#1ROLLS R ROYCE Rolls-Royce Investor Presentation Paris Air Show - June 2023 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. KSTATION STATION LEGS#2Transformation to a stronger future Aim to create a high performing, competitive, resilient and growing business Significant opportunity to expand our cash generation and profitability ROLLS Already in action to improve underlying performance We will set a granular strategy with mid-term targets ROLLS R ROYCE R Page 2 © 2023 Rolls-Royce#3Priorities to deliver on our potential Significantly improve operating profit and cash ROLLS R ROYCE Deliver efficiency improvements Generate cash, reduce debt and improve shareholder returns Develop a clear and granular strategy ZERO HARM CH Safety - people and product Play a key role in the energy transition Page 3 © 2023 Rolls-Royce#4How we are transforming Regular Governance 1. Efficiency & Simplification (1a) Organisation Design (1b) Footprint Optimisation (1c) 3rd Party Spend 2. Commercial Optimisation Contract profitability 3. Business Improvement Higher operating margins Commercial edge • Improved operational performance 4. Working Capital Significant near- term reduction Discipline to sustain improvement 5. Strategic Review Differentiated and executable strategies Measurable medium-term targets ROLLS R ROYCE 6. Purpose & Culture 7. Performance Management Page 4 © 2023 Rolls-Royce#52023 shows signs of improved performance Operating profit (£bn) 1.0 0.5 0.0 ROLLS R ROYCE Free cash flow (£bn) Net debt (£bn) Guidance: £800-£1bn 1.0 Guidance: £600-£800m 0.5 -1 0.0 -0.5 -1.0 -1.5 2023 2021 2022 2021 2022 Guide 2023 Guide -2 -3 -4 -5 T≈ 56 -6 Investment grade 2021 2022 Target Page 5 © 2023 Rolls-Royce#6ROLLS R ROYCE Civil Aerospace Page 6 © 2023 Rolls-Royce#7Leading products in growing markets Widebody Portfolio Market leading legacy large engine** 35% market share 787 Sole-source SINGAPORE AIRLINES Sole-source Sole-source QATAR Civil Aerospace 2022 underlying revenue 30% business aviation & regional ROLLS R ROYCE O 70% large engines Airbus A330 Trent 700 1,178 Trent 700 engines average age: 11 years Boeing 787 Trent 1000 662 engines average age: 6 years 762 engines average age: 3 years Business Aviation Portfolio In Service Tay BR710* AE3007 6,300+ engines in service Airbus A330neo Trent 7000 Airbus A350-900 Trent XWB-84 A350-1000 & A350F Trent XWB-97 124 engines average age: 3 years Freighter launched 170 engines average age: 2 years In Production In Flight Test In Development Gulfstream G650 BR725 Bombardier Gulfstream Bombardier 5500/6500 Pearl 15 1000 BR725 & 120 Pearl 15 engines in service Gulfstream G700 Pearl 700 Strong order book * Tay | Gulfstream IV, G300, G400, G350 and G450. BR710 | Bombardier GX, Global 5000 & 6000, Gulfstream V, G500 & G550 ** Legacy large engine fleet also includes: RB211, Trent 500, Trent 800 & Trent 900 (-1850 engines in service or stored) Page 7 © Dassault Dassault Falcon X Pearl 10X Positive market response 2023 Rolls-Royce#8Key drivers of Civil Aerospace value Creating value from a growing and maturing fleet as the market for international passenger travel recovers Retaining the operational efficiency and productivity gains already delivered to drive further margin expansion ROLLS BE R ROYCE Maximise Services Business OE margin Investment service receipts cost reduction Aviation improvement cycle growth . Market recovery • • Contract Extend time on wing • Reduce . extensions and aircraft transitions • Service scope and pricing • Reduce shop visit cost component and assembly costs Productivity and cost base improvement ⚫ Purchasing strategy • Pearl engine programme ramp- up and OE cost reduction . Less intense new product introduction Focus on cost reduction and product maturity Capital light approach utilising partnerships Page 8 © 2023 Rolls-Royce#9Time On Wing improvement drivers Product improvements (-40%) Life limited parts extensions (-50%) ROLLS BE R ROYCE Better aircraft operation (-10%) Business improvement potential IntelligentEngine digital platform - powerful insights, better decisions Using engine digital twins, big data analytics and artificial intelligence Page 9 © 2023 Rolls-Royce#10Winning Together on Shop Visit Cost Lean engine overhaul (10%) Re-use of parts (40%) Part repair (15%) Advance repair tech Lower part cost (30%) (5%) Business improvement potential ROLLS R ROYCE Service Management digital platform – powerful insights, better decision Page 10 © 2023 Rolls-Royce#11Addressing supply chain challenges caused by macro environment Main macro-economic headwinds: · . • Inflation Russia/Ukraine war Global Supply Chain disruption R . ROLLS R BE ROYCE Energy & raw material supply Supply chain resilience Escalation clauses Group domestic energy hedging Contractual protection Nickel hedging and cobalt fixed price Monitoring supplier contracts Managing suppliers who may face financial difficulties Business aviation: No cap on inflation escalations Widebody engines: Escalations with cap with hyper-inflation risk sharing Page 11 © 2023 Rolls-Royce#12UltraFan- the ultimate TurboFan The technologies that we have developed through the UltraFan programme will provide us with solutions for the here and now in offering new ways to improve our existing engines, further enhancing their performance and efficiency ROLLS R ROYCE Conducted using 100% Sustainable Aviation Fuel Technology demonstrator - successful first tests Scalable technology from ~25,000- 110,000lb thrust 10% efficiency improvement over the Trent XWB World-record breaking power gear box Page 12 © 2023 Rolls-Royce#13ROLLS R ROYCE Defence Page 13 © 2023 Rolls-Royce#14Defence Rolls-Royce is a key trusted supplier to governments to power defence for the protection of society, preservation of peace and to underpin economic and social stability ROLLS R ROYCE -50% US DoD 0 -30% UK MOD -20% Export I Long-term drivers of defence spending • US: large new programmes for US DoD (including B-52 and FLRAA) UK: commitment to maintain fighting capability through Project Tempest and UK-led Next- Generation fighter programmes (GCAP) • Export Markets: continued growth including naval products, transport aero engines and Eurofighter typhoon exports and potential involvement in Australian submarines (AUKUS) Geopolitical tensions ● Page 14 © 2023 Rolls-Royce#15ROLLS R ROYCE Once sold our products stay in production for decades and our customers use them for decades Development Product Development Lifecycle Growth Production Maturity • Customer funding available for Defence R&D ⚫ -38% of product revenues from Original Equipment • Stable production volumes 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 Page 15 © 2023 Rolls-Royce#16GLOBAL COMBAT AIR PROGRAMME (GCAP) In December 2022, Italy, Japan, and the UK launched the Global Combat Air Programme (GCAP) to jointly develop a next generation fighter, due to enter into service in 2035. Co-operation under GCAP allows us to share advanced technologies to get the best military capabilities, share the cost of development to get the best value for money, and strengthen the industrial base of each country. Future combat aircraft will need to have greater flexibility than previous generations of fighter, and Tempest will ensure the UK, Japan and Italy keep ahead of those adversaries. ROLLS R ROYCE The UK already has in excess of 2,800 people working on this programme. Over 600 of these at Rolls-Royce alone. We are making rapid progress and driving even greater pace in programme delivery, along with our international partners. Delivering our ambitious in- service date of 2035 requires much faster delivery than conventional programmes. Page 16 © 2023 Rolls-Royce#17F130 For the B-52 "B-52 modernization is our most important program" -USAF global Strike Command Timeline 2024 | CDR 2026 | Mil. Cert 2034|~650 engine deliveries Development Schedule Programme of Record ROLLS R ROYCE ☐ ◉ First two F130 engines delivered and in test at NASA Stennis Space Center, US Cross-wind tests to determine final nacelle design; Critical Design Review (CDR) for engines in early 2024 F130 programme proceeding well, on schedule and within budget, no change to engine pricing New production line under development in RR Indianapolis Integration onto B-52 is managed by Boeing, along with other aircraft upgrades ROLLE ER R RONCE American Made Jet Engine Page 17 © 2023 Rolls-Royce#18ROLLS R ROYCE AE 1107F powering V-280 for FLRAA "This down-select represents a strategic pivot for Army Aviation to the transformational speed and range our Army needs to dominate future battlefields" - Maj. Gen. Walter Rugen, director of the Future Vertical Lift Cross-Functional Team. Timeline 2024 | PDR 2027 | Cert 2030 | First Unit Equipped V 280 N280BH Middle Tier of Acquisition Programme of Record ■ Future Long-Range Assault Aircraft programme will replace Army Blackhawks (not a 1-1 replacement) Competitor lost USG protest and announced they would no longer fight selection of V-280 ■ RR focused on executing the program on schedule to achieve key milestone in mid-2024 Page 18 © 2023 Rolls-Royce#19Next generation submarine: The Dreadnought Alliance The new SSBN Dreadnought ballistic deterrent submarine (SSBN), which will replace the Vanguard Class, is in production and due to be operational in the early 2030s. Rolls-Royce will provide reactors for Australia's nuclear powered submarines as part of the AUKUS trilateral agreement between Australia, the UK and the US (AUKUS). Our most advanced reactor cores operate for over 20 years without needing to be refuelled. The dived endurance of nuclear powered submarines is only limited by the amount of food that can be carried and the endurance of the crew. ROLLS R ROYCE For over 60 years we have provided the power to the Royal Navy's nuclear submarines. Page 19 © 2023 Rolls-Royce#20Safe harbour statement and contact details Isabel Green Head of Investor Relations +44 7880 160976 [email protected] Jeremy Bragg Investor Relations Director +44 7795840875 [email protected] 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 2022 Full Year Results Statement. ROLLS R ROYCE Page 20 © 2023 Rolls-Royce#21ROLLS R ROYCE