Rolls-Royce Regulatory News (RR.)

28 February 2019

ROLLS-ROYCE WITHDRAWS FROM ENGINE COMPETITION

FOR NEW MIDSIZE AIRPLANE PLATFORM

Rolls-Royce has decided to withdraw from the current competition to power Boeing's proposed middle of the market - or New Midsize Airplane (NMA) - platform. While we believe the platform complements Boeing's existing product range, we are unable to commit to the proposed timetable to ensure we have a sufficiently mature product which supports Boeing's ambition for the aircraft and satisfies our own internal requirements for technical maturity at entry into service.

Chris Cholerton, Rolls-Royce, President - Civil Aerospace, said: "This is the right decision for Rolls-Royce and the best approach for Boeing. Delivering on our promises to customers is vital to us and we do not want to promise to support Boeing's new platform if we do not have every confidence that we can deliver to their schedule."

We have made a clear commitment to our customers that we will deliver on our current engine programmes. At the same time, we remain committed to the development of new technologies and will continue to mature and de-risk our next generation UltraFan® engine architecture in preparation for future applications.

Chris Cholerton added: "UltraFan is the foundation of our future large civil aero engine programmes and we must ensure that it has as smooth an entry into service as possible. We had begun its development before the Boeing opportunity emerged and it must undergo a rigorous testing regime before we offer it to customers, which we do not believe can be achieved within the NMA timeframe. Withdrawing at this stage will enable Boeing to structure the final part of the competition in a way that best suits them and we hope and expect to work with Boeing on other new opportunities in the future."

UltraFan is a scalable jet engine design suitable for widebody or narrowbody aircraft and will offer a 25% fuel efficiency improvement over the first-generation of Rolls-Royce Trent engines. We have successfully run tests of the new architecture that sits within the core of the engine through the Advance3 demonstrator, as well as the power gearbox and composite fan blade system. Meeting Boeing's timetable would have required accelerating our demonstrator programme and withdrawing from the process will enable us to have a high confidence in engine maturity towards the end of the next decade.

About Rolls-Royce Holdings plc

1. Rolls-Royce pioneers cutting-edge technologies that deliver the cleanest, safest and most competitive solutions to meet our planet's vital power needs.

2. Rolls-Royce has customers in more than 150 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. Annual underlying revenue was £15 billion in 2018, around half of which came from the provision of aftermarket services.

4. In 2018, Rolls-Royce invested £1.4 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.

5. The Group has a strong commitment to apprentice and graduate recruitment and to further developing employee skills.

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