Current trading in line with expectations
Trading is consistent with the guidance for the Group provided at our half year results in July. For the full year, the Group continues to expect modest growth in underlying revenue and good growth in underlying profit, with cash flow around breakeven.
Guidance for the business segments remains unchanged, except in Defence Aerospace, where we have changed our guidance for underlying profit from broadly flat to modest growth, and in Marine, where we have changed our guidance for underlying profit from modest growth to broadly flat.
Tognum, which we are providing guidance for separately this year, continues to trade in line with expectations.
A consistent strategy delivering shareholder value
Since our half year results in July, Rolls-Royce has achieved some important milestones.
In Civil Aerospace, we welcomed the decision by Japan Airlines to order 31 Airbus A350 XWB aircraft, which are powered by Trent XWB engines. Lufthansa selected Trent XWB engines worth $1.5 billion, including TotalCare® service support, to power 25 Airbus A350-900 aircraft. Trent 1000 engines powered the successful first test flight of the Boeing 787-9, the second member of Boeing's 787 Dreamliner family. And, because of the current regulatory environment, we agreed with United Technologies Corp. not to proceed with our intention to form a new joint venture to develop an engine to power future mid-size aircraft (120-230 passenger aircraft). We remain fully committed to this important market segment and will continue to invest in technologies that will enable us to take advantage of opportunities as they arise.
In Defence Aerospace, we signed multiple contracts worth over $600 million to provide and service military engines for various US government departments. We also completed the sale of our 50 per cent shareholding and interest in the RTM322 helicopter engine programme to Turbomeca (a Safran company), for which we received a cash consideration of €293 million that is not included in the Group’s guidance for cash flow.
In Marine and Power Systems, we were selected to design the propulsion system for the Royal Navy's future Type 26 Global Combat Ship. Subject to contract, this system will feature the world's most powerful marine gas turbine, the Rolls-Royce MT30 in combination with Tognum MTU diesel gensets and Series 4000 engines.
In Power Systems, Tognum announced that it will expand its Research and Development Center at the MTU Aiken Plant. The investment will double the center’s development capacity with the addition of two new test cells for off-highway diesel engines.
Preliminary 2013 full year results
We will report the Group’s preliminary results for the financial year ending 31 December 2013 on 13 February 2014.