Rolls Royce(US:RYCEY)2020-08-27 08:27H1 2020 Performance & COVID-19 Impact - The COVID-19 pandemic significantly affected Rolls-Royce's H1 2020 performance, particularly impacting the civil aviation sector[5, 6, 13, 15, 16, 34, 39, 49, 80, 90] - Group revenue decreased by 24% due to the pandemic[5, 21] - The company reported an operating loss of £(1.7) billion in H1 2020[5] - Civil Aerospace and ITP Aero were the most affected segments, while Defence showed resilience and Power Systems was less severely impacted[6, 7, 15, 50, 81, 90] - Civil Aerospace revenue decreased by 37%, including a 24% reduction in OE (Original Equipment) revenue and a 46% reduction in services revenue[34] Restructuring and Financial Performance - Rolls-Royce initiated a £1.3 billion group-wide restructuring program, including a major reorganization of the Civil Aerospace business[5, 8, 14, 51, 72, 81, 90] - The company aims to resize Civil Aerospace for a smaller mid-term market[8, 14, 51, 81, 90] - A target of £750 million in Free Cash Flow (FCF) is set for as early as 2022, with further growth expected thereafter[9, 14, 52, 60, 62, 64, 81, 90] - The company is implementing cost mitigation measures, with £350 million delivered in H1 towards a £1 billion target for 2020[5] Balance Sheet and Liquidity - Rolls-Royce took rapid actions to strengthen liquidity, reaching £6.1 billion at the end of H1, and secured a £2.0 billion loan in H2[5] - The company aims to return to a net-cash position (excluding leases)[10, 14, 53, 82, 85, 90] - Potential disposals were announced to generate >£2 billion in proceeds to strengthen the balance sheet[5, 11, 14, 54, 83, 86, 90, 91] Strategic Priorities and Outlook - Rolls-Royce is focused on maximizing value from its existing positions and driving growth across the broader Group[12, 14, 55, 56, 91] - The company continues its long-term ambition to lead the low-carbon transition[13, 14, 56, 91, 99] - The company anticipates a return to positive free cash generation during H2 2021[48, 59] - Net debt (excluding leases) at year-end 2020 is expected to be approximately £3.5 billion[48, 84, 85]