Rolls-Royce delivers staggering results, exceeding expectations, but analysts debate whether CEO Tufan Erginbilgic’s success is strategic brilliance or just fortunate timing.

Rolls-Royce has stunned the market with its latest financial results, but not everyone is convinced that the company’s meteoric rise is solely due to leadership brilliance. While CEO Tufan Erginbilgic has been widely credited with turning the aerospace giant around, some analysts argue that external forces—including geopolitical turmoil—played a significant role in the company’s soaring profits.

The FTSE 100-listed company smashed expectations in 2024, with underlying profits and free cash flow far surpassing forecasts. UBS analysts hailed the performance as a resounding success, highlighting that 2025 projections also came in ahead of consensus, while the long-term outlook for 2028 is even more optimistic. The Civil Aerospace division, in particular, exceeded market expectations by 15%, largely driven by the reversal of onerous contract provisions and operational efficiencies.

With new guidance for 2025 setting EBIT and free cash flow between £2.7 billion and £2.9 billion, analysts are acknowledging that significant operational improvements, including extended time-on-wing for engines, have strengthened the business. However, despite the glowing numbers, not all observers are fully convinced that this success is entirely the result of Erginbilgic’s leadership.

Garry White of Charles Stanley acknowledges the CEO’s impact, noting that cash management has improved, waste has been reduced, and the share price has climbed to unprecedented heights. Moreover, Rolls-Royce has reinstated its dividend for the first time since the pandemic, delivering a higher-than-anticipated payout to shareholders. But White also points to a ‘substantial amount of luck’ in the form of global instability.

He argues that the geopolitical landscape—marked by Russia’s invasion of Ukraine and shifting U.S. defence priorities under Donald Trump—has created a windfall for defence contractors. With increased military spending across Europe, demand for Rolls-Royce’s defence offerings has surged, providing a significant tailwind for the business.

Meanwhile, analysts at Panmure Liberum and Agency Partners emphasise another key factor behind the company’s strong results. Rolls-Royce’s guidance on engine overhauls for 2025 and 2028 exceeds previous forecasts, contributing to higher profits. This suggests a lower cost per overhaul, which in turn boosts profit margins and strengthens cash flow.

Overall, industry experts see these results as a powerful endorsement of Rolls-Royce’s long-term potential. Nick Cunningham of Panmure Liberum believes the company is on track to be re-rated in line with European aerospace leaders like Safran and MTU. He views the results as a clear indicator of sustained growth, reinforcing the investment case for the British engineering giant.

While Erginbilgic’s leadership has undoubtedly played a role in Rolls-Royce’s resurgence, the debate over whether his success is down to strategic acumen or fortunate timing remains open. Regardless of the answer, investors appear more than happy to ride the wave of this unexpected boom.