Defense, Rolls Royce increases profit estimates. The title is run in London

Rolls Royce’s turnaround plan continues and the aerospace and defense group is poised to raise estimates for its next financial statement. “Our goal is to make Rolls-Royce financially stronger and more resilient than ever before,” said the company, which now expects important operating between £2.5 and £2.8 billion, operating margin of 13-15% and cash flow between £2.8 and £3.1 billion and a return on capital of 16-18%.

The group has also set medium-term divisional targets for the operating margin they see civil aviation record the biggest change in action, improving from 2.5% in 2022 to 15-17%. In defense, the estimate is an increase from 11.8% last year to 14-16%. In the Power Systems sector, however, Rolls Royce expects to improve from 8.4% in 2022 to 12-14%. “We expect progressive improvements, but not necessarily the same, year after year, and if we can accelerate the achievement of our ambitions, we will do so,” the company explained.

A significant change of pace for Rolls Royce

“Rolls-Royce is at an important moment in its history,” the CEO began, Tufan Erginbilgic, of the group listed in London. “After a good start to our program changes», added the Executive Director, «today we present a clear vision of the journey that we must do and the areas that we must focus on».

“We are building a Rolls-Royce performing well – added the CEO – competitiveness, resilience and growth that will have the financial power to control and shape its own destiny. We are confident in our ability to achieve these ambitions and have a clear and detailed plan to achieve our goals. We have made great strides, with 2023 profitability and liquidity forecast higher than 2022.” The company had already announced in recent months reduced for employees up to 2,500 positions, approximately 6% of the global workforce.

Exit from non-strategic assets

But the overhaul of the English defense giant does not end here. By defining the details of strategic plans that will lead to significant changes in financial performance, the group has decided not to direct capital to business areas where it can generate more value.

“Today we are announcing a plan to not investing at the group level, focusing on gross income between 1-1.5 billion pounds over the next five years, which are not within our free cash flow targets,” explains the company. “We will only sell assets at the right time and at the right price. For example, in Rolls-Royce Electric “We are exploring the options of go out in the short term or, alternatively, at a reasonable price, to reduce our position to a minority with the intention of leaving completely in the medium term”.

Stock market rally

Investors seem to be aware of Erginbilgic’s moves. The title runs on London stock market marking a rise of more than 5% to 254 dinars at 10 am on Tuesday. Since the beginning of the year, the stock has increased by more than 167%, reaching a market capitalization of more than 21 billion.