£5,544mUnderlying services revenue 2010
"We work closely with customers to align service packages"
Tony WoodPresident – Services
|Underlying revenue £m||3,901||4,265||4,755||4,927||5,544|
|Underlying services as
percentage of Group revenue
Rolls-Royce provides power systems for applications that routinely operate in particularly harsh environments, often with years between intervention. Service activities provide over one half of the Group’s revenues, having increased ten per cent compound over the past ten years.
As the original equipment manufacturer, Rolls-Royce is best placed to provide mission critical support, long-term product care and well planned maintenance on behalf of customers in each of the markets we serve. The Group’s service capabilities include field maintenance and support services, the provision of replacement parts, equipment overhaul services, component repair, data management, equipment leasing and inventory management. These are typically packaged together and sold as long-term support agreements such as our TotalCare suite. We work closely with customers to align each service package to their operational needs, helping to maximise the availability and efficient operation of the equipment on their behalf.
We have 76 per cent of the large engine fleet and 92 per cent of the in-service Trent fleet now managed under TotalCare. We also have 900 corporate and business jet aircraft enrolled in CorporateCare®, the equivalent offering for this market sector. In 2010, operational planning has been further enhanced across the Trent family of engines with the adoption of sophisticated proactive engine life management policies. These combine our technical knowledge with the service data on each individual engine to enable each customer to manage their whole fleet in a more predictable manner.
Our network of On-Wing Care facilities supported over 3,500 events globally in 25 different countries.
We continued to develop MissionCare™ provision worldwide and service presence on military bases. A long-term service agreement was signed with Lockheed Martin to support the Canadian Air Force fleet of C-130J military transport aircraft. New contracts were also signed with the UK Ministry of Defence to increase the scope of support for the frontline Tornado and Typhoon fighter aircraft operations. In 2010, Rolls-Royce completed 500,000 flight hours of MissionCare support for the Adour engines that power the US Navy’s T-45 training aircraft.
We secured further long-term service agreements which, together with the additional 38 new gas turbine units that became operational during 2010, mean the number of gas turbines under long-term service agreements is approaching 350. Additionally, a number of long-term service agreements were renewed, the most significant being with Total in the North Sea supporting 14 gas turbine packages on two platforms for a period of ten years. We continue to develop the service infrastructure to support the growth of the Rolls-Royce fleet in China, India, Brazil, Malaysia and Russia, along with extending the global footprint of the business with expanding operations in West Africa and Central Asia.
2010 also saw the 20-year anniversary of the Rolls Wood Group repair and overhaul joint venture. The Rolls Wood joint venture continues to maintain its position as the major supplier of repair and overhaul services for Rolls-Royce industrial gas turbine engines. The scope of the joint venture was expanded in the year with the official opening of a facility in Malaysia in partnership with OTEC.
Service opportunities have continued to increase in marine as a result of the large number of vessels with Rolls-Royce equipment installed, now totalling over 30,000 vessels worldwide. As this installed base of equipment continues to grow, we are actively expanding our support capacity and capability and now have over 30 dedicated marine service centres serving customers across North and South America, Africa, Europe, the Middle East, Asia and Oceania. Marine customers seek to have their ships serviced close to where they primarily operate, and we continued our expansion by adding around 200 service engineers globally. We continue to expand our service capabilities and in 2010 we completed more than 50 successful underwater intervention repair services which enabled major propulsion overhauls to be completed without the need for time consuming dry docking.
The Group invested over £26 million this year in developing and restructuring our wholly-owned gas turbine repair and overhaul network, which will deliver significant improvements in operational performance and customer satisfaction. 2010 also saw the celebration of ten years of Rolls-Royce ownership of the Oakland repair and overhaul facility in the US.
Our component repair business continues to grow rapidly and delivered £150 million in benefit across all sectors in 2010.
Asset optimisation service development has advanced strongly, led by the Optimized Systems and Solutions Inc. (OSyS) business. OSyS has expanded our in-service diagnostic, risk management and predictive capabilities. Through OSyS, we continue to advance the health monitoring services and capabilities already applied successfully to aircraft engines and energy systems with more than 8,900 assets being monitored.