In his address to shareholders, Chief Executive
'In 2021, we delivered improved financial performance and continued to deliver on our commitments. As a result of the actions we have taken, we have made significant progress on the path to recovery from the impact of COVID-19 and are emerging as a better balanced and more resilient business with a sustainable future, focused on the long-term business opportunities presented by the global energy transition. I would like to thank our colleagues for their commitment and achievements this year and all our stakeholders for their support and engagement.
It has been a privilege to lead Rolls-Royce and I am fully committed to driving our business while we work towards a smooth leadership transition this year. We are confident that we have positioned the business to achieve positive profit and cash this year, driven by the benefits of our cost reductions and increased engine flying hours in
Trading update and outlook
Financial performance year-to-date has been in line with expectation and our financial guidance for 2022 is unchanged. We are well positioned for the anticipated growth in our end markets and continue to expect positive momentum in our financial performance in 2022 despite the ongoing risks around macroeconomic uncertainties. We are working closely with our global supply chain to limit the impact of disruption and will continue to adapt our plans as the global situation evolves. Our long-term sourcing agreements and hedging policies designed to limit volatility in raw material inflation, give some near-term protection and we have increased inventory levels to help mitigate the impact. We are working with our suppliers to monitor and manage these risks and challenges.
In
In Defence, the products and services we provide are delivered and maintained over decades of service to our large number of customers and as such they are not immediately exposed to individual geopolitical events. Our strong order backlog gives us confidence on revenue, profit and cash conversion against the headwinds of inflation and supply chain risk. As guided previously, our operating margin is expected to be lower in 2022 compared with 2021, reflecting original equipment and aftermarket mix changes and the planned increase in investment in Defence to support new programme wins. Governments are increasing their long-term budget allocations towards defence activities, underpinning the long-term growth outlook we hold for Defence.
In
Our New Markets businesses, Rolls-Royce Electrical and Rolls-Royce SMR, continue to make good progress supported by Rolls-Royce and third-party investment. We have commenced the multi-year
We are progressing well with our programme of disposals and are confident in achieving the commitment to generate around
We are hosting a site visit at our
The presentation will include our view of the medium-term financial outlook for
Due to physical capacity constraints, the event is by invitation only but there will also be a webcast starting at
Our next scheduled trading update will be on
This announcement has been determined to contain inside information.
About
1. Rolls-Royce pioneers the power that matters to connect, power and protect society. We have pledged to achieve net zero greenhouse gas emissions in our operations by 2030 (excluding product testing) and joined the UN Race to Zero campaign in 2020, affirming our ambition to play a fundamental role in enabling the sectors in which we operate achieve net zero carbon by 2050.
2. Rolls-Royce has customers in more than 150 countries, comprising more than 400 airlines and leasing customers, 160 armed forces and navies, and more than 5,000 power and nuclear customers.
3. Annual underlying revenue was
4.
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