rolls-royce holdings plc/media/files/r/rolls-royce/... · 2015. 11. 5. · 6000 ej200 flying hours...
TRANSCRIPT
Rolls-Royce Holdings plc John Rishton Chief Executive Officer
“Trusted to deliver excellence”
Consistent power systems strategy
“Trusted to deliver excellence”
Delivering growth
“Trusted to deliver excellence”
Strong revenue growth (£bn)
+12% CAGR
Strong order book (£bn)
+ 9% CAGR
Growing underlying profits (£m)
+6% CAGR
Improving average net cash (£m) Growing payments to shareholders (p/share)
+7% CAGR +610m
Further growth 2011 – guidance confirmed
Extraordinary visibility of growth
Record order book
Trebling Trent installed thrust
P&W mid-size collaboration
Tognum growth acceleration
“Trusted to deliver excellence”
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”
Rolls-Royce Holdings plc John Rishton Chief Executive Officer
“Trusted to deliver excellence”
Operations “Delivering on the promises made” Alain Michaelis President – Gas Turbine Supply Chain
“Trusted to deliver excellence”
A record order book – £61.4bn Provides operational scale and investment confidence
£bn
“Trusted to deliver excellence”
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”
An integrated approach Developing and executing our operational strategy
Tailored market approach
Introducing new products
Delivering component strategies
Managing cost and reducing
waste
Working with partners & suppliers
Managing globally
Deliver the order book
Drive operational performance
“Trusted to deliver excellence”
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”
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”
Delivering component strategy Discs – implementing new process technology
University partners
Manufacturing
Research centre
Crosspointe
Sunderland
“Trusted to deliver excellence”
Managing cost and reducing waste Addressing all areas of opportunity on a multi-year basis
IMPROVEMENTS
HEADWINDS
Optimising
design, materials
& process
Driving
operational
efficiency
Investing in
supply chain
design
“Trusted to deliver excellence”
Working with partners & suppliers Make-Buy – a solid foundation for growth
Joint VentureRolls-Royce Supplier
Co
mp
eti
tiv
en
es
s
Business criticality
MakeControl
ProtectBuy
Make-Buy (illustrative)
“Trusted to deliver excellence”
Working with partners & suppliers Managing performance – 5 key elements
“Trusted to deliver excellence”
Managing globally Global teams, standard processes, robust supply chains
EMEA
Asia
Americas
UK
2010 activity
2015 activity
“Trusted to deliver excellence”
Making good progress Driving growth and operational performance in the last 3 years
Civil aero engine deliveries +30%
3 year CAPEX investment £1.2bn
Revenue per employee +25%
New facilities in implementation 14
Major product programmes 40+
Graduate and apprentice intake Doubled
“Trusted to deliver excellence”
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”
Operations “Delivering on the promises made” Alain Michaelis President – Gas Turbine Supply Chain & Deputy COO
“Trusted to deliver excellence”
Services “Adding value, every day” Tony Wood President – Services
“Trusted to deliver excellence”
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
“Trusted to deliver excellence”
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 market sectors
10% CAGR in last decade
“Trusted to deliver excellence”
The customer’s first choice for services Leveraging our unique knowledge as the OEM
•14,000 engines
•500 airlines
•1,700 bizjets
•90% Trent TCA
•60%
CorporateCare
Civil
Aerospace
•18,000 engines
•160 armed
forces
•40% of revenues
under
MissionCare
Defence
Aerospace
•25,000 power &
propulsion units
•75,000 deck
units
•30,000 vessels
•2,500 customers
•45% LTSAs for
Naval Marine
GTs
Marine
•200 plants
operating
•11 submarines
•20 countries
•25% Naval
LTSAs
Nuclear
•4,000 power
systems
•1,600 customers
•80 countries
•45% Trent LTSAs
Energy
Services across the Group A broad base of programmes and installed products
Global services presence Comprehensive network of Service Delivery Centres
Field Services Repair & Overhaul
Centres
Marine Service
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
“Trusted to deliver excellence”
Services Centres World-leading integrated capability to deliver availability
High quality
service data
Data Centres
Operations Centres
Hubs to maximise
fleet availability
Delivery of
maintenance
repair and overhaul
Service Delivery Centres
Business Centres
Services policy and
business
management
“Trusted to deliver excellence”
Services strategy A common strategy across sectors
Time &
Material
offerings
Long-Term
Service
Agreements
Asset
management Process &
Systems
Toolkit
Scope of Service offering
Value
proposition
Uncertain Reactive Planned
$ per engine
operating
hour
Maintenance,
Repair & Overhaul
Services
TotalCare,
CorporateCare,
MissionCare
OEM
Services
Confidence in the long-term reliability of our products
High Low
“Trusted to deliver excellence”
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
Trent fleet doubled, disruption
halved
“Trusted to deliver excellence”
Predictable maintenance planning Underpinning reliable support and availability for our customers
Aircraft schedule and maintenance plan
Spare engine availability
Shop capacity
Engine Health Register
Customer alignment
Optimised timing
Optimised workscope
“Trusted to deliver excellence”
Mission critical services in practice Predict and prevent – application of bio science
“Trusted to deliver excellence”
Engine Health Management Reducing disruption and cost for our customers
1. Airline experienced lightning
strike on departure
2. Operations Centre notified via
health monitoring system
3. Technical data analysed and
approval given to continue
4. Necessary people, information
and approvals in place to meet
aircraft
5. Normal turn-around schedule
maintained
Los Angeles
1 2
3 4
5
Singapore
“Trusted to deliver excellence”
Galveston (Texas)
Rio de Janeiro (Brazil)
West Africa
Singapore
Hamburg
Gdynia
Marine services Evolution of the strategy
Global investment in capability close to our customers
“Trusted to deliver excellence”
6000 EJ200 flying hours achieved
24/7 support
High operational demand – 7hr
average sortie
Engine support through
MissionCare
ZERO engine rejections
throughout campaign
Defence services – RAF in Libya High performance of the EJ200 engine for Typhoon
“Trusted to deliver excellence”
Well-established 10-year
relationship
Platform support with deployed
personnel
All Rolls-Royce on-board teams
are Brazilian
Energy services Supporting Petrobras in Brazil
“Trusted to deliver excellence”
Increasing LTSA market penetration LTSA growth over last 5 years
Percentage of Fleet under Long-Term Service Agreements (LTSAs)
%
0
10
20
30
40
50
60
70
80
Civil Defence Energy Marine
2005
2010
“Trusted to deliver excellence”
£5.5bn p.a. sales and
growing
Growing market share and
installed base
Market leading strategy and
business model
Unique capabilities as the
OEM
In summary
Aligned strategy with sustainable growth
0
1
2
3
4
5
6
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
£b
n
Underlying Services Revenue
10% CAGR
51% of underlying
revenue in 2010
“Trusted to deliver excellence”
Services “Adding value, every day” Tony Wood President – Services
“Trusted to deliver excellence”
Technology “Creating competitive advantage” Peter Price Director of Engineering & Technology, Civil Aerospace
“Trusted to deliver excellence”
High pressure turbine blade
“Trusted to deliver excellence”
R&D investment Long-term investment in technology and intellectual property
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
0
100
200
300
400
500
600
700
800
900
1,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Gross Net % sales
“Trusted to deliver excellence”
Gross R&D investment breakdown Full-year 2010 spend – £923m
Sustaining
Engineering
Product Development
Research &
Technology
“Trusted to deliver excellence”
R&D process Coordinated research
1
2
3
4
5
6
7
8
9
Technology readiness level
Project
System demonstration
Applied research
Basic
research
“Trusted to deliver excellence”
Global research network Access to a wealth of talent & creativity
19
North America
UTC* at Purdue
Asia
UTC in Korea
Research Centres in China, Singapore, Japan
Europe
UTCs in Germany, Sweden, Norway, Italy and
the UK
*UTC = University Technology Centre “Trusted to deliver excellence”
Engineering centres Harvesting capability from around the World
19
Bilbao (ITP)
•Turbines
Dahlewitz
•Twin shaft engines
Indianapolis
•Corporate jets
•Defence Aero
•Helicopters
Derby
•Large Engines
Bristol
•Defence Aero
Montreal
•Industrial GT
Mount Vernon
•Pumping
•Integrated systems
Walpole
•Waterjets
Portsmouth
•Electrical systems
Scandinavia
•Marine integration
•Propulsors
•Recips.
Bangalore
•Engineering support
Singapore
•Advanced Tech Centre
“Trusted to deliver excellence”
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 Advanced Manufacturing Research Centre (NAMRC); Rotherham
Commonwealth Centre for Advanced Manufacturing (CCAM); Virginia
Advanced Remanufacturing & Technology Centre (ARTC); Singapore
“Trusted to deliver excellence”
Building blocks of technology The importance of people and tools
Systems, processes and tools
World-class engineers
Competitive technology
“Trusted to deliver excellence”
Trent 1000 Long-term investment in advanced technologies
Trent 1000
programme
launched
“Trusted to deliver excellence”
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”
Continuous improvement Capitalising on our investment
Technology transfer across product range
“Trusted to deliver excellence”
Future middle of the market Leading technologies for the future
Lightweight composites Advanced shroudless High
Pressure Turbine blade and liner
Advanced sealing
and externals
Lightweight
Low
Pressure
Turbine
Advanced blisked High
Pressure Compressor
Advanced
combustor
“Trusted to deliver excellence”
Vision 20 Technologies for a 20-year horizon
“Trusted to deliver excellence”
Technology across the Group World-class reciprocating engines
“Trusted to deliver excellence”
Technology across the Group Leading low carbon technologies
Open Rotor Engine
Tidal Stream Civil Nuclear
PROMAS
“Trusted to deliver excellence”
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”
Technology “Creating competitive advantage” Peter Price Director of Engineering & Technology, Civil Aerospace
“Trusted to deliver excellence”
Financial summary Andrew Shilston Finance Director
“Trusted to deliver excellence”
Agenda
Delivering the growth agenda
Tognum – update
Narrowbody – IAE restructuring
Summary
“Trusted to deliver excellence”
Technology creates opportunities Delivering complex systems and solutions for our customers
Significant barriers to entry
Innovation and technology
Complex systems skills
“Trusted to deliver excellence”
Globalising operational capability Underlying revenue per employee*
182
115 128
140 150 169
194 211
233
259
*Underlying revenue per employee based on
three year rolling average.
Investing for growth and productivity
0
50
100
150
200
250
300
2001 2003 2005 2007 2009 2011
£000’s 182
115 128
140 150 169
194 211
233
259
8% CAGR
“Trusted to deliver excellence”
Growing Group service revenues
182
115 128
140 150 169
194 211
233
259
Growing installed base and evolving services model
0
1
2
3
4
5
2000 2002 2004 2006 2008 2010
£bn
10% CAGR
“Trusted to deliver excellence”
Disciplined and consistent strategy Transforming the business Revenue (£bn) UPBFCT (£m)
-50
0
50
100
150
200
250
1999 2010
Ind
ex
0
50
100
150
200
250
1999 2010
Index Defence
Civil
Marine
Energy
Defence
Civil
Marine
Energy
4.6
10.9
413
1,010
+8% CAGR +9% CAGR
“Trusted to deliver excellence”
Tognum – making solid progress 24 June
94.17%
acceptance
announced
6 April
Offer
launched
9 March
Intent to
offer
announced
Offer period
March 2011 July 2011 December 2011
Regulatory approvals
Consolidate
December 2012
Joint Public
Tender Offer
Rolls-Royce
accounting
Equity accounted
August / September
Completion &
settlement
Approx £1.4bn
“Trusted to deliver excellence”
45%
20%24%
11% 38%
19%26%
17%*
Tognum accelerates Rolls-Royce growth Creating a world-class recips portfolio with Daimler and Tognum
Revenue** £10.9bn Revenue** (incl. Tognum) £13.1bn
Marine
Civil
Energy
Defence
*Includes £0.4m relating to off-highway /
industrial activities
**2010 FY Underlying Revenue
Strong partnership and market access
Enhance technology and product development
Strengthening Marine and Energy powerplant capabilities
Significant long-term growth opportunities
“Trusted to deliver excellence”
Positioned for future mid-size market
C&R
NB
Large a/c
Civil Revenues – 2010
Today – narrowbody is a modest civil contributor
Significant opportunity – market position/scale
Future collaboration builds on 30 year partnership
Focus on high-bypass geared technologies
Restructure IAE – expected to close in 2012
$1.5bn cash proceeds at close
Ongoing industrial and financial involvement
Significantly value and earnings accretive
“Trusted to deliver excellence”
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
– extending collaboration with P&W
Strong balance sheet – flexibility/options in an uncertain environment
“Trusted to deliver excellence”
Financial summary Andrew Shilston Finance Director
“Trusted to deliver excellence”