Rolls-Royce has reported “strong 2024 results” as it moves “with pace and intensity.”
The Derby manufacturer saw underlying operating profit rise from £1.6bn in 2023 to £2.5bn in 2024, a 57% increase compared to the prior year, which Rolls-Royce notes was driven by its “strategic initiatives,” including commercial optimisation and cost efficiency benefits across the group.
The business’s efficiency & simplification programme delivered over £350m of savings by the end of the year, with Rolls-Royce now expecting to deliver benefits of over £500m in 2025, above targets of £400m-£500m in 2027, and two years earlier than planned.
The firm also delivered more than £550m of cumulative gross third-party cost savings in 2024 and expects to deliver in excess of £1bn by the end of 2025, helping to offset inflationary pressures. This is also two years earlier than previous targets of £1bn in 2027.
For 2025 the company has shared expectations of £2.7bn-2.9bn underlying operating profit, and has upgraded mid-term targets to include underlying operating profit of £3.6bn-£3.9bn.
Tufan Erginbilgic, CEO, said: “Strong 2024 results build on our progress last year, as we transform Rolls-Royce into a high-performing, competitive, resilient, and growing business. All core divisions delivered significantly improved performance, despite a supply chain environment that remains challenging.
“We are moving with pace and intensity. Based on our 2025 guidance, we now expect to deliver underlying operating profit and free cash flow within the target ranges set at our Capital Markets Day, two years earlier than planned.
“Significantly improved performance and a stronger balance sheet gives us confidence to reinstate shareholder dividends and announce a £1bn share buyback in 2025.
“Our upgraded mid-term targets include underlying operating profit of £3.6bn-£3.9bn and free cash flow of £4.2bn-£4.5bn. These mid-term targets are a milestone, not a destination, and we see strong growth prospects beyond the mid-term.”
