Rolls-Royce (RR) Trading Update summary

Transformation and financial performance

• Transformation initiatives are driving improved earnings and cash potential, with a more resilient and agile business model.

• 2025 guidance maintained at £2.7bn–£2.9bn for both underlying operating profit and free cash flow, reflecting confidence in ongoing strategic actions.

• All divisions reported strong performance in Q1 2025, with year-on-year improvements in profit and cash flow.

• Balance sheet strength recognized by credit rating upgrades to BBB+ (Fitch) and Baa2 (Moody's); £1bn share buyback underway, with £138m completed by March.

Division highlights

• Civil Aerospace saw large engine flying hours at 110% of 2019 levels, strong aftermarket revenue, and certification of new engine variants improving efficiency and time on wing.

• Defence division experienced robust demand and strong order intake, including delivery of the first AE 3007N engine for the U.S. Navy's MQ-25 program.

• Power Systems achieved strong revenue growth, led by demand for data centre backup generators and governmental orders; next-gen engine development on track for 2028 with 20% higher power output.

• Rolls-Royce SMR advanced with a strategic investment from ČEZ Group and remains ahead in the UK regulatory process, awaiting a key tender decision in June.

Market and operational outlook

• Global tariff increases introduce uncertainty, but mitigating actions are expected to offset direct impacts.

• Demand for products and services remains strong across all business segments.

• Supply chain challenges persist but are being managed within current guidance.

• Half-year results for 2025 will be announced on 31 July 2025.