The manufacturer said that part of that revenue rise was down to an increase in ‘after-market sales’, aka companies wanting it to service their engines. And its future looks bright, too: its order book has risen by 5%, to £362bn. That includes a 70% rise in orders from civil aerospace companies, a sector which represents more than 80% of its business. Part of that is the exclusive deal it’s signed to build engines for Airbus’s A350-1000 aircraft. Not bad.
The company also reckons it’ll do well out of airlines’ desires to move to more efficient aircraft – partly because that gives them kudos from the green movement, but mainly because the high cost of jet fuel is making older, dirtier models unmanageable. Airlines in emerging markets are also becoming more enthusiastic about Rolls-Royce: presumably as business flows into their economies, airlines are working hard to compete with their western rivals.
The company wasn’t without its problems last year, though: its defence order book fell by 7% to £6bn as governments cut back on their defence expenditure. Although it did get a nice little one-off payment of £60m from the Ministry of Defence after it cancelled some of its contracts. Which can’t have gone down badly.
Part of Rolls-Royce’s profit rise was also driven by German engines group Tognum, which it acquired with German car group Daimler last year. And Daimler (which owns Mercedes) didn’t do too badly, either: this morning, it reported a 29% in net profits to €6bn (£5bn). Vehicle sales rose by 11% to 2.11m, with the company adding that Mercedes had ‘never performed better than in 2011’, while fourth-quarter net profits jumped by 57% to €1.79bn. Which just goes to show that not all manufacturers are having a bad time…