Rolls-Royce reported robust strategic and financial progress in 2025, with underlying operating profit rising to £3.5 billion from £2.5 billion in 2024. The operating margin increased to 17.3% from 13.8%. Civil Aerospace achieved a 20.5% underlying operating margin, up from 16.6%, driven by large engine aftermarket performance, contractual margin enhancements and spare engines profitability. Defence reached 14.4%, ahead of 14.2%, while Power Systems delivered 17.4%, up from 13.1%.
Free cash flow grew to £3.3 billion from £2.4 billion, supported by higher operating profit, long-term service agreement balances and working capital performance. Net cash stood at £1.9 billion at year-end, up from £475 million, with gross debt at £2.8 billion and liquidity at £8.7 billion. Over three years, the transformation programme doubled capital expenditure while generating higher profit and cash flow.