Half Year 2024 Rolls-Royce Holdings PLC Earnings Call Transcript
Key Points
- Rolls-Royce Holdings PLC (RLLCF.PFD) reported a significant year-on-year improvement in operating profit and free cash flow across all three divisions.
- The company raised its guidance for 2024, both for operating profit and free cash flow, reflecting strong performance and strategic initiatives.
- Operating profit increased by 74% to GBP1.1 billion, with an operating margin of 14%, up by 4.4 percentage points from the previous year.
- Free cash flow was GBP1.2 billion, a substantial increase from GBP0.4 billion in the first half of 2023.
- The company announced the reinstatement of shareholder distributions for the full year 2024, based on a 30% payout ratio of underlying profit after tax.
- The supply chain remains a significant challenge, causing delays to OE deliveries and shop visits, and impacting overall performance.
- Despite improvements, the Trent 1000 engine still faces issues with time-on-wing, which the company expects to address by the end of 2025.
- The company took a GBP208 million charge related to prolonged supply chain challenges, impacting both onerous and catch-up contracts.
- The second half of the year is expected to see a lower operating margin due to a higher number of OE deliveries and an increased number of Trent 1000 major refurbishments.
- The company anticipates continued supply chain challenges for another 18 to 24 months, which could impact future performance and financial results.
So good morning, everyone, and welcome to our half year 2024 results presentation. My name is Jeremy Bragg. I'm Head of Investor Relations, and I'm joined here today by our CEO, and our CFO, Helen McCabe.
So before we start today's presentation, I'm required to show you our safe harbor statement on slide 2. As always, the full set of results materials can be downloaded from the Investor Relations section of our website.
We're going to start today with an update on our financial performance and strategic progress from Tufan before Helen goes into more details on our 2024 half-year results. Tufan will then close the presentation with our guidance and investment proposition. After the presentation, there will be time for questions from the room and from our audience online. (Event Instructions).
So with that, I'll hand over to Tufan. Thank you.
Thanks, Jeremy. Good morning, everyone. Our
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