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Rolls-Royce Holdings PLC on Thursday backed annual guidance and told its annual general meeting that its transformation under new Chief Executive Officer Tufan Erginbilgic ‘is moving at pace’.
Rolls-Royce is a London-based maker of power and propulsion systems, including jet engines and nuclear reactors.
Its performance in the four months ended April was ‘in line with our expectations’, Erginbilgic said.
In a trading update for the first four months of 2023, Rolls-Royce backed its underlying operating profit guidance range of £800 million to £1.0 billion for 2023, and maintained its free cash flow guidance of £600 million to £800 million.
In 2022, operating profit was £837 million. Underlying free cash flow was £505 million.
In Civil Aerospace, Rolls-Royce said it has continued to win new deals, though it added ‘supply chain management remains a key operational challenge’ in the unit in particular.
Power Systems has enjoyed revenue growth, ‘driven by demand for aftermarket services and exceptionally high order intake in the prior year’.
‘In Defence, we continued our successful run of key programme awards with the announcement that the AUKUS submarine programme will be powered by Rolls-Royce nuclear reactors,’ Rolls-Royce said.
The company added: ‘Work on the transformation programme is moving at pace. Our increased focus on efficiency and simplification is helping to keep costs down and has already identified savings.’
It will release its interim results on August 3.
‘We are transforming Rolls-Royce into a high quality and competitive business with a strong balance sheet and growing profit, cash flows and returns,’ Erginbilgic told the AGM. ‘We are already benefitting from the actions we are taking as well as recovery and growth in our end markets.’
Shares were down 2.2% at 152.90 pence each on Thursday morning in London.
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