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Questions and Answers
What was the main reason for Rolls-Royce issuing profit warnings in 2014 and 2015?
Which of these companies has a larger market share of civil aircraft engines than Rolls-Royce?
What was the impact of Rolls-Royce's decision to sell engines with long-term service contracts?
What is the main area of growth for Rolls-Royce?
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What is the approximate percentage of wide-body aircraft fleet that Rolls-Royce expects to power in the coming years?
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What is the primary purpose of the nuclear reactor Rolls-Royce is developing for the moon?
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What is the name of the service contract that Rolls-Royce uses to sell engines?
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What is the name of the new civil engine that Rolls-Royce launched for the business aviation market?
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In what year was Rolls-Royce Holdings plc incorporated?
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Which company is the largest maker of aircraft engines in the world?
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As of 2020, what was Rolls-Royce's market share in the commercial aircraft engine market?
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When did Rolls-Royce enter voluntary liquidation?
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What was Rolls-Royce plc's market capitalization on 28 August 2019?
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Who established the separate business with Royce in 1904?
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Which stock exchange is Rolls-Royce Holdings plc listed on?
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What does Rolls-Royce primarily design and manufacture for other industries besides aviation?
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Study Notes
Company Overview
- Rolls-Royce Holdings plc, a British multinational aerospace and defence company, was incorporated in February 2011.
- The company designs, manufactures, and distributes power systems for aviation and other industries, continuing a legacy that began in 1904.
- Rolls-Royce is the second-largest maker of aircraft engines globally, following CFM International.
Market Position and Financials
- Ranked as the 16th largest defence contractor in 2018 based on defence revenues.
- Holds the position of the fourth largest commercial aircraft engine manufacturer, with a 12% market share in 2020.
- Market capitalisation of £4.656 billion as of 28 August 2019, making it the 85th largest company on the London Stock Exchange.
Historical Context
- Roots trace back to Henry Royce's engineering business established in 1884, leading to a car production partnership with Charles Rolls in 1904.
- Rolls-Royce Limited was incorporated in 1906, but entered voluntary liquidation in 1971 due to financial difficulties.
- Government acquisition led to the establishment of Rolls-Royce (1971) Limited, which currently operates as Rolls-Royce plc.
Corporate Evolution
- Returned to the stock market in 1987, under the government of Margaret Thatcher.
- Ownership transitioned from Rolls-Royce plc to Rolls-Royce Group plc in 2003, and then to Rolls-Royce Holdings plc on 23 May 2011.
- Throughout these changes, Rolls-Royce plc remained the principal trading entity.
Civil Engine Developments
- In the 1980s, the company expanded engine offerings across a wider range of civil aircraft, powering 17 airliners compared to competitors General Electric's 14 and Pratt & Whitney's 10.
- Civil engines became the primary growth area, with £11 billion invested in research and development from 2010 to 2018.
- Notable engine launches include the Trent XWB and Pearl 15, along with securing 2,700 orders for wide-body aircraft and business jets.
Latest Innovations and Initiatives
- Plans to produce over 600 wide-body engines annually, aiming to power over 50% of the world’s wide-body fleet.
- Entered a $3.52 million agreement with the UK Space Agency in 2023 for nuclear reactor development on the moon, targeting power for space missions.
Challenges and Responses
- Experienced multiple profit warnings in 2014 and 2015 attributed to US defence cuts and downturns in the offshore oil and gas market, leading to job cuts exceeding 3,000.
- Transitioned to selling aero-engines primarily with long-term service contracts, termed “TotalCare”, which delayed revenue recognition despite initial profit booking.
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Description
Learn about the history and business of Rolls-Royce, a British multinational aerospace and defence company. Discover its establishment, products, and major business sectors.
