Rolls-Royce Group plc Preliminary Results 2008, AeroSpace and Defence Industries Association of Europe (ASD)
Release Date: 2009-02-12
Group Highlights
· Order book increased by £9.6bn or 21 per cent to a record £55.5bn (2007 £45.9bn), with strong growth in all businesses.
· Group sales increased to £9,082m (2007 £7,435m). Sales on an underlying basis* increased by 17 per cent to £9,147m.
· Services sales increased by 11 per cent to £4,755m on an underlying basis.
· Profit before financing was £862m (2007 £512m).
· Underlying profit before taxation* increased by ten per cent to £880m (2007 £800m).
· Net cash inflow was £570m (2007 £62m) with average net cash of £375m (2007 £350m).
· Robust balance sheet with net cash of £1,458m (2007 £888m) at the year end.
· Final payment to shareholders 8.58 pence per share, making 14.30p per share, an increase of 10 per cent for the full year.
Sir John Rose, Chief Executive, said:
“We have delivered a good set of results, with strong order intake, cash flow and underlying profit growth achieved in challenging conditions.
“2009 will be a very difficult year for the global economy. Our well diversified portfolio, the scale of our installed base and the strength of our balance sheet give us confidence that Rolls-Royce will respond successfully to current challenges and develop the business for the longer term.
“Our current view is that in 2009 underlying revenues will continue to grow, with underlying profits remaining broadly similar to those achieved in 2008. Average net cash is expected to increase despite a cash outflow in the year”.
Short term resilience and long term growth
Rolls-Royce’s performance in 2008 was characterised by strong order intake, cash inflow and underlying profit growth. The current economic crisis will have an impact on the Group, its customers and suppliers, but it is too early to be precise about the scale and duration of these effects. The Board fully recognises the unprecedented nature of the challenges that lie ahead, but is confident that the Group is better positioned than in the past and that its financial and portfolio strengths will enable it, in the short term, to respond to current uncertainties and continue to develop the business. Over the next ten years, the longevity of the Group’s programmes and its technological leadership, the scale of the order book and the increasing importance of services suggest that Rolls-Royce has the capability to double its revenues through organic growth.The Group is well placed to respond effectively to the current challenging external environment for a number of reasons:·
· It is a global leader in growing markets with very high barriers to entry and the assurance of long-term, worldwide demand for its power systems;
· Its portfolio is broad and well balanced, in terms of the geographical spread of its markets, the balance between its businesses and the relationship between the aftermarket and original equipment;
· Rolls-Royce is rich in technology, understands its customers’ requirements and has the ability to apply its system integration skills to meet those requirements. It is also well positioned to exploit its technological strengths in adjacent markets such as civil nuclear and develop its existing businesses through partnerships and acquisitions;
· The Group has continuously focussed on strengthening operational efficiency and flexibility, with early action taken to restructure and reduce the costs of support functions, improve the performance of the external supply chain and reduce discretionary costs;
· The balance sheet is robust, with a positive cash balance, a strong credit rating and no material refinancing until 2011. Early action has been taken to reduce the volatility and funding requirements of the Group’s pension schemes. The currency headwind of the past four years has abated; and
· The Group successfully responded to previous setbacks in the external environment over the last decade. Its markets have been impacted by the events of 9/11, the Gulf War and the SARS epidemic and by other negative developments such as the weakening dollar, high oil and commodity prices and delays in major aircraft programmes.
| Type: | NORMAL |
| Company: | AeroSpace and Defence Industries Association of Europe (ASD) |
| Country: | Belgium |
| Url: | http://www.rolls-royce.com/Investors/news/2009/120209_prelim_08.jsp |