returns “Trusted to deliver excellence”
Slide 55: Technology: Creating competitive advantage
Technology “Creating competitive advantage” Peter Price Director of Engineering & Technology, Civil Aerospace “Trusted to deliver excellence”
Slide 56: Financial summary – Andrew Shilston
Financial summary Andrew Shilston Finance Director “Trusted to deliver excellence”
Slide 57: Agenda
Agenda Delivering the growth agenda Tognum – update Narrowbody – IAE restructuring Summary “Trusted to deliver excellence”
Slide 58: Technology creates opportunities
Technology creates opportunities Delivering complex systems and solutions for our customers Innovation and technology Complex systems skills Significant barriers to entry “Trusted to deliver excellence”
Slide 59: Globalising operational capability
Globalising operational capability Underlying revenue per employee* 300 250 259 8% CAGR 233 259 200 211 194 233 182 211 £000’s 150 169 194 140 150 182 128 169 100 115 140 150 128 115 50 0 2001 2003 2005 2007 2009 2011 Investing for growth and productivity *Underlying revenue per employee based on “T
Slide 60: Growing Group service revenues
Growing Group service revenues 5 4 10% CAGR 259 3 233 £bn 211 194 2 182 169 140 150 128 1 115 0 2000 2002 2004 2006 2008 2010 Growing installed base and evolving services model “Trusted to deliver excellence”
Slide 61: Disciplined and consistent strategy
Disciplined and consistent strategy Transforming the business Revenue (£bn) UPBFCT (£m) +8% CAGR +9% CAGR 250 10.9 250 1,010 200 Marine 200 Marine 150 Defence Index 150 4.6 413 Defence Index 100 100 Civil 50 50 Civil 0 Energy 0 1999 2010 1999 2010 Energy -50 “Trusted to deliver excellence”
Slide 62: Tognum – making solid progress
Tognum – making solid progress 9 March 6 April 24 June August / September Intent to Offer 94.17% Completion & offer launched acceptance settlement announced announced Approx £1.4bn March 2011 July 2011 December 2011 December 2012 Joint Public Offer period Tender Offer Regulatory approvals Rolls-Royc
Slide 63: Tognum accelerates Rolls-Royce growth
Tognum accelerates Rolls-Royce growth Creating a world-class recips portfolio with Daimler and Tognum Revenue** £10.9bn Revenue** (incl. Tognum) £13.1bn 20% 26% 24% 19% Civil 11% 17% Defence 45% 38% Marine * Energy Strong partnership and market access Enhance technology and product development
Slide 64: Positioned for future mid-size market
Positioned for future mid-size market Today – narrowbody is a modest civil contributor Significant opportunity – market position/scale Civil Revenues – 2010 C&R Future collaboration builds on 30 year partnership Focus on high-bypass geared technologies Restructure IAE – expected to close i
Slide 65: Strong portfolio and financial strength
Strong portfolio and financial strength Technology, global access, well-positioned in growing markets Investing to broaden the portfolio, transforming capability & capacity Tognum accelerates growth opportunities in Marine and Powergen Positioned to compete in next generation mid-size sector
Slide 66: Financial summary – Andrew Shilston
Financial summary Andrew Shilston Finance Director “Trusted to deliver excellence”