£1,374m
Defence aerospace sales 2004
£155m
Defence aerospace underlying profit before interest 2004
Our defence business is broadly based, with a strong portfolio of
products and services covering the key defence aerospace market
sectors, from combat and trainer to transport, tactical aircraft
and helicopters.
In 2004, we continued to expand our services offerings and customer base while increasing the fleet of installed engines.
In the combat market, the order for Tranche 2 of Eurofighter Typhoon aircraft will mean new engine sales worth more than £750 million to Rolls-Royce. The contract covers 519 engines for which Rolls-Royce will produce the combustion system, high pressure turbine, intermediate casing and other components.The Group will also assemble, test and deliver 195 engines for the RAF. Work on Tranche 2 engines will start in 2005 and Rolls-Royce plans to produce approximately 40 engines a year over the next five years to fulfil the RAF order.
2004 was a momentous year for the F-35 Joint Strike Fighter (JSF), F136 engine, in which Rolls-Royce is a 40 per cent partner. The engine successfully performed its first engine test. Soon afterwards we were awarded a US$45 million follow-on contract to complete the concept demonstration work on the F136, which will compete in a potential international market estimated at approximately 5,000 aircraft.
The Rolls-Royce LiftSystem®, which provides vertical lift for the F-35, continued to beat programme requirements. At the beginning of the year, the unique LiftFan test cell was dedicated in Indianapolis. Testing of the whole propulsion system, including the LiftSystem, commenced ahead of schedule and the LiftSystem performed well. Over 1,000 hours of rig and system testing has been undertaken since the beginning of the System Development and Demonstration phase of the programme.
These great strides in the Eurofighter and JSF programmes have helped to maintain our position at the forefront of two of the world’s major combat aircraft programmes.
A further ten Pegasus engines were ordered by the Spanish and Italian navies to support their Harrier AV-8B aircraft.
The transport market, in which Rolls-Royce is the global leader, was another area of strength in 2004, particularly in the United States. T56 turboprop business remained strong in this engine’s 51st year of production and the improved Series IV engine secured the Advanced Hawkeye development programme for the next generation of that aircraft. The AE 1107C-Liberty engine continued to perform well in Operational Assessment testing of the V-22 Osprey in severe environments and multiple mission scenarios. In the summer, the US Air Force took possession of its first AE 2100-powered C-130J aircraft. In Europe, the preliminary design review of the TP400-D6 engine for the Airbus A400M transport aircraft was successfully concluded, followed by on-schedule initial testing of the first engine hardware.
In the helicopter market, the RTM322 continued to grow in orders and power. The selection by Oman of the latest increased power version, to power 20 helicopters, increased the number of customers who have selected the RTM322 for the NH90 to nine out of ten. The first production NH90 made its maiden flight in May, powered by the RTM322. Civil certification of the engine, enabling it to be used in non-military helicopters, was also achieved in the summer.
The Federal Aviation Administration certified the T800 engine for the Super Lynx 300 helicopter, the first of which were formally handed over for Thai and Omani customers. First deliveries of the MTR390-powered Tiger took place in the second half of the year. The company also received a large order for Model 250 engines when the US Border Patrol selected the Bell 430 helicopter. The Model 250 engine also powered the MD500E to a new round-the-world speed record.
In the tactical aircraft market, four BR710 engines powered the Nimrod MRA4 reconnaissance aircraft for its maiden flight and five Rolls-Royce engines – four AE 2100s and one T800 – powered the Japanese US1A-Kai flying boat on its first flight.
The AE 3007 continues to demonstrate superb performance in Global Hawk, which has now exceeded 4,000 flying hours. The AE 3007 also powers the ERJ-145 which has been selected for the Aerial Common Sensor programme.
The provision of services contributed 56 per cent of the Group’s defence sales and we continued to service existing contracts successfully and win new ones. Over 1,100 military engines and 1,800 military engine modules are now covered by Mission Ready Management Solutions long-term service contracts.
After achieving record engine availability during the first year of the Adour support contract for the T-45 US Navy trainer aircraft, the following year’s option was exercised early. A similar performance-based logistics programme is under way to support the AE 2100 powering the US Marine Corps C-130J fleet, providing superior availability while controlling costs.
Rolls-Royce is also supporting a guaranteed level of EJ200 availability to power the UK Royal Air Force’s initial Typhoon training operations. With more than 1,100 hours flown, the programme is exceeding contractual requirements. In addition, we have extended existing availability-based contracts for modules for the RB199s in Tornado aircraft, as well as winning new business to support Pegasus modules in the Harrier.
2004 has been a notable year across all of our market sectors and our balanced portfolio enables us to look forward to the future with well-founded confidence.
| Defence aerospace | 2004 | 2003 | 2002 | 2001 | 2000 |
| Turnover £m | 1,374 | 1,398 | 1,376 | 1,400 | 1,403 |
| Underlying PBIT £m | 155 | 147 | 183 | 175 | 154 |
| Net assets £m | 47 | 69 | 25 | 179 | 261 |
| Order book – firm £bn | 3 | 2.4 | 2.1 | 2.6 | 2.6 |
| Engine deliveries | 548 | 510 | 505 | 472 | 555 |
| Employees | 5,100 | 4,900 | 5,100 | 6,700 | 7,200 |
In 2004, we continued to expand our services offerings and customer base while increasing the fleet of installed engines.
In the combat market, the order for Tranche 2 of Eurofighter Typhoon aircraft will mean new engine sales worth more than £750 million to Rolls-Royce. The contract covers 519 engines for which Rolls-Royce will produce the combustion system, high pressure turbine, intermediate casing and other components.The Group will also assemble, test and deliver 195 engines for the RAF. Work on Tranche 2 engines will start in 2005 and Rolls-Royce plans to produce approximately 40 engines a year over the next five years to fulfil the RAF order.
2004 was a momentous year for the F-35 Joint Strike Fighter (JSF), F136 engine, in which Rolls-Royce is a 40 per cent partner. The engine successfully performed its first engine test. Soon afterwards we were awarded a US$45 million follow-on contract to complete the concept demonstration work on the F136, which will compete in a potential international market estimated at approximately 5,000 aircraft.
The Rolls-Royce LiftSystem®, which provides vertical lift for the F-35, continued to beat programme requirements. At the beginning of the year, the unique LiftFan test cell was dedicated in Indianapolis. Testing of the whole propulsion system, including the LiftSystem, commenced ahead of schedule and the LiftSystem performed well. Over 1,000 hours of rig and system testing has been undertaken since the beginning of the System Development and Demonstration phase of the programme.
These great strides in the Eurofighter and JSF programmes have helped to maintain our position at the forefront of two of the world’s major combat aircraft programmes.
A further ten Pegasus engines were ordered by the Spanish and Italian navies to support their Harrier AV-8B aircraft.
The transport market, in which Rolls-Royce is the global leader, was another area of strength in 2004, particularly in the United States. T56 turboprop business remained strong in this engine’s 51st year of production and the improved Series IV engine secured the Advanced Hawkeye development programme for the next generation of that aircraft. The AE 1107C-Liberty engine continued to perform well in Operational Assessment testing of the V-22 Osprey in severe environments and multiple mission scenarios. In the summer, the US Air Force took possession of its first AE 2100-powered C-130J aircraft. In Europe, the preliminary design review of the TP400-D6 engine for the Airbus A400M transport aircraft was successfully concluded, followed by on-schedule initial testing of the first engine hardware.
In the helicopter market, the RTM322 continued to grow in orders and power. The selection by Oman of the latest increased power version, to power 20 helicopters, increased the number of customers who have selected the RTM322 for the NH90 to nine out of ten. The first production NH90 made its maiden flight in May, powered by the RTM322. Civil certification of the engine, enabling it to be used in non-military helicopters, was also achieved in the summer.
The Federal Aviation Administration certified the T800 engine for the Super Lynx 300 helicopter, the first of which were formally handed over for Thai and Omani customers. First deliveries of the MTR390-powered Tiger took place in the second half of the year. The company also received a large order for Model 250 engines when the US Border Patrol selected the Bell 430 helicopter. The Model 250 engine also powered the MD500E to a new round-the-world speed record.
In the tactical aircraft market, four BR710 engines powered the Nimrod MRA4 reconnaissance aircraft for its maiden flight and five Rolls-Royce engines – four AE 2100s and one T800 – powered the Japanese US1A-Kai flying boat on its first flight.
The AE 3007 continues to demonstrate superb performance in Global Hawk, which has now exceeded 4,000 flying hours. The AE 3007 also powers the ERJ-145 which has been selected for the Aerial Common Sensor programme.
The provision of services contributed 56 per cent of the Group’s defence sales and we continued to service existing contracts successfully and win new ones. Over 1,100 military engines and 1,800 military engine modules are now covered by Mission Ready Management Solutions long-term service contracts.
After achieving record engine availability during the first year of the Adour support contract for the T-45 US Navy trainer aircraft, the following year’s option was exercised early. A similar performance-based logistics programme is under way to support the AE 2100 powering the US Marine Corps C-130J fleet, providing superior availability while controlling costs.
Rolls-Royce is also supporting a guaranteed level of EJ200 availability to power the UK Royal Air Force’s initial Typhoon training operations. With more than 1,100 hours flown, the programme is exceeding contractual requirements. In addition, we have extended existing availability-based contracts for modules for the RB199s in Tornado aircraft, as well as winning new business to support Pegasus modules in the Harrier.
2004 has been a notable year across all of our market sectors and our balanced portfolio enables us to look forward to the future with well-founded confidence.