Rolls-Royce Power Systems business unit with strong 2021 results despite Corona pandemic
Posted on February 24, 2022
- Underlying profit grows to £242 million (€282 million)
- Revenue increased by 3% to £2,749 billion (€3,199 billion)
- Operating margin increased, order backlog at record level
- Economic performance improves despite Corona pandemic
- Forward-looking crisis management ensures stability
- New climate-neutral solution operational: fuel cell system at UN climate conference in Glasgow and as of next year at the port of Duisburg
- Rolls-Royce Group supports corporate strategy with € 400 million investment in climate-friendly technologies
Rolls-Royce business unit Power Systems ends the year 2021 with a satisfactory growth in profits despite pandemic. The underlying profit of £242 million (€282 million) significantly increased, moving towards the same level as in pre-pandemic 2019. At the same time, Power Systems has reached important milestones in its transformation to become a provider of sustainable, climate-friendly and integrated solutions for propulsion and energy needs. The company will invest a triple-digit million-euro sum in sustainable technologies.*
"The financial year 2021 showed: We are on the right track. With strategic and proactive crisis management we protected our employees from infection in the best possible way, supplied our customers reliably and continuously, and presciently managed challenges such as the disruption of global supply chains in the pandemic," emphasized Andreas Schell, CEO of Rolls-Royce Power Systems. "The positive underlying business performance provides both planning security and a sound financial foundation for our transformation into a provider of sustainable solutions. Our customers are demanding such solutions – and we are ensuring that the shift to new types of climate-friendly system solutions can be realized."
Significant economic recovery
Power Systems has ended the 2021 financial year with an underlying operation profit of £242 million (€282 million) (2020: £188 million, €212 million). The underlying revenue increased by 3% to £2,749 billion (€3,199 billion) (2020: £2,735 billion, € 3,077 billion). In the currency used for reporting (British Pound Sterling), revenue appears almost unchanged due to currency rate effects . The underlying operating margin increased to 8.8% (2020: 6.5%). With this, the Rolls-Royce division significantly increased its profit in the second year of the pandemic despite challenging conditions. Order intake of £ 3.3 billion increased by 24% compared to the previous year. The order backlog reached a record £2.8 billion (€3.4 billion) at the end of the year. “Current factory utilization is proof of returning confidence and intend to invest across all segments”, said Andreas Schell.
Sustainable solutions operationalized
Power Systems has reorganized the company into four business units with the introduction of a matrix structure in April 2021. In addition to the existing business in "Mobile Power Solutions" and "Stationary Power Solutions", there is a new business unit for the Chinese growth market: "Power Solutions for Greater China". The new unit “Sustainable Power Solutions” focuses exclusively on developing sustainable and climate-friendly systemic solutions across all application areas.
In 2021, as part of Rolls-Royce's Net Zero strategy, Power Systems published its detailed roadmap to carbon neutrality "Net Zero at Power Systems": from 2030 on, newly supplied products will reduce the product portfolio's greenhouse gas emissions by 35% compared to 2019.
Hydrogen solutions as an essential component of the energy turnaround
In Berlin and Friedrichshafen, Power Systems is vigorously developing solutions based on hydrogen, the fuel of the future. "We see ourselves not only as manufacturer of products that run on hydrogen, but consider the entire hydrogen ecosystem in our development, in line with the concept of integrated end-to-end solutions," explained Andreas Schell.
The mtu fuel cell element for climate-neutral energy supply had its world premiere at the UN Climate Conference COP 26 in Glasgow at the end of 2021. A fuel cell demonstrator is in ongoing operation in Friedrichshafen. From 2025, the company plans to have series-manufactured fuel cell systems in the megawatt range.
Power Systems is providing the first hydrogen-powered mtu energy supply system as part of a lighthouse project for the reconstruction of a terminal in the port of Duisburg, Europe's largest inland port. Three mtu fuel cell systems and two hydrogen-fueled mtu thermal power stations will supply the new container terminals with CO2-free energy from 2023. "In Duisburg, our products and solutions are essential components in a climate-neutral solution that paves the way to a carbon-free future," said Andreas Schell.
Investments and partnerships to further expand sustainable offer
The British technology group, Rolls-Royce, supports this strategy and is prioritizing investment in more sustainable solutions and is allocating €400 million to support the growth of the “Sustainable Power Solutions” business unit of Power Systems. This investment will expand the development capacities for new technologies and solutions, as well as support further partnerships and potential acquisitions. "This illustrates the confidence Rolls-Royce Group has in our capacity to realize significant value from our transformation towards climate-friendly technologies. This confirms our course," underlined CEO Andreas Schell.
Power Systems has made investments of around € 120 million in its 20 most important projects in 2021. This includes a new test stand for the company's engines in China enhancing further its local presence. Several partnerships illustrate the multifaceted transformation into a solution provider: Together with investment company SDCL, Rolls-Royce will offer all-in-one energy solutions to customers who neither own nor operate the plants themselves. In September 2021, Rolls-Royce Power Systems and yacht manufacturer Ferretti announced their deepened partnership for the development of sustainable solutions for modern yachts. NautiQ, a new bridge-to-propeller marine automation system, was unveiled as a result of the acquisition of the former Servowatch company.
"In the future, Power Systems will be increasingly partnering and developing system solutions together with our customers and in ecosystems that go far beyond what we offer today," said CEO Andreas Schell.
*Euro figures by way of information on the basis of fixed exchange rates. The figures in British pounds are binding.
About Rolls-Royce Holdings plc
- Rolls-Royce pioneers the power that matters to connect, power and protect society. We have pledged to achieve net zero greenhouse gas emissions in our operations by 2030 (excluding product testing) and joined the UN Race to Zero campaign in 2020, affirming our ambition to play a fundamental role in enabling the sectors in which we operate achieve net zero carbon by 2050.
- Rolls-Royce Power Systems is headquartered in Friedrichshafen in southern Germany and employs around 9,000 people. The product portfolio includes mtu-brand high-speed engines and propulsion systems for ships, power generation, heavy land, rail and defence vehicles and for the oil and gas industry as well as diesel and gas systems and battery containers for mission critical, standby and continuous power, combined generation of heat and power, microgrids. Power Systems is intensively engaged in the development of climate-neutral solutions.
- Rolls-Royce has customers in more than 150 countries, comprising more than 400 airlines and leasing customers, 160 armed forces and navies, and more than 5,000 power and nuclear customers.
- Annual underlying revenue was £10.95 billion in 2021, underlying operating profit was £414m and we invested £1.18 billion on research and development. We also support a global network of 28 University Technology Centres, which position Rolls-Royce engineers at the forefront of scientific research.
- Rolls-Royce Holdings plc is publicly traded company (LSE: RR., ADR: RYCEY, LEI: 213800EC7997ZBLZJH69)