Rolls-Royce Reports Strong 2024 Results and Raises Mid-Term Outlook

Rolls-Royce Reports Strong 2024 Results and Raises Mid-Term Outlook

Rolls-Royce has announced robust financial results for 2024, reporting an underlying operating profit of £2.5 billion. This performance builds on the previous year’s impressive 50% increase in earnings. In a significant move, the company declared a dividend of 6.0p per share, marking its first shareholder payout since the disruptions caused by the COVID-19 pandemic. Additionally, Rolls-Royce unveiled plans for a £1 billion share buyback program scheduled for completion in 2025, further demonstrating its commitment to rewarding investors.

Chief Executive Tufan Erginbilgic emphasized the company’s strong momentum, noting that all core divisions delivered substantially improved results despite ongoing supply chain challenges. He stated, “Strong 2024 results build on our progress last year, as we transform Rolls-Royce into a high-performing, competitive, resilient, and growing business. We are moving with pace and intensity.” Reflecting this confidence, Rolls-Royce has upgraded its mid-term guidance ahead of schedule. The company now anticipates achieving underlying operating profit between £3.6 billion and £3.9 billion, alongside free cash flow ranging from £4.2 billion to £4.5 billion—targets originally set at its Capital Markets Day two years earlier. Erginbilgic described these revised milestones as “a milestone, not a destination,” underscoring the company’s strong growth prospects beyond the mid-term horizon.

Strategic Focus and Market Outlook

Central to Rolls-Royce’s performance are its strategic initiatives in sustainable aviation and digital innovation. Erginbilgic highlighted the company’s commitment to these areas, describing sustainability and innovation as both ethical imperatives and essential business drivers. He explained that advances in electric power and digital services are enabling Rolls-Royce to meet evolving global demands while setting new industry standards. This strategic positioning places the company at the forefront of the next wave of industrial innovation, securing its long-term leadership and value creation for shareholders.

The market responded positively to the company’s results and upgraded guidance, with Rolls-Royce shares rising sharply as investors welcomed the accelerated progress and renewed shareholder returns. Industry analysts suggest that competitors may intensify efforts to expand their market share in response to Rolls-Royce’s strong performance and optimistic outlook. The company’s enhanced guidance and strategic focus highlight its ongoing transformation into a more resilient and growth-oriented enterprise, positioning it for continued leadership in a rapidly evolving sector.