Rolls-Royce appoints Ian Davis as chairman
He will join the Board as a non-executive Director on 1 March 2013 and take over from Sir Simon at the conclusion of the Annual General Meeting on 2 May 2013.
Courtesy McKinsey & Company
Ian Davis (above) spent more than 30 years with McKinsey & Company, including six as chairman and worldwide managing director. He serves, as a non-executive director, on the Boards of BP and Johnson & Johnson and is a non-executive member of the Cabinet Office Board.
Sir Simon Robertson said: "It has been a privilege and pleasure to lead Rolls-Royce through eight years of continuous growth. This is an exceptional company with exceptional prospects. I would like to welcome Ian onto the Board. I am pleased to know I shall be succeeded by a man of his stature and international experience. I would like to thank my fellow Board members, the management and the wider Rolls-Royce team for their commitment and support."
Ian Davis said: "I am looking forward greatly to joining Rolls-Royce. Sir Simon has led the Board with distinction during the past eight years. I am extremely excited by the prospect of building on the firm foundations that have been laid".
On appointment as non-executive Director, Ian Davis will also join the nominations committee. He currently holds no shares in Rolls-Royce Holdings plc.
Last year saw Rolls-Royce's order book increase by 4% to reach £60.1bn, with underlying revenue of £12.2bn (up 8%) and uprofits (before tax), £1.4bn (up 24%).
John Rishton, chief executive, said: "In the second half of the year, revenue growth increased as we delivered 23% more engines than in the first half. Margins improved, reflecting volume, mix, cost control and the IAE transaction.
"In the full year, underlying profits increased for the tenth consecutive year. We have established this record of consistent delivery while continuing to invest in people, technology and facilities.
"The strength of our order book demonstrates the confidence our customers have in our products and services. Our priorities remain: delivering on the promises we have made; deciding where to grow and where not to; and improving financial performance.
"In 2013, we expect modest growth in underlying revenue and good growth in underlying profit with cash flow around break even as we continue to invest for the future.
"Sir Simon Robertson today announced his intention to retire as Chairman of Rolls-Royce at this year's Annual General Meeting. Simon has made an exceptional contribution over the past eight years. He has worked tirelessly on behalf of the company and his energy and enthusiasm have been an example to us all. I am delighted to welcome Ian Davis as our new Chairman and look forward to working closely with him".
Several significant milestones have been achieved in major Rolls-Royce programmes, including:
- In civil aerospace, the certification of the Trent XWB engine (in February 2013) that will power the Airbus A350, the launch of the Trent 1000-TEN that will power Boeing 787s entering service from 2016 and the entry into service of the BR725 engine powering the new Gulfstream G650 corporate jet.
- In defence aerospace, the Short Take Off and Vertical Landing (STOVL) variant of the F35B Lightning II Joint Strike Fighter entered service with the US Marine Corps and deliveries were made to the UK MoD.
Rolls Royce says that in the civil aerospace sector it is committed to investing in the wide-body, narrow-body and corporate market segments. In defence aerospace, it continues to see opportunities both in developing economies and in its traditional markets, despite pressures on government spending.
Order Book:
- The order book increased 4% to £60.1bn, adjusted for the IAE disposal. Order intake of £16.1bn included new orders of £10.3bn in Civil Aerospace, £1.6bn in Defence Aerospace, £3.3bn in Marine, £0.8bn in Energy and £0.4bn in EH.
- Underlying revenue increased 8%t to £12.2bn, including 12% growth in underlying OE revenue (£5.9bn) and 5% growth in underlying services revenue (£6.3bn).
- Underlying OE revenue growth included a 23% increase in deliveries of Trent and corporate engines in Civil Aerospace and a six per cent increase in military transport, combat, UAV and civil helicopter engines in Defence Aerospace. Growth was offset by the reduction in OE revenue in Marine (down 3%), and in Energy and in Bergen's contribution to EH (both down 35%).
- Underlying services revenue growth included an increase of five per cent in Civil Aerospace, in line with growth in the installed base, and five per cent in Defence Aerospace. Energy and EH also saw good growth. Marine was up one per cent reflecting increased maintenance activity by customers and higher spares spend in the second half.
- Underlying profit before tax increased 24% to £1.4bn, reflecting revenue growth, improved revenue mix, unit cost reduction and net trading contributions of £77m from Tognum and £92m related to the IAE restructuring. These benefits were partially offset in Civil Aerospace by higher R&D charges and lower entry fees associated with major new programmes, and in Defence Aerospace by the non recurrence of the £60m Strategic Defence Security Review (SDSR) settlement. Underlying earnings per share (UEPS) improved 22%.
For 2013, the company anticipates modest growth in revenue and strong growth in profit for the civil aerospace sector, whilst it sees modest growth in revenue and a modest reduction in profit in defence aerospace. In Marine it expects modest growth in revenue and profit.
