Rolls Royce Holdings’ (RYCEY) CEO John Rishton on H1 2014 Results – Earnings Call Transcript


John F. Rishton – Chief Executive Officer, Executive Director and Chairman of Risk Committee

Mark Morris – Chief Financial Officer, Executive Director and Member of Risk Committee


Robert Stallard – RBC Capital Markets, LLC, Research Division

Christian A. Laughlin – Sanford C. Bernstein & Co., LLC., Research Division

Benjamin Fidler – Deutsche Bank AG, Research Division

Celine Fornaro – BofA Merrill Lynch, Research Division

Harry W. Breach – Westhouse Securities Limited, Research Division

Rami Myerson – Investec Securities (UK), Research Division

Sandy Morris – Jefferies LLC, Research Division

Rolls Royce Holdings (OTCPK:RYCEY) H1 2014 Earnings Call July 31, 2014 3:31 AM ET


Hello, and welcome to the 2014 Half Year Results Conference Call for Rolls-Royce Holdings plc. [Operator Instructions] And just to remind you, this conference call is being recorded.

And before we start, some words about Safe Harbor. Please remember today’s call will include some forward-looking statements about the Rolls-Royce’s group and its businesses. These statements are based on the management team’s current views and assumptions but, of course, change over time.

So you should consider the statements in this light.

Today, I’m pleased to present John Rishton, Chief Executive Officer; and Mark Morris, Chief Financial Officer. Gentlemen, please begin.

John F. Rishton – Chief Executive Officer, Executive Director and Chairman of Risk Committee

Thanks very much, Hugh. Good morning, everyone. Thanks for joining us today. It’s good to have you listening in.

I’m going to give you the headlines, and then I’m going to hand over to Mark, who’s going to take you through the details. Mark will speak probably for about 15 minutes or so, and then we’ll go straight to Q&A or wrap the Q&A up no later than 8:25 and then I’ll wrap the call up — at 9:25, I’m sorry, I’ll wrap the call up.

ALSO READ:   Biogen Idec's (BIIB) CEO George Scangos on Q2 2014 Results - Earnings Call Transcript

So looking at the headlines, first of all, the first half performance was in line with guidance. And we maintained our full year guidance and continue to expect growth in 2015. We increased the shareholder payment by 5% to 9p, so I think the key financials where we said we would be.

In terms of the first half, we delivered our first XWB engines to Airbus for Qatar Airlines, launch customer — to launch later this year. We’ve run, for the first time, the large XWB engine, the XWB 97K that will power the A350-1000 aircraft and we’ll also run the Trent 1000-TEN engine in the 787.

And you also all will be well aware that at Farnborough, Airbus announced the launch of the A330neo. And we’re the exclusive engine provider with our Trent 7000 engine, with draws on technology from the Trent 1000 and the Trent XWB engines. And I’m delighted we already have 127 aircraft commitments, and that provides even more confidence about strong growth in the future.

Now I hand over to Mark, who’s going to take you through the details of the first half and our views about the second half. Thanks, Mark.

Mark Morris – Chief Financial Officer, Executive Director and Member of Risk Committee

Thank you, John, and good morning to you. So we’ll start with some of the key group highlights in the first half. Let’s just remind ourselves of what we said at the prelims: Revenue and profit for the group will be flat with a similar free cash flow for the year, and that our performance will be weighted to the second half.

As John has said, our H1 results are largely as we expected. As usual, my comments will be restricted to the underlying performance. Now we will go through these results in a little more detail. But before we do, it’s worth mentioning foreign exchange as the pounds has depreciated against a number of currencies, which has impacted our results. You can find a lot more detail in our press release, but across all our currencies, the strengthening pound has reduced revenue by GBP 226 million and profit by GBP 21 million.

ALSO READ:   International Business Machines' (IBM) CEO Ginni Rometty on Q3 2014 Results - Earnings Call Transcript

Turning to our order book. It remains strong and provides good visibility, over GBP 70 billion, albeit a slight reduction from the year end. Revenue and profit, I will come unto shortly.

On cash, we started the year with GBP 1.9 billion and ended the period with GBP 1.2 billion, a reduction of GBP 762 million, which reflects growth in working capital, continued investment and shareholder payments. And finally, we’ve increased the half year payment to shareholders by 5% to 9p, reflecting our continued confidence in the business.

Pages: First |1 | ... | | Last | View Full Transcript

Leave a Comment

Scroll to Top