Rolls-Royce (RR) Trading update summary

Strategic and financial highlights

• Strong start to the year attributed to transformation initiatives, with robust operational performance and a net cash balance sheet.

• 2026 guidance reaffirmed: £4.0bn–£4.2bn underlying operating profit and £3.6bn–£3.8bn free cash flow.

• Credit ratings upgraded to A3 (Moody's) and A- (Fitch), both with stable outlooks.

• Over £750m completed in the £2.5bn 2026 tranche of the £7bn–£9bn share buyback program.

• €750m bond repaid from free cash flow in February.

Civil aerospace performance

• Large engine flying hours (EFH) grew 5% to 115% of 2019 levels in Q1; full-year EFH expected at 115%–120% of 2019 levels.

• Significant recovery in Middle Eastern airline EFH, with Trent XWB engines at pre-conflict levels.

• Large engine OE deliveries up 18% and shop visits up 12% in Q1.

• Orders include 40 Trent XWB-97 engines for Atlas Worldwide and 30 Trent XWB-84 EP for Delta Air Lines.

• Trent 1000 XE orders on Boeing 787s reflect improved durability and aftermarket services.

Defence and power systems

• Defence saw over 20% year-on-year increase in OE deliveries and strong aftermarket performance.

• Key contracts include EJ200 engines for Türkiye’s Eurofighter Typhoons and MT30 turbines for Australian Navy frigates.

• Power Systems order intake for power generation up 50% year-on-year in Q1; order backlog at £7.3bn.

• Major contracts for mtu engines and PowerPacks for German and Polish armed forces.

• Signed contract to build a large-scale battery energy storage facility in Scotland.