Rolls-Royce’s civil aerospace segment reported a gross profit of £2bn in 2024, up 44% on 2023, the company reported on February 27, 2025. Revenues were up 24% to £9bn.
The civil aerospace segment improved its gross profit margin by 3.1 percentage points to 22%. Operating profits up 79% to £1.5bn in the year. Operating margin improved 5.1 percentage points to 16.6%. The company said this was driven by higher long term service agreement margins and lower shop visits costs.
During the company’s earnings call, Rolls-Royce CEO Tufan Erginbilgic said the company’s £1bn investment programme for the Trent family engine has resulted in doubling the expected time on wing for the engine. The company had originally targeted to improve the time on wing for its modern engines to an average of 40%. The company now expects an average of 80%.
“Going from 40% to 80% is enormous,” said Erginbilgic.
The company said a “significant portion” of these improvements is expected to be delivered by the end of this year. The company completed flight testing of the new HPT blade in January 2025, which is expected to be certified in the coming months, which will double the time on wing of the Trent 1000 engine, which powers the 787 aircraft.
Erginbilgic added that the company is looking to increase its share on the 787. “This is going to be a highly competitive product and that’s why we focused on that.”
He added: “By the end of the year, [Trent 1000] is going to be a totally competitive engine in terms of time on wing… reliability of the engine is as good as the next. The main issue has been time on wing and we are effectively fixing for good, and we know it works.”
He said that the flight test for Trent 1000 was successful but “wasn’t a surprise” because of the Trent 7000’s performance, which he said has been “better than expected” over the last two years.
“We have introduced the new blade into our production engines and expect to roll out the improvement across the existing fleet over the next two years,” the company said in its report.
Rolls-Royce also completed the design phase of further improvements for both the Trent 1000 and Trent 7000 that will deliver an “incremental 30% time on wing benefit” by the end of the year, with testing of the modification to begin in April.
During the year, Rolls-Royce delivered 529 original equipment (OE), up 16% year-on-year. Of these deliveries, 278 deliveries were widebody engines, up 6%. Widebody engines made up 72% of the civil aerospace’s underlying revenues.
“We continue to manage the supply chain very tightly,” said Rolls-Royce CFO Helen McCabe. She added that the company has upskilled teams, as well as integrating its procurement and supplier management teams.
“We expect the supply chain to remain challenged for the next 12 to 18 months, but it is being managed,” added McCabe.
Rolls-Royce’s consolidated results reported revenues of £17.8bn, up 17%. Gross profit was up 29% to £4.1bn, with a gross margin of 22.9%, up two percentage points. Operating profit was up 57% to £2.5bn, with operating margin up 3.5 percentage points to 13.8%. The company said strong demand for its engines had driven the stronger results.
On the back of its strong results, the company launched a £1bn share buyback programme in 2025. In addition, the company is paying a cash dividend of $0.06 per share for the full year 2024, representing a payout ratio of 30% of underlying profit after tax. The dividend It is the first dividend payout by Rolls-Royce in over five years and represents a contribution of £500 million to shareholders.
McCabe said in the call: “Going forward, we will be consistent in how we strike that balance between our priorities. We will protect the balance sheet within a net cash position – a modest net cash position. We’re comfortable operating from there, particularly in the near term, and then we’ll ensure that shareholder dividends are regular.
“They will continue to grow in line with their earnings growth, and then we will continue to assess the options beyond that.”
The company added that it would reach its profit target in 2025, two years earlier than planned.
For 2025, the company expects to generate an underlying operating profit, as well as a free cash flow, both at around £2.7 to £2.9bn.
The free cash flow guidance includes £150-200 million cash impact related to the supply chain with parts availability still constrained.
Rolls-Royce now expects to deliver an underlying operating profit of £3.6-3.9bn, along with an operating margin of 15-17%, by 2028.
The company’s shares soared over 16% after the results were published.
As of the end of 2024, the company had £35.7bn in total assets, including £5.6bn in cash and cash equivalents. Total liabilities were £36.6bn and total equity was £881 million.