REG - Rolls-Royce Holdings - AGM Statement and Trading Update

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RNS Number : 4759C  Rolls-Royce Holdings plc  30 April 2026

 
 

30 April 2026

 

 

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:

 

"We have had a strong start to the year driven by our transformation and
self-help, as we continue to further expand the earnings, cash, and growth
potential of the business. Operational performance has also been strong across
the Group, benefiting our customers. With our diversified portfolio of three
high performing businesses, a net cash balance sheet, and a best-in-class
total cash cost to gross margin ratio, we are creating a more resilient and
agile Rolls-Royce that is better equipped to respond to changes in the
external environment.

 

The conflict in the Middle East has created uncertainty for the industry. We
are taking the necessary actions to support our employees, customers, and
suppliers. We expect to fully mitigate the current financial impact of the
disruption to our business. We continue to monitor the situation for any
future direct and indirect impacts and will take the necessary actions to
mitigate them.

 

Good progress on our transformation, and the actions we are taking, gives us
further confidence in our guidance of £4.0bn-£4.2bn of underlying operating
profit and £3.6bn-£3.8bn of free cash flow for 2026. We remain strongly
positioned to deliver our mid-term targets, with substantial growth beyond the
mid-term from both our existing and new businesses."

 

 

Trading update to 31 March 2026

 

We have had a strong start to the year across all three divisions. We continue
to deliver on our transformation and are proactively mitigating the impact
associated with the conflict in the Middle East. As a result, our guidance for
2026 of £4.0bn-£4.2bn of underlying operating profit and £3.6bn-£3.8bn of
free cash flow remains unchanged. Year-on-year growth in profit and cash flow
across the Group continues to be largely driven by our actions and strategic
initiatives.

 

Rolls-Royce has a diversified and resilient portfolio of businesses. Widebody
demand remains strong, and we have a young fleet which is growing faster than
the market. In addition, business aviation, Defence, and Power Systems are all
highly resilient businesses with growth outlooks remaining highly attractive.

 

Civil Aerospace had a strong start to the year driven by large engine and
business aviation aftermarket, with business aviation flying hours ahead of
budget. Large EFH (engine flying hours) grew by 5% to 115% of 2019 levels in
the three months to 31 March. For the full year 2026, we continue to expect
large EFH at 115%-120% of 2019 levels:

 

   •    There has already been a significant recovery in EFH of Middle Eastern
        airlines, with EFH of Trent XWB engines fully recovered to pre-conflict
        levels.
   •    EFH growth in other regions remains strong, benefiting from the reallocation
        of capacity and our improved operational performance, including fewer AOG
        (aircraft on ground).
   •    The vast majority of economically driven airline capacity reductions announced
        year-to-date have been narrowbody.
   •    We do not expect a change in the retirement profile of the Trent 700, which
        remains the most fuel-efficient engine on the Airbus A330ceo platform, with
        the majority of the fleet contracted up to the 2030s. Trent 700 EFH in the
        three months to 31 March were higher year-on-year.

 

We continue to see good operational momentum:

 

   •    Growth in large engine OE deliveries in the first quarter was 18% and our
        guidance for the full year remains unchanged.
   •    Growth in large engine shop visits in the first quarter was 12%. Given our
        predominantly total service business model, which allows us to better plan for
        shop visits, we do not expect a change in our large engine shop visit profile
        in 2026 and 2027 as a result of the Middle East conflict.
   •    The number of AOG fell to a single-digit level at the end of April, a
        best-in-class level for the industry, and we continue to target zero AOG by
        the second half of the year.

 

Demand for new widebody aircraft remains firm. We announced significant orders
in the period, including 40 Trent XWB-97 engines for Atlas Worldwide that will
power 20 A350F freighter aircraft, alongside 30 Trent XWB-84 EP and 32 Trent
7000 engines for Delta Air Lines.

 

Orders for Trent 1000 XE engines on eight Boeing 787 aircraft in April
provide clear evidence that our sustained investment in durability
improvements has repositioned the Trent 1000 XE as a competitive,
order‑winning engine, while continuing to benefit from our good aftermarket
services offering.

 

Our time on wing programme is progressing to plan. Having certified the second
phase of HPT blade improvements for the Trent 1000 and Trent 7000 at the end
of last year, we have begun installing the new blade in OE deliveries and
during shop visits. We have now upgraded more than a third of the Trent 1000
TEN operational fleet with improved HPT blades, bringing them to the new
enhanced Trent 1000 XE standard of durability. We are also continuing to grow
our MRO capacity. In January, Turkish Technic broke ground on a
state-of-the-art independent maintenance centre in Istanbul, targeted to be
operational by the end of 2027, supporting up to 200 shop visits annually.

 

In Defence, a strong start to the year was driven by improved aftermarket
performance alongside more than a 20% year-on-year increase in OE deliveries.
Demand remains high for both our mature and new programmes. Our unique
positioning in next-generation autonomous aircraft propulsion was demonstrated
by the first flight of the U.S. Navy's MQ-25 autonomous refuelling aircraft in
April, powered by our AE 3007 engine. In March, Rolls-Royce, as the lead
partner in the EUROJET consortium, received an order to provide EJ200 engines
that will power Türkiye's new fleet of 20 Eurofighter Typhoons. In April, our
MT30 marine gas turbine was selected to power up to 11 of the Australian
Navy's new fleet of general-purpose frigates, helping to enhance undersea
warfare and air defence capabilities.

 

On future programmes, engine testing for the U.S. Army's MV-75 Cheyenne II is
progressing well with endurance and altitude testing on track for later this
year, as we keep pace with the accelerated production timeline. In March, we
collaborated closely with Boeing on the next stages of their critical design
review, for the U.S. Air Force's B-52, which will be re-engined with our F-130
engine.

 

Power Systems also had a strong start to the year driven by power generation,
led by data centres, and governmental. Demand remains high, with power
generation order intake across gas and diesel engines in the first quarter
around 50% higher than last year, and revenue growth was also strong. March
was a record month for orders. As a result, Power Systems' order backlog stood
at £7.3bn at 31 March. In January, we announced that we will be supplying 350
upgraded mtu Series 199 engines on new Boxer armoured wheeled vehicles for the
German Armed Forces and other international customers. In March, we announced
an order for around 200 compact mtu PowerPacks for the Bundeswehr's Puma
armoured personnel carrier and signed a memorandum of understanding with the
largest defence technology group in Poland, Polska Grupa Zbrojeniowa S.A.
(PGZ), to provide services to mtu engines used by the Polish armed forces.
Also in March, Power Systems signed a contract with Voltaria Helios Energy
Storage to build a large-scale battery energy storage facility in Scotland.

 

In April, Rolls-Royce SMR finalised and signed the contract with GBE-N to
supply the UK with three small modular reactors (SMR) at Anglesey, Wales.
Commercial terms were also signed with the ČEZ Group, enabling work to
progress at the Temelin site for the first of up to six SMRs in the Czech
Republic.

Both contracts have now entered the execution phase and will generate revenues
and profits this year. Rolls-Royce SMR is the only company with multiple
contractual commitments to deliver SMR units in Europe and is well placed to
become a market leader globally.

 

Our balance sheet remains strong, and the credit ratings agencies continue to
recognise the progress that we are making, with both Moody's and Fitch
upgrading our credit rating to A3 and A-, respectively, both with a stable
outlook. In February, we repaid a €750m bond from free cash flow.

 

We are making good progress with the £2.5bn 2026 tranche of our £7bn-£9bn
share buyback across 2026-2028, having completed more than £750m to date.

 

Our 2026 Half Year results will be announced on 30 July 2026.

 

 

For further information, please contact:

 

Investors

Jeremy Bragg

Head of Investor Relations, Rolls-Royce plc

Tel +44 (0) 7795 840875

Jeremy.Bragg@Rolls-Royce.com (mailto:Jeremy.Bragg@Rolls-Royce.com)

 

Media

Richard Wray

Director of External Communications & Brand, Rolls-Royce plc

Tel +44 (0) 7810 850055

Richard.Wray@Rolls-Royce.com (mailto:Richard.Wray@Rolls-Royce.com)

 

About Rolls-Royce Holdings plc

 

1.    Rolls-Royce is a force for progress; powering, protecting and
connecting people everywhere. Our products and service packages help our
customers meet the growing need for power across multiple industries; enable
governments to equip their armed forces with the power required to protect
their citizens; and connect people, societies, cultures and economies
together.

2.    Rolls-Royce has a local presence in 48 countries and customers in
over a hundred more, including airlines and aircraft leasing companies, armed
forces and navies, and marine and industrial customers.

3.    Through our multi-year transformation programme, we are building a
high-performing, competitive, resilient and growing Rolls-Royce. We are
building the financial capacity and agility to allow us to successfully
develop and deliver the products that will support our customers through the
energy transition.

4.    Annual underlying revenue was £20.0 billion in 2025, and underlying
operating profit was £3.5 billion.

5.    Rolls-Royce Holdings plc is a publicly traded company (LSE: RR., ADR:
RYCEY, LEI: 213800EC7997ZBLZJH69)

 

www.rolls-royce.com (http://www.rolls-royce.com)

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