Report

Emerging from the clouds

Rolls-Royce’s underlying performance in FY16 was ahead of both its own and market expectations. Media focus on the non-cash £4.4bn headline FX loss is missing what looks to be the basis for optimism. As the civil model starts to move from investment in engines for the A350 and A330neo into the aftermarket delivery phase over the remainder of the decade, we think cash flow is likely to improve, particularly if supported by an eventual recovery in Marine.
Underlying
Rolls-Royce Holdings plc

Rolls Royce Holdings is an engineering company. Co. is organised into five businesses: civil aerospace, which develops, manufactures, markets and sells commercial aero engines and aftermarket services; defense aerospace, which develops, manufactures, markets and sells military aero engines and aftermarket services; power systems, which develops, manufactures, markets and sells reciprocating engines and power systems; marine, which is develops, manufactures, markets and sells marine-power propulsion systems and aftermarket services; and nuclear, which develops, manufactures, markets and sells nuclear systems for civil power generation and naval propulsion systems.

Provider
Edison Investment Research
Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts
Andy Chambers

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