Chief Executive Tufan Erginbilgic made the comments during Rolls-Royce’s second-quarter earnings call covering its first-half financial results. He described the group as a clear beneficiary of the UK Defence Investment Plan and said the policy framework provided greater visibility across several long-term military programmes.
Erginbilgic said the investment plan “further underpins the outlook for AUKUS”. His reference was brief, and Rolls-Royce did not quantify the programme’s potential contribution to future sales, earnings or capital expenditure.
The AUKUS comments formed part of a broader assessment of the company’s defence prospects. Erginbilgic also cited the UK’s multi-year funding commitment to the Global Combat Air Programme and planned spending on autonomous military platforms.
Management provided a clearer indication of current momentum in the submarine business. Chief Financial Officer Helen McCabe said submarine activity continued to ramp up and delivered “good submarines growth” during the first six months of the year.
Rolls-Royce did not identify the individual submarine programmes responsible for that increase. It also did not separate submarine revenue, profit or orders from the wider Defence division’s results.
The division generated operating profit of £522 million in the first half, almost 60% above the same period a year earlier. Cash flow increased to £615 million from £327 million, supported by profit growth and customer advances.
Defence operating margin reached 21%, reflecting stronger aftermarket performance across transport and combat programmes. Lower maintenance costs, manufacturing efficiencies, profitable international sales and increased flying hours also contributed to the result.
Erginbilgic cautioned that the first-half margin should not be treated as a permanent run rate because the sales mix was weighted towards higher-margin aftermarket work. He nevertheless said the underlying operational improvements were sustainable and should leave future margins above their earlier levels.
Defence order intake was close to £2.5 billion, while the division’s backlog stood at £17.5 billion. That represented more than three years of revenue, with order coverage for the remainder of 2026 approaching 90%.
The earnings call presented submarine activity as an existing contributor to Rolls-Royce’s growth and AUKUS as a longer-term source of programme visibility. Management, however, stopped short of providing a financial forecast or announcing a new milestone tied directly to AUKUS.
