7 November
2024
ROLLS-ROYCE HOLDINGS PLC
TRADING UPDATE
Rolls-Royce Holdings plc announced today its
trading update to 31 October 2024. Chief Executive Tufan
Erginbilgic said:
"Our
transformation of Rolls-Royce into a high-performing, competitive,
resilient and growing business continues with pace and intensity.
Continued good performance year to date gives us further confidence
in the delivery of our 2024 guidance despite a supply chain
environment which remains challenging. We are also making good
progress towards our mid-term targets, with a front-end loaded
delivery of profit and cash flow improvements. There is more we
still need and want to do, as we expand the earnings and cash
potential of Rolls-Royce."
Trading update
to 31 October 2024
Our current trading is in line with our
expectations and the Full Year 2024 guidance provided on 1 August
2024 of underlying operating profit between £2.1bn and £2.3bn and
free cash flow between £2.1bn and £2.2bn remains unchanged. We
continue to strengthen our balance sheet. This has been recognised
by the ratings agencies, all of which now hold us at an investment
grade rating, and all with a positive outlook.
In Civil Aerospace, demand remains strong
across business aviation and widebody. Large engine flying hours
grew by 18% year-on-year to 102% of 2019 levels for the 10 months
to 31 October 2024. Our expectations for the full year 2024 of
large engine flying hours at 100-110% of 2019 levels, 500-550 OE
deliveries and 1,300-1,400 shop visits remain unchanged. Recent
engine orders include 60 Trent 7000 engines by Cathay Pacific and
an order for Trent 1000 engines by EL AL Airlines. We continue to
target FAA certification of the improved HPT blade for the Trent
1000 TEN in the coming months, which will more than double the time
on wing of the engine. In addition to our £1 billion time on wing
investment programme we are continuing to invest to increase our
MRO capacity for major shop visits by 2030 to support future
aftermarket growth. In October, the Pearl 10X successfully
completed its flying test bed campaign, an important milestone in
the Falcon 10X flight test programme ahead of its entry into
service in 2027.
In Defence, demand remains strong with
significant progress across key platforms. In August, the next
phase of testing began on the
F130 engine in Indianapolis, another step towards delivering
the United States Air Force B-52J Stratofortress. In
August, the Future Long Range Assault Aircraft (FLRAA) programme
for the U.S. Army entered the Engineering and Manufacturing
Development (EMD) phase of the acquisition process, the final phase
before production commences. Work has also commenced
for prime contractor SNC on the Survivable Airborne Operations
Center (SAOC) programme.
The aerospace industry supply
chain remains challenged. However, we continue to work
with focus and intensity across our supply chain
to support growing OE and aftermarket volumes. We have
concentrated our efforts on 15 suppliers, where our interventions
have driven performance improvements.
In Power Systems, Power Generation and
Governmental continue to deliver strong revenue growth supported by
robust order intake. In Power Generation, double-digit revenue
growth was driven by data centres where demand for backup systems
remained high. Governmental order and revenue growth
was also strong across both land and naval end markets.
Marine orders included a bridge to propeller contract with
Azimut Benetti Group, and we strengthened our
footprint in China with the expansion of the joint-venture
MTU Yuchai Power. We continue to progress towards our
sustainability and net-zero targets with an agreement with Lürssen
to collaborate on yacht refits with the latest technologies and
we commissioned the first Liberty Lines
high-speed ferry with hybrid systems. In September, we achieved a
significant milestone in the development of the first new
mtu engine platform in
more than 20 years, with the engine being tested to full power.
This new engine will set new standards in the industry for power
density and efficiency, creating additional value for our customers
and supporting them in their transition to a lower carbon
future.
In Rolls-Royce SMR, we were named in September
as the preferred supplier for the construction of Small Modular
Reactors by the Government of the Czech Republic and the Czech
State utility, ČEZ Group. This is enabled by a strategic investment
by ČEZ into Rolls-Royce SMR and an exclusive commitment to deploy
up to 3GW of electricity in the Czech Republic. In the UK
Government's competition, Rolls-Royce SMR was shortlisted as one of
four potential SMR providers. We remain the only company in Step 3
of the Generic Design Assessment, around 18 months ahead of the
competition in the regulatory process.
In September, we also agreed to sell our Naval
Propulsors & Handling business to Fairbanks Morse Defense. As
previously announced, in the first half of 2024 we completed the
sale of our Direct Air Capture assets and, in July, we completed
the sale of the lower-power-range engines business of Rolls-Royce
Power Systems AG to Deutz AG. In September, we made the decision to
close Rolls-Royce Electrical's Advanced Air Mobility
activities.
We are working at pace on our Transformation
Programme to further embed and accelerate cultural change across
the business. In July, our new organisational design came into
effect, which creates a leaner, more focused organisation with
fewer layers. In September, we gifted all our employees with 150
shares in Rolls-Royce and we also launched our new purpose and
behaviours across the organisation. Our workforce is excited and
energised by our Transformation and the progress we are
making.
2024 Full Year
results
Our 2024 Full Year results are due to be
announced on 27 February 2025. As outlined at our 2024 Half Year
results, we are reinstating shareholder distributions in respect of
the 2024 Full Year results starting at a 30% pay-out ratio
of underlying profit after tax, with an ongoing pay-out ratio
of 30-40% each year thereafter.
For further
information, please contact:
Investors
Jeremy Bragg
Head of Investor Relations, Rolls-Royce
plc
Tel +44 (0) 7795 840875
Jeremy.Bragg@Rolls-Royce.com
Media
Richard Wray
Director of External Communications &
Brand, Rolls-Royce plc
Tel +44 (0) 7810 850055
Richard.Wray@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
