AGM Statement

Rolls-Royce PLC
30 May 2002

                                                                     30 May 2002



           ROLLS-ROYCE AGM:  CHAIRMAN AND CHIEF EXECUTIVE STATEMENTS

Rolls-Royce Chairman Sir Ralph Robins told shareholders today (30 May 2002) that
all the company's businesses made good progress in 2001 and that the current
adverse market conditions in civil aerospace will not affect that sector's
long-term value to the company and its shareholders.  Sir Ralph was speaking at
the Annual General Meeting at the Queen Elizabeth II Conference Centre, London.

He said: 'In many respects, 2001 was a record year. We exceeded £6 billion of
sales for the first time and achieved a record order intake and a record
year-end order book. We generated our highest level of underlying profit,
achieved a positive cash flow and increased underlying earnings per share.

'Of course, the terrorist attacks on the World Trade Centre and the Pentagon did
alter the course of the year. In the short term, the repercussions will
obviously impact our civil aerospace activities.

'However, we have built a robust business through the pursuit of consistent
strategies over many years.   This has enabled us to mitigate the financial
impact of the attacks in 2001, and enabled us to maintain a sound balance sheet
and remain profitable through the ensuing recession, even after absorbing the
costs of restructuring.'

Sir Ralph reviewed the main business highlights of 2001.

In civil aerospace, Rolls-Royce continued to win 30 per cent of engine orders
placed and also delivered a record number of engines. The Trent 500's first
flight took place on schedule and the engine will enter service on the airbus
A340-500/600 this year. The Trent 900 engine for the new Airbus A380 super jumbo
aircraft was launched and secured three of its first four airline customers.

'In recent weeks, we added to that success with Lufthansa's selection of the
engine, securing our leading market position on this important aircraft, ' said
Sir Ralph.

The defence aerospace business performed well in 2001.  The EJ200 engine for
Eurofighter Typhoon began production and continued to perform well during flight
tests. During the year, the company also signed a US$1 billion contract covering
design and development work on the innovative LiftfanTM that provides the short
take-off and vertical landing capability for the Joint Strike Fighter aircraft.

The marine business made an increased contribution. The commercial offshore oil
and gas market continued to grow and Rolls-Royce won a high share of the
available business.

In the naval sector, Rolls-Royce announced two powerplant support contracts for
the Royal Navy's nuclear submarine programme, with a combined potential value of
£800 million.

'Our new product, the Marine Trent 30, is well suited to commercial and naval
vessels requiring high powered propulsion,' said Sir Ralph.

The energy business continued to be affected by the cost of developing and
introducing new products.   However, good progress was made with the
introduction of new low-emission combustion systems for the industrial Trent and
marketing of the product resumed in the fourth quarter of the year.

The financial services businesses produced a robust performance in the face of
challenging market conditions.

Sir Ralph added: 'As a result of the strength of our businesses, we reported a
record year-end order book of nearly £15 billion, with a further £2.3 billion
announced.

Importantly, we have continued to invest in the development of new products and
services across all areas of the company.

'Our success is founded upon the talent and commitment of our people.   I regret
that the challenges we face in the wake of the terrorist attacks have caused us
to announce significant job losses, particularly in our civil aerospace
business.   However, it is essential that we remain competitive by making the
cost reductions that are necessary to withstand the downturn, and to position
the group for long term success.   I thank all our employees for their
contribution and understanding.'

Looking forward, the short-term outlook for Rolls-Royce is consistent with the
guidance provided on October 19 last year, and repeated in March this year, with
profitability in 2002 affected by the downturn in civil aerospace and average
net debt expected to be at a level similar to that in 2000.

Sir Ralph said: 'We operate in growth markets, in which we have established
strong positions.   We therefore believe that the current adverse market
conditions in civil aerospace will not materially affect the long-term value of
the business.

'The market for military aero engines is forecast to grow steadily and our
defence business has a strong position on many of the world's new programmes.

'Our marine business is benefiting from new programmes in the naval market and a
strong flow of orders in the commercial offshore market.

'The performance of the energy business will improve as new products are
introduced into service and development expenditure reduces.

'All our businesses provide a significant service and aftermarket opportunity,
with some 53,000 Rolls-Royce gas turbines in service around the world.

'The financial services businesses are making a substantial contribution to
profits. Over the long term we expect these businesses to grow further.

'We continue to pursue our core values of reliability, integrity and innovation
and I believe Rolls-Royce is better positioned for growth and shareholder value
creation than ever before.

'In accordance with previous plans, I announced in March that I will be retiring
from the Board within the next 12 months.   The excellent performance of the
company over the past year, assures me that I will be leaving behind a strong
business with a bright future, in the hands of a highly-effective management
team under Chief Executive John Rose's leadership.

'Rolls-Royce has made tremendous progress since our flotation in 1987 and we are
now firmly established as a major international player in our chosen markets
and, I believe, as the foremost United Kingdom engineering company.   I would
like to take this opportunity of paying tribute to our employees who have made
this transformation possible.'



                  ROLLS-R0YCE AGM: CHIEF EXECUTIVE'S STATEMENT


Rolls-Royce Chief Executive John Rose told shareholders today (30 May 2002) that
the company has made tremendous progress since flotation in 1987 and is now
established as a major, global competitor with a broad range of high technology
power and propulsion products and services.

Mr Rose said: ' Over the past decade, Rolls-Royce has been transformed. In 1990
our turnover was £3.7 billion; profit was  £226 million; shareholders' funds
were £1.2 billion; and we had a £5.7 billion order book.

'Today, our turnover is more than £6 billion; underlying profits have more than
doubled, shareholders' funds exceed £2 billion; and our order book has grown to
£15 billion.  Sales per employee have almost trebled, from £51,000 to £146,000.
Over the period, we have paid nearly a billion pounds in dividends to our
shareholders.

'Our investment philosophy is to create technology once and use it many times.
Since 1990, we have invested £2.2 billion in capital expenditure and £6.5
billion in research and development. Where appropriate, this has been shared
with partners who have been attracted by the success of our programmes.

'The sale of a Rolls-Royce product generally marks the start of a customer
relationship that lasts 25 years or more.  The provision of aftermarket services
is, therefore, an important feature of our strategy. Service revenues have grown
by 50 per cent over the past five years and are expected to continue to grow.
Today, they represent 40 per cent of total sales.'

In civil aerospace, Rolls-Royce has made dramatic progress, said Mr Rose. 'In
1990 we delivered 385 civil aero engines.  Last year the total was 1,362  - an
increase of 350 per cent.

'We have established a broad range of engines powering all types of aircraft
from business jets to the largest airliners.  Our market coverage has expanded
from six civil aircraft types to more than 30 today.

'The growth in the installed base of engines is creating an increasingly
valuable annuity in the form of our growing aftermarket revenues.

'Whilst the terrorist attacks of September 11 have affected our civil aerospace
business, our long-term prospects remain strong.  We have a solid order book,
with 38 of the world's top 50 airlines among our customers, compared to less
than 10 in 1990.'

Rolls-Royce serves 160 customers in defence aerospace worldwide. In the early
1990s the company's defence revenues almost halved, following the end of the
Cold War and the peace dividend.

'However,' said Mr Rose, 'we have rebuilt our presence to the point where, in
2001, revenues were £1.4 billion.

'We have a broad portfolio of mature products and we are well-positioned on many
of the world's new programmes, including Eurofighter and Joint Strike Fighter.
We also see considerable opportunities to provide aftermarket services to our
defence customers.

'With the acquisition of Vickers we have established the world's leading marine
propulsion systems business with a comprehensive product range, from gas
turbines and diesels to propellers and water jets.

'In 1990 our marine business was a niche naval player.  Today we have a balanced
business with annual sales of more than £800 million, serving 50 navies and 2000
commercial operators in more than 200 countries.'

Rolls-Royce is also developing its position in the energy sector where it will
benefit from the opportunities created by the deregulation of energy markets and
the more widespread availability of gas as a fuel for generating electricity.
Many of the company's products in this sector are derived from its aero engines,
improving the returns from the original investment in technology.

'Over the last decade, Rolls-Royce has built a robust business, created a strong
management team and won a world-leading market position based on our investments
in technology and products.

'In our markets, our growing service activities and increasingly efficient
operations all contribute to a strong competitive position and create
shareholder value. '

Mr Rose concluded: 'It is, of course, no coincidence that this highly-successful
period for the company corresponded with the years that Sir Ralph Robins has
served as Chairman.  On behalf of all shareholders I would like to recognise Sir
Ralph's contribution to the development of our company over 47 years.'




For further information please contact:


Colin Duncan                                Peter Barnes-Wallis
Director of Corporate Communications        Director of Financial Communications
Rolls-Royce plc                             Rolls-Royce plc
Tel: [phone]                          Tel:  [phone]
Fax: [phone]                          Fax: [phone]

Email: [e-mail]
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