Last checked at 28 Jun 2016 07:00
28 June 2016
ROLLS-ROYCE HOLDINGS PLC
PRE-CLOSE STATEMENT
Rolls-Royce Holdings plc will be presenting its Half Year Results on 28 July 2016. As a result, ahead of the start of its close period from 1 July 2016 the company is confirming that there has been no change to its outlook; overall trading in the first five months of the year has been broadly in line with expectations and the outlook for the year as a whole is unchanged.
As outlined in May, underlying profit before financing charges and tax for the first six months of the year is expected to be close to breakeven, with our performance significantly weighted towards the second half. This reflects the previously identified headwinds expected in 2016 and the resulting lower level of overall performance compared to the prior year. Looking to the balance of the year, the second half outlook reflects increased large engine deliveries, good underlying growth in aftermarket revenues and expected incremental benefits from ongoing restructuring programmes.
As set out in February at the time of our Full Year Results, the priorities for 2016 are threefold: to strengthen our focus on engineering and operational excellence and leverage our installed base; to deliver a strong start to our transformation programme; and to start rebuilding trust and confidence in our long-term growth prospects. Good progress has been made on a number of initiatives to deliver these priorities, including the early stages of our transformation programme. As a result, we are well on track to delivering our expected cost savings in 2016 and 2017. Updates on this programme, its financial impact and our planning for Phase 2 will be provided at our Half Year Results in July.
The 2016 full year outlook also excludes the year-on-year effect of foreign exchange translation. Should rates for the full year remain at the average levels seen in the first five months of 2016 (USD:GBP 1.44; EUR:GBP 1.29) the movement would improve underlying revenues by around £400m and improve underlying profit before tax by around £40m.
On Thursday 23 June in a referendum the UK voted to leave the EU. Although this is not the outcome the company would have chosen, Rolls-Royce remains committed to the United Kingdom where we are headquartered, directly employ over 23,000 talented and committed workers and where we carry out a significant majority of our research and development. The UK's decision will have no immediate impact on our day-to-day business. The medium and long term effect will depend upon the relationships that are established between the UK, the EU and the rest of the world over the coming years.
Over the next few days the Company will be holding a number of meetings with investors and analysts, including at the forthcoming Farnborough Airshow. All comments made at these events are expected to be consistent with the outlook reconfirmed above.
This announcement contains forward-looking statements. Any statements that express forecasts, expectations and projections are not guarantees of future performance and will not be updated. By their nature, these statements involve risk and uncertainty, and a number of factors could cause material differences to the actual results or developments. This announcement is intended to provide information to shareholders, is not designed to be relied upon by any other party, or for any other purpose and the Company and its directors accept no liability to any other person other than under English law.
About Rolls-Royce Holdings plc
1. Rolls-Royce's vision is to be the market-leader in high performance power systems where our engineering expertise, global reach and deep industry knowledge deliver outstanding customer relationships and solutions. We operate across five businesses: Civil Aerospace, Defence Aerospace, Marine, Nuclear and Power Systems.
2. Rolls-Royce has customers in more than 120 countries, comprising more than 400 airlines and leasing customers, 160 armed forces, 4,000 marine customers including 70 navies, and more than 5,000 power and nuclear customers.
3. We have three common themes across all our businesses:
· Investing in and developing engineering excellence
· Driving a manufacturing and supply chain transformation which will embed operational excellence in lean, lower-cost facilities and processes
· Leveraging our installed base, product knowledge and engineering capabilities to provide customers with outstanding service through which we can capture aftermarket value long into the future.
4. Annual underlying revenue was £13.4 billion in 2015, around half of which came from the provision of aftermarket services. The firm and announced order book stood at £76.4 billion at the end of 2015.
5. In 2015, Rolls-Royce invested £1.2 billion on research and development. We also support a global network of 31 University Technology Centres, which position Rolls-Royce engineers at the forefront of scientific research.
6. Rolls-Royce employs over 50,000 people in more than 46 countries. Nearly 15,700 of these are engineers.
7. The Group has a strong commitment to apprentice and graduate recruitment and to further developing employee skills. In 2015 we employed 228 graduates and 277 apprentices through our worldwide training programmes.
For further information, please contact:
Investors:
John Dawson +44 7557 287101
Helen Harman +44 7968 906645
Ross Hawley +44 7920 822534
Media:
Richard Wray +44 (0)20 7227 9163