Rolls-royce Holdings Plc · LSE:RR.
Rolls-royce — FY2024 Earnings Presentation
27 slides from Rolls-royce's earnings presentation, February 2025
Slide 1: Full Year Results 2024
FULL YEAR RESULTS 2024 The information in this document is proprietary and confidential to Rolls-Royce and is available to authorised recipients only – copying and onward distribution is prohibited other than for the purpose for which it was made available.
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
01 TUFAN ERGINBILGIC Chief Executive Officer © 2025 Rolls-Royce. Not Subject to Export Control
Slide 4: Transforming Rolls-Royce into a high-performing, competitive, resilient and growing business
TRANSFORMING ROLLS-ROYCE INTO A HIGH-PERFORMING, COMPETITIVE, RESILIENT AND GROWING BUSINESS ▪ Strong financial performance and significant strategic progress ▪ 2025 guidance delivers CMD mid-term targets two years earlier than planned ▪ Balance sheet strengthened & dividends reinstated 1 ▪ £1bn sha
Slide 5: Significantly improved financial performance
SIGNIFICANTLY IMPROVED FINANCIAL PERFORMANCE 2022-2024 Group operating profit improvement 2024 Group key financial metrics +£1.8bn growth Operating margin Free cash flow Return on capital £2.5bn 13.8% £2.4bn 13.8% 5.1% in 2022 £0.5bn in 2022 4.9% in 2022 2024 Divisional operating margin £0.65bn Civi
Slide 6: Strategic initiatives driving delivery
STRATEGIC INITIATIVES DRIVING DELIVERY Renegotiated cumulative contract cash Contract and LTSA margin improvement Delivering a double-digit margin in improvement across all in-production engines Power Generation +17pts 100% +20pts ~30% 2022 2028 2035 2022 2025 2028 2032 2035 2022 Over Product Price
Slide 7: Efficiency & simplification
EFFICIENCY & SIMPLIFICATION Delivering our CMD targets two years earlier than planned Indirect operating costs savings Third-party procurement savings 1 TCC/GM >£350m in 2024 >£550m in 2024 0.47x in 2024 >£1bn >£500m 0.80x 0.59x >£350m 0.47x >£550m ~£150m £130m 2023 2024 2025 2023 2024 2025 2022 202
Slide 8: Significant strategic progress since 2022
SIGNIFICANT STRATEGIC PROGRESS SINCE 2022 1. Portfolio 2. Strategic 3. Efficiency & 4. Lower carbon choices & initiatives simplification & digitally enabled partnerships businesses • Strategic partnership with • Renegotiated Civil OE and • A best-in-class TCC/GM ratio • Differentiated SMR ČEZ in SMR
Slide 9: Continued strong delivery in 2025
CONTINUED STRONG DELIVERY IN 2025 CMD mid-term targets expected to be delivered two years ahead of plan Operating profit Free cash flow . . £2.7 -2.9bn £2.7-2.9bn 2022 2023 2024 2025 CMD mid- 2022 2023 2024 2025 CMD mid- term targets term targets Civil Aerospace drivers Large engine EFH 110% to 115%
Slide 10: Upgraded mid-term targets
UPGRADED MID-TERM TARGETS Based on a 2028 timeframe Operating profit Operating margin Free cash flow Return on capital . Free cash flow . . 18-21% £4.2-4.5bn £3.6-3.9bn 15-17% £2.7-2.9bn £2.7-2.9bn 2022 2023 2024 2025 Mid- 2022 2023 2024 2025 Mid- 2022 2023 2024 Mid- 2022 2023 2024 Mid- term term te
Slide 11: Expanding earnings potential
EXPANDING EARNINGS POTENTIAL 2024-2028 Group operating profit improvement Strategic initiatives driving earnings CIVIL AEROSPACE . £1.1-1.4bn growth £3.6-3.9bn 2024 Widebody Business aviation Portfolio Mid-term DEFENCE £2.5bn 2024 Transport Submarines & Portfolio Mid-term Combat POWER SYSTEMS 2024 C
Slide 12: Helen McCabe, Chief Financial Officer
02 HELEN McCABE Chief Financial Officer © 2025 Rolls-Royce. Not Subject to Export Control
Slide 13: 2024 Full Year Underlying Results
2024 FULL YEAR UNDERLYING RESULTS Underlying results £m 2024 2023 Organic Change1 Organic Change %1 Strong results with every division delivering, Revenue 17,848 15,409 +2,684 +17% driven by strategic initiatives Gross profit 4,091 3,231 +927 +29% Gross margin % 22.9% 21.0% +2.0pts Operating profit
Slide 14: Civil Aerospace
CIVIL AEROSPACE Underlying results 2024 2023 Organic Change Organic Change % £m KEY POINTS Revenue 9,040 7,348 1,753 24% • 24% revenue growth, 79% profit growth Gross profit 1,990 1,394 617 44% • Higher large engine aftermarket profit across both LTSA and time and materials Gross margin % 22.0% 19.0
Slide 15: Defence
DEFENCE Underlying results 2024 2023 Organic Change Organic Change % £m KEY POINTS Revenue 4,522 4,077 511 +13% 1 • Strong revenue growth led by Submarines Gross profit 908 804 116 +14% • Aftermarket profit growth driven by commercial optimisation and mix Gross margin % 20.1% 19.7% +0.4pts • Strong
Slide 16: Power Systems
POWER SYSTEMS Underlying results 2024 2023 Organic Change Organic Change % £m KEY POINTS Revenue 4,271 3,968 +421 +11% • Double digit revenue growth driven by Power Gross profit 1,199 1,050 +182 +17% Generation (data centres) and Governmental • Commercial optimisation and mix benefits, Gross margin
Slide 17: Summary Funds Flow
SUMMARY FUNDS FLOW £m 2024 2023 Change Operating profit 2,464 1,590 874 KEY DRIVERS OF HIGHER YEAR ON YEAR FCF Net investments1 (282) 82 (364) • Strong operating profit growth Movement in Civil LTSA balance, net of RRSAs 691 1,079 (388) • Higher net investments Working capital, excluding Civil Net L
Slide 18: Building Resilience
BUILDING RESILIENCE A best-in-class TCC/GM ratio, a net cash position and increased resilience to EFH volatility TCC/GM Net Debt / Cash EFH Resilience 1 ~2x 0.88x £5.2bn 0.80x 0.59x £3.6bn £3.3bn 0.47x £2.0bn £1.0bn 2024 2019 2022 2023 2024 2019 2020 2021 2022 2023 2019 2022 2023 2024 Net cash £(0.5
Slide 19: Sustainable and growing free cash flow
SUSTAINABLE AND GROWING FREE CASH FLOW Driving sustainable high quality cash flow to the mid-term £4.2–4.5bn mid-term Free Cash Flow (FCF) Improvement of FCF to mid-term driven by £1.8-2.1bn FCF growth • Operating profit growth of £1.1-1.4bn £4.2-4.5bn • Civil net LTSA balance growth • Focused inves
Slide 20: Capital Framework
CAPITAL FRAMEWORK Dividends reinstated for 2024; £1bn share buyback to be completed in 2025 • Lower gross debt: 2025 $1bn bond to be repaid from cash 1 STRONG BALANCE SHEET • Strong investment grade credit rating • Robust liquidity • Reinstating 2024 FY dividend at 30% payout 2 REGULAR AND GROWING D
Slide 21: Tufan Erginbilgic, Chief Executive Officer
03 TUFAN ERGINBILGIC Chief Executive Officer © 2025 Rolls-Royce. Not Subject to Export Control
Slide 22: Key Messages
KEY MESSAGES 2022-2024 IMPROVEMENTS DELIVERED 2025 OUTLOOK UPGRADED 2028 MID-TERM GUIDANCE Continued progress 6.0p dividend for 2024 £1bn share buyback announced Operating profit Operating margin Operating profit Operating margin +£1.8bn growth to +8.7pts growth to £3.6-3.9bn 15-17% £2.5bn 13.8% Fre
Slide 23: Long-term growth momentum
LONG-TERM GROWTH MOMENTUM Continued material growth opportunities beyond mid-term driven by our strategic initiatives Rolls-Royce long-term growth prospects NEW BUSINESS ▪ Significant opportunities with UltraFan uniquely positioned for next generation narrowbody and widebody platforms ▪ Nuclear micr
Slide 24: Significant value creation opportunity - SMR
SIGNIFICANT VALUE CREATION OPPORTUNITY - SMR DIFFERENTIATED PRODUCT & PROVEN TECHNOLOGY ROLLS-ROYCE SMR - CASH GENERATIVE FROM THE FIRST ORDER • Continuous, low cost, net zero power 1. SMR single unit (£m cumulative) 2 • Fully modularised and more than 80% factory-built • Largest SMR in the market a
Slide 25: Achieving the Rolls-Royce proposition
ACHIEVING THE ROLLS-ROYCE PROPOSITION OUR TRANSFORMATION ▪ Strong 2024 results driven by our strategic initiatives 1. HIGH PERFORMING, COMPETITIVE AND RESILIENT BUSINESS ▪ CMD mid-term guidance to be delivered in 2025 ▪ Upgrading mid-term guidance for 2028 ▪ Balance sheet strengthened and IG rating
Slide 26: Q&A
Q&A © 2025 Rolls-Royce. Not Subject to Export Control
Slide 27: Closing slide
CLOSING SLIDE The information in this document is proprietary and confidential to Rolls-Royce and is available to authorised recipients only – copying and onward distribution is prohibited other than for the purpose for which it was made available.