© Rolls-Royce plc 2008 Legal Information

£45.9bn

Order book - firm and announced

34.06p

Underlying earnings per ordinary share

+Read a detailed report of our financial performance

2007 was another year of significant progress for
Rolls-Royce. We have over many years pursued a consistent strategy which has enabled us to build a robust business.

The strength of our technology gives us unusually good access to growing global markets, as well as creating high barriers to entry. The size of our order book, the longevity of our programmes and the scale of our services activity give us clearer visibility of future revenues. We face inevitable challenges but we will continue to invest in the technologies and capability to ensure that our business is run efficiently and with a strong global footprint.

Our financial results reflect this progress. We increased sales to £7,435 million (2006 £7,156 million), with underlying sales growth of six per cent. Underlying profit before tax rose by 13 per cent to £800 million (2006 £705 million). We ended the year with a net cash balance of £888 million, after making a payment of £500 million into our UK pension funds as part of our strategy to reduce overall deficits and reduce volatility. We concluded our strategic financial review and are proposing a significant increase of 35 per cent in payments to shareholders.

Looking to the future, it is particularly encouraging that our success in global markets has strengthened our order book which ended the year at a record £45.9 billion (2006 £26.1 billion).

Ours is a long-term business and it is important not to look at one year in isolation. Twenty years ago, Rolls-Royce returned to the London Stock Exchange as a listed company. The transformation of the Company since then has been remarkable. It seems especially fitting to mark this anniversary by highlighting the progress we have made over this period against each of the elements of the Group's strategy.