Capturing Performance Improvement Opportunities

GROUP MID-TERM TARGETS AND GUIDANCE Mid-term targets Operating profit Operating margin Free Cash flow Return on Capital Other guidance TCC/GM Gross disposal proceeds Net investments Working capital Net interest Tax paid FX - achieved rate Headcount Severance costs Rightsizing benefits (annualised) £2.5bn-£2.8bn 13-15% £2.8bn-£3.1bn 16-18% 0.4-0.5× £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 © 2023 Rolls-Royce Not Subject to Export Control

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