AGM Statement

29 May 2003

                         Rolls-Royce plc AGM statement                         

The presentation made today by Sir John Rose, Chief Executive, at the
Rolls-Royce plc Annual General Meeting, contained the following statement about
the company's priorities and prospects:

`The after-effects of the war in Iraq continue to impact the airline industry.
The situation has been exacerbated by Severe Acute Respiratory Syndrome (SARS),
particularly in Asia and Australasia. It is not clear how long these negative
factors will depress civil aerospace demand but they have already caused
further deferrals of original equipment deliveries. On the other hand, year to
date Rolls-Royce engine flying hours have increased compared to the same period
in 2002, indicating that our important aftermarket can continue to grow even in
a depressed cycle for original equipment.

On March 4 the company provided guidance for profit growth in 2003, with
positive cash flow. This guidance was subject to the uncertainty over Iraq and
the outcome of consultations with employees aimed at limiting the financial
impact of the company's pension fund deficit.

Based on trading performance across all our businesses over the first five
months of 2003 and our current view of market conditions, the company is
reiterating this guidance.

Our priorities remain to manage the business uncertainty in civil aerospace by
accelerating our programmes to reduce costs and extract more cash from the
business.

In the longer term we remain confident that the maturing of our businesses and
our ongoing restructuring programme will allow us to deliver value to our
shareholders by generating strong cash flows'.

The full presentation and supporting text is available on the company's
website, at

www.rolls-royce.com

Corporate note to editors

Rolls-Royce plc operates in four global markets - civil aerospace, defence
aerospace, marine and energy. It is investing in technology and capability that
can be exploited in each of these sectors to create a competitive range of
products.

The success of these products is demonstrated by the company's rapid and
substantial gains in market share over recent years. As a result, engine
deliveries have grown and the company now has a total of 54,000 gas turbines in
service worldwide. The investments in product, capability and infrastructure to
gain this market position create high barriers to entry.

Rolls-Royce has a broad customer base comprising more than 500 airlines, 4,000
corporate and utility aircraft and helicopter operators, 160 armed forces and
more than 2,000 marine customers, including 50 navies. The company has energy
customers in nearly 120 countries. Rolls-Royce employs around 37,000 people, of
which 22,000 are in the UK. Forty per cent of its employees are based outside
the UK - including 5,000 in the rest of Europe and 8,000 in North America.

Most of the engines in service will have operational lives of 25 years or more,
generating an assured aftermarket demand for the provision of spare parts and
services. The company's strategy is to maximise aftermarket revenues which have
increased by 60 per cent over the past five years due to the development of a
comprehensive services capability.

Annual sales total nearly £6 billion, of which over 40 per cent currently comes
from aftermarket services. The order book stands at more than £17 billion,
which, together with aftermarket demand, provides visibility as to future
activity levels.

For further information:

Peter Barnes-Wallis                     Colin Duncan                           
                                                                               
Director of Financial Communications    Director of Corporate Communications   

Tel: [phone]

www.rolls-royce.com