Rolls-Royce shares have experienced a significant surge of 19% following the announcement by its new CEO, Tufan Erginbilgic, of a strategic review aimed at overhauling the business.
Only weeks after describing the company as a “burning platform,” Erginbilgic has identified seven key areas for improvement, including working capital, investment priorities, and company culture.
Rolls-Royce’s CEO has announced seven key areas of focus for the strategic review of the business as part of the company’s annual results.
- Efficiency and simplification – delivering sustainable cost efficiencies.
- Commercial optimisation – getting the right reward for the risks we take and the value we create for customers.
- Working capital – delivering a significant and structural reduction across the group.
- Business improvement – each business unit building and delivering plans to address performance gaps to realise its potential.
- Strategic review – enabling prioritisation of investment opportunities.
- Performance management – delivering on our expectations of high performance from all businesses and employees.
- Purpose and culture – instilling our people with the right mindset to be confident, proactive and timely in our actions.
In a bid to increase profits and investor returns, he has also declared that there will be no dividends for shareholders in 2022.
Erginbilgic, who previously spent twenty years at BP, has already made changes to the company’s operations, including replacing the head of the civil aerospace unit and hiring BP veteran Nicola Grady-Smith as chief transformation officer.
According to the Financial Times, Erginbilgic is committed to transforming Rolls-Royce’s operations to save the company from its current precarious position.
