Rolls-Royce (RR) Trading Update summary

Trading performance and financial guidance

• Trading remains in line with expectations, with 2024 guidance for underlying operating profit of £2.1bn–£2.3bn and free cash flow of £2.1bn–£2.2bn unchanged.

• Balance sheet continues to strengthen, now rated investment grade by all agencies with a positive outlook.

• Shareholder distributions to resume for 2024, starting at a 30% payout ratio of underlying profit after tax, with an ongoing 30–40% payout ratio.

Civil aerospace and defence updates

• Civil Aerospace demand remains strong; large engine flying hours up 18% year-on-year, reaching 102% of 2019 levels.

• 2024 expectations for large engine flying hours, OE deliveries, and shop visits remain unchanged.

• Recent major engine orders include 60 Trent 7000 engines for Cathay Pacific and Trent 1000 engines for EL AL Airlines.

• Defence sector sees strong demand and progress on key platforms, including F130 engine testing and FLRAA programme advancement.

Power systems and sustainability initiatives

• Power Generation and Governmental segments deliver strong revenue growth, driven by high demand in data centres and robust order intake.

• Marine orders include a contract with Azimut Benetti Group and expansion in China via MTU Yuchai Power joint venture.

• Sustainability progress includes collaboration with Lürssen on yacht refits and commissioning of a hybrid ferry.

• New mtu engine platform tested to full power, aiming for industry-leading power density and efficiency.