Rolls-Royce Holdings

Rolls-Royce Holdings plc is a British multinational industrial technology company that designs, manufactures, and services power systems for use in air, land, and sea applications. Founded in 1904 and headquartered in London, the company operates through four main segments: Civil Aerospace, Power Systems, Defence, and New Markets. It is one of the world’s largest manufacturers of aircraft engines, and its operations extend to marine propulsion and energy sectors.

The Civil Aerospace segment focuses on developing, manufacturing, and servicing aero engines for commercial aircraft, regional jets, and business aviation markets. It is one of the leading suppliers of aero engines globally, providing aftermarket services alongside new engine production. The Power Systems division develops and sells integrated solutions for marine, defence, and power generation markets, while also manufacturing engines for a wide range of industries. The Defence segment provides aero engines for military transport and patrol aircraft, as well as naval engines and nuclear power plants for submarines.

In recent years, Rolls-Royce has been pursuing a multi-year transformation aimed at enhancing its competitive position, improving financial performance, and growing sustainable free cash flow. The company is focused on improving commercial discipline, enhancing operational efficiency, and delivering a reduction in working capital. This strategy also seeks to strengthen the company’s balance sheet and enhance shareholder returns while ensuring the continued delivery of mission-critical power systems to its customers.

Rolls-Royce's New Markets segment represents its forward-looking efforts in emerging sectors. This includes work on small modular reactors (SMRs) and new electrical power solutions, which position the company as a leader in sustainable energy technologies. The company also provides maintenance, repair, and overhaul services across its product portfolio.

As of 2020, Rolls-Royce was the world’s fourth-largest commercial aircraft engine manufacturer, holding a 12% market share, and was also the 16th-largest defence contractor globally in 2018. It is listed on the London Stock Exchange as a constituent of the FTSE 100 Index. The company remains committed to its goals of improving profitability, enhancing operational performance, and building a resilient business capable of sustained growth.

Rolls-Royce Holdings plc traces its origins back to 1884 when Henry Royce founded his engineering business, initially focusing on the production of dynamos and electric cranes. In 1904, Royce partnered with Charles Rolls, a car dealer, to form a business that sold Royce's newly developed range of cars. This collaboration led to the incorporation of Rolls-Royce Limited in 1906, laying the foundation for one of the world's most renowned engineering companies.

However, in 1971, Rolls-Royce Limited entered voluntary liquidation due to its inability to meet financial obligations. The British government intervened, creating Rolls-Royce (1971) Limited, which purchased the company's business and assets. This marked the separation of Rolls-Royce Motors in 1973, leaving Rolls-Royce plc to continue as the main trading entity. Rolls-Royce plc was reintroduced to the stock market in 1987, under the government of Margaret Thatcher, and eventually ownership passed to Rolls-Royce Group plc in 2003. In May 2011, Rolls-Royce Holdings plc became the parent company, though Rolls-Royce plc remains the principal trading entity.

Throughout the 1980s, Rolls-Royce focused on expanding its civil aerospace business, with its engines being installed on a broad range of aircraft. By the end of the decade, its engines were powering 17 different airliners and their variants. This success laid the groundwork for future growth.

Between 2010 and 2018, the company invested £11 billion in research, development, and new facilities, resulting in the launch of six new civil engines, including the Trent XWB and Pearl 15, specifically for the business aviation market. Rolls-Royce secured significant orders for 2,700 engines for wide-body aircraft and business jets. It anticipated producing over 600 wide-body engines annually, with a projection to power over half of the world's wide-body fleet in the near future, up from 22% a decade earlier.

Despite its successes, Rolls-Royce has also faced financial difficulties. In 2014 and 2015, the company issued several profit warnings, partly due to US defence budget cuts and a downturn in the offshore oil and gas market. To mitigate these challenges, Rolls-Royce initiated job cuts, reducing over 3,000 positions. Additionally, in 2017, the company posted a record pre-tax loss of £4.6 billion, which included a £4.4 billion writedown on financial hedges and a £671 million penalty to settle bribery and corruption charges with authorities in the UK, US, and Brazil.

Restructuring efforts were announced in June 2018, with Rolls-Royce aiming to simplify its operations by decentralising its business into three core segments: civil aerospace, defence, and power systems. The restructuring plan involved cutting 4,600 jobs, mostly from the UK, and was intended to generate annual savings of £400 million by 2020, though it required an upfront restructuring cost of £500 million.

Further challenges arose with the Trent 1000 engines used in Boeing 787 Dreamliners, which developed faults requiring inspections after every 300 hours of flight, far below the expected intervals. Rolls-Royce committed significant resources to rectify these issues, spending £450 million in 2018, 2019, and 2020, with the goal of completing repairs by 2022.

The COVID-19 pandemic significantly impacted Rolls-Royce, prompting the company to announce a 20% reduction in its workforce in May 2020, resulting in the loss of around 9,000 jobs globally. Approximately 3,000 of these job cuts were expected in the UK, half of which were in Derby, where the company has a major presence. By 2021, Rolls-Royce was discussing an operational shutdown of its civil aerospace unit, reflecting the ongoing pressures from the pandemic.

In recent years, Rolls-Royce has undertaken ambitious projects, including a 2023 agreement with the UK Space Agency for £3.52 million in funding to develop a nuclear reactor for the moon, aimed at providing power for space missions.

In October 2023, Rolls-Royce announced further restructuring, cutting an additional 2,500 jobs, or 6% of its total workforce, in response to ongoing financial and operational challenges. These measures align with the company's broader strategy to streamline operations and improve profitability in the long term.

Rolls-Royce is actively developing electric and hybrid-electric vehicles for the Urban Air Mobility (UAM) market, focusing on overcoming the significant challenges involved in creating safe and efficient eVTOLs (electric vertical take-off and landing vehicles). These vehicles must operate with low weight while generating considerable thrust using low-speed propellers to minimise noise pollution, a crucial requirement for urban environments. Dr Andreas Reeh, Global Head of Electromagnetics and Thermal Design at Rolls-Royce, emphasises that the company's Advanced Air Mobility teams are working closely with universities and research centres across Europe to build a deep understanding of UAM applications while also nurturing the next generation of engineers to lead the development of these technologies.

The mission of Rolls-Royce is to provide cutting-edge, mission-critical power solutions that meet the needs of its customers across air, land, and sea. The company is committed to driving innovation and excellence in engineering, delivering high-performing and sustainable power systems. Rolls-Royce aims to grow its business through a disciplined approach, focusing on operational efficiency, financial resilience, and long-term partnerships. By leveraging its expertise, Rolls-Royce seeks to unlock its full potential, ensuring profitability, shareholder returns, and a positive impact on global industries.

The vision of Rolls-Royce is to be the world’s leading industrial technology company, driving innovation in power systems that are integral to modern life. By focusing on engineering excellence and sustainability, Rolls-Royce aims to deliver mission-critical solutions across aerospace, defence, and power sectors. The company is committed to transforming its operations, enhancing financial performance, and unlocking growth potential while supporting global decarbonisation efforts through advanced technologies such as small modular reactors and electric propulsion systems. Rolls-Royce envisions a future of reliable, clean energy and cutting-edge power solutions for land, air, sea, and space applications.

Rolls-Royce Holdings develops and delivers complex power and propulsion solutions for safety-critical applications across air, sea, and land. The company's expertise spans various sectors, with a strong focus on innovation and sustainability.

Civil Aerospace

Rolls-Royce leads in developing engines for large commercial and business aviation, pushing the boundaries of efficiency and sustainability. Its Civil Aerospace division focuses on delivering high-performance aero engines, such as the Trent series, with innovative services that enhance aircraft availability and operational efficiency. In 2019, Rolls-Royce delivered 510 Trent powerplants, supporting 5,029 large engines in service, including 32% Trent 700 engines. The company invests approximately $2 billion annually in research and development, particularly in the business jet market, which is expected to grow with 8,500 to 9,000 aircraft in the 2020s.

Defence

Rolls-Royce is a key player in the defence sector, providing advanced power solutions for military air and naval forces. The company supplies gas turbine engines for military, civil, and corporate aircraft and manufactures nuclear propulsion systems for all UK Royal Navy submarines. Rolls-Royce Marine Power Operations, a subsidiary, plays a vital role in developing and testing these reactors. Additionally, Rolls-Royce provides gas turbine engines and propulsion systems for various military aircraft and naval applications worldwide.

Power Systems

Under the mtu brand, Rolls-Royce offers products that contribute to sustainable energy and propulsion solutions. Its power systems are used in various sectors, including marine propulsion, emergency power for safety-critical installations, and heavy land vehicles. Rolls-Royce’s Power Systems division supports the global transition towards greener energy solutions through its high-performance products and services.

Electrical

Rolls-Royce is at the forefront of advancing all-electric and hybrid-electric power systems, driving the transition to net-zero emissions. Its electrical division focuses on providing clean, sustainable, safe, and silent propulsion systems. These systems are particularly crucial for the Advanced Air Mobility Market, where Rolls-Royce’s technologies aim to redefine sustainable aviation and transportation solutions for the future.

Gas Turbines and Engines

Rolls-Royce manufactures an extensive range of gas turbines and engines for both aerospace and marine applications. In the aerospace sector, its products include turbojets like the Avon and Viper, turbofans such as the Eurojet EJ200 and Rolls-Royce Trent, and turboshafts like the LHTEC T800 and Rolls-Royce Gem. For marine applications, Rolls-Royce offers gas turbines like the AG9140 and MT30 and propulsion systems like the Kamewa waterjets and tunnel thrusters. Rolls-Royce’s advanced engineering in turbine and engine technology powers a wide range of fixed-wing, rotary-wing, and naval platforms.

Submarines and Propulsion Systems

Rolls-Royce plays a significant role in the submarine sector, developing and manufacturing nuclear reactors for UK Royal Navy submarines. The company produces PWR1, PWR2, and PWR3 reactors, which are vital to the country’s defence capabilities. Additionally, Rolls-Royce manufactures submarine propulsion systems, including the Nato Submarine Rescue System and stabilisation technologies, further enhancing the operational capabilities of marine vessels.