Thursday, 30 June 2016

Rolls-Royce and its partners have received regulatory approval and met all other closing conditions for its previously announced changes to three Approved Maintenance Centre joint ventures.

Approved Maintenance Centres (AMCs) support Rolls-Royce's strategy to develop a competitive, capable and flexible Trent Service Network to meet the changing needs of customers across the lifecycle of engines and to support the growing Trent engine fleet.

The changes, announced last November, subject to certain closing conditions that have now been satisfied, relate to three existing AMC joint ventures: Hong Kong Aero Engine Services Limited (HAESL), Singapore Aero Engine Services Pte Ltd (SAESL) and N3 Engine Overhaul Services GmbH and Co. KG (N3).

Under the completion of the agreements announced today these joint ventures will now operate under a new business model where the existing geographic territory-based arrangements used by Rolls-Royceto direct maintenance, repair and overhaul (MRO) work to each AMC will be replaced with a competitive model where each AMC will need to compete to secure their Trent TotalCare engine overhauls. Rolls-Roycebelieves that this competitive model will encourage greater capability and flexibility across the Trent Service Network. The AMCs are also able to compete globally for MRO Services under 'time and material' business terms.

The completion simplifies the shareholding structure and management of HAESL and SAESL. The former will become a 50/50 joint venture between Rolls-Royceand HAECO, the latter a 50/50 joint venture between Rolls-Royceand SIAEC.

The shareholding arrangements with Lufthansa Technik AG for N3 remain unchanged at 50/50 ownership.

These changes to create a competitive, capable and flexible Trent Service Network complement the announcement that Delta TechOps will be joining the Trent Service Network as an independent AMC. Additional AMCs to further enhance the Trent Service Network will be announced at the appropriate time.

In addition to SAESL, Rolls-Royceand SIAEC have a second joint venture in Singapore, International Engine Component Overhaul Pte Ltd (IECO), which overhauls and repairs aero engine components. As part of these new agreements, and to further simplify our joint venture structures, Rolls-Royceand SIAEC intend to take the opportunity to amalgamate the business and operations of SAESL and IECO into a single entity, enabling them to compete more effectively for global component repair business.

About Rolls-RoyceHoldings plc

  1. Rolls-Royce's vision is to be the market-leader in high performance power systems where our engineering expertise, global reach and deep industry knowledge deliver outstanding customer relationships and solutions. We operate across five businesses: Civil Aerospace, Defence Aerospace, Marine, Nuclear and Power Systems.
  2. Rolls-Royce has customers in more than 120 countries, comprising more than 400 airlines and leasing customers, 160 armed forces, 4,000 marine customers including 70 navies, and more than 5,000 power and nuclear customers.
  3. We have three common themes across all our businesses:
    • Investing in and developing engineering excellence
    • Driving a manufacturing and supply chain transformation which will embed operational excellence in lean, lower-cost facilities and processes
    • Leveraging our installed base, product knowledge and engineering capabilities to provide customers with outstanding service through which we can capture aftermarket value long into the future.
  5. Annual underlying revenue was £13.4 billion in 2015, around half of which came from the provision of aftermarket services. The firm and announced order book stood at £76.4 billion at the end of 2015.
  6. In 2015, Rolls-Royce invested £1.2 billion on research and development. We also support a global network of 31 University Technology Centres, which position Rolls-Royceengineers at the forefront of scientific research.
  7. Rolls-Royce employs over 50,000 people in more than 46 countries. Nearly 15,700 of these are engineers.
  8. The Group has a strong commitment to apprentice and graduate recruitment and to further developing employee skills. In 2015 we employed 228 graduates and 277 apprentices through our worldwide training programmes.

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Rolls-Royce Holdings plc published this content on 30 June 2016 and is solely responsible for the information contained herein.
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