LONDON: Rolls-Royce vowed to deliver up to 2.8 billion pounds ($3.53 billion) of operating profit in the medium term by increasing the margin on its civil aerospace business to 15-17% from 2.5% last year, putting it closer to its rivals.
Chief Executive Tufan Erginbilgic's masterplan, which has been almost a year in the making, will see a major step change in margins in its business that powers nearly half of the long-haul civil market by around 2027.
Erginbilgic, who took over in January, is the latest CEO to try to tackle the Rolls-Royce's inefficiencies. Britain's flagship engineer has long trailed the margins made by General Electric, its main competitor in the widebody aircraft sector.
He recognised that the targets set were stretching.
"We are setting compelling and achievable financial targets for the mid-term which will take Rolls-Royce significantly beyond any previous financial performance," he said in his statement.
The company also announced a group wide divestment programme targeting up to 1.5 billion pounds in the next five years, as it focuses capital on key parts of its business.
"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," he said on Tuesday. - Reuters
