2019 - Rolls-Royce Holdings/media/Files/R/Rolls-Royce/documents/... · H1 18 Reduced OE cash...
Transcript of 2019 - Rolls-Royce Holdings/media/Files/R/Rolls-Royce/documents/... · H1 18 Reduced OE cash...
2019 Half Year Results © Rolls-Royce
6 August 2019
2019 Half Year Results
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Jennifer Ramsey Head of Investor Relations
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Agenda for today
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Jennifer Ramsey Introductions
Highlights & Strategy Warren East
Financial Review Stephen Daintith
Business Outlook Warren East
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Notices
Safety Safe Harbour
Mobile Phones
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Warren East Chief Executive
Highlights
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Group Overview
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Results summary
Underlying core revenue
Underlying core operating profit
Core underlying EPS
Underlying core PBT
Core free cash flow
‘Dividend’ per share
£7.2bn 7 %* £203m
(1.4)p
+33%*
£(391)m H1 2018: £10m
4.6p H1 2018: 4 . 6 p
* Organic change
Further progress
H1 2018: 3.1p
£94m £5m*
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2019 Half Year Results overview
Civil Aerospace Good engine flying hour growth; OE loss reduced; technical fixes on Trent 1000 progressed; material Trent 7000 production ramp-up
Power Systems Healthy progress in H1 with sales outperforming GDP growth; strong growth in LTSA revenues; book-to-bill ratio 1.1
Defence Good H1; strong order intake and customer deposits; operational improvements in US facilities; increased investment in new products and technologies
ITP Aero Good revenue growth; lower profit largely phasing
Restructuring In line with original plan; run-rate cost savings of £134m per annum achieved to date
Financial Good revenue growth; FCF reflects typical seasonality; improved net cash position
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Increase in CROIC
Focus on value creation
Improve returns on current invested capital - target at least 15% through the cycle
Ensure returns on new investments support CROIC ambition
Strengthen balance sheet – improve credit rating
Fund organic investment – brought more rigour to internal process
Free cash flow ambition
2018 2017
£0.3bn £0.6bn
Mid-term ambition
2019 2020
~£0.7bn
At least £1bn
Payment to shareholders
Committed to restoring shareholder payments as FCF grows
Aspire to mid-term dividend cover of 2.5x through the cycle
Disciplined allocation
>£1 FCF per share
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Our commitment to sustainable growth
Increase efficiency of existing products
Develop breakthrough technologies
Champion electrification and build capabilities
Decrease greenhouse gas emissions
Dedicated energy reduction programme across all sites
Closed loop manufacturing processes
Safety & ethics are non-negotiable
Make our organisation as world-leading as our technologies
Enable global mindset through diversity & inclusion
Products Operations People
The drive for low carbon power
Creating a sustainable future through a pragmatic and balanced approach to the present
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Simplification
Enabling change
Portfolio
Systems
Processes
People
Significantly reduce central costs
Empowered businesses, more control of own costs
Shared vision and clear accountability
Run rate cost savings
Cumulative net headcount reduction
FY 18 H1 19
£81m
£134m
FY 18 H1 19
~1,300 ~1,600
Key objectives
~2,700
FY 19e
To create a stronger more competitive business
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Business update
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Civil Aerospace
Progress across a number of key metrics; successful transition to Trent 7000 production from Trent 700
Widebody EFH growth
Lower OE unit loss
Trent 7000 Trent XWB Business Aviation
13% Reduction through pricing and cost out
Cumulative four million flying hours with 562 engines in service and 99.9% dispatch rate
Delivered first Pearl 15 engine ahead of entry into service later in year
Material ramp up achieved in production in period
8% Ahead of air traffic growth
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Trent 1000 update
Trent 1000 pack B/C
Trent 1000 TEN high pressure turbine blade
Continued progress with technical solution
Cash cost in H1 2019 of £219m (H1 2018: £107m)
Incremental cash cost increase
2019: £450m - £500m
2020: declining by £50m - £100m
Stepping down materially thereafter
Limited to around a third of the TEN fleet
Costs expected to be within bounds of normal programme risk
Progressing with test of re-designed blade
Operational update
MRO capacity increased
Pack C IPC replacement blades being fitted; AOG reducing
Trent 1000 TEN and Pack B IPC re-design underway
Pack B
Pack C
TEN
Trent 1000 variants
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Power Systems
Healthy progress with increasing penetration of services; good demand for power generation products for data centres
Microgrid progress
Product innovation
Order intake
Operating profit
Total solutions
ABB collaboration on microgrid solutions
Moving portfolio from product to systems and LTSA
£1.7bn Book-to-bill ratio 1.1
+20% increase reflects increased sales volume Environmental
performance improvements driving growth
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Defence
Strong order intake and good operational performance with increased investment in new products and technologies
Strong order intake
Modernisation
F-35 LiftSystem
Future products
Directed energy
60% of Indianapolis production now moved to new facilities
1.5 Book-to-bill ratio Driving higher
OE sales with LRIP 11 & 12 agreed
Successful demonstration of power and thermal management system
Bell vertical lift
Tempest
Hypersonics
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ITP Aero
Milestones
Technologies
Revenue growth
Profit headwinds
Expansion
Additive manufacturing cell installed to support new production
23% led by progress in civil aerospace OE
(18)% Temporary headwinds from phasing of mix in H1 to unwind in FY
New and extended facilities in Spain and Mexico
First test of UltraFan intermediate pressure turbine
Good revenue growth, expansion of externals business
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Stephen Daintith Chief Financial Officer
Financial Review
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Agenda for today
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01 Half year results
02 Business unit review
03 Guidance
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Half year results
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£m
Civil Aerospace x
Power Systems x
Defence x
ITP Aero x
Corporate / eliminations x
Core business x
Non-core business x
Group underlying result x
Core & Non-core business reporting format
Non-core business Legacy energy assets
Disposal completed of:
Commercial Marine
Power Development
Core business Key focus of Group operations
A reminder of our reporting format
Commentary is provided on an underlying basis. All percentage or absolute change figures are on an organic basis unless otherwise stated
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Group underlying results
Good revenue growth and operating profit improvement; typically seasonal H1 cash outflow
£m Underlying
Revenue Organic change
Underlying op. profit
Organic change
Civil Aerospace 4,018 +11% (21) +86
Power Systems 1,553 +6% 96 +20%
Defence 1,494 +2% 173 +2%
ITP Aero 457 +23% 32 -18%
Corporate/eliminations (309) - (77) -
Core business 7,213 +7% 203 +33%
Non-core business* 140 - - -
Group underlying result 7,353 +7% 203 +32%
Free cash flow H1 2019 H1 2018
Core (391) 10
Group (429) (72)
*Non-core includes Commercial Marine, Rolls-Royce Power Development, L’Orange and other smaller non-core businesses
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Core business underlying results
£m H1 2019 H1 2018 Change Organic change
Core underlying revenue 7,213 6,680 +8% +7%
Core underlying gross profit 995 897 +11% +10%
Gross margin % 13.8% 13.4% +40bps +30bps
Commercial & administrative costs (516) (467) +10% +10%
Restructuring (9) (12) -25% -25%
Research & development costs (314) (296) +6% +5%
Joint ventures & associates 47 24 +96% +80%
Core underlying operating profit 203 146 +39% +33%
Underlying operating margin 2.8% 2.2% +60bps +60bps
Financing costs (109) (65) +68% +68%
Core underlying profit before tax 94 81 +16% +6%
Core free cash flow (391) 10 (401)
Core CPS (20.7)p 0.5p (21.2)p
Further progress
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Continued underlying growth in core OE & LTSA revenue
13%
28%
8%
4%
OE
LTSA
Other service
Strong organic LTSA growth of 13% across our core businesses
£m H1 2019 H1 2018 Change Organic change
OE revenue 3,350 3,201 +5% +4%
LTSA service revenue 1,868 1,645 +14% +13%
Other service revenue 1,995 1,834 +9% +8%
Core underlying revenue 7,213 6,680 +8% +7%
Gross margin (%) 13.8% 13.4% +40bps +30bps
26%
46%
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Progress on key levers
Reduced avg. OE loss per engine
Improved aftermarket cash
margin
Bending the fixed cost curve
£0.2m improvement per engine
H1 2019 saw further progress delivered on key drivers of cash flow improvement
£0.1bn improvement
110bps lower as % sales
~£150m/£500m to date
~£300m/£750m to date
~340bps/800bps to date
Progress achieved towards CMD targets*
* 2018 CMD baseline is FY 2017
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Widebody avg. loss per engine
Widebody deliveries
H1 18
Reduced OE cash deficit per engine
H1 18 H1 17
7 Spare
H1 17 H1 19
Successful transition to Trent 7000
Trent XWB-84
Trent 700
Trent 1000
Trent 900
Trent 7000
Trent XWB-97
H1 2019 OE engine sales volumes
257 H1 2019
£0.2m improvement
per engine
(£1.7m) (£1.5m)
(£1.3m)
202 Installed
240 Installed
19 Spare
H1 19
239 Installed
18 Spare
14 Shipped
H1 18 H1 19
21%
13%
33%
23%
7% 3 %
Engines invoiced
41 Trent 700s
54 Trent 7000s
7 Trent 700s
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Improved aftermarket cash margin in Civil Aerospace
On path to our mid-term ambition
£0.8bn
H1 2018
In-service fleet
Major refurbs
Check & repair
Other AM costs
H1 2019
£0.7bn
4,567 engines
6.9m EFHs
137 SVs
242 C&R*
4,897 engines
7.5m EFHs
141 SVs
295 C&R*
Underlying widebody aftermarket cash margin (pre-Trent 1000 costs)
Invoiced EFH
*Check & repair visits include Trent 1000 in-service related visits
Note chart illustrative. Not to scale
£0.1bn improvement Income
Costs
U/L cash margin
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R&D and capex as % of sales will continue to fall reflecting:
– Civil Aerospace has passed peak R&D, following 70% increase since 2010
– Headcount reduction
– OE volume related capex has passed its peak
While enabling rising R&D in Defence and on electrical technologies
Bending the fixed cost curve
Mid-term ambition
Core capex as % sales Core cash R&D and certification costs as % sales
H1 19 H1 18
6.0%
7.1% 7.8%
Mid-term ambition
H1 19 H1 18
4.0%
4.8% 5.0%
Adjusted underlying core C&A as % sales
Mid-term ambition
H1 19 H1 18
5.0%
7.2% 7.4% “Combined 23% of sales in 2017, down to 15% over the mid-term”
110bps lower as
% of sales
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Progress on restructuring
Group restructuring announced in June 2018
Activity during the half ~540 gross reduction in H1 2019, ~300 net reduction
Consultation underway; expect ~1,400 net reduction in FY 2019
On track for 4,600 net headcount reduction by 2020
Provisions now largely built against P&L element of costs
£134m run-rate savings achieved to date
FY18 actual
H1 19 actual FY19 FY20
Total Target
Gross headcount reduction ~2,000 ~540 ~2,600 ~2,000 ~6,600
Net headcount reduction ~1,300 ~300 ~1,400 ~1,900 ~4,600
Cumulative net headcount reduction ~1,300 ~1,600 ~2,700 ~4,600
Cash cost £70m £66m ~£200-230m ~£130-160m ~£500m
P&L charge £223m £39m
Run-rate savings at period end £88m £134m ~£400m
Provisioning now largely complete
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Summary funds flow
£m H1 2019 H1 2018 Change
Underlying operating profit 203 141 62
Depreciation and amortisation 511 315 196
Lease payments (capital plus interest) (184) - (184)
Capital expenditure (PPE & intangibles) (622) (669) 47
Change in inventory (433) (461) 28
Change in net receivable/payable 391 130 261
Civil Aerospace net LTSA balance change 128 487 (359)
Of which underlying change 120 295 (175)
Of which impact of contract catch-ups 8 192 (184)
Movement on provisions (271) 1 (272)
Net interest received and paid (45) (36) (9)
Other (8) 66 (74)
Trading cash flow (330) (26) (304)
Pension contribution vs P&L charge 1 31 (30)
Tax paid (100) (77) (23)
Group free cash flow (429) (72) (357)
Of which: core free cash flow (391) 10 (401)
Core FCF
£(391)m
5 key drivers:
Higher profit
Inventory build
Higher customer deposits
Further growth in LTSA receipts
Trent 1000 costs
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Key drivers of cash flow performance
Since the year-end higher inventory has offset a favourable impact from receivables and payables, driven by customer deposits in Defence
Inventory £(433)m
Outflow reflecting seasonality and planned inventory build in Civil Aerospace and Power Systems
At least £500m unwind in H2
Receivables and Payables £391m
Inflow largely due to customer deposits and advances of c.£300m, driven by recent order wins in Defence
Broadly neutral trade receivables: growth offset by better overdue debt collection
Underlying Operating Profit £203m
Improved underlying operating profit (+£62m YoY)
Further improvement expected in H2
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Key drivers of cash flow performance Impacted by the absence of aftermarket deposits and greater provision consumption as we make progress on Trent 1000 issues
Provision utilisation £(271)m Increase year-on-year largely reflected utilisation of Trent 1000 exceptional
provision (total H1 2019 in service cash costs of £219m)
H1 2018 Trent 1000 costs not covered by provisions, which were established on 30th June 2018
Remainder due to increased utilisation of other provisions
Underlying increase in deferred EFH revenue £120m
Continued contribution from higher invoiced Engine Flying Hours in excess of revenue recognised as our installed base grows
£(175)m lower YoY, primarily due to absence of material aftermarket deposits seen in H1 2018 upon customer conversions to TotalCare
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Inventory: £(433)m
£4.8bn at period end to reduce by at least
£0.5bn in H2
Clear pathway to reducing inventory in H2
Inventory build for H2 deliveries, including 14
engines currently on airframer assembly line.
Aftermarket parts build-up to support H2 shop visits.
H1 inventory build of ~£433m to unwind in H2
Civil Aerospace engines awaiting
invoice
Power Systems Project delay
Power Systems Mix impact
Power Systems Production phasing
Power Systems Globalisation
strategy
Civil Aerospace
~£0.2bn
Power Systems
~£0.2bn
China sales growth in H2 supported by backlog. Consumption of buffer stocks in India ahead of local production of S1600 engine
Higher deliveries of full systems in H2
Major projects will invoice in H2
Unwinds with more balanced Q3/Q4 phasing vs prior years
Reduction in finished engines held in inventory. Reduced aftermarket parts inventory as LTSA shop visits increase in H2
Earlier parts purchase to smooth H2 production
Inventory build due to project delays
Inventory build to support long lead-time
powergen systems
Temporary build-up to support production
localisation and sales
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Deferred revenue reflects difference between invoiced EFH receipts and P&L revenues traded
Invoiced EFH receipts
Reflects invoiced EFH receipts on long-term contracts across entire Civil LTSA-covered fleet:
Large engine (7.5m EFH in 1H 19) + business aviation + regional*
P&L revenue
Driven by cost (shop visit & other costs) across large engine, business aviation and regional fleets
Recognised by contract, as costs incurred, at relevant contract margins
YoY +£243m
2019 Opening balance (LTSA net creditor)
£4,487m
Closing balance (LTSA net creditor)
£4,730m
Invoiced EFH
receipts
£1,704m
P&L LTSA revenue
£1,576m FX
£115m
*excludes V2500 as not covered by a LTSA
Total
+£128m
Of which
£8m contract catch-ups
Of which
£120m underlying
Civil Aerospace: Drivers of LTSA balance
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Group funding H1 2019 group free cash outflow £(429)m
Completed disposal of Commercial Marine, net proceeds of £451m
Completed disposal of Power Developments, net proceeds to date of £29m
No material maturities until October 2020
Reiterating ambition to return to a single A rating
Debt maturity (£m)
2019 20 21 22 23 24 25 26 27 28 29
Successful actions strengthen position in H1 2019
Drivers of £42m higher financing cost:
IFRS 16 driving lease costs to £(39)m, compared to £(2)m in 1H 2018
£m H1 2019 FY 2018
Cash 4,182 4,980
Debt 6,119 4,369
Net cash/(debt) (1,937) 611
Undrawn facility 2,500 2,500
Cash 4,182 4,980
Liquidity 6,682 7,480
0
200
400
600
800
1000
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Capital allocation priorities
Committed to restoring shareholder payments to an appropriate level over time; FCF key driver of growth
Aspire to 2.5x FCF / dividend cover through the cycle
View in the context of overall capital allocation priorities
Fund organic Investment: drive growth & technology leadership
Strong balance sheet: improve credit rating
M&A: disciplined & selective
Payment to shareholders: increase dividend as FCF grows
H1 2019 Interim payment maintained;
4.6p per share
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Business unit review 02
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Underlying revenue – £4,018m, T&M services growth and +3% OE revenue; LTSA +18%
Gross profit – Improved OE losses and lower contract catch-ups of £1m (H1 2018: £(154)m), partially offset by weaker LTSA margin as expected
Operating loss – improved to £(21)m. £22m lower net R&D capitalisation driving £5m higher R&D charge; C&A cost increase impacted by prior year credits
Civil Aerospace
£m H1 2019 H1 2018 Change Organic change
OE revenue 1,570 1,530 +3% +3%
Services – LTSA 1,576 1,328 +19% +18%
Services - T&M/other 872 742 +18% +17%
Underlying revenue 4,018 3,600 +12% +11%
Gross profit 276 175 +58% +54%
Gross margin % 6.9% 4.9% +200bps +190bps
Operating loss (21) (112) +91 +86
Operating margin % -0.5% -3.1% +260bps +240bps
Strong growth in revenue. Operating loss reduced by
£86m
Moving towards profitability
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Civil Aerospace
Underlying revenue
£4,018million
39%
39%
22%
OE 3%
T&M & other
17%
LTSA 18%
By type
By end market
70%
15%
11%
4%
Large engines 13%
Business 17%
Regional 5%
V2500 3%
OE revenue growth 3% Good widebody OE growth +6% and strong growth in business jets +9%. Material decline in V2500 OE
Services revenue +18% 20% growth in large engine services led by higher shop visit volumes; business jets 29% growth led by shop visits and positive catch up adjustments
In service fleet and flying hours Large engine in service fleet up 7% YoY to 4,897 engines. Large engine flying hours +8% on a challenging comparison base
Outlook FY19: Around 10% revenue growth; profit closer to breakeven. Improved cash generation in H2 as inventory unwinds
Good growth in widebody and business jet OE, decline in V2500
Strong services revenue growth of 18%, with widebody engine flying hours up 8%
Outlook - closer to breakeven profit for FY; inventory reduction in H2
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Underlying revenue: 6% growth in OE and 7% in Services; Good demand for power generation products for data centres; Strong growth in LTSA revenues, up 27% YoY
Operating profit: +20% YoY to £96m, led by volume growth and improved product mix
Power Systems
£m H1 2019 H1 2018 Change Organic change
OE 994 945 +5% +6%
Services 559 526 +6% +7%
Underlying revenue 1,553 1,471 +6% +6%
Gross profit 389 354 +10% +10%
Gross margin % 25.0% 24.1% +90bps +90bps
Operating profit 96 80 +20% +20%
Operating margin % 6.2% 5.4% +80bps +70bps
Good revenue and profit growth driven by end market strength
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Power Systems overview
Underlying revenue
£1,553million
64%
4%
32%
24%
27%
35%
9%
5%
OE 6%
T&M & other
5%
PowerGen 37%
Defence/other 11%
LTSA 27%
By type
By end market
Industrial 4%
OE revenue growth 6% Strong demand for power generation products in data centre markets. Growth despite non-recurrence of 2018 pre-buy in construction & agriculture markets
Services revenue +7% Increase in installed base, plus good progress in LTSA growth strategy
Good order intake Order intake of £1.7bn
Outlook Good order coverage for remainder of year. FY19: mid single digit revenue growth; c.100bps higher operating margins led by improved product mix
Marine 10% Civil Nuclear
8%
Increased OE volumes and services growth
Book to Bill 1.1 times
Confident full year outlook, with inventory reduction through H2
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Defence
£m H1 2019 H1 2018 Change Organic change
OE 653 608 +7% +4%
Services – LTSA 277 250 +11% +7%
Services – T&M/other 564 557 +1% -2%
Underlying revenue 1,494 1,415 +6% +2%
Gross profit 295 281 +5% +1%
Gross margin (%) 19.7% 19.9% -20bps -10bps
Operating profit 173 162 +7% +2%
Operating margin (%) 11.6% 11.4% +20bps -10bps
Underlying revenue: marginally higher. OE growth in combat and naval, partially offset by lower Trent 700 MRTT volumes
Gross profit: modestly higher. Lower UK combat profits offset by benefits from operational efficiency in our US facilities
Operating profit: 2% growth - increased gross profit from higher revenues offset by greater R&D spend as we invest in future technology
Solid performance; gross profit higher
Operating margin stable after higher R&D spend on future technology
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37%
22% 21%
8%
12%
Defence
Solid OE revenue +4% Combat and naval growth, partially offset by lower transport volumes
Services revenue +1% Increased transport LTSA sales offset by lower naval T&M (phasing)
Strong orders of £2.3bn, a 1.5 times book to bill Large order in submarines, closing order backlog of £7.5bn
Increased R&D investment in future products
Outlook FY19: stable revenue, modest operating margin decline reflecting R&D investment in future technologies, partially mitigated by increased operational efficiencies
Transport 2%
Combat 15%
Submarines 1%
Naval Marine 2%
Other 14%
Stable revenues and margins, with investment ramping up
Underlying revenue
£1,494million
44%
19%
37%
OE & Development 4%
T&M & other
2%
LTSA 7%
By type
By end market
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£m H1 2019 H1 2018 Change Organic change
OE 400 290 +38% +40%
Services 57 85* -33% -32%
Underlying revenue 457 375 +22% +23%
Gross profit 80 85 -6% -4%
Gross margin (%) 17.5% 22.7% -520bps -490bps
Operating profit 32 40 -20% -18%
Operating margin (%) 7.0% 10.7% -370bps -350bps
ITP Aero
Underlying revenue: growth driven by higher Civil Aerospace OE volumes across Trent and P&W programmes; aftermarket decline due to phasing
Gross profit: decline of 4% - lower high-margin aftermarket sales; temporary mix headwind in OE; higher production costs to support OE ramp-up
Operating profit: decline primarily as a result of lower gross profit; modestly higher C&A cost and R&D investment
Continued strong revenue growth, temporary margin headwinds
*Restated to show In-Service Support Solutions (ISS) revenue as services
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76% 12%
12%
88%
12%
Defence 10%
Services/MRO 3%
Civil 35%
OE 40%
Services (32)%
ITP Aero OE revenue up 40%
Growth in Trent and P&W programmes
Services revenue decline Lower spare parts consumption - expected to increase in H2
Margin headwinds, largely due to phasing Operating margins affected by lower levels of high-margin spares sales (expected to improve in H2); temporary OE mix headwinds, and production ramp-up costs
Outlook Around 10% revenue growth, margins stable vs FY18
Growth in Civil OE and installed fleet
Underlying revenue
£457million
By type
By end market
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FY19 guidance 03
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Key drivers of our H2 FCF improvement
Higher profits and significant working capital unwind will drive cash performance
H1 2019 core FCF: £(391)m
Higher underlying profit led by Power Systems; improvement in ITP Aero; Civil Aerospace close to breakeven
Unwind of high H1 inventory levels in Civil Aerospace & Power Systems
Continued growth of engine flying hours ahead of sales in Civil Aerospace (LTSA creditor inflow)
FY 2019 core FCF: £700m +/- £100m
£(391)m
H1 2019 core FCF
£700m +/- £100m
FY 2019 core FCF
~£500m
>£500m
>£100m
H2 Contribution
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2019 Outlook
£m 2018 Core 2019 Outlook
Underlying revenue
Civil Aerospace 7,378 Around 10% growth
Power Systems 3,484 Mid single-digit growth
Defence 3,124 Stable
ITP Aero 779 Around 10% growth
Core underlying revenue 14,336
Underlying operating profit
Civil (162) Closer to breakeven
Power Systems 317 Margins around 100bps higher
Defence 427 Margins around 100bps lower
ITP Aero 67 Margins stable
Core underlying operating profit 633 £700m +/- £100m
Core free cash flow 641 £700m +/- £100m
A further step towards at least £1bn of FCF in 2020
FY 2019 guidance confirmed
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Warren East Chief Executive
Business outlook
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Market environments
Power systems Defence
Power generation – mission critical / microgrid enables renewable technologies
Markets – hybrid power / changing emissions standards
Geographical expansion – under penetration in China and India
US DoD – modest long-term growth in defence budget
UK MoD – stable environment with continuing MoD cost focus
Export – regional tensions driving pockets of growth e.g. SE Asia
ITP Aero – supported by sustained growth in both widebody and narrowbody fleets
Engine Published build rate (airframe per month)
Trent 1000 14
Trent 7000 4.5
Trent XWB 10
Trent 900 0.5
c. 500 Our deliveries p.a.
6,500 Our installed base
Civil Aerospace
Widebody civil engine deliveries moving to long-term trend
Business aviation current build rates expected to continue; Pearl family of engines
2019 Half Year Results © Rolls-Royce
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Build balanced portfolio
Pioneering the Power that Matters
Rolls-Royce pioneers cutting edge technologies that deliver clean, safe and competitive solutions to meet our planet’s vital power needs
Champion electrification
Transform our Business
Reinvent with digital Vitalise existing capabilities
Creating the leading industrial technology company
Develop: Our long-term vision and strategy
2019 Half Year Results © Rolls-Royce
The ‘power that matters’ is increasingly lower carbon
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Two-thirds of R&D
New technologies
Data itself
Real products today
Bolt-on acquisition
E-Fan X and regional opportunities
Three demonstrators
Microgrids Stimulates renewables
Alternative energy storage
Small Modular Reactors Non-carbon base load
Export opportunities
Few companies are better placed than us to be part of the solution
Playing our part in delivering lower carbon power
Vitalising existing capabilities
Championing electrification
2019 Half Year Results © Rolls-Royce
People & culture
Customers
Technology
Financial progress
Revitalise service
Develop new engine architecture
Advance electrification projects
Build a resilient business
Continue restructuring programme
Further simplify processes
Diversity & belonging
Continue improving free cash flow
Further strengthen balance sheet
Continued capital allocation discipline
Increase production volume
Expand service network
Mitigate disruption from in-service issues
Building on progress for FY 2019
2019 Half Year Results © Rolls-Royce
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Safe harbour statement
This announcement contains certain forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. In particular, all statements that express forecasts, expectations and projections with respect to future matters, including trends in results of operations, margins, growth rates, overall market trends, the impact of interest or exchange rates, the availability of financing to the Company, anticipated cost savings or synergies and the completion of the Company's strategic transactions, are forward-looking statements. By their nature, these statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. The forward-looking statements reflect the knowledge and information available at the date of preparation of this announcement, and will not be updated during the year. Nothing in this announcement should be construed as a profit forecast. All figures are on an underlying basis unless otherwise stated - see note 2 of the Financial Review section of the 2019 Half Year Results Statement for the definition.