7012 川崎重 2019-11-11 16:30:00
Trent1000エンジンについて [pdf]
NO.2019051 2019年 11月 11日
各 位
会 社 名 川崎重工業株式会社
代 表 者 名 取締役社長 金花 芳則
コード番号 7012 東京① 名古屋①
問 合 せ 先 経理部長 星野 達生
【東京】TEL 03-3435-2130
【神戸】TEL 078-371-9531
Trent1000 エンジンについて
当社がリスク＆レベニューシェアリングパートナー（RRSP）方式で参画しているロールス・ロイス社
製ボーイング 787 用 Trent1000 エンジンプログラムについて、ロールス・ロイス社が別紙「ROLLS-
ROYCE HOLDINGS PLC TRADING AND TRENT 1000 UPDATE」（2019年11月7日付）の通り、追加費用
の発生に関する発表を行いました。
本件の業績に与える影響については、現時点では不明ですが、今後、開示すべき事項が判明した
場合は、速やかにお知らせいたします。
以上
Trading and Trent 1000 Update
07 November 2019
ROLLS-ROYCE HOLDINGS PLC TRADING AND TRENT 1000 UPDATE
Trading update:
Improved trading since the Half Year, however we now expect Full Year operating profit and
FCF outcome towards the lower end of guidance ranges
At least £1bn FCF in 2020, underpinned by restructuring benefits, operational efficiency
improvements, further efforts to reduce inventory and disciplined approach to capital
allocation
Confident in mid-term ambition of £1 per share of FCF as Trent 1000 costs subside
Trent 1000 review provides greater certainty to customers and clarity to investors:
Progress in resolving Trent 1000 issues with only one major design fix remaining
Improved high pressure turbine (HPT) blade for Trent 1000 TEN – the final fundamental issue to
address – postponed to 2021. Based upon recent testing and our detailed technical evaluation
we are resetting financial and operational expectations for the Trent 1000 TEN based on a more
conservative estimate of final HPT durability
Total expected in-service cash costs of around £2.4bn across 2017-2023. This includes £1.6bn as
previously guided, the £400m increase announced today, and £400m of Trent 1000 TEN costs
previously included within normal programme contingency
To minimise the impact on customers, further actions underway including accelerated
investments in additional maintenance capacity and spare engines to reduce disruption
Full financial analysis of Trent 1000 TEN results in a likely exceptional charge of c.£1.4bn to
operating profit in FY 2019. This represents the additional near term costs of customer
disruption and remediation shop visits highlighted above, and provisions against future losses
on a small number of contracts due to our new estimate of HPT durability
No material cash or profit effect anticipated on the Trent 7000 following impact assessment
Warren East, CEO, Rolls-Royce said: “In spite of improved trading since the Half Year, we now
expect Full Year operating profit and free cash flow to be towards the lower end of our guidance
ranges. In Civil Aerospace, while the Trent 1000 costs remain a headwind, the vast majority of our
installed fleet of widebody engines is performing well, with the Trent XWB surpassing our
expectations. We have seen growth in ITP and steady sales in Defence. In Power Systems, while
trading remains healthy, a small number of larger projects have been deferred and as a result we
now expect sales growth for the Full Year in the low- to mid-single-digit range.
“My top priority is improving customer confidence in the Trent 1000. We are today announcing
additional action to further expand our maintenance capacity and increase our stock of spare
engines. We deeply regret the ongoing disruption caused to customers. These steps, which build
upon progress made to date, will further reduce disruption to our airline customers and give them
the certainty that they need.
“We have completed a detailed technical evaluation of our work on an improved high pressure
turbine blade for Trent 1000 TEN, the last major redesign activity required for the issues which we
have identified with the engine. Although we regret that the blade will not be ready when we had
originally planned, our understanding of the technical issues has significantly improved. As a
result we are now able to reset our financial and operational expectations for the engine based on
a blade design with a prudent durability estimate that we are confident we can deliver. This will
give our customers and ourselves a higher degree of certainty as we plan for the servicing of the
fleet over the coming years.
“With this increased understanding we have been able to carry out a full financial review of the
Trent 1000. The result is a revised assessment of cost and future profitability of the programme to
provide greater clarity for investors.
“We expect to deliver at least £1bn of FCF in 2020, underpinned by the benefits of our
restructuring programme, operating efficiency improvements, further efforts to reduce inventory
and disciplined capital allocation. Longer term as the Trent 1000 costs subside, we remain
confident in our mid-term ambition of at least £1 of FCF per share.”
Group trading update
In the coming weeks we expect to reach a significant milestone in our Civil Aerospace business
with our widebody installed fleet surpassing 5,000 engines – this is a 50% increase over the past
decade. The vast majority of our installed fleet is performing well with continued growth in
widebody engine flying hours in the third quarter. The Trent XWB, which is around 15% of our
fleet today, and will be more than half of our new deliveries in the coming years, is surpassing our
expectations for in-service reliability. Visual inspections and positive engine health monitoring
data have allowed us to keep the fleet leader Trent XWB-84 engines flying for longer than initially
expected. As a result, we are increasingly confident that the engine will meet and potentially
exceed the initial expectations we had for durability and performance. The Trent 700, which
represents around one third of our installed fleet today, also continues to deliver excellent
performance. We recently announced the launch of the Pearl 700 business jet engine to power
the new Gulfstream G700. Along with the Pearl 15 announced last year, this secures our market-
leading position in business jets.
In Defence, we continue to expect steady sales and modest margin decline in 2019. Investment is
progressing well on next generation programmes to underpin the long term success of our
Defence business in both the UK and US markets.
In Power Systems, the diversified nature of our business and our globalisation strategy has
supported continued growth in the third quarter, despite challenging conditions in certain end
markets. However, due to delivery deferrals on a small number of larger projects, we now expect
revenue growth in the low- to mid-single-digit range for the Full Year, versus prior expectations
for mid-single-digit growth.
While we are progressing with our efforts to reduce year-end inventory from the elevated levels
seen at the Half Year results, the pace has been slower than planned. We now expect Full Year
inventory to be at a broadly similar level to December 2018. We have made strong progress in our
efforts to improve working capital efficiency, with increased discipline around overdue debt
collection and pursuing contractual entitlements. Defence has continued to benefit from better-
than-expected deposit flows. Along with discretionary cost control, this strong contribution from
working capital is helping to offset the material Trent 1000 cash costs we are currently absorbing.
We have continued to deliver on the restructuring plan we announced on 14 June 2018. The result
will be a simpler, leaner and more agile organisation. The focus to date has been on establishing
our new operating model and on delivering the targeted 4,600 headcount reduction by the end of
2020. We updated on 6 August 2019 that we had delivered one third of these reductions and we
expect to deliver more than half of the total programme reductions by the end of this year.
Trent 1000 technical update
Returning the Trent 1000 fleet to the level of service which our customers expect is the top
priority of senior management and the Board. We have been dealing with three significant
technical issues which have affected each of the three variants of the Trent 1000 (Package B,
Package C and TEN). Of the nine fixes therefore required, we have so far designed eight and
certified seven which are now being incorporated into the fleet.
A new HPT blade for the Trent 1000 TEN variant is the final modification required. Ahead of our
plans to start incorporating this into the fleet in early 2020, we have completed a detailed
technical evaluation of our proposed HPT redesign. We have now identified that it will not deliver
a sufficient level of enhanced durability and as such we are being prudent in assuming that an
improved blade is unlikely to be ready before the first half of 2021. Through our work we have
significantly improved our understanding of the issue. We are now able to reset our financial and
operational expectations for the Trent 1000 TEN on the basis of a subsequent final HPT design,
with a more conservative durability estimate that we are confident we can deliver. This estimate is
lower than our initial target but sufficient to meet the needs of our customers, and allows us to
update our forecasts of future shop visits and maintenance costs. This work will provide customers
with a clearer view of their fleet’s servicing requirements and provide investors with a clearer view
of future costs.
Additional action to accelerate the recovery of the Trent 1000 fleet
We are determined to reduce the unacceptable level of disruption we are causing customers and
to bring the number of aircraft on ground (AOG) down to single digit levels by the end of Q2 2020
– as stated in our update of 20 September 2019. In light of the engineering and financial work
described above and the regrettable postponement of the new HPT blade design, we are today
announcing further action to provide customers with greater aircraft availability:
We will invest significantly to increase our stock of spare engines which will be deployed to
dramatically reduce the time it takes to get aircraft flying again. This helps ensure that we can
keep AOG levels low. We aim to offset the significant majority of this capital expenditure as we
reprioritise spend and deliver savings elsewhere.
We are further accelerating plans to grow our MRO network, with several major projects
underway to deliver a near term increase in capacity for the Trent 1000. These include the
announcement today that part of our existing sites in Dahlewitz and Montreal will transition to
become service hubs with the capability of handling Trent 1000 engine overhauls. We have
secured the use of an additional test bed at Dallas Fort Worth to support Trent 1000 engine
tests. Additionally, we are investing to expand our capacity in Derby and double our overhaul
capacity at Heathrow. This investment marks a step-change in our MRO expansion plans and
will assist us over the longer term in meeting the servicing demands of our growing installed
base.
We will further step up our investment in engineering to support the specialist team which has
been assembled to focus on resolving the final design and engineering challenges on the Trent
1000. This effort will be aided by a bespoke facility we have created in Derby dedicated to
Trent 1000 test engines, which is now fully operational, enabling faster testing and validation of
new component designs.
Greater clarity on financial impact of Trent 1000
We have conducted a thorough review of the Trent 1000 programme. Building on our increased
understanding of the Trent 1000 TEN HPT issue, Management and the Board now have a clearer
view of the costs associated with resolving the in-service issues. We now expect total in-service
cash costs of around £2.4bn across 2017-2023. This includes £1.6bn as previously guided at the
Half Year and a £400m increase in estimated costs across all Trent 1000 variants. It also now
includes the £400m of Trent 1000 TEN costs previously included within normal annual programme
contingency. In 2017-18 we incurred £550m of cost on the Trent 1000. We now expect the overall
cash impact of dealing with the in-service issues on all variants of the Trent 1000 to be c.£550m in
2019. We expect costs of £450-550m in 2020 and a similar level in 2021, before declining
significantly thereafter.
Separately, as a result of this review, we expect to take an exceptional charge on the Trent 1000 of
c.£1.4bn in 2019. This charge will primarily comprise:
Those additional cash costs associated with customer disruption and remediation shop visits.
The recognition of future contract losses from a small number of customer contracts. The cash
impact occurs over the 10-15 year life of the contracts.
We continue to work through the full accounting treatment and will provide further detail at our
Full Year results.
Implications for the Trent 7000
The Trent 7000, which accounts for 1% of our fleet, shares much of the same core design as the
Trent 1000 TEN, but has a less arduous usage profile in-service. As a result we continue to expect
a materially improved in-service durability of the HPT relative to the Trent 1000 TEN. It has always
been our intention to introduce the new Trent 1000 TEN HPT blade to the Trent 7000 fleet when
it becomes available. The postponed Trent 1000 TEN HPT blade redesign will therefore result in
later introduction into the Trent 7000. However, we do not expect a material financial impact, due
the younger and smaller Trent 7000 fleet, together with its less arduous usage profile. We have
also been able to plan our maintenance capacity and spare engine provision appropriately to
safeguard against customer disruption.
Conference call and presentation details
We will be hosting a conference call and WebEx for analysts and investors at 8.30am GMT on
November 7. To dial-in to the call, including Q&A participation, please use the dial-in details below:
United Kingdom Toll-Free: 08003589473
United Kingdom Toll: +44 3333000804
URL for international dial in numbers:
http://events.arkadin.com/ev/docs/NE_W2_TF_Events_International_Access_List.pdf
PIN: 42945821#
To view the corresponding presentation via WebEx please use the link below:
https://exostar.webex.com/exostar/e.php?MTID=m3494d458448e1d5e84abb27465073660
Disclosures
All commentary in this release relates to the performance of the core business at underlying FX
rates.
Full Year 2019 results
Our 2019 Full Year results will be announced on 28 February 2020.
This announcement has been determined to contain inside information.
About Rolls-Royce Holdings plc
1. Rolls-Royce pioneers cutting-edge technologies that deliver clean, safe and competitive
solutions to meet our planet’s vital power needs.
2. Rolls-Royce has customers in more than 150 countries, comprising more than 400 airlines
and leasing customers, 160 armed forces, 70 navies, and more than 5,000 power and
nuclear customers.
3. Annual underlying revenue was £15 billion in 2018, around half of which came from the
provision of aftermarket services.
4. In 2018, Rolls-Royce invested £1.4 billion on research and development. We also support a
global network of 29 University Technology Centres, which position Rolls-Royce engineers
at the forefront of scientific research.
5. The Group has a strong commitment to apprentice and graduate recruitment and to
further developing employee skills.
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