By Rupert Hargreaves
Rolls-Royce laid out its medium-term growth targets this morning ahead of its capital markets event later today.
The British company, under the leadership of its new chief executive, Tufan Erginbilgic, has laid out plans to create “a high performing, competitive, resilient and growing business.”
The group is targeting an operating profit of £2.5bn to £2.8bn over the medium term, with an operating margin of 13 per cent to 15 per cent and a return on capital of as high as 18 per cent.
Erginbilgic and the team also want the group to generate free cash flow of £2.8bn to £3.1bn over the medium term.
As part of the strategy, the group is targeting disposals of £1bn to £1.5bn over the next five years.
Track all markets on TradingView
Alongside the capital markets day update, Rolls-Royce also confirmed it is currently trading in line with management targets for the full year. It reported engine flying hours for large civil engines on long-term service agreements were 86 per cent of 2019 levels for the ten months to the end of October, in line with the company’s initial expectation.
Erginbilgic said: “Rolls-Royce is at a pivotal point in its history. After a strong start to our transformation programme, we are today laying out a clear vision for the journey we need to take and the areas where we must focus.
“We are creating a high performing, competitive, resilient and growing Rolls-Royce that will have the financial strength to control and shape its own destiny.”
