Rolls-Royce PLC reported its 2023 results that outperformed expectations. Revenues grew 21% year over year to £15.4 billion with adjusted operating profit of £1.6 billion. Each of the three divisions were above expectations as the company continues its recovery from its pandemic-induced downturn. The performance reduced the net debt/EBITDA ratio to approximately 1:1, but the company will not resume shareholder payments until it has returned to an investment grade rating.
Interestingly, the company noted a 12% price growth in time and materials spares in 2023, buoying its economic recovery, With both the A350XWB and A330neo order books
growing, Rolls Royce backlog is growing and it is gaining market share in the wide-body market. The company’s cost reduction programs, in combination with the revenue increases, dramatically impacted margins.
The turnaround has been quite dramatic, with profit more than doubling in 2023. When CEO Tufan Erginbilgic took over as CEO last January, he described the company as a “burning platform” and “underperforming every key competitor,” indicating the depth of the challenges. The cost reduction and revenue improvement strategies introduced appear to be working quite well.
Rolls-Royce PLC reported its 2023 results that outperformed expectations. Revenues grew 21% year over year to £15.4 billion with adjusted operating profit of £1.6 billion. Each of the three divisions were above expectations as the company continues its recovery from its pandemic-induced downturn. The performance reduced the net debt/EBITDA ratio to approximately 1:1, but the company will not resume shareholder payments until it has returned to an investment grade rating.
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