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Rolls-Royce Holdings

DB:RRU1
Snowflake Description

Reasonable growth potential with mediocre balance sheet.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
RRU1
DB
£14B
Market Cap
  1. Home
  2. DE
  3. Capital Goods
Company description

Rolls-Royce Holdings plc operates as an industrial technology company worldwide. The last earnings update was 67 days ago. More info.


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RRU1 Share Price and Events
7 Day Returns
3.7%
DB:RRU1
0.8%
Europe Aerospace & Defense
2.5%
DE Market
1 Year Returns
-14.6%
DB:RRU1
11.7%
Europe Aerospace & Defense
2.6%
DE Market
RRU1 Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Rolls-Royce Holdings (RRU1) 3.7% -9.1% -10.1% -14.6% 1% -14.3%
Europe Aerospace & Defense 0.8% -2.9% 0.9% 11.7% 67.1% 114.9%
DE Market 2.5% 0.2% 1% 2.6% 7.8% 23.7%
1 Year Return vs Industry and Market
  • RRU1 underperformed the Aerospace & Defense industry which returned 11.7% over the past year.
  • RRU1 underperformed the Market in Germany which returned 2.6% over the past year.
Price Volatility
RRU1
Industry
5yr Volatility vs Market

Value

 Is Rolls-Royce Holdings undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Rolls-Royce Holdings to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Rolls-Royce Holdings.

DB:RRU1 Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 17 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 7.7%
Perpetual Growth Rate 10-Year DE Government Bond Rate 0.2%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for DB:RRU1
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year DE Govt Bond Rate 0.2%
Equity Risk Premium S&P Global 6.7%
Aerospace & Defense Unlevered Beta Simply Wall St/ S&P Global 0.86
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.864 (1 + (1- 19%) (45.88%))
1.124
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.12
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 0.23% + (1.124 * 6.65%)
7.7%

Discounted Cash Flow Calculation for DB:RRU1 using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Rolls-Royce Holdings is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

Note: Free cash flow to equity valuations ignore the company's cash or debt.

DB:RRU1 DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (GBP, Millions) Source Present Value
Discounted (@ 7.7%)
2020 873.25 Analyst x8 810.80
2021 1,136.03 Analyst x9 979.36
2022 1,524.60 Analyst x5 1,220.35
2023 1,850.00 Analyst x2 1,374.92
2024 2,081.17 Est @ 12.5% 1,436.11
2025 2,264.63 Est @ 8.82% 1,450.96
2026 2,405.92 Est @ 6.24% 1,431.25
2027 2,512.64 Est @ 4.44% 1,387.85
2028 2,592.38 Est @ 3.17% 1,329.49
2029 2,651.74 Est @ 2.29% 1,262.68
Present value of next 10 years cash flows £12,683.00
DB:RRU1 DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2029 × (1 + g) ÷ (Discount Rate – g)
= £2,651.74 × (1 + 0.23%) ÷ (7.7% – 0.23%)
£35,560.64
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= £35,560.64 ÷ (1 + 7.7%)10
£16,933.01
DB:RRU1 Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= £12,683.00 + £16,933.01
£29,616.01
Equity Value per Share
(GBP)
= Total value / Shares Outstanding
= £29,616.01 / 1,924.87
£15.39
DB:RRU1 Discount to Share Price
Calculation Result
Non-primary Listing Adjustment Factor 1 share in DB:RRU1 represents 1.13697x of LSE:RR.
(This could be a different class, a depositary receipt, a different currency, or all of these things.)
1.13697x
Value per Share
(Listing Adjusted, EUR)
= Value per Share (GBP) x Listing Adjustment Factor
= £ 15.39 x 1.13697
€17.49
Value per share (EUR) From above. €17.49
Current discount Discount to share price of €8.45
= -1 x (€8.45 - €17.49) / €17.49
51.7%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price Rolls-Royce Holdings is available for.
Intrinsic value
>50%
Share price is €8.45 vs Future cash flow value of €17.49
Current Discount Checks
For Rolls-Royce Holdings to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Rolls-Royce Holdings's share price is below the future cash flow value, and at a moderate discount (> 20%).
  • Rolls-Royce Holdings's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Rolls-Royce Holdings's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Rolls-Royce Holdings's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
DB:RRU1 PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-06-30) in GBP £-1.25
LSE:RR. Share Price ** LSE (2019-10-11) in GBP £7.43
Europe Aerospace & Defense Industry PE Ratio Median Figure of 36 Publicly-Listed Aerospace & Defense Companies 21.4x
Germany Market PE Ratio Median Figure of 417 Publicly-Listed Companies 19.72x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Rolls-Royce Holdings.

DB:RRU1 PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= LSE:RR. Share Price ÷ EPS (both in GBP)

= 7.43 ÷ -1.25

-5.93x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Rolls-Royce Holdings is loss making, we can't compare its value to the Europe Aerospace & Defense industry average.
  • Rolls-Royce Holdings is loss making, we can't compare the value of its earnings to the Germany market.
Price based on expected Growth
Does Rolls-Royce Holdings's expected growth come at a high price?
Raw Data
DB:RRU1 PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section -5.93x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 17 Analysts
32.8%per year
Europe Aerospace & Defense Industry PEG Ratio Median Figure of 26 Publicly-Listed Aerospace & Defense Companies 1.59x
Germany Market PEG Ratio Median Figure of 264 Publicly-Listed Companies 1.38x

*Line of best fit is calculated by linear regression .

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Unable to calculate PEG ratio for Rolls-Royce Holdings, we can't assess if its growth is good value.
Price based on value of assets
What value do investors place on Rolls-Royce Holdings's assets?
Raw Data
DB:RRU1 PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-06-30) in GBP £-1.39
LSE:RR. Share Price * LSE (2019-10-11) in GBP £7.43
Europe Aerospace & Defense Industry PB Ratio Median Figure of 49 Publicly-Listed Aerospace & Defense Companies 1.96x
Germany Market PB Ratio Median Figure of 597 Publicly-Listed Companies 1.74x
DB:RRU1 PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= LSE:RR. Share Price ÷ Book Value per Share (both in GBP)

= 7.43 ÷ -1.39

-5.36x

* Primary Listing of Rolls-Royce Holdings.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Rolls-Royce Holdings has negative assets, we can't compare the value of its assets to the Europe Aerospace & Defense industry average.
X
Value checks
We assess Rolls-Royce Holdings's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Aerospace & Defense industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Aerospace & Defense industry average (and greater than 0)? (1 check)
  5. Rolls-Royce Holdings has a total score of 2/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is Rolls-Royce Holdings expected to perform in the next 1 to 3 years based on estimates from 17 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
32.8%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Rolls-Royce Holdings expected to grow at an attractive rate?
  • Rolls-Royce Holdings's earnings growth is expected to exceed the low risk savings rate of 0.2%.
Growth vs Market Checks
  • Rolls-Royce Holdings's earnings growth is expected to exceed the Germany market average.
  • Rolls-Royce Holdings's revenue growth is positive but not above the Germany market average.
Annual Growth Rates Comparison
Raw Data
DB:RRU1 Future Growth Rates Data Sources
Data Point Source Value (per year)
DB:RRU1 Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 17 Analysts 32.8%
DB:RRU1 Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 17 Analysts 4%
Europe Aerospace & Defense Industry Earnings Growth Rate Market Cap Weighted Average 14.2%
Europe Aerospace & Defense Industry Revenue Growth Rate Market Cap Weighted Average 4.3%
Germany Market Earnings Growth Rate Market Cap Weighted Average 12.8%
Germany Market Revenue Growth Rate Market Cap Weighted Average 4.9%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
DB:RRU1 Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 17 Analyst Estimates (S&P Global) See Below
All numbers in GBP Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
DB:RRU1 Future Estimates Data
Date (Data in GBP Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2023-12-31 18,011 2,610 755 3
2022-12-31 17,561 3,270 1,480 7
2021-12-31 16,905 2,605 945 14
2020-12-31 16,163 2,174 686 16
2019-12-31 15,433 1,920 419 14
2019-10-12
DB:RRU1 Past Financials Data
Date (Data in GBP Millions) Revenue Cash Flow Net Income *
2019-06-30 16,125 1,885 -2,356
2019-03-31 15,927 2,056 -2,379
2018-12-31 15,729 2,226 -2,401
2018-09-30 15,654 2,145 -569
2018-06-30 15,578 2,064 1,256
2018-03-31 15,163 1,788 2,319
2017-12-31 14,747 1,512 3,382
2017-09-30 15,273 1,448 1,355
2017-06-30 15,149 1,239 -1,088
2017-03-31 15,052 1,325 -2,560
2016-12-31 14,955 1,411 -4,032
2016-09-30 14,386 1,441 -3,041

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Rolls-Royce Holdings's earnings are expected to grow significantly at over 20% yearly.
  • Rolls-Royce Holdings's revenue is expected to grow by 4% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
DB:RRU1 Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 17 Analyst Estimates (S&P Global) See Below

All data from Rolls-Royce Holdings Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

DB:RRU1 Future Estimates Data
Date (Data in GBP Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2023-12-31 0.40 0.40 0.40 1.00
2022-12-31 0.56 0.76 0.37 2.00
2021-12-31 0.56 0.61 0.49 5.00
2020-12-31 0.37 0.44 0.29 8.00
2019-12-31 0.22 0.26 0.18 6.00
2019-10-12
DB:RRU1 Past Financials Data
Date (Data in GBP Millions) EPS *
2019-06-30 -1.25
2019-03-31 -1.27
2018-12-31 -1.29
2018-09-30 -0.31
2018-06-30 0.68
2018-03-31 1.26
2017-12-31 1.84
2017-09-30 0.74
2017-06-30 -0.59
2017-03-31 -1.40
2016-12-31 -2.20
2016-09-30 -1.66

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Rolls-Royce Holdings is expected to make outstanding use of shareholders’ funds in the future (Return on Equity greater than 40%).
X
Future performance checks
We assess Rolls-Royce Holdings's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the Europe market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the Europe market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Rolls-Royce Holdings has a total score of 4/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Rolls-Royce Holdings performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Rolls-Royce Holdings's growth in the last year to its industry (Aerospace & Defense).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Rolls-Royce Holdings does not make a profit and their year on year earnings growth rate was negative over the past 5 years.
  • Unable to compare Rolls-Royce Holdings's 1-year earnings growth to the 5-year average as it is not currently profitable.
  • Unable to compare Rolls-Royce Holdings's 1-year growth to the Europe Aerospace & Defense industry average as it is not currently profitable.
Earnings and Revenue History
Rolls-Royce Holdings's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Rolls-Royce Holdings Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

DB:RRU1 Past Revenue, Cash Flow and Net Income Data
Date (Data in GBP Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-06-30 16,125.00 -2,356.00 1,147.00 757.00
2019-03-31 15,927.00 -2,378.50 1,201.00 762.50
2018-12-31 15,729.00 -2,401.00 1,255.00 768.00
2018-09-30 15,653.50 -568.50 1,370.50 757.00
2018-06-30 15,578.00 1,256.00 1,307.00 746.00
2018-03-31 15,162.50 2,319.00 1,212.00 794.50
2017-12-31 14,747.00 3,382.00 1,117.00 843.00
2017-09-30 15,273.00 1,355.00 1,383.50 896.00
2017-06-30 15,149.00 -1,088.00 1,685.00 976.00
2017-03-31 15,052.00 -2,560.00 1,725.00 949.50
2016-12-31 14,955.00 -4,032.00 1,765.00 923.00
2016-09-30 14,386.00 -3,040.50 1,448.00 870.50
2016-06-30 13,817.00 -2,049.00 1,131.00 818.00
2016-03-31 13,771.00 -983.00 1,084.50 818.00
2015-12-31 13,725.00 83.00 1,038.00 818.00
2015-09-30 13,791.00 -85.00 1,064.50 823.00
2015-06-30 13,857.00 -253.00 1,091.00 828.00
2015-03-31 13,796.50 -163.00 1,122.00 810.50
2014-12-31 13,736.00 -73.00 1,153.00 793.00
2014-06-30 13,546.00 2,236.00 1,175.00 708.00
2014-03-31 14,094.00 1,773.50 1,219.00 683.00
2013-12-31 14,642.00 1,311.00 1,263.00 658.00
2013-09-30 14,649.50 1,032.50 1,306.50 593.50
2013-06-30 13,786.00 725.00 1,180.00 565.00
2013-03-31 12,973.50 1,523.00 1,090.50 548.00
2012-12-31 12,161.00 2,321.00 1,001.00 531.00

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • It is difficult to establish if Rolls-Royce Holdings has efficiently used shareholders’ funds last year (Return on Equity greater than 20%) due to its liabilities exceeding its assets.
  • It is difficult to establish if Rolls-Royce Holdings has efficiently used its assets last year compared to the Europe Aerospace & Defense industry average (Return on Assets) as it is loss-making.
  • It is difficult to establish if Rolls-Royce Holdings improved its use of capital last year versus 3 years ago (Return on Capital Employed) as it is currently loss-making.
X
Past performance checks
We assess Rolls-Royce Holdings's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Aerospace & Defense industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Rolls-Royce Holdings has a total score of 0/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Rolls-Royce Holdings's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Rolls-Royce Holdings's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Rolls-Royce Holdings is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Rolls-Royce Holdings's long term commitments exceed its cash and other short term assets.
Balance sheet
This treemap shows a more detailed breakdown of Rolls-Royce Holdings's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Rolls-Royce Holdings has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Rolls-Royce Holdings Company Filings, last reported 3 months ago.

DB:RRU1 Past Debt and Equity Data
Date (Data in GBP Millions) Total Equity Total Debt Cash & Short Term Investments
2019-06-30 -2,599.00 4,118.00 4,220.00
2019-03-31 -2,599.00 4,118.00 4,220.00
2018-12-31 -1,052.00 4,466.00 4,984.00
2018-09-30 -1,052.00 4,466.00 4,984.00
2018-06-30 770.00 4,340.00 4,398.00
2018-03-31 770.00 4,340.00 4,398.00
2017-12-31 933.00 3,384.00 2,956.00
2017-09-30 6,170.00 3,384.00 2,956.00
2017-06-30 3,243.00 3,543.00 2,339.00
2017-03-31 3,243.00 3,543.00 2,339.00
2016-12-31 1,864.00 3,324.00 2,774.00
2016-09-30 1,864.00 3,324.00 2,774.00
2016-06-30 3,842.00 3,315.00 2,288.00
2016-03-31 3,842.00 3,315.00 2,288.00
2015-12-31 5,016.00 3,346.00 3,178.00
2015-09-30 5,016.00 3,346.00 3,178.00
2015-06-30 5,410.00 2,276.00 1,589.00
2015-03-31 5,410.00 2,276.00 1,589.00
2014-12-31 6,387.00 2,265.00 2,869.00
2014-06-30 6,741.00 2,247.00 3,362.00
2014-03-31 6,741.00 2,247.00 3,362.00
2013-12-31 6,303.00 2,435.00 4,311.00
2013-09-30 6,303.00 2,435.00 4,311.00
2013-06-30 5,130.00 2,626.00 3,443.00
2013-03-31 5,130.00 2,626.00 3,443.00
2012-12-31 5,996.00 1,399.00 2,601.00
  • Rolls-Royce Holdings has negative shareholder equity (liabilities exceed assets), this is a more serious situation compared with a high debt level.
  • Irrelevant to check if Rolls-Royce Holdings's debt level has increased considering it has negative shareholder equity.
CASH RUNWAY ANALYSIS

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

  • Whilst loss making Rolls-Royce Holdings has sufficient cash runway for more than 3 years if it maintains the current positive free cash flow level.
  • Whilst loss making Rolls-Royce Holdings has sufficient cash runway for more than 3 years, even with free cash flow being positive and shrinking by -36.4% per year.
X
Financial health checks
We assess Rolls-Royce Holdings's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Rolls-Royce Holdings has a total score of 3/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is Rolls-Royce Holdings's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
1.57%
Current annual income from Rolls-Royce Holdings dividends. Estimated to be 2.44% next year.
If you bought €2,000 of Rolls-Royce Holdings shares you are expected to receive €31 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Rolls-Royce Holdings's pays a higher dividend yield than the bottom 25% of dividend payers in Germany (1.46%).
  • Rolls-Royce Holdings's dividend is below the markets top 25% of dividend payers in Germany (3.86%).
Upcoming dividend payment

Purchase Rolls-Royce Holdings before the 'Ex-dividend' to receive their next dividend payment.

Dividends are usually paid every 3 or 6 months, you can time your share purchase to take advantage of upcoming dividend payments.
Dividend payment calendar
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
DB:RRU1 Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 17 Analyst Estimates (S&P Global) See Below
Europe Aerospace & Defense Industry Average Dividend Yield Market Cap Weighted Average of 30 Stocks 1.7%
Germany Market Average Dividend Yield Market Cap Weighted Average of 337 Stocks 3.1%
Germany Minimum Threshold Dividend Yield 10th Percentile 0.8%
Germany Bottom 25% Dividend Yield 25th Percentile 1.5%
Germany Top 25% Dividend Yield 75th Percentile 3.9%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

DB:RRU1 Future Dividends Estimate Data
Date (Data in £) Dividend per Share (annual) Avg. No. Analysts
2023-12-31 0.48 1.00
2022-12-31 0.29 5.00
2021-12-31 0.20 15.00
2020-12-31 0.16 16.00
2019-12-31 0.13 15.00
2019-10-12
DB:RRU1 Past Annualized Dividends Data
Date (Data in £) Dividend per share (annual) Avg. Yield (%)
2019-03-25 0.117 1.387
2019-02-28 0.117 1.294
2018-03-27 0.117 1.304
2018-03-07 0.117 1.303
2017-03-09 0.117 1.344
2017-02-14 0.117 1.576
2016-07-28 0.092 1.281
2016-02-15 0.164 2.449
2015-02-16 0.231 3.116
2014-03-06 0.220 2.284
2014-02-13 0.220 2.190
2013-03-01 0.195 1.678
2012-02-27 0.175 2.023
2012-02-10 0.175 2.209
2011-03-22 0.160 2.441
2011-02-10 0.160 2.624
2011-02-09 0.160 2.451
2010-07-29 0.154 2.528
2010-03-01 0.150 2.561
2010-02-11 0.150 2.844
2009-02-13 0.143 3.661

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been volatile in the past 10 years (annual drop of over 20%).
  • Dividends per share have fallen over the past 10 years.
Current Payout to shareholders
What portion of Rolls-Royce Holdings's earnings are paid to the shareholders as a dividend.
  • The company is paying a dividend however it is incurring a loss.
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by earnings (2.3x coverage).
X
Income/ dividend checks
We assess Rolls-Royce Holdings's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Rolls-Royce Holdings afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Rolls-Royce Holdings has a total score of 2/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of Rolls-Royce Holdings's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
D. Warren East
COMPENSATION £3,943,000
AGE 57
TENURE AS CEO 4.3 years
CEO Bio

Mr. D. Warren A. East, CBE, has been the Chief Executive Officer of Rolls-Royce Holdings plc since July 1, 2015. Mr. East served as the Chief Executive Officer of ARM Holdings Plc and ARM Ltd. from October 2001 to July 1, 2013. Mr. East served as the Chief Executive Officer of Arm, Inc. He serves as a Member of the UK Trade and Investment Executive Board for Technology, where he is responsible for driving the UK’s trade and investment objectives in the telecoms and IT sectors. He joined ARM Holdings plc in 1994 and served as its Vice President of Business Operations from February 1998 and as Chief Operating Officer since October 2001. Mr. East served as the Chief Executive Officer of Artisan Components, Inc. since August 23, 2004. He was with Texas Instruments (TI) for 11 years and latterly managed TI 's FPGA marketing in Europe. He has been an Executive Director of Rolls-Royce Holdings plc since January 1, 2014. He serves as a Member of Advisory Board at Quester Venture Partnership. He served as a Director of ARM Ltd., and Reciva Limited. He served as a Non-Executive Director of De La Rue plc from January 9, 2007 to July 23, 2015 and served as its Senior Independent Director from July 25, 2013 to July 23, 2015. He served as an Independent Director of Micron Technology, Inc. from July 17, 2013 to January 27, 2016. He served as a Director at ARM Holdings PLC from October 2000 to July 1, 2013. He is a chartered engineer, Fellow of the Institution of Engineering and Technology, Fellow of the Royal Academy of Engineering and a Companion of the Chartered Management Institute. He is Director at DnDyson James Group Limited. Mr. East holds MBA from Cranfield University who also awarded him an honorary doctorate in 2011. He has Bachelor's Degree in Engineering sciences from the University of Oxford.

CEO Compensation
  • D. Warren's compensation has increased whilst company is loss making.
  • D. Warren's remuneration is about average for companies of similar size in Germany.
Management Team Tenure

Average tenure of the Rolls-Royce Holdings management team in years:

3.5
Average Tenure
  • The tenure for the Rolls-Royce Holdings management team is about average.
Management Team

D. Warren East

TITLE
CEO & Executive Director
COMPENSATION
£4M
AGE
57
TENURE
4.3 yrs

Stephen Daintith

TITLE
CFO & Executive Director
COMPENSATION
£3M
AGE
54
TENURE
2.5 yrs

Paul Stein

TITLE
Chief Technology Officer
TENURE
2.5 yrs

Jennifer Ramsey

TITLE
Head of Investor Relations

Mark Gregory

TITLE
General Counsel
TENURE
4 yrs

Richard Wray

TITLE
Director of External Communications & Brand
TENURE
6 yrs

Ben Story

TITLE
Strategic Marketing Director
TENURE
3 yrs

Harry Holt

TITLE
Chief People Officer
TENURE
1.8 yrs

Ed Pease

TITLE
Senior Vice President of America
TENURE
18.6 yrs

Ian Lawson

TITLE
Chief Medical Officer
Board of Directors Tenure

Average tenure and age of the Rolls-Royce Holdings board of directors in years:

5.8
Average Tenure
65.5
Average Age
  • The tenure for the Rolls-Royce Holdings board of directors is about average.
Board of Directors

Ian Edward Davis

TITLE
Independent Chairman
COMPENSATION
£427K
AGE
68
TENURE
6.4 yrs

D. Warren East

TITLE
CEO & Executive Director
COMPENSATION
£4M
AGE
57
TENURE
5.8 yrs

Stephen Daintith

TITLE
CFO & Executive Director
COMPENSATION
£3M
AGE
54
TENURE
2.5 yrs

Pamela Coles

TITLE
Company Secretary & Chief Governance Officer
AGE
58

Charles Powell

TITLE
Chairman of International Advisory Board
AGE
78

Lewis W. Booth

TITLE
Independent Non Executive Director
COMPENSATION
£124K
AGE
70
TENURE
8.4 yrs

Frank Chapman

TITLE
Independent Non-Executive Director
COMPENSATION
£95K
AGE
66
TENURE
7.9 yrs

Linda Cairnie

TITLE
Independent Non-Executive Director
COMPENSATION
£93K
AGE
65
TENURE
5.1 yrs

Kevin Smith

TITLE
Senior Independent Director
COMPENSATION
£107K
AGE
64
TENURE
3.4 yrs

Ratan Tata

TITLE
Member of International Advisory Board
AGE
82
Who owns this company?
Recent Insider Trading
  • No 3 month open market individual insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price (€) Value (€)
X
Management checks
We assess Rolls-Royce Holdings's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Rolls-Royce Holdings has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

Company Info

Description

Rolls-Royce Holdings plc operates as an industrial technology company worldwide. It operates through four segments: Civil Aerospace, Power Systems, Defence, and ITP Aero. The Civil Aerospace segment manufactures aero engines for large commercial aircraft, regional jet, and business aviation markets, as well as provides aftermarket services. The Power Systems segment provides high-speed and medium-speed reciprocating engines, and propulsion systems for marine, defense, power generation, and industrial markets. It also engages in civil nuclear operations that supply safety-critical systems to nuclear power plants. The Defence segment offers aero engines for military transport and patrol aircraft applications; and naval engines and submarines, as well as aftermarket services. The ITP Aero segment is involved in the design, research and development, manufacture and casting, and assembly and testing of aeronautical engines and gas turbines. It also provides maintenance, repair, and overhaul services for regional airlines and helicopters, as well as business aviation, and industrial and defense applications. Rolls-Royce Holdings plc was founded in 1884 and is headquartered in London, the United Kingdom.

Details
Name: Rolls-Royce Holdings plc
RRU1
Exchange: DB
Founded: 1884
£16,420,740,974
1,924,870,919
Website: http://www.rolls-royce.com
Address: Rolls-Royce Holdings plc
Kings Place,
90 York Way,
London,
Greater London, N1 9FX,
United Kingdom
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
LSE RR. Ordinary Shares London Stock Exchange GB GBP 02. Jan 1992
OTCPK RYCE.F Ordinary Shares Pink Sheets LLC US USD 02. Jan 1992
DB RRU Ordinary Shares Deutsche Boerse AG DE EUR 02. Jan 1992
BMV RR N Ordinary Shares Bolsa Mexicana de Valores MX MXN 02. Jan 1992
BATS-CHIXE RRL Ordinary Shares BATS 'Chi-X Europe' GB GBP 02. Jan 1992
OTCPK RYCE.Y SPONSORED ADR Pink Sheets LLC US USD 28. Dec 1990
OTCPK RLLC.F NON CUM RED PREF SHS GBP0.001 C Pink Sheets LLC US USD 23. Nov 2016
DB RRU1 SPONSORED ADR Deutsche Boerse AG DE EUR 28. Dec 1990
Number of employees
Current staff
Staff numbers
54,500
Rolls-Royce Holdings employees.
Industry
Aerospace and Defense
Capital Goods
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/10/12 22:34
End of day share price update: 2019/10/11 00:00
Last estimates confirmation: 2019/10/11
Last earnings filing: 2019/08/06
Last earnings reported: 2019/06/30
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.