As one iconic British company rises above corruption allegations, two others fight it out in the chip market.
Rolls-Royce seemed to rise above the corruption allegations that surfaced last year by unveiling an impressive set of annual results in February and convincing the markets that it would have a strong 2013.
The world's number two aero-engine maker said that its order book had risen by 4 per cent to more than £60bn, with 23 per cent more engines being delivered in 2012. Revenues rose 12 per cent to £12.2bn for the year, compared with 2011, while profits saw a whopping 24 per cent increase to £1.43bn. The results add to a decade-long story of growth for the company.
Demand for Rolls-Royce's new fuel-efficient civil aviation engines has helped to bolster its order book. The Trent XWB will power the Airbus A350, while the Trent 1000-TEN will come into service from 2016 as a more advanced option for Boeing's 787 Dreamliner family. In addition, the BR725-powered Gulfstream G650 entered service early in 2013, and the AE3007C-powered Cessna Citation TEN is due to do so later this year, the company said.
John Rishton, Rolls-Royce's chief executive, said the company would concentrate on making engines for the civil and defence aerospace markets as well as turbines for the marine and energy sectors. However, Rolls-Royce is withdrawing from tidal power generation, following the sale of its business in the sector to Alstom this January.
Rolls recently sold a 51 per cent stake in its fuel-cell division to LG, with the aim of further developing this technology. Another joint venture relationship, with Daimler, is also being exploited to take forward Rolls-Royce's interest in industrial diesel engines used in the power sector. The Rolls-Daimler joint venture recently assumed full control of Tognum, a company making these engines, while Rolls has transferred its comparable Bergen Engines business to the joint venture.
But Rolls-Royce's core business remains aerospace engines – hardly surprising, as it is estimated that a Rolls aero-engine is used in the take-off or landing of an aircraft every 2.5 seconds. However, some of the shine was taken off the company's global image last year as a result of corruption allegations against some of its overseas agents.
The allegations, which centre on Indonesia and China, are the subject of a Serious Fraud Office (SFO) inquiry. Rolls-Royce has said it has passed information to the SFO, which has yet to decide whether to launch a criminal investigation.
Meanwhile, the company has announced that it will appoint a new chairman, who will oversee the allegations issue. BP executive Ian Davis will succeed current Rolls-Royce chairman Sir Simon Robertson in May. The company has also hired a top lawyer, Lord Gold, to review its compliance procedures.
But this cloud hanging over the company has so far not hit market confidence. As Rolls-Royce has continued to provide solid growth globally, there is no reason to doubt that 2013 and beyond will be any different.