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Chief Executive’s review Sir John Rose
Rolls-Royce performed strongly in 2008 in the face of increasingly challenging conditions.
Our results demonstrate the value of our consistent strategy. The strength of our technology, the breadth of our product and service portfolio, our knowledge of the customer and the capabilities of our people continue to increase our resilience and enable us to develop the business for the longer term.
Our financial results reflect the strength of our business model. In 2008, Group sales increased to £9,082 million (2007 £7,435 million), with underlying sales growth of 17 per cent. The published loss before tax was £1,892 million (2007 profit £733 million). This loss was caused primarily by the effects of the marking to market of various financial instruments, as is explained further in the Finance Director’s review page, and the reported earnings do not reflect the underlying trading performance of the Group in 2008. Underlying profit before tax rose by ten per cent to £880 million (2007 £800 million). We ended the year with a net cash balance of £1,458 million (2007 £888 million) and a record order book of £55.5 billion (2007 £45.9 billion).
As I write, the global economic crisis continues to intensify and it is impossible to be precise about its ultimate severity and duration. What is certain is that all companies will be affected to varying degrees and it is clear that Rolls-Royce, its customers and suppliers will not be immune from this global crisis. However, as a strong power systems company, Rolls-Royce has a number of characteristics which give me confidence that we will be able to deal effectively with the very considerable challenges and uncertainties that lie ahead.