LONDON (dpa-AFX) - Rolls-Royce Holdings plc. (RYCEF.PK, RR.L, RYCEY.PK) presented the initial findings of Chief Executive Warren East's review of operations. It expects incremental gross cost savings of 150 million pounds - 200 million pounds per annum, with benefits accruing from 2017 onwards, targeting a 1-2 year payback.
Warren East said major restructuring will simplify the organisation, streamline senior management, reduce fixed costs and add greater pace and accountability to decision making. Strong long-term cash flows will be driven by significant growth in widebody aftermarket, industrial transformation and cost reduction programmes.
Focused power systems portfolio will provide a strong balance of growth and cash generative businesses, protected by strong engineering-led barriers to entry.
Warren East, commenting on his review, said, 'As a group we are undergoing an unprecedented period of change. Change in our mix of business and how we account for it. Change in our industrial footprint as we invest in a wide-ranging transformation. And change in demand for our products as we double our large engine output and manage reductions in demand in other markets. These changes, while more painful than we expected in the near-term, are vital to our long-term success. My review has underpinned my confidence about the opportunities before us and I am convinced that our long-term outlook is positive.'
Ian Davis, Chairman of Rolls-Royce, said, 'As a Board we are committed to providing Warren with the support he needs to implement the findings of his review. He is recommending clear and decisive actions which we fully support and we are committed to ensuring he has the right resources at the highest level to deliver these changes.'
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