Investor Relations | CMD 2016
Business Focus
Civil Aerospace
Civil Aerospace – Aftermarket Value
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
Presenters
© Airbus S.A.S 2014
Î 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
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
Senior Vice President, Marketing –
Civil Aerospace
2015 Group
Revenue
Market Dynamics
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
Richard Goodhead
Director, Customers and Services –
Civil Aerospace
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.
Î 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
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)
Dominic Horwood
Older widebody aircraft are experiencing reduced
utilisation by certain airlines, in particular Boeing 777s
and the four-engined Airbus A340s
Underlying
Revenue
AM
52%
53%
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
£6.9bn
Small
&Med
OE 47%
£m
Order book
Engine deliveries
Underlying revenue
Change
Underlying OE revenue
Change
Underlying services revenue
Change
Underlying gross margin
Gross Margin %
Commercial
and Group
administrative
costs
5% 2015
Revenue
Restructuring costs
Research and development costs
Joint ventures and associates
Underlying profit before financing
Change
Underlying operating margin
2014
63,229
739
6,837
3,463
3,374
1,675
24.5%
(283)
(82)
(461)
93
942
13.8%
Acquisitions &
Disposals
-
Exchange
(105)
-2%
(88)
-3%
(17)
+1%
(10)
1
11
3
5
OE
47%
Revenue
Breakdown
Historically, traffic growth has recovered quickly
following major economic shocks
Underlying
Change
3,800
(27)
201
+3%
(117)
-3%
318
+9%
(139)
-270 bps
(14)
75
(65)
8
(135)
-14%
-230 bps
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.
2015
67,029
712
6,933
+1%
3,258
-6%
3,675
+9%
1,526
22.0%
(296)
(7)
(515)
104
812
-14%
11.7%
37%
T&M 15%
63%
LTSA* 38%
*Long Term Service Agreement
Employees
Order Book
Historic Revenue & Profit
£6,655m
70.5bn
£6,837m
£6,933m
£
OE
67%
H1 2016 Figure
AM
33%
23,200*
£844m
*FY15 Average
2013
£942m
2014
£812m
2015
@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
Large
All figures are for Full Year 2015 unless otherwise stated.
www.facebook.com/RollsRoyceGroup
www.rolls-royce.com
Civil Aerospace – Capturing Aftermarket Value
•
•
•
Offering choice and adapting
to customer requirements
across lifecycle
•
Creating next generation
Service Solutions
Rolls-Royce installed engine growth
Manage transitions to
keep Trents flying
3,492 engines 2025
2015
>7,000 engines
Competitive, capable
and growing Service
Network
© Airbus S.A.S 2014
Digitally enabling all of
our services to improve
customer outcomes
Over 100 widebody airline customers
Competitive and global Service Network
Delivering the right Services Solutions across the product lifecycle
Trent Service Network
4%
Maintain
engine
assets
Maintenance
SelectCareTM
• Hybrid payment
structures
• Selected services
based on airline
needs
• Agreed fixed price
per shop visit
Delta TechOps MRO
65%
Aircraft
technically
available
and ready
to depart
Availability
Efficient
sector
Optimised
network
and
operating
costs
Manage
inventory
and assets
Efficiency
Dispose of
equipment
Transitions
Digital Platform
TotalCare®
• Time on wing and
shop visit price risk
transfer
• Fully
comprehensive
range of service
Customer Service Centres
Foundation
Services
• Pay at event
• Access to
additional services
• Short term cost
certainty
Digitally enabled services, focused on customer outcomes
Trent aircraft >8 years old
2010
Today
2020
230
530
~900
32%
39%
~37%
Trent transitions in first three quarters
10
2015
24
2016
Availability
+
World
Leading
Analytics
+
Efficiency
Product
Knowledge
Customer
Intimacy
Safety
Collaboration Platform
Accountable Insights
•
Capturing aftermarket value
and reducing costs as
widebody fleet grows
Data
•