Investor Relations | CMD 2016
All figures are for Full Year 2015 unless otherwise stated.
Civil Aerospace – Aftermarket ValuePresenters
5% 2015 Group Revenue
H1 2016 Figure
£70.5bn
OE 67%
AM 33%
Order Book
23,200*
Overall there has been a slowdown in all major geographical markets for new aircraft orders reflecting a period of higher than normal order placement for new airframe products in recent years (principally Airbus A350 and A330neo, and Boeing 787 and 777X)
Our current share in the widebody engine market is at 31% of the installed widebody passenger fleet and is expected to reach 50% in the first half of the next decade
Long-term growth in the number of widebody aircraft in the global fleet has historically been strongly correlated to global GDP growth and disposable income
£m 2014 Underlying
Change Acquisitions &
Disposals Exchange 2015 Order book 63,229 3,800 - - 67,029 Engine deliveries 739 (27) - - 712 Underlying revenue 6,837 201 - (105) 6,933
Change +3% - -2% +1% Underlying OE revenue 3,463 (117) - (88) 3,258
Change -3% - -3% -6% Underlying services revenue 3,374 318 - (17) 3,675
Change +9% - +1% +9%Underlying gross margin 1,675 (139) - (10) 1,526Gross Margin % 24.5% -270 bps 22.0%
Commercial and administrative costs (283) (14) - 1 (296)Restructuring costs (82) 75 - - (7) Research and development costs (461) (65) - 11 (515) Joint ventures and associates 93 8 3 104
Underlying profit before financing 942 (135) - 5 812 Change -14% -14%
Underlying operating margin 13.8% -230 bps 11.7%
Business Focus
Business Aviation • Powers the fastest, the longest-range, and the largest business jets• In the past decade, our engines have powered seven new business jets into
service• Total fleet of over 3,000 aircraft
Market Dynamics
Older widebody aircraft are experiencing reduced utilisation by certain airlines, in particular Boeing 777s and the four-engined Airbus A340s
The introduction of the A330neo, announced in summer 2014, reduced Trent 700 sales ahead of the new Trent 7000 entering service in 2017 as the sole source engine for A330neo
Increasing environmental legislation and efficiency requirements drive emission and efficiency technologies
Historically, traffic growth has recovered quickly following major economic shocks
£6,655m £6,837m £6,933m
£844m £942m £812m
2013 2014 2015
Civil Aerospace Rolls-Royce powers more than 35 types of commercial aircraft and has over 13,000 engines in service around the world. Demand for our products remains robust and underpins strong performance
Airlines • Strong market position on widebody aircraft• Trent family of engines have all been either the launch engine for the airframe
for which it was designed, is the market leader on that application or both
www.rolls-royce.com www.facebook.com/RollsRoyceGroup
@RollsRoyce All figures are for Full Year 2015 unless otherwise stated.
This newsletter is for informational purposes only, it is not intended to contain any new material or non-public information relating to Rolls-Royce plc but is a summary of recent public announcements and as such may not be relied on. Nothing in this document should be construed as a profit forecast, however it may repeat certain statements that might be deemed to be forward-looking; such statements are made under the provisions of Rolls-Royce’s Safe Harbour Statement which can be found as part of our presentation materials on Rolls-Royce’s website http://www.rolls-royce.com/investors/results-centre
© Airbus S.A.S 2014
Employees Historic Revenue & Profit
Underlying Revenue
2015 Group Revenue
Revenue Breakdown
52%
£6.9bn
47% 53% AM
OE
63% 37%
Large Small &Med
LTSA* 38%
T&M 15%
OE 47%
*FY15 Average
*Long Term Service Agreement
Dominic joined Rolls-Royce as an undergraduate trainee in 1990. He has worked in many different areas of the business, including leading the development of the Trent 1000 engine for the Boeing 787. In 2013 Dominic was appointed as Chief Customer Officer of Rolls-Royce Civil Large Engines. In 2016, he was appointed as Director, Customers and Services – Civil Aerospace with responsibility for leading all sales, marketing and services delivery across our airplane manufacturers, airlines, business jet and lessor customers.
Richard joined Rolls-Royce in 1990 as a sponsored engineering undergraduate, undergoing an intensive year’s training in Derby. He successfully obtained his MBA in 2010 before running the Market Assessment team, providing strategic understanding to lead key decision-making and strategy-setting. In 2012, Richard was asked to restructure the customer-facing elements of marketing, and in 2016 he assumed responsibility for the entire Civil Aerospace marketing team.
Dominic Horwood Director, Customers and Services – Civil Aerospace
Richard Goodhead Senior Vice President, Marketing – Civil Aerospace
Civil Aerospace – Capturing Aftermarket Value • Capturing aftermarket value
and reducing costs as widebody fleet grows
• Offering choice and adapting to customer requirements across lifecycle
• Creating next generation Service Solutions
2015 2025 Rolls-Royce installed engine growth
Competitive and global Service Network
Digitally enabled services, focused on customer outcomes
Maintain engine assets
Aircraft technically available and ready to depart
Efficient sector
Optimised network and operating costs
Manage inventory and assets
Dispose of equipment
Maintenance Availability Efficiency Transitions
4% 65%
• Manage transitions to keep Trents flying
• Competitive, capable and growing Service Network
• Digitally enabling all of our services to improve customer outcomes
© Airbus S.A.S 2014
Trent Service Network Customer Service Centres Delta TechOps MRO Delivering the right Services Solutions across the product lifecycle
>7,000 engines 3,492 engines
Over 100 widebody airline customers
230 32%
530 39%
~900 ~37%
2010 Today 2020
10 24
Trent aircraft >8 years old
Trent transitions in first three quarters
TotalCare®
• Time on wing and shop visit price risk transfer
• Fully comprehensive range of service
SelectCareTM • Hybrid payment
structures• Selected services
based on airline needs
• Agreed fixed price per shop visit
Foundation Services • Pay at event• Access to
additional services • Short term cost
certainty
Digital Platform
2015 2016
World Leading Analytics
Product Knowledge
+ Efficiency
Availability
Safety
Collaboration Platform
Acco
unta
ble
Insi
ghts
Dat
a
Customer Intimacy
+