Rolls-Royce Holdings plc · LSE:RR.
Rolls-Royce — FY2021 Earnings Presentation
27 slides from Rolls-Royce's earnings presentation, Feb 24, 2022
Slide 1: 2021 Full Year Results
2021 Full Year Results 24 February 2022 1 2021 Full Year Results © Rolls-Royce
Slide 2: Safe harbour statement
Safe harbour statement This announcement contains certain forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. In particular, all statements that express forecasts, expectations and projections with re
Slide 3: 2021 Performance Summary
2021 Performance Summary Warren East Chief Executive 3 2021 Full Year Results © Rolls-Royce
Slide 4: Warren East, Chief Executive
4 2021 Full Year Results Warren East Chief Executive © Rolls-Royce
Slide 5: Operational highlights
New image to follow Operational highlights Civil Aerospace Key award in Defence Order intake accelerated restructuring with B-52 in Power Systems Successful SMR Two world records £2bn total disposal fundraising & next phase with Spirit of Innovation proceeds expected commencement 5 2021 Full Year Re
Slide 6: Improved financial performance
Improved financial performance Financial Delivering on our commitments Our financial performance was severely impacted by the COVID-19 pandemic summary Investing for growth and sustainable value Operating profit £bn 1 2021 • Improved financial performance driven by cost reduction and market growth 0
Slide 7: Successful restructuring programme
Successful restructuring programme Our financial performance was severely impacted by the COVID-19 pandemic Restructuring update ✓ Exceeded our £1.3bn run-rate savings target one year ahead of schedule Civil operations footprint 1/3 smaller ✓ Civil Aerospace one third smaller, creating a leaner, mor
Slide 8: Executive Team changes
Executive Team changes Focused Executive Team with a breadth of experience and expertise Panos Kakoullis Grazia Vittadini Chief Financial Officer Chief Technology & Strategy Officer Sarah Armstrong Rob Watson 8 2021 Full Year Results Chief People Officer President – Rolls-Royce Electrical © Rolls-Ro
Slide 9: 2021 Financial Performance
2021 Financial Performance Panos Kakoullis Chief Financial Officer 9 2021 Full Year Results © Rolls-Royce
Slide 10: 2021 Full Year underlying results
2021 Full Year Underlying2 Organic £m FY 2021 FY 2020 Change1 underlying results Lower Civil Aerospace revenue Revenue 10,947 11,430 (214) balanced by growth in Defence and Underlying performance Power Systems from continuing operations Gross profit / (loss) 1,996 (613) 2,672 Gross margin % 18.2% (5
Slide 11: Civil Aerospace
Civil Aerospace Underlying results Organic Reduction in engine £m FY 2021 FY 20201 Change % deliveries partly offset by improvement in Revenue 4,536 5,068 (491) (10)% LTSA catch up Gross profit / (loss) 474 (1,987) 2,477 Restructured business with smaller footprint Large engine KPIs Gross margin % 1
Slide 12: Defence
Defence Underlying results Organic £m FY 2021 FY 20201 Change % Higher services sales in Revenue 3,368 3,355 155 5% both the UK and US Gross profit 721 684 63 9% Profitable mix due to spare parts Order intake Gross margin % 21.4% 20.4% 0.9%pt £2.3bn up 3% Operating profit 457 461 13 3% 0.7 book to b
Slide 13: Power Systems
Power Systems Underlying results Organic £m FY 2021 FY 20201 Change % Revenue 2,749 2,735 89 3% Gross profit 778 678 120 18% Order intake Gross margin % 28.3% 24.8% 3.6%pt More profitable £3.3bn up 24% Operating profit 242 188 67 37% product mix through services sales and 1.2 book to bill improved f
Slide 14: New Markets
£490m SMR committed funds £68m R&D Spend New Markets 10% 23% Leveraging synergies Rolls-Royce 43% RR Electrical +41% across the group Equity Investment RR SMR +164% UKRI Government Grant 47% 77% Employees (FTE at year end) >570 up 60% • A ramp-up in R&D spend as we invest to develop our products and
Slide 15: Summary funds flow: £2.0bn
£m FY 2021 FY 2020 Change Underlying operating 414 (2,008) +2,422 Summary funds (loss) / profit £2.0bn flow: Depreciation, amortisation 971 1,048 -77 Operating performance £(1.5)bn free cash and impairment 1 improvement Led by cost savings, higher outflow in 2021 Civil Aero net LTSA contract EFH rec
Slide 16: Rebuilding the balance sheet
Pathway to investment grade profile Rebuilding the Reduce Improve financials balance sheet uncertainty Improve Reduced Improve business Deliver Improve Clear pathway to on our uncertainty operational leverage profile Strong ESG improving our credit of EFH and financial (balanced scorecard commitment
Slide 17: Disciplined Investments
Disciplined Investments by the COVID-19 pandemic Investments Our updated approach to investment places an even greater focus on sustainability and ESG 17 2021 Full Year Results © Rolls-Royce
Slide 18: Deliver, Simplify, Invest
Clear financial priorities to drive and support our Deliver business on our commitments performance Simplify how we report Invest wisely for the future 18 2021 Full Year Results © Rolls-Royce
Slide 19: 2022 outlook and guidance
Well positioned for the anticipated growth in our end markets 2022 outlook • Positive momentum in 2022 despite the challenges and risks around the pace of market recovery, global supply chain disruption and rising inflation. and guidance • A strong order book and continuation of the gradual improvem
Slide 20: Securing a Sustainable Future
Securing a Sustainable Future Warren East Chief Executive 20 2021 Full Year Results © Rolls-Royce
Slide 21: Civil Aerospace: Driving growth from established businesses
Civil Aerospace © Dassault • Improved operational gearing with restructured cost base • Significant value in installed base of around 5,700 large and 9,700 regional and business aviation engines • Airbus A350 freighter is a great opportunity for Trent XWB with 58 additional engine orders since its l
Slide 22: Defence: Driving growth from established businesses
Defence • Strategic investments in products and facilities supports strong order book and long-term sustainable growth • Awarded the B-52 engine replacement contract in the US, securing new work for the coming decades • In a competitive process for the Future Long-Range Assault Aircraft (FLRAA) prog
Slide 23: Power Systems: Driving growth from established businesses
Power Systems • 2021 represented the best order book in Power Systems’ history, with a record order intake in the 4th quarter • Significant awards include power solution for hyperscale data centre customer and a first-of-a-kind net-zero microgrid • Increased investment enabling the continued develop
Slide 24: New Markets: Rolls-Royce SMR
New Markets: Rolls-Royce SMR New Markets reporting segment established for • Rolls-Royce SMR secured £490m of funding in 2021 Rolls-Royce SMR and • UK Government grant and third party equity investment helping to support SMR design Rolls-Royce Electrical through multi-year UK Generic Design Assessme
Slide 25: New Markets: Rolls-Royce Electrical
New Markets: Rolls-Royce Electrical New Markets reporting segment established for • Double world record success of the ‘Spirit of Innovation’ demonstrates pace of electrical Rolls-Royce SMR and technology acceleration and exciting applications for the Advanced Air Mobility Markets Rolls-Royce Electr
Slide 26: A better balanced and more sustainable business
Summary Improved financial Investing to drive performance Delivering on growth and driven by cost our commitments deliver sustainable reduction and value market growth A better balanced and more sustainable business 26 2021 Full Year Results © Rolls-Royce
Slide 27: Q&A
Q&A 27 2021 Full Year Results © Rolls-Royce