Rolls-Royce: Like a wingless engine – Les Echos

It is not only the vertigo of the figures which is destabilizing in this health crisis. It is also the extravagance of situations that escapes business leaders. The examination of the Rolls-Royce black box, to understand the crash of 17% of its workforce, or 9,000 jobs, is revealing. Last February, fully focused on the first fruits of five long years of efforts to straighten the declining British flagship, his boss, Warren East, maintained his goal of one billion pounds of free cash flow this year, in taking care to exclude possible effects of the pandemic. In March, flight hours, which condition its very juicy maintenance services, fell by half. In early April, the group suspended its dividend for the first time in thirty-three years. The 750 million pounds of savings launched at that time become 1 billion at the beginning of May, then 1.3 billion fifteen days later. What in the eyes of the analyst of AlphaValue may not be enough to avoid a monumental capital increase for the one who is worth today on the stock market half as much as Just Eat. Undercapitalized, entangled in technical failures, the engine manufacturer of the Spitfire and the Concorde let itself be marginalized. " Who would have thought ten years ago that Safran would be a much better company »That the honorable lady, more than a hundred years old, wondered, at the end of 2019, AlphaValue. So shocking!

To note

Rolls-Royce was in the process of completing a plan for 4,600 layoffs since mid-2018. The 9,000 job cuts include a thousand that were still in progress. The layoffs are expected to contribute 700 million of the 1.3 billion pounds of savings expected by 2022. Restructuring costs are expected to amount to 800 million pounds. The group estimates that it will take between 3 and 5 years to regain its pre-crisis level of activity in civil aeronautics, weighing around half of its turnover.

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