Rolls-Royce Holdings plc · LSE:RR.
Rolls-Royce — H1 2024 Earnings Presentation
18 slides from Rolls-Royce's earnings presentation, Aug 1, 2024
Slide 1: Half Year Results
ROLLS ROYCE 7 resus 224 TTT
Slide 2: Safe Harbour Statement
SAFE HARBOUR STATEMENT This announcement contains certain forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. In particular, all statements that express forecasts, expectations and projections with re
Slide 3: Tufan Erginbilgic, Chief Executive Officer
TUFAN ERGINBILGIC Chief Executive Officer
Slide 4: Strong delivery gives confidence to raise guidance and reinstate shareholder distributions
STRONG DELIVERY GIVES CONFIDENCE TO RAISE GUIDANCE AND REINSTATE SHAREHOLDER DISTRIBUTIONS FOR FY24 • Transforming Rolls-Royce into a high-performing, competitive and resilient business with safety as our first priority • Expanding earnings and cash potential of the Group in a challenged supply chai
Slide 5: Improved financial performance in all businesses
IMPROVED FINANCIAL PERFORMANCE IN ALL BUSINESSES KEY GROUP FINANCIAL METRICS DIVISIONAL OPERATING MARGIN Operating profit Operating margin CIVIL AEROSPACE £1.1bn 14.0% 18.0% +74% yoy +4.4pts yoy +5.6pts DEFENCE 15.5% Free cash flow Return on capital +1.9pts £1.2bn 13.8% +225% yoy +4.8pts yoy POWER S
Slide 6: Delivering strategic progress
DELIVERING STRATEGIC PROGRESS 1. PORTFOLIO CHOICES & 2. ADVANTAGED 3. EFFICIENCY & 4. LOWER CARBON & PARTNERSHIPS BUSINESSES & SIMPLIFICATION DIGITALLY ENABLED STRATEGIC INITIATIVES BUSINESSES • Ramp up of Pearl 700 • Strong Trent XWB-97 orders • New organisational design as • Developing hydrogen de
Slide 7: Helen McCabe, Chief Financial Officer
HELEN McCABE Chief Financial Officer
Slide 8: 2024 Half Year Underlying Results
2024 HALF YEAR UNDERLYING RESULTS Underlying results £m H1 2024 H1 2023 Organic Change1 Organic Change %1 Improved profit reflects commercial Revenue 8,182 6,950 +1,335 +19% optimisation and cost efficiency actions Gross profit 1,977 1,515 +491 +33% Gross margin % 24.2% 21.8% +2.4pts Free cash flow
Slide 9: Civil Aerospace
CIVIL AEROSPACE Underlying results £m H1 2024 H1 2023 Organic Change Organic Change % KEY POINTS Revenue 4,119 3,257 +888 +27% • Double digit revenue growth Gross profit 992 690 +313 +45% • Higher large engine aftermarket profitinbothLTSAandtime and materials Gross margin % 24.1% 21.2% +3.0pts • Str
Slide 10: Defence
DEFENCE Underlying results £m H1 2024 H1 2023 Organic Change Organic Change % KEY POINTS Revenue 2,219 1,913 +335 +18%1 • Strong revenue growth driven by Submarines and Combat Gross profit 476 379 +102 +27% • Aftermarket profit growth in Combat and Gross margin % 21.5% 19.8% +1.5pts Transport Operat
Slide 11: Power Systems
POWER SYSTEMS Underlying results £m H1 2024 H1 2023 Organic Change Organic Change % KEY POINTS Revenue 1,837 1,774 +111 +6% • Revenue growth driven by Power Generation Gross profit 507 452 +68 +15% (data centres) and Governmental • Commercial optimisation with pricing benefits in Gross margin % 27.6
Slide 12: Summary Funds Flow
SUMMARY FUNDS FLOW £m H1 2024 H1 2023 Change Operating profit 1,149 673 476 KEY DRIVERS OF HIGHER YEAR ON YEAR FCF Net investments1 41 64 (23) • Underlying operating profit growth Movement in Civil LTSA balance, net of RRSAs 544 609 (65) • Lower working capital outflows with improved Working capital
Slide 13: Building Resilience
BUILDING RESILIENCE TCC/GM Net Debt 0.88x £5.2bn KEY POINTS 0.80x • Continued reduction in TCC/GM to 0.49x • €550m bond repaid in May 0.59x £3.6bn £3.3bn • Net debt reduced to £0.8bnwith 0.49x ND/EBITDA of 0.3x1 £2.0bn • £6.8bn liquidity with £4.3bn cash and cash equivalents £1.0bn • Upgraded to inv
Slide 14: Maintaining a strong balance sheet, rewarding shareholders and investing for growth
MAINTAINING A STRONG BALANCE SHEET, REWARDING SHAREHOLDERS AND INVESTING FOR GROWTH • Strong investment grade credit rating 1 STRONG BALANCE SHEET • • Robust liquidity position Repayment of 2025 bond maturity from available cash • Reinstating regular shareholder distributions in 2 REGULAR SHAREHOLDE
Slide 15: Tufan Erginbilgic, Chief Executive Officer
TUFAN ERGINBILGIC Chief Executive Officer
Slide 16: Full Year 2024 Guidance Raised
FULL YEAR 2024 GUIDANCE RAISED OPERATING PROFIT OPERATING MARGIN FREE CASH FLOW RETURN ON CAPITAL £2.8–3.1bn 16-18% £2.5-2.8bn 13-15% £2.1-2.3bn £2.1–2.2bn 11.3% £1.6bn 10.3% £1.3bn £0.65bn 5.1% 4.9% £0.5bn 2022 2023 2024 Mid-term 2022 2023 Mid-term 2022 2023 2024 Mid-term 2022 2023 Mid-term BY THE
Slide 17: Achieving the Rolls-Royce proposition
ACHIEVING THE ROLLS-ROYCE PROPOSITION OUR TRANSFORMATION ▪ Strong results driven by our strategic initiatives 1. HIGH-PERFORMING, COMPETITIVE AND RESILIENT BUSINESS ▪ Raised FY24 guidance for operating profit and FCF 2. GROWING SUSTAINABLE CASH FLOWS ▪ Front-end loaded delivery of mid-term performan
Slide 18: Q&A
ROLLS ROYCE TT Q&A 2 A