Rolls-royce Holdings Plc · LSE:RR.
Rolls-royce — FY2023 Earnings Presentation
19 slides from Rolls-royce's earnings presentation, Feb 22, 2024
Slide 1: 2023 Full Year Results
ROLLS ROYCE 2025 FULL YEAR RESULTS
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: Step-Change in Performance
STEP-CHANGE IN PERFORMANCE • Building a high-performing, competitive, resilient and growing business • Significant performance improvement and a record year • New mindset underpinning new ways of working • Granular strategy in place and owned across the Group • Continued progress guided in 2024 • St
Slide 5: Record Financial Performance in 2023
RECORD FINANCIAL PERFORMANCE IN 2023 Operating profit Operating margin Free cash flow Return on capital £1.6bn 10.3% £1.3bn 11.3% + 143% yoy + 5.2pts yoy + 154% yoy + 6.4pts yoy £2.8-3.1bn 16-18% £2.5-2.8bn 13-15% 11.3% 10.3% £1.6bn £1.3bn 5.1% 4.9% £0.65bn £0.5bn 2022 2023 Mid-term 2022 2023 Mid-te
Slide 6: Strong Delivery of Transformation
STRONG DELIVERY OF TRANSFORMATION Group operating profit improvement Strategic initiatives driving margin improvements £1.6bn CIVIL AEROSPACE 11.6% +9.1pts DEFENCE £0.65bn 13.8% +1.9pts POWER SYSTEMS 10.4% 2022 Civil Defence Power New Markets Portfolio 2023 +2.0pts Aerospace Systems & other Year-on-
Slide 7: Delivering Strategic Progress
DELIVERING STRATEGIC PROGRESS 1. PORTFOLIO CHOICES 2. ADVANTAGED & PARTNERSHIPS BUSINESSES & STRATEGIC INITIATIVES • UltraFan tested to maximum power • Time on wing: Trent 7000 improvement 20% installed, Trent • Pearl 700 certification milestone for G700 and G800 1000 improvement expected to be cert
Slide 8: Delivering Strategic Progress
DELIVERING STRATEGIC PROGRESS 3. EFFICIENCY & 4. LOWER CARBON & SIMPLIFICATION DIGITALLY ENABLED BUSINESSES • Around £150m cost efficiencies delivered across the Group • 100% SAF tests completed on Trent and business aviation • £130m reduction in gross third party costs engines • Strategically align
Slide 9: Helen McCabe, Chief Financial Officer
HELEN McCABE Chief Financial Officer
Slide 10: 2023 Full Year Underlying Results
2023 FULL YEAR UNDERLYING RESULTS Underlying results £m 2023 2022 Organic Change1 Organic Change %1 RECORD RESULTS WITH STRONG Revenue 15,409 12,691 +2,630 21% PERFORMANCE ACROSS THE GROUP Gross profit 3,231 2,477 +732 30% Gross margin % 21.0% 19.5% +1.4pts Operating profit 1,590 652 +933 143% COMME
Slide 11: Civil Aerospace
CIVIL AEROSPACE Underlying results 2023 2022 Organic Change Organic Change % £m KEY POINTS Revenue 7,348 5,686 +1,645 29% • Higher widebody aftermarket profits Gross profit 1,394 853 +540 63% • Higher business aviation profits Gross margin % 19.0% 15.0% +4.0pts • Efficiency and strategic actions dri
Slide 12: Defence
DEFENCE Underlying results 2023 2022 Organic Change Organic Change % £m KEY POINTS Revenue 4,077 3,660 +428 12% • Double digit revenue growth Gross profit 804 726 +78 11% • Commercial optimisation with the implementation of value based pricing Gross margin % 19.7% 19.8% (0.1)pts • Efficiency and str
Slide 13: Power Systems
POWER SYSTEMS Underlying results 2023 2022 Organic Change Organic Change % £m KEY POINTS Revenue 3,968 3,347 +539 16% • Strong revenue growth led by power generation Gross profit 1,050 918 +111 12% • Commercial optimisation benefits in all segments Gross margin % 26.5% 27.4% (0.9)pts • Cost efficien
Slide 14: Summary Funds Flow
SUMMARY FUNDS FLOW £m 2023 2022 Change Operating profit 1,590 652 938 Operating profit from discontinued operations - 86 (86) KEY DRIVERS OF HIGHER YEAR ON YEAR FCF Net investments1 82 279 (197) • Stronger operating profit across all divisions Movement in Civil LTSA balance, net of RRSAs 1,079 784 2
Slide 15: Building Resilience
BUILDING RESILIENCE TCC/GM Net Debt 0.88x £5.2bn KEY POINTS 0.80x • TCC/GM improved to 0.59x • Net debt reduced to £2.0bn £3.6bn 0.59x £3.3bn • £7.2bn liquidity with £3.7bn cash and cash equivalents £2.0bn • £2bn undrawn facilities retired • Progress towards investment grade profile £1.0bn 2019 2022
Slide 16: Tufan Erginbilgic, Chief Executive Officer
TUFAN ERGINBILGIC Chief Executive Officer © 2024 Rolls-Royce Not Subject to Export Control
Slide 17: Guidance Delivers >50% of Mid-Term Improvement by 2024
GUIDANCE DELIVERS >50% OF MID-TERM IMPROVEMENT BY 2024 Operating profit Operating margin Free cash flow Return on capital £2.8-3.1bn 16-18% £2.5-2.8bn 13-15% £1.7-2.0bn £1.7-1.9bn 2022 2023 2024 Mid-term 2022 2023 Mid-term 2022 2023 2024 Mid-term 2022 2023 Mid-term 2024 guidance based on … Civil lar
Slide 18: Achieving the Rolls-Royce Proposition
ACHIEVING THE ROLLS-ROYCE PROPOSITION OUR TRANSFORMATION ▪ SAFE AND EFFICIENT OPERATIONS 1. HIGH PERFORMING, COMPETITIVE AND RESILIENT BUSINESS ▪ ADVANTAGED PRODUCTS AND TECHNOLOGIES ▪ CLEAR STRATEGY AND CHOICES 2. GROWING SUSTAINABLE CASH FLOWS ▪ NEW MINDSET AND DISTINCTIVE PERFORMANCE CULTURE 3. S
Slide 19: Q&A
Q&A © 2024 Rolls-Royce Not Subject to Export Control