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© Rolls-Royce plc 2008 Legal Information
Business review: Defence aerospace
| Operational highlights | |||||
|---|---|---|---|---|---|
| EJ200 engine and support contract signed for Royal Saudi Air Force Eurofighter Typhoon aircraft | |||||
| F136 programme received US$480 million development funding for 2008 | |||||
| Rolls-Royce selected as propulsion system provider for the US forces Joint Cargo Aircraft programme | |||||
| V-22 Osprey engine contract for US$700 million gained | |||||
| RR300 launched to power the Robinson R66 | |||||
| Service contracts worth over US$500 million signed | |||||
| Key financial data | 2007 | 2006 | 2005 | 2004 | 2003 |
| Underlying revenue £m | 1,673 | 1,601 | 1,420 | 1,374 | 1,398 |
| +4% | +13% | +3% | -2% | +2% | |
| Underlying profit before financing £m | 199 | 193 | 180 | 179 | 147 |
| +3% | +7% | +1% | +22% | -20% | |
| Net assets £m | (172) | 20 | 55 | 131 | 69 |
| Other key performance indicators | |||||
| Order book £bn | 4.4 | 3.2 | 3.3 | 3.3 | 2.7 |
| +38% | -3% | 0% | +22% | +4% | |
| Engine deliveries | 495 | 514 | 565 | 548 | 510 |
| Underlying services revenues £m | 877 | 853 | 787 | 768 | 789 |
| Underlying services revenues % | 52 | 53 | 55 | 56 | 56 |
| % of fleet under management | 11 | 11 | 8 | 5 | 5 |
Axel Arendt
President - Defence Aerospace
Defence aerospace
The defence aerospace business has over 20,000 engines in service and is Europe's largest aero-engine manufacturer in the defence sector. We power aircraft in all the major categories including transport, helicopters, trainers, combat, tactical and unmanned aerial vehicles.
2007 marked another year of progress in all sectors. EJ200 engine business and support for the fleet of 72 Eurofighter Typhoon aircraft for the Royal Saudi Air Force will be worth up to £1 billion to Rolls-Royce. We are the prime contractor for EJ200 on behalf of the Eurojet consortium.
The F136 engine, which we are jointly developing with GE to power the F-35 Lightning II, has been fully funded for 2008 by the US Department of Defense (DoD) at US$480 million. The engine continues to perform exceptionally well in both testing and milestone delivery. The LiftSystem for the STOVL variant of the F-35 has been installed in the aircraft and is expected to make its first flight in the first half of 2008.
The selection of the AE 2100-powered C-27J for the Joint Cargo Aircraft programme in the US further enhanced the Group's position as the leader in the transport aircraft engine market. The supply of the engines and aftermarket services is worth more than US$500 million over the life of the programme. For the collaborative TP400 engine programme, a challenging year culminated in the delivery of the first engine for the flight test programme. Incremental development costs of £40 million associated with the programme have been provided for in the year.
In the tactical sector, the Advanced Hawkeye programme, with the T56-A-427A powered E-2D aircraft, achieved its first flight in August 2007. The programme has a potential contract value of US$500 million. Initial production for the programme commences in 2008.
The launch of the RR300 engine represents a major step forward in the helicopter sector with the engine providing 300 shaft horsepower at take off, excellent hot and high performance and outstanding value. Federal Aviation Authority type certification was achieved ahead of schedule in December 2007, with full-rate production to follow in 2008. Under the agreement with Robinson Helicopter, Rolls-Royce will provide several hundred RR300 engines in forthcoming years. Elsewhere in the helicopter sector, additional RTM322 orders were secured from Belgium and Australia, while the T800 was selected by Turkey to power the ATAK helicopter.
2007 marked a significant year for the AE 1107C-Liberty engine with the award of a five-year production contract from the US DoD worth US$700 million for the V-22 Osprey tiltrotor aircraft.
Aftermarket support continued to develop, both in terms of new contracts and the scope of services being offered to customers. Rolls-Royce signed its first contract with the US Air Force to support its fleet of AE 2100 engines on the C-130J aircraft, worth US$235 million. Adour engine support contracts were also signed with the US Navy and the UK Ministry of Defence (MoD). A Memorandum of Understanding was signed with BAE Systems to work together to improve support to the UK MoD and other worldwide customers, building on two successful availability contracts for the UK's RB199-powered Tornado fleet.