23 May 2024
ROLLS-ROYCE HOLDINGS PLC AGM
STATEMENT AND TRADING UPDATE
Rolls-Royce Holdings plc is holding its Annual
General Meeting today. In his address to shareholders, Chief
Executive Tufan Erginbilgic will comment:
"Our work to
transform Rolls-Royce into a high-performing, competitive,
resilient and growing business is continuing with pace and
intensity as we execute on the granular strategy we set out last
November. We are driving growth, delivering contractual
improvements and improved margins, unlocking efficiencies and
creating value across the Group. We have had a strong start to the
year, despite continued industry-wide supply chain challenges. This
builds on our record performance in 2023 and provides further
confidence in our guidance for 2024. The focused investments we are
making will continue to drive growth and create value for all our
stakeholders in the mid-term and beyond."
Trading update
to 30 April 2024
We continue to demonstrate a strong track
record of delivery. Our operating profit and cash growth reflects
an underlying performance improvement driven by the impact of our
strategic initiatives, notably commercial optimisation including
contractual improvements, cost efficiency actions, and the
effective management of ongoing supply chain challenges. Our full
year 2024 guidance is unchanged, with a broadly balanced weighting
for both profit and cash flow across the year. As part of our
strategy, we are also strengthening our balance sheet. This has
been recognised with credit rating upgrades at Fitch (BBB-) and
S&P (BBB-), where we now have an investment grade rating, and
at Moody's (Ba1), all with a positive outlook. We have reduced our
gross debt position by repaying a EUR 550 million bond
from underlying cash and cancelled our last remaining
UKEF-supported undrawn loan facility, both enabled by our more
resilient and growing cash delivery.
In Civil Aerospace, long-term service agreement
large engine flying hours (EFH) have returned to 100% of 2019
levels in the four months to 30 April, driven by the continued
recovery of international traffic in Asia and our growing fleet.
For the full year, our expectations of large EFH at 100%-110% of
2019 levels, 1,300-1,400 shop visits and 500-550 OE deliveries are
all unchanged. We have invested in our facilities in Derby and
Dahlewitz to strengthen our operational and MRO capability to meet
rising shop visit volumes. The momentum of new widebody business
wins has continued with VietJet and Starlux orders announced during
the Singapore Air show. In addition, IndiGo, one of the fastest
growing airlines in the world, recently agreed to order 60 Trent
XWB engines. Business aviation has also seen key milestones
with the introduction of the Pearl 700 into service on the
Gulfstream G700, and the Pearl 10X has taken to the sky as part of the final stages of engine
certification.
In Defence, the long-term growth of the
business has been underpinned by several recent contract
awards. Australian funding was confirmed for the AUKUS
submarine programmes, which includes Rolls-Royce reactors.
The B-52 Rapid Twin Pod Test is concluding at the Rolls-Royce
test facilities at NASA's Stennis site in the US, providing
critical data to inform the development program and accelerate the
integration of the F130 engine onto the B-52J. We have also seen
encouraging progress with the Global Combat Air Programme (GCAP),
with Japan's cabinet agreeing to permit the transfer of aircraft
from Japan to countries that have signed defence partnership
agreements. This marks a positive early step that helps to pave the
way for future export orders.
In Power Systems, our strong position in the
data centre market is providing growth opportunities as we see
higher demand from artificial intelligence and cloud services
providers. Demand for governmental applications also remains high
as states increase their investments in defence capabilities. We
also continue to win new business in Battery Energy Storage
Solutions (BESS), with a new order secured for the Latvian power
grid with a system capacity of 160 megawatt hours. The sale of our
lower-power-range engines business to Deutz is progressing well. We
have signed definitive agreements and are working towards
completion by 3Q 2024.
We announced proposed organisational changes in
October 2023 and we are on track to deliver the annualised
sustainable benefit of around £200 million by the end of 2025.
Consultation is advanced and continued progress is expected during
the remainder of the year as we implement a simpler and more
strategically focused agile organisation.
Our transformation is based on building a
sustainably differentiated business built on: safe and efficient
operations, advantaged products and technologies, a clear and
granular strategy, and a new mindset with a distinctive performance
culture. We have an aligned, energised workforce and together we
are building One Rolls-Royce, that can fully realise its potential
to be a high performing, competitive, resilient and growing
business.
Half Year 2024 results will be announced on 1
August 2024.
For further
information, please contact:
Media
Richard Wray
Director of External Communications &
Brand, Rolls-Royce plc
Tel +44 (0) 7810 850055
Richard.Wray@Rolls-Royce.com
Investors
Jeremy Bragg
Investor Relations Director, Rolls-Royce
plc
Tel +44 (0) 7795 840875
Jeremy.Bragg@Rolls-Royce.com
About Rolls-Royce Holdings
plc
1. Rolls-Royce develops and
delivers complex power and propulsion solutions for safety-critical
applications in the air, at sea and on land. Our products and
service packages enable our customers to connect people, societies,
cultures and economies together; they meet the growing need for
power generation across multiple industries; and enable governments
to equip their armed forces with the power required to protect
their citizens.
2. Rolls-Royce has customers
in more than 150 countries, comprising more than 400 airlines and
leasing customers, 160 armed forces and navies, and more than 5,000
power and nuclear customers. We are committed to making our
products compatible with net zero carbon emissions to meet customer
demand for more sustainable solutions.
3. The annual underlying
revenue was £15.41 billion in 2023, and the underlying operating
profit was £1.59 billion.
4. Rolls-Royce Holdings plc is
a publicly traded company (LSE: RR., ADR: RYCEY, LEI:
213800EC7997ZBLZJH69)
www.rolls-royce.com