Interim Management Statement

RNS Number : 5684M

Rolls-Royce Holdings plc

08 May 2015

 



8 May 2015

ROLLS-ROYCE HOLDINGS PLC - INTERIM MANAGEMENT STATEMENT

We maintain our full year guidance for 2015.

We expect performance to be more weighted towards the second half. In Aerospace, deliveries of Trent XWB engines will ramp up. In Land & Sea, as expected, trading continues to be affected by lower oil prices and has therefore started more slowly than in 2014.

On cash, we expect a first-half bias in the cash cost of our restructuring efforts, with the benefits of restructuring beginning to be seen later in the year. We therefore also expect free cash flow to be more weighted towards the second half than in 2014.

Our 2015 guidance excluded the effects of foreign exchange translation. Compared with 2014, average rates for Sterling have weakened against the US dollar but strengthened against the Euro and the Norwegian Kroner. If rates remain at the average levels seen so far in 2015, these movements would be broadly offsetting for earnings. However for revenue, we would expect a roughly £350 million reduction from translation.

We announced last November that we would reduce our headcount by 2,600, principally in our Aerospace division. We are on track to deliver this plan and to date approximately 1,300 people have left the company. We are also driving further cost reduction programmes in our Land & Sea division.

Since we last reported, we have continued to grow our order book and to invest in the future growth of our business.

In Aerospace, we announced our largest ever order, with Emirates selecting our Trent 900 engines to power 50 Airbus A380 aircraft. Air China also announced that it had selected Rolls-Royce Trent 1000 engines and long-term TotalCare^® support to power 15 new Boeing 787-9 Dreamliner aircraft. We continue to improve our delivery and customer focus, with Boeing recognising Rolls-Royce as a Supplier of the Year.  At the end of February, Airbus announced that they had decided to reduce A330 production to six aircraft per month in 2016.

In Land & Sea we secured a landmark agreement to supply six of our new B33:45 medium-speed diesel generator sets to China's Fuijan Mawei shipyard for configuration aboard the world's first ever seabed mining vessel, and secured a contract with Keppel Shipyard in Singapore to supply two all-gas engines for power generation on-board a Floating Liquefaction Vessel (FLNGV) owned by Golar LNG Ltd. In Power Systems we secured a major order from Chinese locomotive manufacturer CNR Dalian for the delivery of 232 MTU Series 4000 engines.

In February, we marked the official opening of our new Advanced Blade Casting Facility (ABCF) in Rotherham. When fully operational in 2017, the facility will have the capacity to manufacture more than 100,000 single crystal turbine blades a year. These blades will feature in a wide-range of Trent aero engines including the world's most efficient civil large aero engine, the Rolls-Royce Trent XWB.

In March, we announced the launch of an advanced manufacturing development facility in Bristol. This site will be at the forefront of developing the next generation of carbon fibre composite fan blades and fan cases.

In April, we announced that John Rishton had decided to retire as Chief Executive, and that he will be succeeded by Warren East from 3 July 2015.

We will report Interim Results on 30 July 2015.

For further information, please contact:

Investors                                                                   Media:

Jilinda Crowley                                                         Richard Wray

Acting Director - Investor Relations                            Director of External Communications

Rolls-Royce plc                                                          Rolls-Royce plc

Tel: [phone]                                           Tel: [phone]

[e-mail]                                 [e-mail]     

About Rolls-Royce Holdings plc

1.   Rolls-Royce's vision is to create better power for a changing world via two main business divisions, Aerospace and Land & Sea. These business divisions address markets with two strong technology platforms, gas turbines and reciprocating engines. Aerospace comprises Civil Aerospace and Defence Aerospace. Land & Sea comprises Marine, Nuclear and Power Systems.

2.   Rolls-Royce has customers in more than 120 countries, comprising more than 380 airlines and leasing customers, 160 armed forces, 4,000 marine customers including 70 navies, and more than 5,000 power and nuclear customers.

3.   Our business is focused on the 4Cs:

·      Customer - placing the customer at the heart of our business

·      Concentration - deciding where to grow and where not to

·      Cost - continually looking to increase efficiency

·      Cash - improving financial performance.

4.   Annual underlying revenue was £14.6 billion in 2014, around half of which came from the provision of aftermarket services. The firm and announced order book stood at £73.7 billion at the end of 2014.

5.   In 2014, Rolls-Royce invested £1.2 billion on research and development. We also support a global network of 31 University Technology Centres, which position Rolls-Royce engineers at the forefront of scientific research.

6.   Rolls-Royce employs over 54,000 people in more than 50 countries. Over 15,500 of these are engineers.

7.   The Group has a strong commitment to apprentice and graduate recruitment and to further developing employee skills. In 2014 we employed 354 graduates and 357 apprentices through our worldwide training programmes. Globally we have over 1,000 Rolls-Royce STEM ambassadors who are actively involved in education programmes and activities; we have set ourselves a target to reach 6 million people through our STEM outreach activities by 2020.

 

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