Record orders underpin Rolls Royce performance

The aero engine maker said that during 2008, its order book had increased by £9.6bn or 21 per cent to a record £55.5bn (2007 £45.9bn), sales increased to £9.1bn (2007 £7.4bn) and underlying pre-tax profit increased by 10% to £880 million (2007 £800m). Chief executive Sir John Rose (pictured) said: “We have delivered a good set of results, with strong order intake, cash flow and underlying profit growth achieved in challenging conditions. 2009 will be a very difficult year for the global economy. Our well diversified portfolio, the scale of our installed base and the strength of our balance sheet give us confidence that Rolls-Royce will respond successfully to current challenges and develop the business for the longer term. “Our current view is that in 2009 underlying revenues will continue to grow, with underlying profits remaining broadly similar to those achieved in 2008.” Rolls-Royce said its board fully recognised the unprecedented nature of the challenges that lie ahead, but was confident that the group was better positioned than in the past and that its financial and portfolio strengths would enable it, in the short term, to respond to current uncertainties and continue to develop the business. Over the next 10 years, the longevity of the group's programmes and its technological leadership, the scale of the order book and the increasing importance of services suggested that Rolls-Royce has the capability to double its revenues through organic growth. Confidence in its ability to weather the challenging external environment was founded on the belief that it was a global leader in growing markets with very high barriers to entry and the assurance of long-term, worldwide demand for its power systems; the balance of its geographical market spread and its balanced aftermarket and original equipment mix; its technological strengths in adjacent markets such as civil nuclear; and its operational efficiency and flexibility, evidenced by the headcount reductions it made in 2008/2009.