Highlights of the year
Our energy business is a recognised leader in worldwide oil and gas
applications, both on and off shore. We are leveraging this market
position to build a strong, complementary global power generation
business. While the past few years have remained strong for oil and
gas, the worldwide power generation market has been depressed. We
have used this period to restructure our business and continue new
product development that will position us to take best advantage of
the anticipated market recovery. Opportunities in our Customer
Service business also position the segment for strong, profitable
growth in both the oil and gas and power generation markets.
- Return to profitability.
- Record order intake.
- New business won in emerging oil and gas markets such as China,
Qatar, offshore West Africa and offshore Brazil.
- Long-Term Service Agreement business growth.
- Released enhanced performance Dry Low Emissions (DLE) system
for industrial Trent gas turbine.
2003 marked a return to profit following a programme of new product
development and the costly technical problems associated with the
Our energy business uses gas turbine technology at the heart of its
products. Industrial versions of aero-engine cores serve both oil
and gas and power generation markets, utilising state-of-the-art
manufacturing facilities and processes while maintaining
application flexibility to meet diverse market and customer needs.
As well as leveraging technology from the aerospace sector, the
energy business is also able to exploit cross-selling opportunities
provided by complementary products in the marine business. Floating
oil and gas production and storage vessels are a growing market and
Rolls-Royce is uniquely qualified to provide ship
design, deck machinery, propellers, rudders, steering gear, oil and
gas compression and power generation equipment.
Global markets for Rolls-Royce energy products face a
healthy future, with demand for energy predicted to double in size
by the year 2020.
The past ten years have seen a dramatic shift in the global market
for our oil and gas products, from North Sea and North America
applications to emerging markets in other regions of the world. Our
2003 successes include two very significant order wins in China and
Qatar. Rolls-Royce RB211 gas turbines and centrifugal
gas compressors have been selected for installation along the new
3,900km West-East China Gas Pipeline, and in the Middle East,
Dolphin Energy Limited has selected Rolls-Royce
industrial Trent powered gas compression packages for its new
underwater pipeline connecting Qatar with the United Arab Emirates.
In power generation, we are well positioned to take advantage of
the anticipated global market recovery. Gas turbines are the
technology of choice in this market and the industrial Trent, which
is now fully released for sale, is the most powerful and efficient
aero-derived gas turbine in its class.
Our Customer Service business remains robust with long-term service
contracts securing our position throughout the product lifetime. We
have expanded our capability in engineered product upgrades,
enabling us to apply today’s patented technology to the installed
fleet. These tailored solutions create significant value for our
customers while enhancing both our customer relationships and
Our priorities are focused on maintaining our leadership position
in the oil and gas market segment, building a strong, complementary
global power generation business, and achieving sustained,
profitable growth through innovative Customer Service solutions
such as Long-Term Service Agreements and value-added,
state-of-the-art product upgrades. We are continually improving
manufacturing efficiency to ensure we remain competitive on costs.
|Underlying PBIT £m
|Net assets £m
|Order book - firm £bn