Latest news with #TufanErginbilgiç
Yahoo
a day ago
- Business
- Yahoo
Rolls-Royce CEO fired managers and held staff brainstorms as part of a ‘4 pillar' turnaround plan that led to 600% share price jump
Just two years ago, Tufan Erginbilgiç, then newly installed as CEO of Rolls-Royce, gave a grim warning to the engine maker's employees, describing the company as a 'burning platform' facing its 'last chance' at survival, as he lamented its track record of destroying value with each of its investments. With that considered, Rolls-Royce's turnaround since—including a 600% share price jump and hitting profit targets two years ahead of schedule—is nothing short of astounding. But Erginbilgiç, a former BP executive who doesn't regard himself as ruthless, took a fairly rudimentary approach to instill a successful turnaround at a group that has added more than $70 billion to its market value in the last two years. Rolls-Royce manufactures engines for major plane manufacturers, Airbus and Boeing, on large, dual-aisle aircraft. The group is also a supplier of engines and propulsion systems for combat aircraft and submarines to government defense departments including the Ministry of Defense in the U.K. Despite that, when Erginbilgiç joined Rolls-Royce, the company was near its floor for market valuation, bogged down by falling air travel during the COVID-19 pandemic and costly contracts with loss-making clients. An industry-wide rebound in travel demand and some astute contract negotiations are among the headline points that explain Rolls-Royce's turnaround. In the background, though, are the fruits of an ambitious plan involving each of Rolls-Royce's 42,000 employees. In an interview with the Financial Times, a victorious Erginbilgiç described how he leaned on 'four pillars' to encourage wholesale change throughout his organization. The first pillar involved showing staff the extent of the difficulties faced by the company, exemplified by Erginbilgiç's 'burning platform' comments, which both shocked and focused his employees. Tougher stances were to follow. Under Erginbilgiç's guidance, the company laid off 2,500 employees in 2023, mostly in middle manager positions, the FT reports. At the same time, Erginbilgiç held workshops for 500 employees to allow brainstorming and the implementation of the best ideas. Erginbilgiç's third pillar required the company to set clear performance targets. The company now has 17 targets, including improving the amount of time its engines were on the wing of a plane, rather than losing money in the repair shop. The fourth pillar of the turnaround aimed to ensure Rolls-Royce's targets were attacked with 'pace and intensity.' 'If you don't have a strategy that can cascade down to 42,000 people it won't get delivered,' Erginbilgiç summarized to the FT. Bosses are increasingly turning to management practices that can help them get their message across directly to as many staffers as possible. In some cases, this is driven by urgency and, in other cases, by technological advancement. Speaking to Fortune last year, Sanofi CEO Paul Hudson described how he used the 'Fight Club' approach to encourage employees to begin using its AI agent. Hudson initially got a small group of people in a room using the tool, before allowing word of mouth to help uptake of the technology spread. Meanwhile, Bayer, a similarly struggling European giant, also turned to a personnel shakeup to combat investor pessimism. Bayer's CEO, Bill Anderson, got rid of more than 5,000 employees, mostly in managerial positions, and asked employees to self-organize and work in 90-day 'sprints' in self-directed teams.A year after Bayer's attack on bureaucracy began, Anderson said attrition at the company had fallen. Editor's note: A version of this article first appeared on on March 25, 2025. This story was originally featured on
Yahoo
3 days ago
- Business
- Yahoo
Rolls-Royce CEO fired managers and held staff brainstorms as part of a ‘4 pillar' turnaround plan that led to 600% share price jump
Just two years ago, Tufan Erginbilgiç, then newly installed as CEO of Rolls-Royce, gave a grim warning to the engine maker's employees, describing the company as a 'burning platform' facing its 'last chance' at survival, as he lamented its track record of destroying value with each of its investments. With that considered, Rolls-Royce's turnaround since—including a 600% share price jump and hitting profit targets two years ahead of schedule—is nothing short of astounding. But Erginbilgiç, a former BP executive who doesn't regard himself as ruthless, took a fairly rudimentary approach to instill a successful turnaround at a group that has added more than $70 billion to its market value in the last two years. Rolls-Royce manufactures engines for major plane manufacturers, Airbus and Boeing, on large, dual-aisle aircraft. The group is also a supplier of engines and propulsion systems for combat aircraft and submarines to government defense departments including the Ministry of Defense in the U.K. Despite that, when Erginbilgiç joined Rolls-Royce, the company was near its floor for market valuation, bogged down by falling air travel during the COVID-19 pandemic and costly contracts with loss-making clients. An industry-wide rebound in travel demand and some astute contract negotiations are among the headline points that explain Rolls-Royce's turnaround. In the background, though, are the fruits of an ambitious plan involving each of Rolls-Royce's 42,000 employees. In an interview with the Financial Times, a victorious Erginbilgiç described how he leaned on 'four pillars' to encourage wholesale change throughout his organization. The first pillar involved showing staff the extent of the difficulties faced by the company, exemplified by Erginbilgiç's 'burning platform' comments, which both shocked and focused his employees. Tougher stances were to follow. Under Erginbilgiç's guidance, the company laid off 2,500 employees in 2023, mostly in middle manager positions, the FT reports. At the same time, Erginbilgiç held workshops for 500 employees to allow brainstorming and the implementation of the best ideas. Erginbilgiç's third pillar required the company to set clear performance targets. The company now has 17 targets, including improving the amount of time its engines were on the wing of a plane, rather than losing money in the repair shop. The fourth pillar of the turnaround aimed to ensure Rolls-Royce's targets were attacked with 'pace and intensity.' 'If you don't have a strategy that can cascade down to 42,000 people it won't get delivered,' Erginbilgiç summarized to the FT. Bosses are increasingly turning to management practices that can help them get their message across directly to as many staffers as possible. In some cases, this is driven by urgency and, in other cases, by technological advancement. Speaking to Fortune last year, Sanofi CEO Paul Hudson described how he used the 'Fight Club' approach to encourage employees to begin using its AI agent. Hudson initially got a small group of people in a room using the tool, before allowing word of mouth to help uptake of the technology spread. Meanwhile, Bayer, a similarly struggling European giant, also turned to a personnel shakeup to combat investor pessimism. Bayer's CEO, Bill Anderson, got rid of more than 5,000 employees, mostly in managerial positions, and asked employees to self-organize and work in 90-day 'sprints' in self-directed teams.A year after Bayer's attack on bureaucracy began, Anderson said attrition at the company had fallen. Editor's note: A version of this article first appeared on on March 25, 2025. This story was originally featured on
Yahoo
09-05-2025
- Business
- Yahoo
Canada beats Britain in race to launch first mini-nuclear reactor in the West
Canada has approved the construction of the first mini-nuclear reactor in the West, beating Britain in the race to approve the technology. The Government of Ontario has endorsed a multibillion-dollar plan for GE Hitachi to build four small nuclear reactors (SMRs), with the first to be operational by 2029. The project will create 18,000 jobs and cost C$20.9bn (£11.3bn). The decision comes as GE Hitachi vies to build Britain's first mini-nuclear reactor, competing in a government-led competition against Britain's Rolls-Royce and US company Holtec. The UK is not expected to have its own SMR up and running until the mid-2030s. Andy Champ, GE Hitachi's UK director, said: 'The decision to proceed with construction in Canada means our BWRX-300 is the only SMR in the Western world with a contract to deploy, making us the lowest-risk choice.' Great British Nuclear (GBN) is expected to announce the winning bidders of its SMR contract this summer, with participants expected to build three to four small reactors. The competition to bring the power plants to Britain has been repeatedly delayed in what has been described as a 'tortuously slow' Whitehall process. The winning technologies was initially supposed to be chosen by late 2024, but that timeline has repeatedly slipped. The delays have led to warnings from industry that Britain risked falling behind in the global race to capitalise on the technology. Nations that award the initial contracts are likely to see factories assembled in their country, something that may not be a given as the industry evolves. Tufan Erginbilgiç, the boss of Rolls-Royce, told The Telegraph last year that Britain risked losing 'first-mover advantage'. SMRs are viewed as a key breakthrough in nuclear technology, since they can be made in factories and assembled on site, cutting the building time for a new nuclear power plant from decades to years, saving billions of pounds. GBN has advertised contracts worth £20bn in total for 'technology partners', a figure expected to be shared among two winning bids. However, that budget is expected to come under pressure from the Chancellor's cross-departmental spending review. The four Canadian reactors will provide enough clean energy for 1.2m homes and produce 1,200 megawatts (MW) of power. The government-owned Ontario Power Generation will install a GE Hitachi BWRX-300, which uses commercially available uranium to generate power. 'This is a historic day for Canada as we start construction on the first small modular reactor in the G7,' said Stephen Lecce, minister for energy. 'This nation-building project being built right here in Ontario will be led by Canadian workers using Canadian steel, concrete and materials to help deliver the extraordinary amount of reliable and clean power we will need to deliver on our ambitious plan to protect Ontario and unleash our economy.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Yahoo
27-04-2025
- Business
- Yahoo
Will the Rolls-Royce share price collapse? Here's what the charts say
The Rolls-Royce (LSE:RR) share price is up a remarkable 71% over 12 months. In fact, the stock's rebirth has been truly incredible over the past three years. Surging more than 1,000% from the nadir, Rolls-Royce is now one of the largest companies on the FTSE 100, with a market cap around £60bn. But what's happened to its valuation over the period? Let's take a closer look. Starting with the price-to-earnings (P/E) ratio, we can see that Rolls-Royce shares have gradually become more expensive over the past year. The data prior to 2023 isn't that useful because Rolls-Royce really struggled during the pandemic, and it was either loss-making or had to sell business units to cover costs. Data since mid-2023 suggests that the stock's rise has broadly outpaced trailing earnings. Price-to-sales (P/S) data also confirms this trend. Over the past five years, we can see that investors have become increasingly willing to pay more for each pound of sales. Having traded around 0.5 times P/S, the business is now more than 600% more expensive. That's certainly something to bear in mind, although earnings are the key metric, not sales. This data tells me that Rolls-Royce stock is more expensive on a historical basis. However, that doesn't give us the whole picture. Earnings growth is forecasted to average around 15% over the medium term. This is impressive, but leads to a P/E-to-growth (PEG) ratio of two times. That's a 35% premium versus the industrial sector global average. What's more, Rolls-Royce isn't just an industrials stock, it's a company with a really strong economic moat. In other words, it's doesn't often face new competition in its primary sections like building aircraft engines and submarine propulsion systems. With that in mind, it's more appropriate to compare it with peers like GE. GE's P/E ratio is high: 37.5 times (trailing 12-month period, or TTM), and the company's expected growth is similar to Rolls-Royce. What's more, its price-to-sales (P/S) ratio is 5.3 times (TTM), also elevated. While US stocks typically trade at a premium to their UK counterparts, it also suggests Rolls is not overvalued. Sometime the numbers aren't everything, so let's take a closer look at the business. Rolls-Royce is capitalising on strong demand in civil aerospace and defence, with engine flying hours surpassing pre-pandemic levels and robust growth in service revenues. Aggressive transformation under CEO Tufan Erginbilgiç has delivered higher margins, strong cash flow, and a return to net cash, enabling dividend reinstatement and a £1bn share buyback programme. Upgraded mid-term targets reflect confidence in continued operational improvements and market share gains. However, persistent supply chain challenges, including parts shortages and cost inflation, are expected to impact cash flow by £150m–£200m in 2025 and may disrupt deliveries. The civil aerospace sector's inherent volatility, reliance on long-haul travel, and potential technical issues could threaten earnings stability. Finally, while the balance sheet is much stronger, unexpected shocks or aggressive shareholder returns could slow deleveraging. Overall, Rolls-Royce's outlook is bright, but execution risks remain. Personally, I'm not adding to my position right now as I believe there could be more clearly undervalued stocks available. The post Will the Rolls-Royce share price collapse? Here's what the charts say appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool James Fox has positions in Rolls-Royce Plc. The Motley Fool UK has recommended Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
Yahoo
21-04-2025
- Business
- Yahoo
With the Rolls-Royce share price still down 10%, can I resist buying?
The Rolls-Royce Holdings (RR.L) share price has regained some of its recently-lost ground, after dipping below 600p in early April. That pushed it down to levels we hadn't seen since before February's full-year results sent it flying high. Not long ago I was wondering how soon Rolls-Royce shares might make it through the £10 barrier. There's actually nothing special about that price really. But markets do seem to like round decimal numbers. Recently though, I've been wondering if it can hold on to £7-ish levels. Even around 730p, the shares are still more than 10% down from their high point this year. Is this another of those buying opportunities that I keep thinking I'm waiting for? The speed with which investors bought back into Rolls-Royce shares when it sounded like noises from the White House might have been softening says one thing to me. Confidence remains strong. The market seems to think a global trade war might not be so bad for the company after all. But is that confidence misplaced? Aircraft construction strikes me as one of the worst potential casualties of trade protectionism. It's got to be among the most widely globalised industries. Look at Boeing (BA), for example. Final assembly is in US plants, but the parts come from Japan, South Korea, the UK, Germany, Italy, France, Australia, Sweden… and China. Dozens of global companies provide parts and assemblies. And China contributes parts to every single commercial model that Boeing currently makes. Boeing shares have recovered some of the hammering they took in the immediate aftermath of tariff day. But to assume no real impact on Boeing and on the whole aircraft construction business could be a big mistake. Rolls-Royce has its annual general meeting (AGM) on 1 May. Those can be dreary affairs, with nothing more than a formulaic roll-out of statistics, votes and the like. But I wonder if the board might have a few words to offer at this one, on how they see the global trade threat unfolding? CEO Tufan Erginbilgiç isn't shy when it comes to saying what he thinks, and I'd really like to hear him at this event. At FY results time he was strongly upbeat, speaking of a 'high-performing, competitive, resilient, and growing business'. And the numbers backed him up. But he did allude to 'a supply chain environment that remains challenging'. And global supply chains aren't going to be made easier by recent events. Forecasts put the shares on a price-to-earnings (P/E) ratio of 28.5 for the end of this year, dropping to 23.3 by 2027. That doesn't look too high for a company with growth prospects. But projected earnings per share (EPS) growth is relatively slow, with a 2% rise between 2024 and 2027 as there's a dip on the cards this year. I like today's lower share price. But I don't like the greater uncertainty we now face. Rolls-Royce doesn't fit my risk profile, so yes, I can resist it. But I still think growth investors who don't mind a bit of risk could do well to consider it now. The post With the Rolls-Royce share price still down 10%, can I resist buying? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
