Rolls-Royce to ‘offset’ tariff blow thanks to Turbo Tufan’s turnaround

By MIKE SHEEN

Updated: 08:29 BST, 1 May 2025

Rolls-Royce will ‘offset’ the impact of US tariffs via ongoing turnaround efforts spearheaded by its chief executive, the aerospace and defence giant said on Thursday.

The FTSE 100 group maintained full-year underlying operating profit guidance of £2.7billion to £2.9billion, up from £2.5billion in 2024, after a ‘strong start to the year’ that saw all divisions perform well.

Rolls has been riding high thanks to the success of a strategy shake-up led by chief executive Tufan Erginbilgic, after the pandemic left the aerospace and engineering giant on its knees.

It has continued to benefit from an increase in flying hours and global defence spending, while the impact of cost control measures brought in under Erginbilgic has fattened profit margins.

The firm is on a mission to achieve £3.6billion to £3.9billion in underlying operating profits by 2027.

Erginbilgic told shareholders at Roll’s annual general meeting on Thursday that global tariff increases ‘have created a degree of uncertainty for the industry’, but the group will ‘offset the impact’ of levies ‘through the mitigating actions we are taking’.

Rolls has been riding high thanks to the success of a strategy shake-up led by chief executive Tufan Erginbilgic

He added: ‘We are closely monitoring the potential indirect impact on economic growth and inflation, and will continue to take the necessary actions.

‘Good progress on our transformation and the actions we are taking give us confidence in our guidance for 2025.’

Rolls-Royce shares opened 3.2 per cent higher at 778.52p. They have now added more than 90 per cent over the last 12 months and a blockbuster 625 per cent over the last five years.

It came as Rolls-Royce, which is also targeting £2.7billion to £2.9billion of free cash flow for 2025, revealed its civil aerospace division saw large engine flying hours in the first quarter hit 110 per cent of 2019 levels.

Rolls said strong aftermarket revenue growth was ‘driven by higher shop visit volumes’.

In defence, Rolls said ‘demand remains robust’ across its portfolio with strong order intake.

In April, the group delivered the first AE 3007N engine to Boeing for the MQ-25 program, the US Navy’s first aircraft carrier-based unmanned air vehicle to be used for refuelling, intelligence and surveillance.

Meanwhile its power systems unit benefited from ‘continued demand’ for back-up power generators for data centres.

Erginbilgic added: ‘Our transformation of Rolls-Royce is progressing strongly and we continue to expand the earnings and cash potential of the business.

We are creating a more resilient and agile Rolls-Royce that is better equipped to respond to changes in the external environment. As a result, we have had a strong start to the year.’

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Rolls-Royce to ‘offset’ tariff blow thanks to Turbo Tufan’s turnaround

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