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%. Over the past three years, its transformation programme generated higher operating profit and free cash flow, while capital expenditure doubled. Civil Aerospace achieved an underlying operating margin of 20.5%, up from 16.6%, driven by large engine aftermarket performance, contractual margin enhancements and spare engines profitability.
Defence recorded an underlying operating margin of 14.4%, ahead of 14.2% in 2024, reflecting improved transport and combat programmes. Power Systems delivered 17.4%, up from 13.1%, supported by power generation growth in data centres and government demand. Free cash flow rose to £3.3 billion from £2.4 billion, with net cash at £1.9 billion versus £475 million prior year. Gross debt fell to £2.8 billion and liquidity stood at £8.7 billion.