A Global Business

Credit Suisse - A & D Conference

September 11 2008

Agenda

�Strategic overview

�Sector update

�Operations update

�Summary and outlook

Addressing four global markets

Investing in technology,capability and infrastructure

Broadening our portfolio

A broadly based business- Non-civil becoming more material

Group Sales

2001 2008

100%

55%

45%

5.5% CAGR150%

50%

50%Civil

NonCivil

0

0

10

20

30

40

50

60

2002 2003 2004 2005 2006 2007 2008H1

Europe Americas Asia/Middle East£bn

Firm and announced

Rolls-Royce order book

Sector Update

Technology creates opportunities – Civil

� Trent XWB addressing a market opportunity of $186bn over next 20 years, with orders taken for over 700 engines.

� BR725 selected for the G650, addressing a sector worth $14bn over the next 20 years.

Installed Engine Fleet by Thrust – 2013 (V2500 @ 50%)Unit: Lbs Million Thrust

RB211

Trent

V2500

0

100

200

300

400

500

600

1986

1991

1996

2001

2006

2011

000422

C&RAInstalled thrust up 45% since 2001

Expected to grow at 7% CAGR to 2013

Parked aircraft announcements (since 3/08)

0

50

100

150

200

250

737 C

lassic

MD80EMB13

5CRJ

737 N

GA30

0A32

0 fam 757

767

CRJ700

EMB145

747

MD90DC10MD11

A340-5

00 777

F100

PWGER-R

Updated 4 Sept

AE2100 for the C130J AE3007 on the Global HawkAE2100 for the C27JAE1107C for the V22 Osprey

� Strong demand in the military transport sector(15% CAGR).

� AE common core powering seven applications across transport, business jets and UAV’s.

� Significant opportunity in long-term: A400M, JSF, FSTA.

Technology creates opportunities – Defence

Technology creates opportunities - Marine

� O&G investment driving demand for support vessels

� Number of support vessels worldwide will double in a decade

� Global trade supporting merchant growth

�Submarines� Exclusive provider of nuclear steam raising plant to UK RN

� Long-term visibility

� Nuclear capability creates options for Energy expansion

�Surface - Naval� Supporting 70 navies around the world

� MT30 creating new positions with US Navy

� Commercial

Technology creates opportunities - Energy

� 2000 employees inUK, France and US

� Targeting UK new build

� Globalopportunities

�Tidal Power

� Equity stake in TGL

� Deep water trialsQ1 2009

�Fuel Cells� 100 hour testplanned H2 2008

� Nuclear

Operations update

Investing to deliver productivity and growth� Targeted investment to deliver capacity

� UK facility programme making good progress� Singapore and USA.

� Expanding international footprint of our own operations� Low cost environments.� Continued dollarisation.

� Good progress on restructuring support functions� 80% complete in H1 – complete in 2008.� Self funding in 2008.

� Developing a more flexible and capable cost base.

� Supply chain improving but still challenged in some areas.

� Programme delays contribute to the challenges� Managing operational base and costs.� Additional stresses on inventory levels.

� Unit costs up 2% ~ 4% in 2008.

Managing the challenges

Operations summary� Increasingly global footprint will drive long term

improvements.

� Managing the effects of increasing costs and programme delays.

� Good progress in H1 despite ongoing challenges.

� Restructuring of support functions going well and will deliver benefits this year.

� Significant further load growth over the near term.

� Developing a more flexible and capable cost base.

Agenda

�Strategic overview

�Sector update

�Operations update

�Summary and outlook

Growth in a challenging environment

� A high technology power systems company, with a broad portfolio,geographically diverse customer base and order book.

� Consistent focus on cost reduction and performance improvement.

� Civil portfolio mitigates aviation sector challenges.

� Non-civil businesses growing and increasingly material.

� For 2008 continuing growth in underlying profits and positive cash generation.

Rolls-Royce Group plc (the “Group”) is providing the following cautionary statement. This document contains certain statements that are or may be forward-looking with respect to the financial condition, results or operations and business of the Group. These statements are sometimes, but not always, identified by the words ‘may’, ‘anticipates’, ‘believes’, ‘expects’ or ‘estimates’. By their nature forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to (i) changes to the current outlook for global power systems markets, (ii) changes in tax laws and regulations, (iii) the risks associated with the introduction of new products and services, (iv) significant global disturbances such as terrorism or prolonged healthcare concerns, (v) the termination or delay of key contracts and (vi) long-term fluctuations in exchange rates, (vii) regulatory and shareholder approvals, (viii) unanticipated liabilities and (ix) actions of competitors.

Subject to the Listing Rules of the UK Listing Authority, Rolls-Royce Group plc assumes no responsibility to update any of the forward looking statements herein.

SAFE HARBOUR STATEMENT

Appendix

Rolls-Royce

4.32.51.00.3Aftermarket sales £bn

888(501)18(300)Net cash £m

55403020% Aftermarket

40435756Employees 000

7.86.33.51.4Sales £bn

461773Order book £bn

2007200119911981

Balanced business portfolio – 2008 H1

Civil: 19%Marine: 16%

Defence: 8%

Energy: 4%

Aftermarket services: 53%£2.2 bn

Original equipment: 47%£2.0bn

Total sales: £4.2bn

Foreign exchange management

� Forward cover of $9.1bn with an average rate £~$1.87

� Opening spot rate £~$1.99

� Average spot rate £~$1.97

� Closing spot rate £~$1.99

� Hedging policy offers visibility of £~$ rate allowing planned transition

� Managing exposure through

�Utilisation of hedge book

�Dollarisation of supply chain

�Cost reduction

The broadest civil product range

Civil Aerospace

2007£m

2008£m

272 261

2007£m

2008£m

2,102 2,011

Sales * Profit *

*Underlying sales and profit before financing costs

2007£bn

2008£bn

Order Book

42.1 35.9

� Strong progress across all programmes.� Flying hours up 4% in H1; Services revenues up 10%.� £16m customer charge in H1.� Continuing cost and FX headwinds.� Strong OE growth in H2 led by deliveries for widebody.

A competitive portfolio–Defence Aerospace

Defence Aerospace

2007£m

2008£m

104 106

2007£m

2008£m

769 808

Sales * Profit *

* Underlying sales and profit before financing costs

Order Book2007£bn

2008£bn

4.9 4.4

� Strong positions on major programmes~growing order book.� Improvement in sales in second half. � Phasing of restructuring charges and R&D held back first half.� Well balanced business

� development, production and services.

The widest range of marine products and services from a single supplier

Ship design

Automation & control

Deck machinery

EnginesPropulsion systems

Motion control

Integrated systems capabilityScope of supply

Marine

� Increasingly broad portfolio

�Extending capability through the acquisition of SHE.

� Strong market positions in naval and commercial.

� Investing in increased capacity.

� Strong first half trading performance with positive outlook.

2007£m

2008£m

87 58

2007£m

2008£m

1,016 700

Sales * Profit *

* Underlying sales and profit before financing costs

2007£bn

2008£bn

5.5 4.7

Order Book

Energy Portfolio

� Oil & Gas production(onshore and offshore)� Oil and Gas production� Oil transmission� Gas gathering� Secondary oil/gas

recovery� Gas transmission

� Gas pipelines� Gas storage

� Power Generation� Industrial� Commercial� Municipal

� 501s and RB211s provide 4 - 32 MW of power

� Trent 60 provides up to58 MW of power

� Developing a 1MW Fuel Cell

�Civil Nuclear� 50 years experience with the UK RN Submarine fleet� Integrated design, supply and services� Instrumentation and control for all French reactors� World class expertise

� Tidal Power� Leveraging marine experience and capabilities

� Investing in tidal demonstrator

� Offshore trials inQ1 2009

Energy

� Benefiting from increased O&G activity.

� Power Generation making good progress

� Record order intake for industrial Trent.

� Further fuel cells tests planned.

� H1 trading held back by restructuring and one-off£18m technology fees in H1 2007.

2007£m

2008£m

(8) (1)

2007£m

2008£m

324 227

Sales * Profit *

* Underlying sales and profit before financing costs

2007£bn

2008£bn

1.0 0.9

Order Book

Fuel cells