18 May 2015
ROLLS-ROYCE SEEKS FURTHER EFFICIENCIES IN MARINE BUSINESS
We have today announced that we will accelerate cost reduction programmes in our Marine business and reduce the number of employees by a further 600 by the end of this year in response to challenging market conditions.
Today's announcement follows our Interim Management Statement on May 8th in which we confirmed that the year had started slowly and consequently a drive for further efficiencies is underway.
The Marine business employs around 6,000 people in 34 countries, and while the reductions will be global, around half will be in Norway, where the majority of employees and manufacturing facilities are located.
Mikael Makinen, Rolls-Royce, President - Marine, said: "We are transforming our Marine business and while we are making good progress on cost, the effect of low oil prices means we have to continue to look for further efficiencies.
"It is never an easy decision to propose reductions in our workforce, but it is a sign of the challenging market in which we operate. We will work closely with employees and their representatives as we manage this change.
"The future prospects for the Marine business remain bright, and we are focused on maintaining our position as a technology leader, but we must drive further cost reduction today so that we are ready to grow tomorrow".
We anticipate the proposals will have a broadly neutral impact on profits in 2015 and generate approximately £25m of benefits from 2016 onwards. The reductions announced today are in addition to programmes already underway to consolidate manufacturing at several locations in the UK, USA, Norway, Sweden and South Korea.
About Rolls-Royce Holdings plc
1. Rolls-Royce's vision is to create better power for a changing world via two main business divisions, Aerospace and Land & Sea. These business divisions address markets with two strong technology platforms, gas turbines and reciprocating engines. Aerospace comprises Civil Aerospace and Defence Aerospace. Land & Sea comprises Marine, Nuclear and Power Systems.
2. Rolls-Royce has customers in more than 120 countries, comprising more than 380 airlines and leasing customers, 160 armed forces, 4,000 marine customers including 70 navies, and more than 5,000 power and nuclear customers.
3. Our business is focused on the 4Cs:
· Customer - placing the customer at the heart of our business
· Concentration - deciding where to grow and where not to
· Cost - continually looking to increase efficiency
· Cash - improving financial performance.
4. Annual underlying revenue was £14.6 billion in 2014, around half of which came from the provision of aftermarket services. The firm and announced order book stood at £73.7 billion at the end of 2014.
5. In 2014, Rolls-Royce invested £1.2 billion on research and development. We also support a global network of 31 University Technology Centres, which position Rolls-Royce engineers at the forefront of scientific research.
6. Rolls-Royce employs over 54,000 people in more than 50 countries. Over 15,500 of these are engineers.
7. The Group has a strong commitment to apprentice and graduate recruitment and to further developing employee skills. In 2014 we employed 354 graduates and 357 apprentices through our worldwide training programmes. Globally we have over 1,000 Rolls-Royce STEM ambassadors who are actively involved in education programmes and activities; we have set ourselves a target to reach 6 million people through our STEM outreach activities by 2020.
For further information, please contact:
Investors Media:
Jilinda Crowley Richard Wray
Acting Director - Investor Relations Director of External Communications
Rolls-Royce plc Rolls-Royce plc
Tel: +44 (0)207 227 9237 Tel: +44 (0)7974 918416
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