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Rolls-Royce Half Year results
Rolls-Royce announced Half Year results on Thursday 1 August 2024.
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Friday 28 February 2020 07:00 AM
Rolls-Royce Holdings Plc 2019 Full Year Results
28 February 2020
Warren East, Chief Executive commented: “After a challenging first half, we had a good end to 2019, delivering 25% growth in full year underlying operating profit and an encouraging level of free cash flow. Our restructuring efforts gained momentum, with run-rate cost savings of £269m. Civil Aerospace improved its underlying profit significantly, with record engine deliveries, good aftermarket performance and improved OE unit losses. We made further progress on the Trent 1000; cash costs are in line with guidance. We remain on target to reduce aircraft on ground to single digits by the end of Q2 2020.
We continued to invest significantly in R&D and took important steps towards becoming a leader in low carbon technologies. We grew our electrical capabilities with the acquisitions of Siemens’ eAircraft business and a majority stake in Qinous, as well as developing new in-house hybrid-electric solutions.”
*Net cash is presented excluding lease liabilities **2019 underlying EPS ~18p before the impact of IFRS 16 Footnotes to the tables can be found with the Financial Highlights
Financial:
Operational:
Civil Aerospace in-service performance:
Market environment: mid-term ambition of £1 FCF per share remains supported
Percentage or absolute change figures in this document are on an organic basis4 unless otherwise stated.
Notes:
1Underlying: for definition see Note 2
2Core includes Civil Aerospace, Power Systems, Defence and ITP Aero. Non-core includes Commercial Marine sold on 1 April 2019, Rolls- Royce Power Development sold on 15 April 2019, Civil Nuclear North America Service business and other smaller non-core businesses
3The prior period has been restated to reflect the treatment of our Civil Nuclear North America Services business as non-core (disposal announced in September 2019). See Note 1 for details
4Organic change at constant translational currency (‘constant currency’) by applying FY 2018 average rates to 2019 and 2018 numbers excluding M&A. All commentary is provided on an organic basis unless otherwise stated
5Free cash flow is defined as operating cash after capital expenditure, pensions and taxes, before payments to shareholders, payments to investigating authorities and M&A. Excludes cash costs of 2018 restructuring plan. The derivation of free cash flow is shown in Note 24
Commenting on the outlook for 2020, Warren East added: “The changes we have been implementing over the past two years are creating a tangible and sustainable cultural and performance shift. The momentum we gained in 2019 underpins our confidence for the year ahead. We will continue to make progress against our key drivers of improving OE losses, growing aftermarket cash flow, and controlling our indirect costs, while investing significantly in R&D to enable our future growth.
There are macro risks to navigate in 2020, notably the outbreak of COVID-19. The situation is still evolving, and as such our guidance for 2020 excludes any material impact. We are monitoring developments, taking mitigating actions, and will update the market as appropriate. Core operating profit growth is expected to be around 15%, with at least £1bn of FCF in 2020, as we drive towards our ambition to exceed £1 per share of FCF – or at least £1.9bn – in the mid-term.
We see a significant opportunity in the years ahead to lead the transition to providing low carbon power and we made significant progress on this strategy in 2019. We will continue to invest in developing increasingly efficient engines, exploiting new technologies, and innovating to become a disruptor in new areas. We are increasingly well placed to realise our long-term aspiration to be the world’s leading industrial technology company.”
Detailed 2020 guidance
*Civil Aerospace profit improvement despite headwind from £100-150m lower capitalisation of R&D in 2020
^For 2020 guidance purposes Power Systems 2019 is shown excluding Bergen, which is included in non-core to reflect treatment from 2020
2Core includes Civil Aerospace, Power Systems, Defence and ITP Aero. Non-core includes Commercial Marine sold on 1 April 2019, Rolls- Royce Power Development sold on 15 April 2019, Bergen (for 2020 guidance purposes only), Civil Nuclear North America Service business and other smaller non-core businesses.
3The prior year has been restated to reflect the treatment of our Civil Nuclear North America Services business as non-core (disposal announced in September 2019). See Note 1 for details
This announcement has been determined to contain inside information.
Enquiries:
Investors:
Peter Lapthorn
+44 (0) 7717 811 069
Media:
Richard Wray
+44 (0) 7974 918416
Photographs and broadcast-standard video are available at www.rolls-royce.com. A PDF copy of this report can be downloaded from www.rolls-royce.com/investors.
This Full Year Results announcement contains forward-looking statements. Any statements that express forecasts, expectations and projections are not guarantees of future performance and will not be updated. By their nature, these statements involve risk and uncertainty, and a number of factors could cause material differences to the actual results or developments. This report is intended to provide information to shareholders, is not designed to be relied upon by any other party, or for any other purpose and the Company and its directors accept no liability to any other person other than under English law.
Results presentation
A presentation will be held at 09:00 (GMT) today. Details of how to join the event online are provided below. Downloadable materials will be available on the Investor Relations section of the Rolls-Royce website from the start of the event.
Online webcast registration details:
To register for the live webcast, including Q&A participation, please visit the following link:
https://edge.media-server.com/mmc/p/724ns9b4
Please use this same link to access the webcast replay which will be made available shortly after the event concludes.
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