In Civil Aerospace, we are committed to investing in the wide-body, narrow-body and corporate market segments. In Defence Aerospace, we continue to see opportunities both in developing economies and in our traditional markets, despite the pressure on government spending. In Marine, offshore oil and gas remains a fast growing market and, in Energy, we continue to invest in our Civil Nuclear business where we believe Rolls-Royce can play an important part supporting both existing and new build nuclear capacity.
Areas where we have decided not to invest include the sale of our tidal power generation business to Alstom in January 2013 and the sale of a 51 per cent stake in our fuel cell business to LG.
3. Improve financial performance
We continue to focus on margin progression. In 2012, margins at Group level improved to 12.2 per cent (10.7 per cent 2011). The Tognum and the IAE restructuring together contributed 1.1 percentage points, with 0.4 percentage points improvement coming from the underlying business. Overall, profits grew by 24 per cent enabling us to raise our full year distribution to shareholders to 19.5 pence, an 11 per cent increase.
Margin progression, cost reduction and cash generation remain areas of intense focus for the Group, as we seek to improve quality, on-time delivery and working capital, while continuing to invest to meet the rising load. Around £50m of unit cost improvements were realised in 2012.
Our cash inflow of £137m, prior to acquisitions and disposals, was delivered after a heavy year of investment in technology, capability and infrastructure.
During 2012, we made a number of important announcements:
We completed the sale of our equity holding in International Aero Engines (IAE) to Pratt & Whitney. We remain a major supplier to IAE and will receive an agreed payment for each hour flown by the current installed fleet of V2500-powered aircraft for the next fifteen years.
Engine Holding (EH), the collaboration we formed with Daimler in 2011, assumed full management control of Tognum. We will fully consolidate the results of EH, including Tognum, from 1 January 2013.
We acquired the 50 per cent of the shares we did not already own in Aero Engine Controls (AEC) from Goodrich Corporation. Engine control systems play an increasingly important part in enhancing the fuel efficiency and overall performance of modern jet engines.
We have passed information to the Serious Fraud Office (SFO) relating to concerns about bribery and corruption involving intermediaries in overseas markets. This follows a request for information from the SFO about allegations of malpractice in Indonesia and China. We have significantly strengthened our compliance procedures in recent years, including new policies for Global Ethics and Intermediaries. We have also expanded the Compliance function. As a further measure, we have appointed Lord Gold to lead a review of current procedures and report to the Ethics Committee of the Board.
It has won a $1bn order from Singapore Airlines to supply Trent 700 engines to power 15 Airbus A330 aircraft, along with TotalCare® services support.
ZURICH, June 29, 2012 /PRNewswire/ -- Pratt & Whitney, a United Technologies Corp. (NYSE: UTX) company, closed today on its agreement to purchase Rolls-Royce's program share in IAE International...
IAE has reached or extended agreements with legacy and new customers; recommitted to its collaboration agreement to 2045, and developed yet another iteration of its V2500 engine.