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Underlying Revenue
Investor Relations | CMD 2016
All figures are for Full Year 2015 unless otherwise stated.
Power Systems Presenters
5% 2015 Group Revenue
2015 Group Revenue
Revenue Breakdown
Population growth and increasing urbanisation are driving rising demands for energy, resources and food and continuous infrastructure developments Current weak environment in certain markets (eg. oil & gas and mining), due to current low oil and commodity price levels Geopolitics and an increasing multipolar world are driving modest defence budget growth (1-2%) in NATO countries with more growth in emerging markets
Business Focus
Market Dynamics
Increasing focus on renewable energy sources requires decentralised and clean energy solutions (eg. continuous gas and back-up power generation solutions) Increasing environmental legislation and efficiency requirements drive emission and efficiency technologies Global GDP development with particular growth in Asia Increasing global and regional trade and transport of goods
Marcus joined Rolls-Royce Power Systems as CFO in 2015. He is responsible for the Corporate Services division including finance, IT-applications, legal and compliance, personnel and facility management. He is also Director of Industrial Relations within the group and a board member of our MTU subsidiary. Formerly, Marcus was CFO of Senvion SE after being SVP Management Control and responsible for the entire financial division of Senvion SE from 2009.
Marcus Wassenberg CFO – Power Systems
Petar joined Rolls-Royce in 2012 and became Director of Product Management in 2014. His responsibility covers all reciprocating engine product lines. Prior to Rolls-Royce Petar was with MAN Diesel & Turbo for six years, where his final position was head of Product Strategy. He holds a doctoral degree in engineering, an MBA with focus on Corporate Strategy and a Diploma in Industrial Engineering.
Petar Pelemis Director Product Management – Power Systems
MTU One of the leading manufacturers of large diesel engines and complete propulsion and drive systems for marine applications, for heavy land, rail and defence vehicles, and for the oil and gas industry
18% 68%
32%
OE
Services
37%
21%
30%
12%
Defence/Other
Marine
Industrial
Energy
£2.4bn
LTSA* 2%
T&M 30%
OE 68%
H1 2016 Figure
Employees Historic Revenue & Profit
10,600* Order Book
£2.0bn
£2,831m £2,720m £2,385m
£294m £253m £194m
2013 2014 2015
MTU Onsite Energy Standardised and tailor-made diesel gensets for emergency, base load and peak load power generation and for cogeneration plants for the generation of combined heat and power based on gas engines and gas turbines
Bergen Medium-speed Rolls-Royce engines for marine and power generation applications, and for the oil and gas industry
L’Orange Leader in the field of electronically-controlled, high-pressure injection technology for diesel and heavy fuel oil engines in the off-highway sector
£m
2014
Underlying Change
Acquisitions & Disposals
Exchange
2015
Order book 1,971 (43) - - 1,928 Underlying revenue 2,720 (72) - (263) 2,385
Change -3% - -10% -12% Underlying OE revenue 1,893 (97) - (178) 1,618
Change -5% - -9% -15% Underlying services revenue 827 25 - (85) 767
Change +3% - -10% -7% Underlying gross margin 742 (37) - (70) 635 Gross Margin % 27.3% -70bps 26.6%
Commercial and administrative costs (296) (9) - 30 (275) Restructuring costs (7) 3 - - (4) Research and development costs (183) 3 - 18 (162) Joint ventures and associates (3) 3 - 0
Underlying profit before financing 253 (37) - (22) 194 Change -15% -23%
Underlying operating margin 9.3% -110bps 8.1%
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
*FY15 Average
*Long Term Service Agreement
Power Systems – Engineering Excellence • Product development driven by customer
demand for improved life-cycle cost and continuously tightening emissions requirements
• Taking a focused approach on existing product portfolio investment
• Investing / innovating to maintain technology leadership and create additional customer value
Life-cycle cost profile Emissions regulation forecast: 2025
Focus on high quality reciprocating engine portfolio
Continuous operation applications
Expanding gas engine portfolio
Strengthening integrated system capabilities
High
Medium nationwide / high in urban areas
Medium
No legislation Acquisition cost Maintenance cost Operation cost
Ensuring high quality new engine development • Investing in new engine series to secure
technology leadership
Maintaining a clear market-led focus • Focusing on key growth markets • Responding to customer requirements
Pursuing modularised R&D approach • Accelerating development time • Increasing investment effectiveness
Increasing relevance of gas engines
Maximising returns on R&D investment by applying proven gas technology for new applications in existing markets
Creating value through systems integration • Compliance with
stricter emission regulations
• Low gas prices • Improved gas
infrastructure
• Optimising customer life-cycle cost
• Improving performance and emissions footprint
• Potential for greater data capture and analysis
Technology approach to emissions legislation: