#1ROLLS R ROYCE INVESTOR PRESENTATION#2ROLLS-ROYCE PROPOSITION 1. HIGH PERFORMING, COMPETITIVE AND RESILIENT BUSINESS 2. GROWING SUSTAINABLE CASH FLOWS 3. STRONG BALANCE SHEET AND GROWING SHAREHOLDER RETURNS ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control N#3DIFFERENTIATED GROUP STRENGTHENED THROUGH TRANSFORMATION ...TRANSFORMING INTO ... BUILDING ON.... ■ Civil Aerospace | Leading positions in Business Aviation, and exclusivity on the latest Airbus widebody aircraft ■ Defence | Long-term pipeline and leading position in Transport, Combat and Submarines ■ Power Systems | Structural advantages ■ Nuclear | Broadest capability portfolio in the industry, fuelling growth in defence and commercial applications ■ Group | Global brand, deep customer relationships and experienced partner ■ ■ A more resilient and efficient business with - Quality of earnings - cash expansion focused More rateable and growing cash flows One Rolls-Royce with - Different ways of working and mind-set - Differentiated performance culture - A new organisation - re-organising for efficiency, synergies and capability building - Strategic clarity - focused and aligned organisation External focus and benchmarking SAFETY PEOPLE Foundations TECHNOLOGY ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control 3#4DIFFERENTIATED AND ADVANTAGED TECHNOLOGIES Advantaged technologies Systems integration UltraFan Leading technologies for next generation aircraft Control systems Advanced manufacturing Electrical systems Trusted and proven reactor design Next generation technology ROLLS R ROYCE Nuclear Vertically integrated ©2024 Rolls-Royce 4 Not Subject to Export Control#5CAPTURING PERFORMANCE IMPROVEMENT OPPORTUNITIES Strategic framework ROLLS R ROYCE 1. Portfolio choices & partnerships 2. Advantaged businesses & strategic initiatives 3. Efficiency & simplification 4. Lower carbon & digitally enabled businesses High performing Operating profit Competitive Operating margin Growing Sustainable cash flow Resilient Return on capital ©2024 Rolls-Royce Not Subject to Export Control#6MID-TERM TARGETS Based on 2027 timeframe Operating profit Operating margin Free cash flow £2.5bn-£2.8bn £0.65bn £1.6bn £2.5-2.8bn 5.1% 13-15% 10.3% 13-15% £2.8bn-₤3.1bn £0.5bn £1.3bn £2.8-3.1bn 4.9% Return on capital 16-18% 11.3% ROLLS R ROYCE 16-18% 2022 2023 2024 Mid- 2022 2023 Mid-term 2022 2023 2024 Mid-term 2022 2023 Mid-term term 2024 Rolls-Royce Not Subject to Export Control.#7CAPTURING PERFORMANCE IMPROVEMENT OPPORTUNITIES Divisional mid-term targets ROLLS R ROYCE Divisional operating margin, % CIVIL AEROSPACE A350 DEFENCE POWER SYSTEMS +12-14 pts I 15-17% 11.6% +2-4pts +4-6pts 13.8% 14-16% 12-14% 11.8% 10.4% 8.4% 2.5% 2022 2023 Mid- 2022 2023 Mid- 2022 2023 Mid- term term term ©2024 Rolls-Royce Not Subject to Export Control 7#8POWER SYSTEMS DEFENCE CIVIL AEROSPACE PORTFOLIO CHOICES & PARTNERSHIPS 1. Focused and granular approach Key investment areas for performance and growth RINCE Business Aviation Transport Governmental A400M Rolls-Rovse Widebody ATKAL 14 PART NCT 1-04T Partnerships Exits | Focused on ■ Non-core businesses Valued higher outside portfolio Narrowbody Combat Submarines Micro-Reactors SMR Marine Power Generation & Battery Storage Electrical Advanced Air Mobility ₤1.0bn-₤1.5bn Gross disposal proceeds across all divisions ©2024 Rolls-Royce Not Subject to Export Control ROLLS R ROYCE#9ROLLS R ROYCE 2. ADVANTAGED BUSINESSES & STRATEGIC INITIATIVES Positioned in attractive and growing markets 2022-2030 annual market growth rates¹ COMMERCIAL AVIATION 3-5% Business Aviation DEFENCE 0-2% Combat & Transport POWER SYSTEMS 5-7% Power Generation 5-7% Widebody UK & AUKUS Submarines 4-6% Mobile Application 2 ©2024 Rolls-Royce Not Subject to Export Control 6#102 ADVANTAGED BUSINESSES & STRATEGIC INITIATIVES Strategic initiatives driving margin improvements £0.65bn £2.5bn-£2.8bn Strategic initiatives driving margin improvements CIVIL AEROSPACE 15-17% Mid-term operating margin target 2022 ROLLS R ROYCE Business Aviation Widebody Efficiency & simplification Portfolio & other Mid- term DEFENCE 14-16% Mid-term operating margin target Combat Submarines Efficiency & simplification Portfolio Mid-term & other 2022 Transport POWER SYSTEMS 12-14% Mid-term operating margin target 2022 Civil Aerospace Defence Power Systems New Markets Portfolio Mid-term 2022 Power Generation BESS1 Governmental Marine Efficiency & simplification & other 1. Battery Energy Storage Solutions Portfolio & other Mid-term ©2024 Rolls-Royce Not Subject to Export Control 10#113. EFFICIENCY & SIMPLIFICATION Sustainable cost efficiency to improve competitiveness and resilience Key drivers Total Cash Cost / Gross Margin (TCC/GM) (40-50)% Right-sizing the organisation ■ Reduction of 2,000-2,500 roles proposed worldwide ■ Focus on efficiency, simplification and enterprise-wide synergies to create a more agile business ■ £200m annual benefits Procurement Excellence ■ ~£1bn procurement interventions ■ Consolidation of Group spend, leverage scale and develop consistent best-in-class standards Zero-based budgeting ■ 10-15% reduction in targeted areas 0.80x 0.59x 04-05x 2022 2023 Mid-term ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control 11#124. LOWER CARBON & DIGITALLY ENABLED BUSINESSES Transition to lower carbon, supporting our customers on their journey to net zero Committed to 2050 net AEROSPACE & DEFENCE ENGINE EFFICIENCY zero ambition All in-production commercial aero engines POWER SYSTEMS ALTERNATIVE FUELS AND HYBRID 100% SAF compatible NUCLEAR Foundations in place for SMALL MODULAR REACTORS lower carbon transition SUSTAINABLE AVIATION FUEL BATTERY ENERGY STORAGE SOLUTIONS Energy Pack MICRO- REACTORS ©2024 Rolls-Royce Not Subject to Export Control ROLLS R ROYCE 12#134. LOWER CARBON & DIGITALLY ENABLED BUSINESSES Differentiated customer experience and greater operational efficiency CUSTOMER Differentiated service and experience DESIGN MANUFACTURE Digitally-integrated design, build and Improved operational performance operate WIND GROUP. **** Leveraging Al across all businesses and functions PEOPLE Digitally connected workforce ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control 13#14LONG-TERM GROWTH MOMENTUM Continued material growth opportunities beyond mid-term Rolls-Royce long-term growth prospects Mid-term Long-term New business Additional upside potential from narrowbody and nuclear micro-reactors SMR Poised to play major role in the civil nuclear market Power Systems Grow in line with markets and above GDP with competitive product portfolio Defence Significant benefits of recent wins, such as B-52, FLRAA, AUKUS and GCAP Civil Aerospace Continue to lead in Business Aviation, Widebody Engines growing above GDP and ready for the next generation platform ROLLS R ROYCE ©2024 Rolls-Royce 14 Not Subject to Export Control#15TRANSFORMING THE BUSINESS FOR SUSTAINABLE GROWTH ROLLS R OUR TRANSFORMATION STRATEGIC FRAMEWORK ■ Portfolio choices & partnerships Advantaged businesses & strategic initiatives ◉ Efficiency & simplification ▪ Lower carbon & digitally enabled businesses 1. 2. HIGH PERFORMING, COMPETITIVE AND RESILIENT BUSINESS GROWING SUSTAINABLE CASH FLOWS ROYCE DELIVER AS ONE ROLLS-ROYCE ■ Embrace new ways of working and mind-set ■ Establish a differentiated performance culture ■ Execute with strategic clarity Externally focused and benchmarking Simplified organisation and strengthened capabilities 3. STRONG BALANCE SHEET AND GROWING SHAREHOLDER RETURNS ©2024 Rolls-Royce Not Subject to Export Control 15#16FY 2023 RESULTS ROLLS R ROYCE#17STEP-CHANGE IN PERFORMANCE · Building a high-performing, competitive, resilient and growing business Significant performance improvement and a record year New mindset underpinning new ways of working Granular strategy in place and owned across the Group Continued progress guided in 2024 Strong progress builds confidence in mid-term targets ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control 17#18RECORD FINANCIAL PERFORMANCE IN 2023 £0.65bn Operating profit Operating margin £1.6bn +143% yoy ₤1.6bn £2.5-2.8bn 5.1% 10.3% +5.2pts yoy 10.3% 13-15% £0.5bn Free cash flow £1.3bn +154% yoy £2.8-3.1bn Return on capital 11.3% +6.4pts yoy £1.3bn 4.9% 11.3% 2022 2023 Mid-term 2022 2023 Mid-term 2022 2023 Mid-term 2022 2023 Record results since adoption of IFRS15 in 2017 | Year-on-year change is organic change ROLLS R ROYCE 16-18% Mid-term ©2024 Rolls-Royce Not Subject to Export Control#19STRONG DELIVERY OF TRANSFORMATION Group operating profit improvement £0.65bn ₤1.6bn 2022 Civil Aerospace Defence Power New Markets Systems Portfolio 2023 & other Year-on-year margin improvement is organic change Strategic initiatives driving margin improvements CIVIL AEROSPACE 11.6% +9.1pts 水水 USAF DEFENCE 13.8% +1.9pts POWER SYSTEMS 10.4% +2.0pts ROLLS R ROYCE 2024 Rolls-Royce Not Subject to Export Control 19#20DELIVERING STRATEGIC PROGRESS 1. PORTFOLIO CHOICES & PARTNERSHIPS 2. ADVANTAGED BUSINESSES & STRATEGIC INITIATIVES ROLLS R ROYCE • • . UltraFan tested to maximum power Pearl 700 certification milestone for G700 and 6800 Formal confirmation of awards on AUKUS and FLRAA New prototype engine successfully tested in Power Systems Small Modular Reactor (SMR) entered 2nd phase of GDA process Electrical (AAM) partnership/exit announced Power Systems off-highway lower power sale agreement announced Time on wing: Trent 7000 improvement 20% installed, Trent 1000 improvement expected to be certified this year Civil Aerospace shop visit costs lowered All key Civil Aerospace OEM and airline contract renegotiations either concluded or progressed Major Battery Energy Storage System (BESS) project commissioned one of the largest in Europe - ©2024 Rolls-Royce Not Subject to Export Control 20 20#21DELIVERING STRATEGIC PROGRESS 3. EFFICIENCY & SIMPLIFICATION 4. LOWER CARBON & DIGITALLY ENABLED BUSINESSES Around £150m cost efficiencies delivered across the Group £130m reduction in gross third party costs Strategically aligned organisation, more efficient and fewer layers Zero based budgeting being launched in 2024 . 100% SAF tests completed on Trent and business aviation engines Power Systems S2000/S4000 engines approved for sustainable fuel 100% hydrogen test in power generation and combustion test on a Pearl engine Embraced digital solutions for accelerated product design, enhanced manufacturing and customer experience ROLLS R ROYCE ©2024 Rolls-Royce 21 Not Subject to Export Control#222023 FULL YEAR UNDERLYING RESULTS Underlying results £m 2023 2022 Revenue 15,409 12,691 Organic Change¹ +2,630 Organic Change %¹ RECORD RESULTS WITH STRONG 21% PERFORMANCE ACROSS THE GROUP Gross profit 3,231 2,477 +732 30% Gross margin % 21.0% 19.5% +1.4pts Operating profit 1,590 652 +933 143% COMMERCIAL OPTIMISIATION AND COST EFFICIENCIES ARE KEY PERFORMANCE DRIVERS Operating margin % 10.3% 5.1% +5.2pts Profit after taxation 1,142 158 +980 620% £m 2023 2022 Free cash flow 1,285 505 Change +780 £m Net debt 2023 2022 Change (1,952) (3,251) +1,299 £m Return on capital 2023 2022 Change 11.3% 4.9% +6.4pts All results are shown for Group continuing operations on an underlying basis, excluding discontinued operations (ITP Aero). Organic change is the measure of change at constant translational currency applying full year 2022 average rates to 2023. All underlying income statement commentary is provided on an organic basis unless otherwise stated. Record results since adoption of IFRS15 in 2017 OPERATING PROFIT AND LTSA GROWTH DROVE RECORD FREE CASH FLOW DELIVERY HIGHER MARGINS AND FOCUSED INVESTMENTS SUPPORT DOUBLE DIGIT RETURN ON CAPITAL ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control 22#23CIVIL AEROSPACE → Underlying results £m 2023 2022 Organic Change Organic Change % KEY POINTS Revenue 7,348 5,686 +1,645 29% • Gross profit 1,394 853 +540 • 63% · Gross margin % 19.0% 15.0% +4.0pts Operating profit 850 143 +710 497% · Operating margin % 11.6% 2.5% +9.1pts Trading cash flow 626 226 +400 177% UNDERLYING REVENUE SPLITS 63% 37% ■ OE 36% ■Services 25% 20% 3% 4% 0 Higher widebody aftermarket profits Higher business aviation profits Efficiency and strategic actions drive lower indirect costs Strong progress improving onerous contracts offset by the impacts of supply chain challenges OE DELIVERIES ROLLS R ROYCE LARGE ENGINE OE DELIVERIES 458 +29% 262 +38% ■Large engines 33% LTSA ENGINE FLYING HOURS Business Aviation 22% 73% ■Regional 15% V2500 6% 16.5m +25% TOTAL LTSA SHOP VISITS 1,227 +18% ©2024 Rolls-Royce Not Subject to Export Control 23#24DEFENCE Underlying results £m 2023 2022 Organic Change Organic Change % KEY POINTS ROLLS R ROYCE Double digit revenue growth Commercial optimisation with the implementation of value based pricing Efficiency and strategic actions drive lower indirect costs • Submarines volume growth Revenue 4,077 3,660 +428 12% . Gross profit 804 726 +78 11% Gross margin % 19.7% 19.8% (0.1)pts Operating profit 562 432 +130 30% Operating margin % 13.8% 11.8% +1.9pts Trading cash flow 511 426 +85 20% UNDERLYING REVENUE SPLITS 57% 43% ■ OE Services 8% 14% 22% 5% 8% 31% ORDER INTAKE ORDER BACKLOG £5.2bn £9.2bn Transport ■Combat Submarines 3% 18% 20% Book-to-bill ratio 1.3x +8% ■Naval 34% Helicopters 2% 15% ©2024 Rolls-Royce Not Subject to Export Control 24#25POWER SYSTEMS (0) O Underlying results 2023 2022 Organic Change Organic Change % £m KEY POINTS Revenue 3,968 3,347 1,050 918 +539 16% . Strong revenue growth led by power generation Gross profit +111 12% . . Gross margin % 26.5% 27.4% (0.9)pts · Operating profit 413 281 +123 44% Operating margin % 10.4% 8.4% +2.0pts Trading cash flow 461 158 303 192% UNDERLYING REVENUE SPLITS 33% 0 67% 12% ■OE 19% Services 10% 24% Commercial optimisation benefits in all segments Cost efficiency actions supported results Power generation profit more than tripled ORDER INTAKE £4.3bn ORDER BACKLOG £4.1bn 39% Power Gen 34% Book-to-bill ratio 1.1x +2% ■Governmental 0% ■Marine 17% 25% Industrial 10% ROLLS R ROYCE 2024 Rolls-Royce Not Subject to Export Control 25#26SUMMARY FUNDS FLOW KEY DRIVERS OF HIGHER YEAR ON YEAR FCF Stronger operating profit across all divisions Higher investments Continued net LTSA balance growth Lower working capital outflows, all three divisions released inventory in H2 Movement in provisions reflects utilisation of contracts loss provisions • Reduced net interest costs £m Operating profit 2023 2022 Change 1,590 652 938 Operating profit from discontinued operations 86 (86) • Net investments¹ 82 279 (197) Movement in Civil LTSA balance, net of RRSAs 1,079 784 295 · Working capital, excluding Civil Net LTSA (396) (524) 128 • Movement in provisions (258) (23) (235) • Settlement of excess derivatives (389) (326) (63) Net interest Tax Other Free cash flow ...of which is continuing operations (174) (316) 142 • (172) (174) 2 (77) 53 (130) 1,285 491 794 1,285 505 780 1 Net investments = D&A - capital element of lease payments - capital expenditure - investment ROLLS R ROYCE 2024 Rolls-Royce 26 Not Subject to Export Control#27BUILDING RESILIENCE 0.88x TCC/GM 0.80x Net Debt £5.2bn £3.6bn 0.59x £3.3bn £1.0bn KEY POINTS • TCC/GM improved to 0.59x • Net debt reduced to £2.0bn • £7.2bn liquidity with £3.7bn cash and cash equivalents ROLLS R ROYCE • £2.0bn £2bn undrawn facilities retired • Progress towards investment grade profile 2019 2022 2023 2019 2020 2021 2022 2023 2024 Rolls-Royce 27 Not Subject to Export Control#28GUIDANCE DELIVERS >50% OF MID-TERM IMPROVEMENT BY 2024 ROLLS R ROYCE Operating profit £1.7-2.0bn £2.5-2.8bn Operating margin Free cash flow £2.8-3.1bn 13-15% £1.7-1.9bn Return on capital 16-18% 2022 2023 2024 Mid- term 2022 2023 Mid-term 2022 2023 2024 Mid-term 2022 2023 Mid-term 2024 guidance based on... Civil large engine flying hours Total Civil OE deliveries Total Civil shop visits 100%-110% of 2019 level 500-550 1,300-1,400 2024 Rolls-Royce 28 Not Subject to Export Control#29ACHIEVING THE ROLLS-ROYCE PROPOSITION OUR TRANSFORMATION 1. HIGH PERFORMING, COMPETITIVE AND RESILIENT BUSINESS ■ SAFE AND EFFICIENT OPERATIONS ■ ADVANTAGED PRODUCTS AND TECHNOLOGIES 2. GROWING SUSTAINABLE CASH FLOWS CLEAR STRATEGY AND CHOICES ■ NEW MINDSET AND DISTINCTIVE PERFORMANCE CULTURE ROLLS R ROYCE 3. STRONG BALANCE SHEET AND GROWING SHAREHOLDER RETURNS 2024 Rolls-Royce Not Subject to Export Control#30FINANCIALS ROLLS R ROYCE#31CAPITAL FRAMEWORK Driving shareholder value ROLLS R ROYCE Strong balance sheet and investment grade credit profile Committed to growing shareholder returns Disciplined investment Improved net debt/EBITDA Once strong balance sheet Reduced gross debt and investment grade profile Group-wide Strategically are assured prioritisation aligned Rigorous capital allocation process Clear and differentiated hurdle rates Strong liquidity 2024 Rolls-Royce Not Subject to Export Control 31#32SUSTAINABLE AND GROWING FREE CASH FLOW Driven by higher operating profit and stronger balance sheet £2.8bn-£3.1bn mid-term Free Cash Flow (FCF) +£2.3bn-£2.6bn FCF growth £0.5bn £1.3bn £2.8bn-₤3.1bn 2022 2023 Mid-term Improvement in FCF to mid-term driven by ROLLS R ROYCE Operating profit growth (£1.8bn-£2.1bn) with an operating margin of 13-15% Focused investments aligned to strategy Civil LTSA balance growth Disciplined working capital management Increased cash tax costs reflecting higher profit Lower financing costs and debt reduced Absence of over-hedge costs 2024 Rolls-Royce 32 Not Subject to Export Control#33CIVIL LTSA BALANCE GROWTH £0.8bn-£1.2bn per annum growth Civil LTSA balance growth¹ 2022 2023 Growth 'Civil net LTSA liability less Risk and Revenue Sharing Partners (RRSP) prepayments for LTSA parts Mid-term Growing cash receipts ahead of shop visits costs driven by Widebody EFH growth reaching 120-130% of 2019 levels Business Aviation growth Higher average EFH rate Time on wing improvements Legacy hedge book consumption drives improved FX rate ROLLS R ROYCE 2024 Rolls-Royce 33 Not Subject to Export Control#34WORKING CAPITAL OPTIMISATION c.£2bn of sustainable improvements more than offset the impact of headwinds Net Working Capital management 2022 Inventories Receivables & Payables Concessions Growth Portfolio & Other Mid-term c. £2bn optimisation actions Disciplined working capital management INVENTORIES Significant improvement in Days Inventories Outstanding Improved demand planning and supply chain management Optimised buffer stock RECEIVABLES & PAYABLES ☐ ☐ Improvement in Days Sales Outstanding New behaviours and tools drive improved collections and billing Unbilled invoice backlog cleared CONCESSIONS Legacy agreements outflows GROWTH ☐ Modest working capital build to support business growth ROLLS R ROYCE 2024 Rolls-Royce 34 Not Subject to Export Control#35REVENUE BY BUSINESS AND GEOGRAPHY Full year 2023 Business Power Systems £3,968m Defence £4,077m Civil Aerospace £7,348m Our New Markets business contributed £4m underlying revenue to the Group Geography ROLLS R ROYCE Asia/Middle East 26% RoW 6% 0 North America 31% Europe 37% The Group's revenue by destination of the ultimate operator ©2024 Rolls-Royce 35 Not Subject to Export Control#36CIVIL AEROSPACE ROLLS R ROYCE#37CIVIL AEROSPACE Advantaged products and services in growing markets Underlying revenue (2023) £7,348m AVIATION WIDEBODY REGIONAL/V2500 ROLLS R ROYCE Business Aviation - 20% Widebody - 73% Regional - 3% V2500 - 4% Market leading position -70% Aircraft in service market share¹ 8-9% Rolls-Royce delivery growth² 120-130% Forecast Rolls-Royce EFH mid-term vs 20193 Capitalise on Power of the Trent -55% Strength in legacy programmes Widebody delivery share4 7-9% Rolls-Royce powered aircraft in service growth 5 120-130% Forecast Rolls-Royce EFH mid-term vs 20196 -2,000 Rolls-Royce powered aircraft in service -180m Rolls-Royce EFH to date 35m-40m Forecast Rolls-Royce EFH over mid-term 1. Large aircraft in service 2022 | 2. Annual growth of powered Very Long Range (VLR) / Ultra Long Range (ULR) aircraft deliveries 2022 and 2030 | 3. VLR/ULR Engine Flying Hours (EFH) mid-term vs 2019 | 4. New passenger widebody delivery share 2022 | 5. Annual growth of passenger aircraft in service between 2022 and 2030 | 6. Long Term Service Agreement widebody Engine Flying Hours 2024 Rolls-Royce Not Subject to Export Control 37#38WIDEBODY PORTFOLIO BUSINESS AVIATION PORTFOLIO LEADING PRODUCTS IN GROWING MARKETS MARKET LEADING LEGACY LARGE ENGINE 35% MARKET SHARE SOLE-SOURCE Airbus A330 Trent 700 1,322 Trent 700 engines average age: 11 years IN SERVICE Boeing 787 Trent 1000 696 engines average age: 6 years Airbus A350-900 Trent XWB-84 864 engines average age: 3 years IN PRODUCTION Bombardier Gulfstream Tay* BR710 * AE3007 6,300+ engines in service Gulfstream G650 BR725 Bombardier 5500/6500 Pearl 15 1000 BR725 & 144 Pearl 15 engines in service SOLE-SOURCE QATAN SOLE-SOURCE A350-1000 & A350F Trent XWB-97 148 engines average age: 3 years Freighter launched Airbus A330neo Trent 7000 196 engines average age: 2 years IN FLIGHT TEST Gulfstream G700 Pearl 700 Strong order book IN DEVELOPMENT Dassault Falcon X Pearl 10X Positive market response © Dassault ROLLS R ROYCE ** Legacy large engine fleet also includes: RB211, Trent 500, Trent 800 & Trent 900 (-1850 engines in service or stored) Tay Gulfstream IV, G300, G400, G350 and G450. BR710 | Bombardier GX, Global 5000 & 6000, Gulfstream V, G500 & G550 ©2024 Rolls-Royce 38 Not Subject to Export Control#39CAPTURING PERFORMANCE IMPROVEMENT OPPORTUNITIES Strategic initiatives driving margin improvements Civil Aerospace operating profit improvements (£bn) 15-17% Mid-term operating margin targets £143m 2022 Business Aviation Widebody Efficiency & simplification Portfolio & other Mid-term 10 BUSINESS AVIATION Grow market share, aftermarket growth and commercial optimisation ROLLS R ROYCE USA350 WB WIDEBODY Keep Engines Earning, Contractual Rigour, Value-Driven pricing, Time on Wing, Shop Visit cost, Product Cost, Volume & Mix EFFICIENCY & SIMPLIFICATION Simplifying and optimising our business ©2024 Rolls-Royce 39 Not Subject to Export Control#40BUSINESS AVIATION Strategic initiatives driving margin improvements 5500 GROW MARKET SHARE WITH PEARL ■▪ Leaders in resilient and growing market ■ Pearl is today's engine family of choice ■ Won the last three major campaigns 8-9% Annual growth of Rolls-Royce powered aircraft deliveries¹ SIGNIFICANT SERVICES GROWTH Highly profitable services model with CorporateCare ■ Continued growth of EFH ☐ ■ Large and growing installed fleet 2-3% Annual growth of invoiced EFH² COMMERCIAL OPTIMISATION ■ Cost reduction ☐ ■ Improving commercial terms Implementing new pricing strategy 1. Very Long Range / Ultra Long Range aircraft deliveries, 2022 to 2030 | 2. Rolls-Royce Very Long Range / Ultra Long Range EFH, 2022 to 2030 | 3. Rolls-Royce data >100% Mid-term operating profit growth³ ©2024 Rolls-Royce Not Subject to Export Control ROLLS R ROYCE 40#41WIDEBODY Strategic initiatives driving margin improvements KEEP ENGINES EARNING Improve engine performance and earning through extensions, transitions and passenger to freighter conversions Powering 80% of A330 committed freighter conversions¹ COMMERCIAL OPTIMISATION ■ Drive contractual rigour ■ Implementing value-driven pricing strategy ▪ Embedding a culture of commercial acumen Drive towards value driven pricing ROLLS R ROYCE INSTALLED ENGINES AND AFTERMARKET GROWTH Growth driven by engine deliveries, major refurbishments and shop visit volumes ■ EFH forecast 120-130% over mid-term 1. Very Long Range / Ultra Long Range aircraft deliveries, 2022 to 2030 | 2. Rolls-Royce Very Long Range / Ultra Long Range EFH, 2022 to 2030 | 3. Rolls-Royce data 300-350 Engine deliveries p.a. 700-750 Major refurbishments p.a. 1,100-1,200 Total shop visits p.a.² ©2024 Rolls-Royce Not Subject to Export Control 41#42WIDEBODY Strategic initiatives driving margin improvements EXTEND TIME ON WING Improve product durability ■ Extend life and component limits Optimise aircraft operations and maintenance -40% Time on Wing increase over mid-term 1 REDUCE SHOP VISIT COST ■ Greater control workscope ■ Optimise MRO build/strip ■ Repair and re-use of parts -50% Trent XWB Shop visit cost reduction 2 PRODUCT COST REDUCTION ■ Concentrate activity to high-performing suppliers Improve contracts to protect value ■ Advanced technical cost out 200 Technical cost out engineers ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control 42#43TRANSITION TO LOWER CARBON Supporting our customers on their journey to net zero Maximise efficiency of current fleet All in-production engines compatible with 100% SAF UltraFan technologies for current and next generation widebody and narrowbody aircraft ©2024 Rolls-Royce Not Subject to Export Control ROLLS R ROYCE 43#44DEFENCE ROLLS R ROYCE#45DEFENCE Advantaged and resilient business operating in attractive markets Underlying revenue (2022) TRANSPORT £4,077m COMBAT¹ SUBMARINES NAVAL HELICOPTER ROLLS R ROYCE - Transport 31% Combat -34% Submarines - 22% Naval - 8% Helicopter -5% Versatile core 25-30% Market share 2,500+ Aircraft in service T56 60+ years in service to date Global solutions with leading technology 10-20% Market share 2,500 Aircraft in service RB199 Full value chain capability Power-dense engines Decades of small engine experience 100% Market share (UK submarine power) 10 Boats in service PWR1 15-30% Market share (gas turbines & generators) 250+ Ships in service (engines) 10-15% Market share 3,200² 2 Aircraft in service Marine Spey M250 40+ years in service to date 60 years in service to date 40+ years in service to date 1. Includes Trainers | 2. Military helicopters | Market share relates to 2023-2030 60+ years in service to date ©2024 Rolls-Royce Not Subject to Export Control 45#46ONCE SOLD OUR PRODUCTS STAY IN PRODUCTION FOR DECADES AND OUR CUSTOMERS USE THEM FOR DECADES Development Product Development Growth Production Lifecycle Customer funding available for Defence R&D ~38% of product revenues from Original Equipment Stable production volumes Maturity Services ~62% of product revenues from Services Defence fleets stay in-service for decades Winning a position during the development phase supports long-term favorable financial returns ROLLS R ROYCE 2024 Rolls-Royce Not Subject to Export Control 46 46#47CAPTURING PERFORMANCE IMPROVEMENT OPPORTUNITIES Strategic initiatives driving margin improvements Defence operating profit improvements (£bn) 14-16% Operating margin mid-term target 2022 Transport Combat Submarines Efficiency & simplification Portfolio & Mid-term other TRANSPORT Continuing support for a growing Transport & Patrol fleet COMBAT Pursuing new, funded Combat programmes SUBMARINES Increase in funded Submarines activity EFFICIENCY & SIMPLIFICATION Simplifying and optimising our business ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control 47#48CAPTURING PERFORMANCE IMPROVEMENT OPPORTUNITIES Key drivers of operating profit improvements Defence operating profit improvements (£bn) 14-16% Operating margin mid-term target VOLUME & MIX ■ Moving from legacy to new, funded programmes Profitable aftermarket volume growth ■ 2022 Volume & mix Commercial Investment Cost optimisation prioritisation management Mid-term 22% Increase in AE shop visits ROLLS R ROYCE COMMERCIAL OPTIMISATION ☐ Mitigating external impacts with regular contractual updates enabling value recognition & risk mitigation All Material contracts renew in medium term INVESTMENT PRIORITISATION ■ ◉ Prioritising spend for strategic markets Pursuing customer-funded programmes COST MANAGEMENT Simplifying the organisation • Managing efficiencies across the business 150% Increase in customer-funded R&D 30% Improvement in TCC/GM ©2024 Rolls-Royce Not Subject to Export Control 48#49LONG-TERM GROWTH MOMENTUM Recent wins underpin long-term growth in Transport, Combat and Submarines TRANSPORT Recent wins Future Long Range Assault Aircraft (FLRAA) Future opportunities ROLLS R ROYCE Grow market share by leveraging FLRAA position for additional Transport & Patrol opportunities SUBMARINES COMBAT Global Combat Air Programme and B-52 Grow in existing and new markets by developing next-gen technologies and pursuing autonomous platform opportunities SSN-AUKUS for UK Royal Navy and Royal Australian Navy Grow into new markets by developing micro-reactor technology utilising our proven nuclear capabilities 2024 Rolls-Royce Not Subject to Export Control 49#50POWER SYSTEMS ROLLS R ROYCE#51POWER SYSTEMS Resilient business model in attractive growth markets Revenue split (2022)1 POWER GENERATION GOVERNMENTAL MARINE INDUSTRIAL 37 £3,986m Power Gen 39% Governmental - 25% Marine - 12% Industrial -24% Mission-critical power 15-20% Market share +5-7% Market growth p.a. -85,000 Units installed base Stable, high-power solutions >30% Market share +2-4% (>10%) Market growth p.a. (Mid-term p.a.) -30,000 Units installed base Complete integrated systems 15-20% Market share +3-5% Market growth p.a. -25.000 Units installed base Efficient, long-lasting engines 10-15% Market share +4-6% Market growth p.a. -25,000 Units installed base² 1. Revenue split reallocated compared to annual report - Governmental includes Defence and Naval, which was previously reported under Marine 2. Excluding lower power range engines Note: Market shares and installed unit base, based on 2022 figures; Market growth reflecting p.a. Original Equipment growth from 2022 to 2030 (Mid-term: 2022 to 2027) ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control 51#52CAPTURING PERFORMANCE IMPROVEMENT OPPORTUNITIES Strategic initiatives driving margin improvements Power Systems operating profit improvements (£bn) 12-14% Operating margin mid-term target Granular Strategic Initiatives ROLLS R ROYCE POWER GENERATION Strengthen position with increased profitability in growing market GOVERNMENTAL Capture strong growth in highly attractive markets MARINE Strengthen #1 position in Yacht and grow in Commercial Marine BATTERY ENERGY STORAGE SOLUTIONS Expand market reach and increase scale for profitable growth EFFICIENCY & SIMPLIFICATION Simplifying and optimising 2022 Power Governmental Marine Generation BESS1 Efficiency & Portfolio & Mid-term simplification other our business ©2024 Rolls-Royce Not Subject to Export Control 52 52#53POWER GENERATION PERFORMANCE IMPROVEMENT Strategic initiatives driving margin improvements Power Generation operating profit improvements (£bn) 2022 Leverage Service Commercial Mid-term high growth growth optimisation markets LEVERAGE HIGH GROWTH MARKETS Build on strong position in data centre market and focus on growth with strategic key accounts SERVICE GROWTH Achieve significant service growth through extended offering such as upgrade & retrofit kits and digital solutions >20% Al-related data centre spend growth p.a. 2x Service business ROLLS R ROYCE COMMERCIAL OPTIMISATION Optimise cost structure building on increasing scale and better leverage global production footprint >100% Mid-term operating profit growth ©2024 Rolls-Royce Not Subject to Export Control 53#54PROFITABLE GOVERNMENTAL GROWTH Strategic initiatives driving margin improvements Governmental operating profit improvements (£bn) 2022 Capture market Grow Expand Mid-term product technology growth scope leadership ROLLS R ROYCE CAPTURE MARKET GROWTH Leverage technology leadership and close customer relationships to capture current market dynamics and service upside >10% Mid-term revenue growth per annum GROW PRODUCT SCOPE Further expand product scope towards integrated solutions incl. automation and new digital services 3x Automation revenue EXPAND TECHNOLOGY LEADERSHIP Invest in platform updates and new technologies leveraging customer funding opportunities Strong long-term growth potential ©2024 Rolls-Royce Not Subject to Export Control 54#55PROFITABLE MARINE GROWTH Strategic initiatives driving margin improvements Marine operating profit improvements (£bn) 2022 Expand Secure Grow Mid-term solution leading Service offering portfolio business position EXPAND SOLUTION OFFERING Grow integrated propulsion solution offering in line with Bridge to Propeller strategy 2x Sales potential SECURE LEADING PORTFOLIO POSITION Develop methanol solutions and strengthen sustainable fuel-ready portfolio GROW SERVICE BUSINESS Offer new digital service solutions such as equipment health monitoring Sustainable fuel-ready engines >40% Service share ©2024 Rolls-Royce Not Subject to Export Control 55 59 ROLLS R ROYCE#56TRANSITION TO LOWER CARBON Supporting our customers on their journey to net zero ALTERNATIVE FUELS Further advance engines certified for alternative fuels to support energy transition HYBRID OFFERINGS Expand portfolio to support our customers on their path towards net zero and enhance customer experience (e.g. silent drive, emission reduction) BATTERY ENERGY STORAGE SOLUTIONS Strengthen existing portfolio and expand offering into additional markets 2 CONNO MAINIRAN LOCATION mtu EnergyPack a ROLLS R ROYCE DIGITAL INITIATIVES Drive development of digital solutions and connect digital solutions offering with life-cycle services 2024 Rolls-Royce Not Subject to Export Control 56 56#57NEW MARKETS ROLLS R ROYCE#58NEW MARKETS Underlying results 2023 2022 Organic Change Organic Change % £m KEY POINTS . SMR 2023 cash costs covered by third party funding Revenue 4 3 1 33% • Gross profit/(loss) 1 (1) 2 nm Operating loss (160) (132) (26) 20% Trading cash flow (63) (57) (6) £137M R&D SPEND 46% 54% First power planned in early 2030s Electrical (AAM) partnership/exit announced RR Electrical RR SMR 10% ▲ 54% EMPLOYEES c1,200 vs 800 in FY22 (monthly average) R&D SPEND £137m vs £108m in FY22 +50% ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control 58#59NEW MARKETS G-NXIE Rolls-Ray HHI ROLLS R ROYCE Rolls-Royce Electrical Complete power and propulsion systems for all-electric and hybrid-electric applications. • Our research and portfolio stretches from electric motors across power electronics, control systems and battery systems to power generation. We have decided to exit Electrical in the short term or alternatively, for the right value, reduce our position to a minority with an intention to exit fully in the mid-term. Rolls-Royce SMR Small Modular Reactors are 470MW, 50Hz, nuclear power stations designed to help decarbonise global power generation Factory production of modules lowers cost and risk with repeatable precision engineering and predictable build programme with just 500 days on site for the modular build. ©2024 Rolls-Royce Not Subject to Export Control 59#60SAFETY, ETHICS & , SUSTAINABILITY ROLLS R ROYCE#61OUR SUSTAINABILITY APPROACH We focus on areas where we can make the most material contributions to a sustainable future, informed by our impacts as a business, supported by global frameworks such as the United Nations Sustainable Development Goals, and the expectations of our all stakeholders. We look to operate and act in an ethically, environmentally and socially responsible manner, through our: VALUE CHAIN Managing and minimising environmental impacts across our value chain COMMUNITIES Creating a positive social impact for our people, our partners, and communities COMPLIANCE Maintaining the highest standards of ethics and compliance Underpinned by our values and behaviours ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control 61#62SAFETY Rolls-Royce provides mission critical products that people's lives depend on. Our commitment to the safety of our products is therefore at the heart of our 'Operate Safely' core value. The Rolls-Royce Product Safety Policy sets out the five principles which we have established to ensure we keep our products safe and our customers, operators and the general public free from danger, injury and loss. These are implemented and overseen by the Rolls-Royce Company Product Safety Review Board and governed by the Board Safety and Ethics Committee. Leadership Commitment Level of Product Safety and Accountability ROLLS R ROYCE Maintaining and Improving Conforming Product Safety Awareness and Competence Product Safety Rolls-Royce Product Safety Management System ©2024 Rolls-Royce Not Subject to Export Control 62 62#63OUR PEOPLE We are focused on the areas required to step change our culture and performance, enabling our transformation Our priorities: Safety, health and wellbeing of our people; HEADCOUNT BY BUSINESS 3% 0% 24% 44% 29% Tri rate (per 100 employees) 2025 2023 TARGET 0.33 ■Civil Aero ■Power Systems ■Corporate ■Defence ■New Markets 0.32 2022 0.41 HEADCOUNT BY LOCATION 2021 0.43 2022 BASELINE 0.35 1% 5% 2% 2% 15% • Performance management: enabling high performance, rewarding and recognising our people Leading with purpose - driving a growth agenda: empowering our leaders; leaning, skills and capabilities Culture and behaviours: inclusion, equity, diversity and belonging; engagement and listening; and Colleague experience: wellbeing, community investment and STEM outreach, change and transformation 24% ■ UK US & Canada ■Singapore ■Rest of World ■Germany ■Italy ■India PROGRESS ON GENDER DIVERSITY (% FEMALE REPRESENTATION) 50% Board level 24% Senior leaders 18% All company 2024 Rolls-Royce Not Subject to Export Control 84 63#64ETHICS We are committed to maintaining high ethical standards underpinned by our values and behaviours to create a working environment where everyone at Rolls-Royce and those we work with can be at their best. Our code of conduct (Our Code) and associated Group policies guide our actions and decisions to ensure we can be proud of the way we do business. In 2023, 132 employees (vs 76 in 2022) left the business for reasons related to breaches of Our Code. ANTI-BRIBERY AND CORRUPTION We do not tolerate bribery and corruption in any form, as set out in Our Code and associated anti-bribery and corruption policy. In 2023, a global "win right" campaign was deployed across the Group to engage our employees on the important role they play in maintaining our high standard of ethics and compliance. We ask all employees to annually certify their understanding of our code, this is mandatory for our leaders. HUMAN RIGHTS AND ANTI-SLAVERY We are committed to protecting and [reserving all internationally recognised human rights of everyone who may be impacted by our business activities along our value chain. In 2023, we enhanced our human rights risk management framework to ensure that we take appropriate actions to prevent, minimise, mitigate and, where necessary, remedy human rights related risks. ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control 64#65STATE OF THE ART FACILTIES We continue to invest in developing state of the art manufacturing and production environments that enable us to reduce the environmental impact of our operations. Energy consumption (mwh/£m) -50% Total solid and liquid waste (t/£m) Recycling & recovery rate (%) 3.56 60.0 2023 vs 2014 vs target 3.31 vs target 68% Our progress in 2023 Achieved 2025 normalised energy reduction target two years early Completed Group-wide Scope 1+2 net zero carbon roadmaps 100% of active suppliers in tier 1 supply chain completed first stage of sustainability due dilligence ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control 65#66APPENDIX ROLLS R ROYCE#67FINANCIAL RESULTS SUMMARY FINANCIAL PERFORMANCE FOR PAST 5 YEARS £m Underlying revenue Underlying operating profit/(loss) Profit/(loss) for the year from continuing operations Group FCF Shareholder payments DEBT (£m) Issued Bond Notes¹ UKEF £1bn loan (undrawn)2 Revolving Credit Facility (undrawn)³ UKEF £1bn loan (undrawn)4 Bank Loan Facility (undrawn) 5 Total committed borrowing facilities 1. May 2028 5. March 2024 2. September 2027 7. March 2024 3. November 2026 8. March 2024 4. March 2025 5. January 2024 2023 2022 2021 2020 2019 15,409 12,691 10,947 11,430 15,450 1,590 652 414 (2,008) 808 1,050 158 10 (3,997) 306 1,285 505 (1,485) (4,255) 873 0 0 (4) (92) (224) 31 December 2023 31 December 2022 Net debt Credit ratings 3,995 3,995 FY23 £(2.0)bn Moody's6: Bal 1,000 1,000 FY22 £(3.3)bn Fitch7: BBB- 2,500 2,500 FY21 £(5.2)bn S&P8: BBB- 1,000 All now positive outlook 1,000 7,495 9,495 ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control 67#68GUIDANCE ROLLS R ROYCE GROUP GUIDANCE FOR MID-TERM (BASED ON 2027) Operating profit Operating margin Free cash flow Return on capital DIVISIONAL GUIDANCE FOR MID-TERM (BASED ON 2027) Operating margin Civil Aerospace Defence Mid-term guidance £2.5bn-£2.8bn 13-15% £2.8bn £3.1bn 16-18% Mid-term guidance 15-17% 14-16% 12-14% Power Systems GROUP GUIDANCE FOR 2024 FY24 guidance FY23 FY22 Operating profit £1.7bn £2.0bn £1,590m Free cash flow from continuing operations - £1.7bn £1.9bn £1,285m £652m £505m ©2024 Rolls-Royce Not Subject to Export Control 68#69FY 2024 GUIDANCE Operating profit £1.7bn-₤2.0bn Free cash flow £1.7bn-₤1.9bn Significant cash flow items: LTSA creditor growth Over-hedge costs Civil Aerospace drivers: OE deliveries Shop Visits Large engine flying hours Other: Net interest paid (including fees) Cash tax low end of the guided mid term range (£0.8bn to £1.2bn) £146m 500-550 ~50% large engines, large spares broadly unchanged in 2023 1,300 1,400 of which 450-500 large engine major SV 100%-110% of 2019 modestly better c.£100m higher year on year ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control 69#70MID-TERM GROUP GUIDANCE Group Operating profit Operating margin Free Cash flow Return on Capital £2.5bn-£2.8bn 13-15% £2.8bn-£3.1bn 16-18% TCC/GM Gross disposal proceeds Net investments Working capital Net interest Tax paid FX - achieved rate Headcount Severance costs Rightsizing benefits (annualised) 0.4-0.5x £1.0bn-£1.5bn over 5 years Investments > D&A in the mid-term vs. £300m below in 2022 c.£2bn released 2022 - mid-term; partly offset by headwinds/growth Reduces as we pay down debt Increases in line with profit growth c. $1.36/₤ 2,000-2,500 roles reduced globally £200m-£250m through 2024/25 c.£200m annualised benefit by the end of 2025 ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control 70#71MID-TERM DIVISIONAL GUIDANCE Civil Aerospace Operating margin mid-term target Market growth: Widebody Market growth: Business Aviation Large engine deliveries Business Aviation deliveries Large engine refurbs Large engine total shop visits Widebody LTSA engine flying hours (EFH) Business Aviation EFH LTSA balance (net of risk & revenue partners) Defence Operating margin mid-term target Market growth: Combat and Transport Power Systems Operating margin mid-term target 15-17% 5-7% (CAGR 2022 - 2030) 3-5% (CAGR 2022 - 2030) 300-350 250-300 700-750 1,100-1,200 120-130% of 2019 vs. 80-90% 2023 120-130% of 2019 vs. 110% 2023 £0.8bn-£1.2bn growth p.a. 14-16% 0-2% (CAGR 2022 - 2030) 12-14% 5-7% (CAGR 2022 - 2030) Market growth: Power Generation Market growth: Mobile applications 4-6% (CAGR 2022 - 2030) ROLLS R ROYCE 2024 Rolls-Royce Not Subject to Export Control 71#72TRANSACTIONAL FOREIGN EXCHANGE ROLLS R ROYCE % cover of forecast net US$ income % £/$ exchange rate Rolls-Royce hedges transactional FX Transactional exposure arises when revenue currencies differ from cost currencies 100% Achieved rate is not typically affected by short-term spot rate movements unless new cover is taken; this impact is usually diluted 80% . $15 billion GBP:USD hedge book (average rate £/$1.52) • $3 billion EUR:USD hedge book (average rate €/$1.14) 60% Each 1 $ cent change in the £/US$ hedge rate impacts pre-tax cash by c£20-30m USD hedge book cash costs of closing out over-hedge positions Costs are included in Group FCF definition 2024-2026 are future cash outflows £m Cash cost 2020-2022 2023 2024 2025 2026 Total 40% 20% 0% 964 389 146 148 27 1,674 2023 1% Hedged 2024 2025 1% Unhedged 2026 Blended rate (RHS) 2027 2028 Market rate (RHS) 1.60 1.50 1.40 1.30 1.20 1.10 ©2024 Rolls-Royce Not Subject to Export Control 72#73TRANSLATIONAL FOREIGN EXCHANGE The impact of translational foreign exchange is driven by period average spot rates Period average rates 2023 2022 USD 1.24 1.24 EUR 1.15 1.17 ROLLS-ROYCE DOES NOT HEDGE AGAINST THE IMPACT OF TRANSLATIONAL FX Translational exposure varies by source of revenues and profits Translational FX impact is driven by period average spot rates Translational impact increases as rate reduces ROLLS R ROYCE Underlying revenue Underlying operating Exposure impact profit impact 2022 vs. 2021 £m Revenue/Profit Including FX FX Including FX FX Group 15,409 88 1,590 4 Civil Aerospace USD, EUR 7,348 17 850 (3) TRANSLATIONAL IMPACT OF 0.01 UNIT OF CURRENCY CHANGE IN PERIOD AVERAGE RATES Defence USD, EUR 4,077 (11) 562 Revenue Profit Power Systems EUR, USD 3,968 82 413 New Markets EUR, USD 4 (160) (2) USD £19 million £4 million Other Businesses EUR 12 (15) EUR £45 million £4 million Corporate eliminations (60) 1 ©2024 Rolls-Royce Not Subject to Export Control 73#74DRIVERS OF CIVIL LTSA BALANCE CHANGE Deferred revenue reflects difference between invoiced EFH receipts and P&L revenues traded ROLLS R ROYCE INVOICED EFH RECEIPTS Reflects invoiced EFH receipts on long-term contracts across entire Civil LTSA-covered fleet P&L REVENUE Driven by cost (e.g. shop visits) across large engine, business aviation and regional fleets Recognised by contract, as costs incurred, at relevant contract margins 2023 Opening balance (LTSA net creditor) £7,372m + P&L LTSA Invoiced EFH receipts £4,648m revenue (pre-catch-ups) £3,422m LTSA contract catch-ups £104m FX & other £378m + II LTSA revenue post catch-ups £3,318m 2023 Closing balance (LTSA net creditor) £9,080m ©2024 Rolls-Royce Not Subject to Export Control 74#75CIVIL AEROSPACE REVENUES BY ENGINE TYPE ROLLS R £m 2023 2022 Organic change¹ Original Equipment 2,703 1,982 36% Large engine 2,039 1,516 34% Business aviation 657 447 44% G700 V2500 7 19 (63)% Service 4,645 3,704 25% Large engine 3,299 2,492 33% Business aviation 790 721 9% Regional 264 229 15% V2500 292 262 11% Total 7,348 5,686 29% 1 Organic change is the measure of change at constant translational currency applying full year 2022 average rates to 2023. ROYCE ©2024 Rolls-Royce Not Subject to Export Control 75#76TRENT ENGINE PRODUCTS Engines in Engines on Airframe Market share* service order Trent 7000 Airbus A330neo 100% 220 332 Trent XWB-84 Airbus A350 100% 952 778 Trent XWB-97 Airbus A350 100% 162 435 Trent 1000 Boeing 787 27% 738 87 Trent 900 Airbus A380 48% 300 0 Trent 800 Boeing 777 40% 224 Trent 700 Airbus A330 60% 1,372 0 Trent 500 Airbus A340 100% 104 0 Total 4,072 1,632 *Share of total firm and announced programme sales with an engine decision (excludes cancelled orders) BMXN- 350-7 ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control 76#77CIVIL AEROSPACE ENGINE DELIVERIES ROLLS R ROYCE By engine 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Trent 500 Trent 700 181 184 140 88 110 63 10 2 2 1 1 Trent 800 - Trent 900 42 35 6 30 67 44 34 15 1 2 Trent 1000 59 79 106 122 109 125 126 82 12 5 38 Trent XWB-84 13 56 117 196 184 178 109 120 96 118 Trent XWB-97 1 45 56 34 29 23 31 Trent 7000 8 106 22 31 63 74 Civil Large Engines 282 311 308 357 483 469 510 264 195 190 262 Tay 67 46 38 28 2 AE3007 78 48 34 20 8 10 BR700 326 334 332 244 190 205 191 112 70 77 93 Pearl 2 24 72 44 88 103 Civil Small Engines 471 428 404 292 200 217 219 184 114 165 196 Civil Total 753 739 712 649 683 686 729 448 309 355 458 ©2024 Rolls-Royce Not Subject to Export Control 77#78CIVIL AEROSPACE IN-SERVICE INSTALLED FLEET* ROLLS R ROYCE By engine 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 RB211 22B 6 3 3 3 3 3 3 3 3 3 RB211 524 530 455 352 302 278 266 242 210 82 80 85 79 RB211 535 1,028 1,026 1,012 908 868 826 850 824 576 658 682 716 RB211 Total 1,564 1,484 1,367 1,213 1,149 1,095 1,095 1,037 661 741 767 795 Trent 500 452 440 388 352 336 280 284 240 68 92 80 104 Trent 700 948 1,114 1,288 1,388 1,460 1,590 1,636 1,606 1,054 1,146 1,178 1,372 Trent 800 446 436 422 362 352 330 334 320 134 176 184 224 Trent 900 208 244 280 304 332 360 400 428 68 168 252 300 Trent 1000 44 84 164 260 384 476 546 658 538 604 662 738 Trent XWB-84 2 30 124 278 432 590 562 666 762 952 Trent XWB-97 28 70 96 98 124 162 Trent 7000 2 80 90 130 170 220 Trent 2,098 2,318 2,544 2,696 2,988 3,314 3,662 3,992 2,610 3,080 3,412 4,072 Civil Large Engines 3,662 3,802 3,911 3,909 4,137 4,409 4,757 5,029 3,271 3,821 4,179 4,867 Spey 632 580 506 460 430 404 360 284 252 236 210 182 Tay 1,969 2,019 2,011 2,035 2,027 1,993 2,009 1,946 1,892 1,866 1,838 1,832 AE3007 2,544 2,598 2,534 2,468 2,326 2,302 2,448 2,472 2,028 2,124 1,954 2,076 BR700 2,362 2,696 2,964 3,388 3,642 3,858 4,098 4,322 4,314 4,382 4,442 4,560 Pearl 36 84 120 184 Civil Small Engines 7,507 7,893 8,015 8,351 8,425 8,557 8,915 9,024 8,522 8,692 8,564 8,834 Civil Total 11,169 11,695 11,926 12,260 12,562 12,966 13,672 14,053 11,793 12,513 Fleet growth -13% 5% 2% 3% 2% 3% 5% 3% -16% 6% 12,743 2% 13,701 8% * Installed engine base is net of retirements and excludes aircraft which are parked or in storage Fleet data from Cirium excludes aircraft temporarily parked due to COVID-19 ©2024 Rolls-Royce Not Subject to Export Control 78#79CIVIL IN-SERVICE THRUST BASE (MILLIONS LBS)* ROLLS R ROYCE Thrust per engine (lbs) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 RB211 22B 60,000 RB211 524 60,000 32 27 21 18 17 16 15 13 5 5 5 5 RB211 535 40,000 41 41 40 36 35 33 34 33 23 26 27 29 RB211 Total 73 69 62 55 52 49 49 46 28 31 32 34 Trent 500 56,000 25 25 22 20 19 16 16 13 Trent 700 72,000 68 80 93 100 105 114 118 116 76 46 5 83 Trent 800 92,000 41 40 39 33 32 30 31 29 12 16 Trent 900 70,000 15 17 20 21 23 25 28 30 Trent 1000 71,000 3 6 12 18 27 34 39 47 38 Trent XWB-84 84,000 3 10 23 36 50 584 12 43 47 56 16 47 55182 6 99 17 21 21 52 64 80 Trent XWB-97 97,000 3 7 9 10 12 16 Trent 7000 72,000 6 7 9 12 16 Trent 152 168 185 196 217 243 270 297 198 233 260 311 Civil Large Engines 226 237 247 251 269 292 319 343 226 265 292 345 Spey 11,000 7 6 6 5 5 4 4 3 3 3 Tay 15,000 30 30 30 31 30 30 30 29 28 28 AE3007 7,500 19 19 19 BR700 15,000 35 40 44 25 19 17 17 18 18 15 16 51 55 58 61 65 65 66 67 2856 2 28 15 16 68 Pearl 15,000 1 2 Civil Small Engines 91 97 99 105 107 109 114 116 112 114 114 114 Civil Total 317 333 346 356 376 402 433 459 338 378 406 459 Thrust Growth -12% 5% 4% 3% 6% 7% 8% 6% -26% 12% 7% 13% * Installed engine base is net of retirements and excludes aircraft which are parked or in storage Fleet data from Cirium excludes aircraft temporarily parked due to COVID-19 ©2024 Rolls-Royce Not Subject to Export Control 79#80DEFINITIONS AND CALCULATIONS Return on Capital: RoC = net operating profit after tax / average invested capital Net operating profit is defined as underlying operating profit after tax (where the tax charge reflects the group tax charge after removing the estimated tax shield on net financing costs). Invested capital is defined as total assets (excluding cash and cash equivalents and any surplus on post-retirement schemes) minus current liabilities (excluding debt), with an average calculated as the difference between opening and closing balance sheets. Total cash costs / Gross margin: TCC/GM = (self-funded R&D expenditure + C&A costs) / underlying gross profit Self-funded research and development (R&D) expenditure excludes the impact of contributions (government funding, amortisation and impairment of capitalised costs and amounts capitalised during the year) and fees. Free Cash Flow is cash from operating activities including capital expenditure and movement in investments, capital elements of lease payments, interest paid and excluding amounts spent or received on activity relating to business acquisitions or disposals, financial penalties paid and exceptional restructuring payments. The information in this document is proprietary and confidential to Rolls-Royce and is available to authorised recipients only copying and onward distribution is prohibited other than for the purpose for which it was made available. Rolls-Royce content only. ROLLS R ROYCE ©2024 Rolls-Royce 03/04/2024 Not Subject to Export Control 80#81SAFE HARBOUR STATEMENT This announcement contains certain forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. In particular, all statements that express forecasts, expectations and projections with respect to future matters, including trends in results of operations, margins, growth rates, overall market trends, the impact of interest or exchange rates, the availability of financing to the Company, anticipated cost savings or synergies and the completion of the Company's strategic transactions, are forward-looking statements. By their nature, these statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. The forward-looking statements reflect the knowledge and information available at the date of preparation of this announcement, and will not be updated during the year. Nothing in this announcement should be construed as a profit forecast. All figures are on an underlying basis unless otherwise stated - for the definition see note 2 to the condensed consolidated financial statements section of the 2023 Full Year Results Statement. ROLLS R ROYCE ©2024 Rolls-Royce Not Subject to Export Control 81