Rolls-Royce has announced its full-year 2022 results, with the UK-based company seeing “improved orders, revenue, profit, and cash flow”.
The company said that new orders were won in the Civil Aerospace and Defense sectors, plus a record order book for Power Systems. They went on to say these sectors resulted in a rise in revenue and profits for them during 2022.
To be exact, Rolls-Royce made an underlying operating profit of £652 million which equates to £238 million higher than in 2021.
In addition, free cash flow from continuing operations was also up by a massive £2 billion over 2021 rising to £505 million.
On the topic of debt, RR’s debt is now sitting at £3.3 billion, which is down from £5.2 billion at the end of 2021, showing improvements across the board.
Rolls-Royce Aims for Significant Performance Improvement
For 2023, Rolls Royce has implemented a “Transformation Programme”. This programme has been put in place to allow further performance improvements for 2023 and beyond.
This programme attempts to be successful by enforcing rigorous benchmarks in order to meet the various requirements for success.
As it seems, the “Transformation Programme” is proving to be a success, with RR making underlying operating profit guidance of £0.8 – £1.0 billion and a free cash flow of £0.6 – £0.8 billion in 2023.
The company plans on holding a strategic review of this plan midway through 2023. This will allow Rolls-Royce to identify any new priorities they will need to hit for the rest of 2023.
Tufan Erginbilgic, the CEO of Rolls-Royce said, “It is an honour to lead Rolls-Royce, one of the world’s most trusted brands and a business with strong positions in growing markets.”
“Our people take tremendous pride in our innovation and engineering solutions. Together, we must now move at pace and harness that pride to create a high-performing, growing and competitive business”.
He then went on to say: “While our performance improved in 2022, we are capable of much more. Our transformation programme will improve our efficiency and commercial outcomes and deliver a sustainable reduction in working capital.”
“This will require a winning culture, underpinned by more effective performance management and a shared determination to deliver cash and reduce debt. Our success will enable us to reward investors for their support and invest in future growth.”
Continuing, Mr Erginbilgic talked about the company’s 2023 strategy adding: “Our Transformation strategy is already underway and moving at pace. It will include a strategic review so that we can prioritise our investment towards the most profitable opportunities.”
“We will report the findings together with our medium-term goals in the second half of this year.”
Full-year 2022 Group Results Summarised
Below is a summarised table of Rolls Royce’s financial results with figures in the millions for context:
Based on the figures released, Rolls Royce has had a successful year, having had some turbulent ones during the pandemic and now the company appears to be back on track for success during 2023.
As far as the next year is concerned, 2023 is off to a great start after receiving its largest-ever order for its Trent XWB-97 engines to date from Air India, thanks to their mammoth fleet renewal order announced recently.
Having this order right from the get-go has set RR up for success during 2023 and with many more projects in the pipeline that will propel Rolls-Royce into a more sustainable future, the company is looking forward to this great future ahead.