Trading Statement23 May 2024 07:12
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 b