REG - Rolls-Royce Holdings - AGM Statement and Trading Update

Rolls-Royce HoldingsAnnouncement

23/05/2024 07:00

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RNS Number : 5470P  Rolls-Royce Holdings plc  23 May 2024

                                    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 (mailto:Richard.Wray@Rolls-Royce.com)

 

Investors

Jeremy Bragg

Investor Relations Director, Rolls-Royce plc

Tel +44 (0) 7795 840875

Jeremy.Bragg@Rolls-Royce.com (mailto: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 (http://www.rolls-royce.com)

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