|Order book (£bn)||3.0||3.5|
|Underlying revenues (£m)||2,591||2,589|
|Underlying OE revenues (£m)||1,719||1,804|
|Underlying services revenues (£m)||872||785|
|Underlying profit before financing (£m)||332||263|
The Marine business provides complex integrated power systems for a range of applications in the offshore oil and gas, specialist vessel and naval markets. It has more than 2,500 customers including 70 navies, with equipment installed on more than 30,000 vessels worldwide.
The Marine business delivered another strong year, despite a sluggish recovery in new shipbuilding activity. Service opportunities increased as a result of the large number of vessels incorporating Rolls-Royce equipment entering the market and our expanding services network.
New programmes have achieved a number of important milestones. These included the Littoral Combat Ship (LCS) entering active duty, the launch of the second MT30 powered LCS, USS Fort Worth, and the confirmation in January 2011 of orders for a further 10 Rolls-Royce powered LCS vessels for delivery over the next few years. Sea trials for the nuclear powered Astute class submarine and the Type 45 Destroyer, HMS Daring, progressed well.
In commercial marine, the world's largest gas powered ferry powered by Bergen gas engines was commissioned, and the first order was secured for the innovative UT 754 Wave-Piercing vessel. The new Wave-Piercing design improves vessel stability and crew safety, while minimising environmental impact.
The completion of the acquisition of ODIM ASA further extends our capabilities within the offshore oil and gas market. It also strengthens our position in growth segments including subsea, well intervention and seismic survey activities. We acquired the remaining 67 per cent of the business in April, an investment of £147m in cash (£218m including the 2009 investment).
The Marine business performed particularly strongly through the year with considerable mix change and operational volatility managed well. There were no cancellations of existing orders in the second half of 2010 and we are starting to observe some encouraging signs of a recovery in demand. Order intake increased to £1.8bn, more than double the 2009 level. However, because of the high rate of deliveries in the year, the order book declined. The original equipment order cycle remains a key factor for the 2011 and 2012 outlook.
Investment in the global service capability continued, with new facilities being built in Poland and Germany. New service infrastructure developed and commissioned in the prior three years supported good aftermarket revenue growth of 11 per cent in the period. Mid teens service revenue growth is anticipated for 2011.
The combination of improving revenue mix, strong operational performance, more favourable contract pricing and the non-recurrence of a number of one-off charges in 2009 more than offset original equipment volatility and contributed to a strong improvement in margins and profitability in 2010.
Demand for sophisticated offshore oil and gas exploration and production capabilities, and for cleaner more efficient vessels remains encouraging. Revenue in 2011 is expected to be similar to 2010, reflecting weaker original equipment revenues, offset by a full year of contribution from ODIM ASA and further good growth in service revenues. Full-year profits are expected to be similar to those of 2010.