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News Release ROLLS - ROYCE HOLDINGS PLC TRADING UPDATE This update addresses our full year 2020 outturn , subject to audit , and our initial expectations for 2021 considering developments in the COVID - 19 pandemic . Trading in December was broadly in line with expectations across all business units and we delivered good progress on our restructuring programme . Full year 2020 Group free cash outflow was in line with previous guidance , and in - year cash cost savings of more than £ 1 billion were achieved from our mitigating actions . Year - end liquidity was approximately £ 9 billion , at the upper end of the previously guided range . 26 January 2021 Continued progress on vaccination programmes is encouraging for the medium - term recovery of air traffic and economic activity . In the near - term , however , more contagious variants of the virus are creating additional uncertainty . Enhanced restrictions are delaying the recovery of long - haul travel over the coming months compared to our prior expectations , placing further financial pressure on our customers and the wider aviation industry , all of which are impacting our own cash flows in 2021 . ROLLS R ROYCE In this environment , financial forecasts remain highly sensitive to changes in external conditions and , while we are continuing to drive cost reduction , our current forecasts indicate a free cash outflow in the region of £ 2 billion in 2021. This is based on 2021 widebody engine flying hours at around 55 % of 2019 levels ( compared to the base case of 70 % presented on 01 October 2020 ) . Though significant uncertainty remains over the precise shape and timing of the recovery in air traffic and the phasing of engine ( OE ) concession payments , free cash outflow this year is forecast to be heavily weighted towards the first six months . We continue to expect to turn cash flow positive at some point during the second half , reflecting our forecasted profile of flying hours as they recover from today's low base . Investors Isabel Green Head of Investor Relations , Rolls - Royce plc Tel +44 ( 0 ) 7880 160976 Isabel . Green@Rolls-Royce.com www.Rolls-Royce.com With liquidity of approximately £ 9 billion , we are confident that despite the more challenging near - term market conditions we are well - positioned for the future . We remain focused on completing our restructuring programme and footprint consolidation as well as maintaining cost control and capital discipline . During 2020 we removed around 7,000 roles , making good progress towards our target to remove at least 9,000 roles by the end of 2022. This restructuring will be a key enabler of our target to deliver at least £ 750 million of free cash flow ( excluding disposals ) as early as 2022 , contingent on the expected recovery in engine flying hours . Our 2020 Full Year results announcement will be published on 11 March 2021 . For further information , please contact : Media Richard Wray Director of External Communications & Brand , Rolls - Royce plc Tel +44 ( 0 ) 7810 850055 Richard.Wray@Rolls-Royce.com 1