Latest news with #nuclear reactors
Times
5 days ago
- Business
- Times
Rolls-Royce aims to become UK's biggest company by market value
Rolls-Royce, Britain's engineering champion, is chasing a target of becoming the country's largest company by market value. The company's chief executive Tufan Erginbilgic said that that could be achieved by a take-off in demand for small modular nuclear reactors for local power stations being commissioned to build to secure the nation's energy sovereignty. The ambition of Erginbilgic, who took over at the Derby-based group in 2023, would need to see Rolls-Royce nearly double its market capitalisation to overtake AstraZeneca, the pharmaceuticals group worth just shy of £172 billion. Rolls-Royce's market capitalisation is £92 billion. If it is to claim the scalp, Rolls-Royce would need to pass several other colossi of the UK corporate scene on the way: HSBC, Europe's biggest bank, is valued on the stock market at £163 billion, oil and gas major Shell has a value of £155 billion and Unilever, the consumer goods group, is at £110 billion. British American Tobacco currently remains marginally ahead of Rolls-Royce at £93 billion. Erginbilgic said Rolls-Royce has the 'potential' to become top dog because of its pivot into civil nuclear, using its technology developed for Britain's nuclear submarine fleet to build out local power stations with small modular reactors (SMRs). It has already signed deals with the UK and Czech governments. 'There is no private company in the world with the nuclear capability we have,' Erginbilgic told the BBC. 'If we are not market leader globally, we did something wrong.' He said Rolls-Royce is chasing a $1 trillion-plus market in SMRs which he reckons will see 400 of them installed worldwide by 2050 at a current cost of £2.2 billion apiece. The Rolls-Royce boss said the need for SMR installations is becoming particularly acute because of the need to power the data centres that will facilitate mass adoption of artificial intelligence. Rolls-Royce shares have already risen tenfold since Erginbilgic took over in January 2023 with the stock rising from 93p to the current £10.82. The chief executive famously called the company a 'burning platform' when he arrived and set about turbocharging the reforms of the company begun under his predecessor Warren East, who had weathered the Covid-19 crisis. Other storms have swept the business, including record fines for bribery and corruption across five continents; and billions of pounds to repair design and durability issues with the Trent 1000 engines for the Boeing 787 Dreamliner. Erginbilgic swept out much of the previous management and set about creating a regime in which the company would refuse to accept second best on pricing power for its engines for Boeing, Airbus and business jets, or on manufacturing efficiency. Since he took over Erginbilgic has seen Rolls-Royce overtake in market capitalisation terms the likes of his old oil and gas employer BP, fellow defence company BAE Systems, Barclays bank and Rio Tinto the miner.
Yahoo
6 days ago
- Business
- Yahoo
AI can make us UK's biggest firm, Rolls-Royce says
Rolls-Royce's plan to power artificial intelligence (AI) with its nuclear reactors could make it the UK's most valuable company, its boss has said. The engineering firm has signed deals to provide small modular reactors (SMRs) to the UK and Czech governments to power AI-driven data centres. AI has boomed in popularity since 2022, but the technology use lots of energy, something which has raised practical and environmental concerns. Rolls-Royce chief executive Tufan Erginbilgic told the BBC it has the "potential" to become the UK's highest-valued company by overtaking the largest firms on the London Stock Exchange thanks to its SMR deals. "There is no private company in the world with the nuclear capability we have. If we are not market leader globally, we did something wrong," he said. Tufan Erginbilgic has overseen a ten-fold increase in Rolls-Royce's share price since taking over in January 2023. However, he has ruled out the idea of Rolls-Royce seeking to list its shares in New York as British chip designer Arm has done and the likes of Shell and AstraZeneca have considered in the search for higher valuations. This is despite the fact that 50% of its shareholders and customers are US-based. "It's not in our plan," said Mr Erginbilgic, a Turkish energy industry veteran. "I don't agree with the idea you can only perform in the US. That's not true and hopefully we have demonstrated that." AI investment Rolls-Royce already supplies the reactors that power dozens of nuclear submarines. Mr Erginbilgic said the company has a massive advantage in the future market of bringing that technology on land in the form of SMRs. SMRs are not only smaller but quicker to build than traditional nuclear plants, with costs likely to come down as units are rolled out. He estimates that the world will need 400 SMRs by 2050. At a cost of up to $3bn (£2.2bn) each, that's another trillion dollar-plus market he wants and expects Rolls-Royce to dominate. The company has signed a deal to develop six SMRs for the Czech Republic and is developing three for the UK. But it remains an unproven technology. Mr Erginbilgic conceded he could not currently point to a working SMR example but said he was confident in its future potential. There are also concerns about the demands on water supplies from the data centre and SMR cooling systems. In response, companies including Google, Microsoft and Meta have signed deals to take energy from SMRs in the US when they are available. Next generation aircraft Rolls-Royce sees SMRs as key to its future, but its biggest business is aircraft engines. Already dominant in supplying engines to wide-bodied aircraft like Boeing 787 and Airbus A350, it plans to break into the next generation of narrow-bodied aircraft like the Boeing 737 and Airbus A320. This market is worth $1.6tn - nine times that of the wide-bodied . Rolls-Royce is a bit player in a market that has powerful and successful leaders, and that rival Pratt and Witney lost $8bn trying and failing to break into. The market is dominated by CFM International – a joint venture between US-based GE Aerospace and French company Safran Aerospace Engines. Industry veterans told the BBC that market leaders can and will drop prices to airline customers long enough to see off a new assault on their market dominance. But Mr Erginbilgic said this is not just the biggest business opportunity for Rolls-Royce. Rather, it is "for industrial strategy... the single biggest opportunity for the UK for economic growth". "No other UK opportunity, I challenge, will match that," he said. Share price up ten-fold Although Rolls-Royce sold its car making business to BMW nearly 30 years ago, the name of the company is still synonymous with British engineering excellence. But in the early part of this decade that shine had worn off. The company was heavily indebted, its profit margins were non-existent, and thousands of staff were being laid off. When Mr Erginbilgic took over in January 2023, he likened the company to "a burning platform". "Our cost of capital was 12%, our return was 4% so every time we invested we destroyed value," he said. Two and a half years later, the company expects to make a profit of over £3bn, its debt levels have fallen and shares have risen over 1,000% - a ten-fold rise. So how did that happen? And is Mr Erginbilgic right to think that Rolls-Royce's roll is only just starting? 'Grudging respect' The timing of his appointment was fortunate according to some industry veterans. Rolls-Royce's biggest business – supplying engines to commercial airlines – has rebounded strongly from the Covid pandemic. The company's most successful product – the Trent series of aircraft engines – are at the sweet spot of profitability as the returns on investment in their development over a decade ago begin to pour into company coffers. Russia's full-scale invasion of Ukraine in 2022 arguably made it almost inevitable that its defence business would see higher spending from European governments – which has been confirmed by recent announcements. Unions have not always been fans of Mr Erginbilgic's hard-charging approach. In October 2023, one of his first major move was cutting jobs, which drew criticism from Sharon Graham, the boss of the Unite union. "This announcement appears to be about appeasing the markets and its shareholders while ignoring its workers," she said at the time. However, overall global headcount has grown from 43,000 to 45,000 since 2023 and union sources say there is "grudging respect" for Mr Erginbilgic. Those sources give him one third of the credit for the turnaround around in the company's fortunes, with a third credited to market conditions and a third to his predecessor Warren East for "steadying the ship". So does Mr Erginbilgic really believe that Rolls-Royce can be the UK's most valuable company – overtaking the likes of AstraZeneca, HSBC, and Shell? "We are now number five in the FTSE. I believe the growth potential we created in the company right now, in our existing business and our new businesses, actually yes – we have that potential." Rolls-Royce is undoubtedly a company with the wind at its back – and Tufan Ergenbilgic certainly believes he has set the sails just right. What is AI, how does it work and why are some people concerned about it? Warning AI could use as much energy as Netherlands
BBC News
6 days ago
- Business
- BBC News
Nuclear-powered AI could make Rolls Royce UK's biggest firm, says boss
Rolls-Royce's plan to power artificial intelligence (AI) with its nuclear reactors could make it the UK's most valuable company, its boss has engineering firm has signed deals to provide small modular reactors (SMRs) to the UK and Czech governments to power AI-driven data has boomed in popularity since 2022, but the technology use lots of energy, something which has raised practical and environmental chief executive Tufan Erginbilgic told the BBC it has the "potential" to become the UK's highest-valued company by overtaking the largest firms on the London Stock Exchange thanks to its SMR deals. "There is no private company in the world with the nuclear capability we have. If we are not market leader globally, we did something wrong," he Erginbilgic has overseen a ten-fold increase in Rolls-Royce's share price since taking over in January he has ruled out the idea of Rolls-Royce seeking to list its shares in New York as British chip designer Arm has done and the likes of Shell and AstraZeneca have considered in the search for higher is despite the fact that 50% of its shareholders and customers are US-based."It's not in our plan," said Mr Erginbilgic, a Turkish energy industry veteran. "I don't agree with the idea you can only perform in the US. That's not true and hopefully we have demonstrated that." AI investment Rolls-Royce already supplies the reactors that power dozens of nuclear submarines. Mr Erginbilgic said the company has a massive advantage in the future market of bringing that technology on land in the form of are not only smaller but quicker to build than traditional nuclear plants, with costs likely to come down as units are rolled estimates that the world will need 400 SMRs by 2050. At a cost of up to $3bn (£2.2bn) each, that's another trillion dollar-plus market he wants and expects Rolls-Royce to company has signed a deal to develop six SMRs for the Czech Republic and is developing three for the it remains an unproven technology. Mr Erginbilgic conceded he could not currently point to a working SMR example but said he was confident in its future are also concerns about the demands on water supplies from the data centre and SMR cooling systems. In response, companies including Google, Microsoft and Meta have signed deals to take energy from SMRs in the US when they are available. Next generation aircraft Rolls-Royce sees SMRs as key to its future, but its biggest business is aircraft engines. Already dominant in supplying engines to wide-bodied aircraft like Boeing 787 and Airbus A350, it plans to break into the next generation of narrow-bodied aircraft like the Boeing 737 and Airbus A320. This market is worth $1.6tn - nine times that of the wide-bodied .Rolls-Royce is a bit player in a market that has powerful and successful leaders, and that rival Pratt and Witney lost $8bn trying and failing to break market is dominated by CFM International – a joint venture between US-based GE Aerospace and French company Safran Aerospace veterans told the BBC that market leaders can and will drop prices to airline customers long enough to see off a new assault on their market Mr Erginbilgic said this is not just the biggest business opportunity for Rolls-Royce. Rather, it is "for industrial strategy... the single biggest opportunity for the UK for economic growth". "No other UK opportunity, I challenge, will match that," he said. Share price up ten-fold Although Rolls-Royce sold its car making business to BMW nearly 30 years ago, the name of the company is still synonymous with British engineering in the early part of this decade that shine had worn off. The company was heavily indebted, its profit margins were non-existent, and thousands of staff were being laid Mr Erginbilgic took over in January 2023, he likened the company to "a burning platform"."Our cost of capital was 12%, our return was 4% so every time we invested we destroyed value," he and a half years later, the company expects to make a profit of over £3bn, its debt levels have fallen and shares have risen over 1,000% - a ten-fold rise. So how did that happen? And is Mr Erginbilgic right to think that Rolls-Royce's roll is only just starting? 'Grudging respect' The timing of his appointment was fortunate according to some industry veterans. Rolls-Royce's biggest business – supplying engines to commercial airlines – has rebounded strongly from the Covid pandemic. The company's most successful product – the Trent series of aircraft engines – are at the sweet spot of profitability as the returns on investment in their development over a decade ago begin to pour into company full-scale invasion of Ukraine in 2022 arguably made it almost inevitable that its defence business would see higher spending from European governments – which has been confirmed by recent announcements. Unions have not always been fans of Mr Erginbilgic's hard-charging approach. In October 2023, one of his first major move was cutting jobs, which drew criticism from Sharon Graham, the boss of the Unite union. "This announcement appears to be about appeasing the markets and its shareholders while ignoring its workers," she said at the overall global headcount has grown from 43,000 to 45,000 since 2023 and union sources say there is "grudging respect" for Mr sources give him one third of the credit for the turnaround around in the company's fortunes, with a third credited to market conditions and a third to his predecessor Warren East for "steadying the ship". So does Mr Erginbilgic really believe that Rolls-Royce can be the UK's most valuable company – overtaking the likes of AstraZeneca, HSBC, and Shell?"We are now number five in the FTSE. I believe the growth potential we created in the company right now, in our existing business and our new businesses, actually yes – we have that potential."Rolls-Royce is undoubtedly a company with the wind at its back – and Tufan Ergenbilgic certainly believes he has set the sails just right.
France 24
06-08-2025
- Science
- France 24
Karol Nawrocki becomes Poland's president
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