Farnborough Airshow underlines the success of the Rolls-Royce product and services portfolio

Friday, 18 July 2008

Rolls-Royce reported today that it has secured orders worth around $9.3 billion during the Farnborough Airshow.

These orders reflect the company’s ability to create market opportunities by continuing to develop its broad portfolio of power systems and services, the most extensive in the aerospace industry. Rolls-Royce provides engines for more than 30 types of civil and 39 military aircraft.

The Rolls-Royce strategy is to develop families of engines, tailoring each engine within the family to a specific aircraft. This enables the company to offer low-risk, high-value solutions to specific aircraft, opening up new market opportunities as each comes to market.

“Through our consistent strategy, we are creating new markets for Rolls-Royce,” said Sir John Rose, Chief Executive. “We have built leading positions in sectors with considerable potential and are well placed to take advantage of them throughout the engine life cycle.”

In the company’s civil aviation portfolio, the latest member of the Trent family, designed for the modern widebody sector where Rolls-Royce has a leading 50 per cent market share, has become its fastest selling Trent engine ever. Rolls-Royce announced orders at Farnborough worth nearly $7 billion for the Trent XWB, which is the only engine offered for the Airbus A350 XWB. The overall market potential for engines in this thrust range is around $400 billion, according to the Rolls-Royce Twenty Year Forecast.

Since the launch of the A350 XWB at Farnborough 2006, firm orders have been placed for more than 350 aircraft, with a potential engine value of $14 billion. The associated annual services revenue opportunity – based on installed thrust – will be more than twice that generated by the current fleet of more than 1,400 Rolls-Royce powered regional aircraft.

Also in the civil sector, the V2500, produced by International Aero Engines in which Rolls-Royce is a senior partner, won business worth more than $1.1 billion to Rolls-Royce. Six customers placed orders for 232 engines, plus related services, which will power 116 A320 family aircraft.

Rolls-Royce also revealed its Option programme, a wide-ranging, multi-dimensional approach to examine the engine requirements for the 150-seat aircraft replacement market. The solution, which will include a combination of technology and services, promises an efficiency improvement of between 15-50 per cent, depending on the time frame for future airframe requirements.

In the business jet market, where Rolls-Royce is the world’s leading engine supplier, the newest engine in its BR700 family has also opened new market opportunities. Selected as the sole engine for the Gulfstream G650 corporate jet earlier this year, the BR725 has helped create a new market sector of large cabin, ultra long-range business jets valued at around $30 billion in the Rolls-Royce Twenty Year Forecast.

The AE military engine family also won new business at the airshow. Rolls-Royce secured a long-term supply agreement worth $900 million for the AE 2100, to power Alenia Aeronautica’s C-27J Spartan military transport. This augments the $135 million contract with the Canadian Air Force, announced earlier in the year, to power the C-130J.

The AE family comprises three engine types with 80 per cent commonality that are customised for seven different aircraft platforms: the C-27J, C-130J, V-22 Osprey, Global Hawk UAV, Embraer 135-140 family, Embraer Legacy and Cessna Citation X. In total, around 4,300 AE engines have been delivered to date.

The Group’s portfolio of products broadened further with the announcement at Farnborough that Rolls-Royce will lead the development of the Integrated Power System for the Mantis demonstrator in the growing Unmanned Aerial Vehicle (UAV) sector.

The strength of the company’s Services business, which comprises 53 per cent of its total revenues, was underlined by agreements announced at the airshow. A new joint venture with the Mubadala Development Company will provide on-wing care through Abu Dhabi Aircraft Technologies for the growing fleet of Rolls-Royce engines in the Middle East. New and existing Trent customers, Asiana Airlines, Etihad Airways and Qatar Airways, also joined the fleet of TotalCare customers during the week.

  1. Rolls-Royce, a world-leading provider of power systems and services for use on land, at sea and in the air, has established a strong position in global markets - civil aerospace, defence aerospace, marine and energy. In each sector, Rolls-Royce offers value-added long-term service agreements for customers and operators.
  2. The Group has a broad customer base comprising more than 600 airlines, 4,000 corporate and utility aircraft and helicopter operators, 160 armed forces, more than 2,000 marine customers, including 70 navies, and energy customers in nearly 120 countries. It employs around 38,800 people worldwide people in offices, manufacturing and service facilities in 50 countries and has businesses headquartered in the UK, US, Canada, Germany, Scandinavia and China. This global presence allows the Group to access long-term international growth opportunities with its technology, presence, partnerships and people.
  3. Rolls-Royce continues to invest in core technologies, products, people and capabilities with the objective of broadening and strengthening the product portfolio, improving efficiency and enhancing the environmental performance of its products. These investments create high barriers to entry.
  4. Each year, in collaboration with its partners, Rolls-Royce invests over £800 million on research and development, two thirds of which has the objective of further improving the environmental aspects of its products. The primary technology investment area is aimed at reducing noise and emissions.
  5. Sixty per cent of research and development investment and 40 per cent of new product development spending over the past five years has been outside the UK. Research and development is carried out in facilities in the UK, Germany, Italy, Singapore, Japan, the US and Scandinavia, with particularly strong relationships with the 29 universities where there are Rolls-Royce University Technology Centres.
  6. Annual sales were £7.4 billion in 2007, of which 55 per cent came from services revenues. The firm and announced order book at the end of 2007 stood at £45.9 billion, of which aftermarket services represent 30 per cent, providing visibility of future levels of activity.
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