Rolls-Royce chief to step down as engineering giant returns to profit

Rolls-Royce has announced that the business has returned to profit following a strategy to reduce costs.

In its full-year results, the firm, which has its civil aerospace and defence divisions in Derby, said it made a profit of £124 million for the year to 31 December 2021, up from losses of £3.1 billion in 2020.

The company said it had achieved its cost savings target a whole year early, after reducing headcount and selling off ancillary companies.

The firm has also announced that its chief executive, Warren East, plans to step down at the end of 2022 after almost eight years in the post.

Mr East said: “It is a privilege to lead Rolls-Royce. It’s a job which I thoroughly enjoy. There have been challenges, but we have built on the cultural and organisational improvements we have made to work through them, deliver on our commitments and create a better business.

“We have simplified the group, fundamentally improved our underlying operations and driven long-term change.”

Rolls-Royce has said that it will now launch an extensive search for Mr East’s successor.

Under his stewardship, Rolls-Royce has negotiated the pandemic and evolved into a company that is at the forefront of addressing the global challenge of reducing carbon emissions.

For example, the company is now developing technology to reduce the environmental impact of aviation, through the use of sustainable aviation fuels and projects such as its all-electric Spirit of Innovation aircraft.

The firm has also recently launched a new business – Rolls-Royce SMR – building a new technology solution to deliver affordable, low carbon, nuclear power.

Each mini nuclear power station it is developing will occupy around a tenth of the size of a conventional nuclear generation site and power approximately one million homes.

Recently, the Qatar Investment Authority, the sovereign wealth fund of the State of Qatar, agreed to invest £85 million in Rolls-Royce SMR.

Mr East said: “Rolls-Royce is a dramatically different business today: a leading industrial technology company that is not only addressing the energy transition but embracing the opportunity it presents to generate substantial business growth, including through the creation and nurturing of new businesses with very significant potential.

“With the advances we have made, the momentum and energy we have shown and our firmer financial foundations, this is the right moment to look to the future. I am thoroughly committed to leading this business while we work towards a smooth leadership transition.

“The passion and skills of our people, the strength of our technologies and the depth of our relationships give Rolls-Royce tremendous opportunities to pioneer the vital solutions our planet needs to create a Net Zero carbon future.

“This is the biggest technological shift for the group since the arrival of the jet engine.”

Anita Frew, chair of Rolls-Royce, said: “Warren is an exceptional leader and has set a pioneering vision and strategic direction for Rolls-Royce to lead the transition to net zero across our markets.

“He has shown incredible tenacity, steering the group through unprecedented times, and driven substantial cultural change throughout the organisation.

“He has a real passion for the business which engenders pride in our people and confidence among our stakeholders.

“He has led Rolls-Royce to a point where we have substantially delivered on our recent commitments to investors and are now firmly set on the path to a more prosperous and sustainable future.

“We are now running an open and transparent process to find his successor and ensure a smooth transition.

“I know that during this time, Warren will continue to lead Rolls-Royce with all the dedication he has shown throughout his tenure.”