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Rolls-Royce slims down to three business, eyeing commercial marine sale
Rolls-Royce may sell off its commercial marine business as part of a new restructuring that will see the group run in three operating divisions.
The FTSE 100 engine maker said it was evaluating "strategic options" for the commercial marine unit and a reduction to three core units based around civil aerospace, defence and power systems.
As it looks to cut back central management costs, the naval marine and nuclear submarines lines will be folded into the defence business, with civil nuclear absorbed within power systems.
Rolls-Royce expects the restructuring to deliver "an additional reduction in costs", which it said it would quantify at its full year results on 7 March, and will assist in "improving performance from core businesses and the whole group".
Chief executive Warren East said the changes building on the cuts he has made over the past two years, and the three-division group will be able "to act with much greater pace" to adapt to customer trends and "strengthen our ability to innovate in core technologies and enable us to take advantage of future opportunities in areas such as electrification and digitalisation".
He added: "Alongside the simplification into three operating businesses, we must continue to address the cost and complexity of the structures that support and serve these businesses, including our corporate head office, with greater decisiveness. Taking this action now will help secure the long-term benefit for our business and stakeholders of the growing cash flows that will be generated over the coming years. At the same time, our operational teams must continue to focus on managing in-service issues within Civil Aerospace and delivering the current increase in engine production."