Rolls-Royce Holdings plc Rolls-Royce Proposes Major Reorganisation (4045N)
20 Maggio 2020 - 8:00AM
UK Regulatory
TIDMRR.
RNS Number : 4045N
Rolls-Royce Holdings plc
20 May 2020
20 May 2020
ROLLS-ROYCE PROPOSES MAJOR REORGANISATION
TO ADDRESS MEDIUM-TERM IMPACT OF COVID-19
The impact of COVID-19 on Rolls-Royce and the whole of the
aviation industry is unprecedented. We have already taken action to
strengthen the financial resilience of our business and reduce our
cash expenditure in 2020. It is, however, increasingly clear that
activity in the commercial aerospace market will take several years
to return to the levels seen just a few months ago. We must now
address these medium-term structural changes, as demand from
customers reduces significantly for our civil aerospace engines and
aftermarket services.
Warren East, Rolls-Royce, CEO said: "This is not a crisis of our
making. But it is the crisis that we face and we must deal with it.
Our airline customers and airframe partners are having to adapt and
so must we. Being told that there is no longer a job for you is a
terrible prospect and it is especially hard when all of us take so
much pride in working for Rolls-Royce. But we must take difficult
decisions to see our business through these unprecedented times.
Governments across the world are doing what they can to assist
businesses in the short-term, but we must respond to market
conditions for the medium-term until the world of aviation is
flying again at scale, and governments cannot replace sustainable
customer demand that is simply not there. We have to do this right,
which means we will work closely with our employee and trade union
representatives as appropriate, look at any viable alternatives to
mitigate the impact, consult with everyone affected and treat our
people with dignity and respect."
We are proposing a major reorganisation of our business to adapt
to the new level of demand we are seeing from customers. As a
result, we expect the loss of at least 9,000 roles from our global
workforce of 52,000. In addition to the savings generated from this
headcount reduction, we will also cut expenditure across plant and
property, capital and other indirect cost areas. The proposed
reorganisation is expected to generate annualised savings of more
than GBP1.3bn, of which we expect headcount to contribute around
GBP700m. The cash restructuring costs related to these actions are
likely to be around GBP800m, with outflows incurred across 2020 to
2022.
The proposed reorganisation will predominantly affect our Civil
Aerospace business, where we will carry out a detailed review of
our facility footprint. It will also have implications for our
central support functions. Our Power Systems business and ITP Aero
are currently developing, negotiating and executing extensive
measures to deal with the current situation. Our Defence business,
based in the UK and US, has been robust during the pandemic, with
an unchanged outlook, and does not need to reduce headcount. As
part of the reorganisation, we will ensure that our internal Civil
Aerospace supply chain continues to support our defence programmes
and explore any opportunities to move people into our Defence
business.
Due to the need to consult with the appropriate employee and
trade union representatives, we are not providing further details
of the impact of the proposed reorganisation on specific sites, or
countries, at this stage. The restructuring announced on 14 June
2018 will transition into this wider proposed reorganisation.
Focused predominantly on reducing the complexity of our support and
management functions, the programme has substantially delivered on
its objectives.
Warren East added: "The strategic choices that we have made over
the last few years have helped us to respond rapidly to COVID-19
and the synergies between our divisions leave us well placed to
capitalise on the long-term potential of our markets. The world on
the other side of this pandemic will need the power that we
generate to fuel economic recovery. I absolutely believe the call
for that power to be more sustainable will be stronger than ever.
This plays to our strengths. We must ensure that we are able to
continue to innovate and play our leading role in enabling the
vital sectors in which we operate achieve net zero carbon
emissions. We have emerged from troubled times before, to achieve
incredible things. We will do so again."
This announcement has been determined to contain inside
information.
Rolls-Royce Holdings plc LEI: 213800EC7997ZBLZJH69
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 GBP15.3 billion in 2019, around
half of which came from the provision of aftermarket services.
4. In 2019, Rolls-Royce invested GBP1.45 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.
For further information, please contact:
Media:
Richard Wray
Director of External Communications & Brand
Rolls-Royce plc
Tel +44 (0) 7810 850055
Richard.Wray@Rolls-Royce.com
Daisy Omissi
VP External Communications Civil Aerospace
Rolls-Royce plc
Tel +44 (0) 7500 990583
daisy.omissi@rolls-royce.com
Investors:
Isabel Green
Head of Investor Relations
Rolls-Royce plc
Tel +44 (0) 7880 160976
Isabel.Green@Rolls-Royce.com
Peter Lapthorn
Investor Relations Manager
Rolls-Royce plc
Tel. +44 (0) 7717 811 069
Peter.Lapthorn@Rolls-Royce.com
www.Rolls-Royce.com
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END
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