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© Rolls-Royce plc 2008 Legal Information
Business review: Energy
| Operational highlights | |||||
|---|---|---|---|---|---|
| Record orders received totalling £856 million | |||||
| Services now represent 52 per cent of sales | |||||
| Largest ever order won at £120 million for maintaining RB211s for BP | |||||
| Record number of contracts for the industrial Trent | |||||
| Avon 200 upgrade well received by market in first year | |||||
| Key financial data | 2007 | 2006 | 2005 | 2004 | 2003 |
| Underlying revenue £m | 558 | 546 | 535 | 538 | 529 |
| +2% | +2% | -1% | +2% | -17% | |
| Underlying profit before financing £m | 5 | (18) | 1 | (7) | (18) |
| +128% | -1900% | +114% | +61% | +80% | |
| Net assets £m | 370 | 387 | 390 | 453 | 511 |
| Other key performance indicators | |||||
| Order book £bn | 0.9 | 0.5 | 0.4 | 0.4 | 0.4 |
| +80% | +25% | 0% | 0% | -33% | |
| Engine deliveries | 32 | 44 | 61 | 47 | 54 |
| Underlying services revenues £m | 289 | 251 | 219 | 248 | 214 |
| Underlying services revenues % | 52 | 46 | 41 | 46 | 40 |
| % of fleet under management | 7 | 6 | 5 | 5 | 4 |
Tom Curley
President – Energy
Energy
The energy business has customers in over 120 countries. It is a leading supplier of power systems to the oil and gas industries and has a growing presence in the electrical power generation sector.
In 2007, the energy business won a record number of contracts in both the oil & gas and power generation sectors. Services also had a strong year and now accounts for over 50 per cent of total sales.
With record demand driving a strong oil and gas market, we continued to expand our global footprint with orders from customers in the Americas, Europe, the Middle East and Asia.
The Caspian region proved particularly active. In Azerbaijan, the energy business secured its largest single contract to date, a TotalCare service agreement with British Petroleum (BP) worth £120 million for the maintenance of 28 industrial RB211 gas turbines operating onshore and offshore. As part of our strategy to work more closely with customers, this contract will be managed from our service centre in Baku. We also won our first order for the installation of RB211 units in Turkmenistan. This order continues the expansion of our footprint in the central Asia/Caspian region.
Our growing presence in the power generation sector continues. Momentum is building as the industrial Trent attracts a broader customer base, particularly in a recovering North American market. In 2007, we received a record number of orders for the industrial Trent, including five units for installation in the US. Commitments were also received from customers in South America, Europe and Australia.
We continue to focus on becoming a service solutions provider, with the services segment having doubled its order intake over the past three years. We now have dedicated customer service centres in Scotland, Brazil and Azerbaijan, with plans under way for an additional site in West Africa. These centres position the skills and knowledge of our services team closer to our customers.
Our product upgrades business also delivered a record year. Demonstrating our commitment to the existing Rolls-Royce installed gas turbine fleet, this business applies new technology into existing products to extend their service life by enhancing power and performance. Of particular note is our Avon 200 programme, which provides Avon gas turbine users with increased efficiency and power for their installed units. The market response to this programme has been extremely positive, with orders for 19 unit upgrades received in the first year.