Rolls Royce Power Systems is bullish with a strong performance
Rolls Royce Power Systems is working on zero emissions power technology
The Rolls-Royce Power Systems business unit reports strong 2021 results despite Corona pandemic. The firm’s underlying profit grew to £242 million (€282 million), while revenue increased by 3% to £2.749 billion (€3.199 billion).
The operating margin increased, with the order backlog at record level and the firm’s economic performance improved, while the company says that its forward-looking crisis management is ensuring stability. A new climate-neutral solution is operational with its fuel cell system being demonstrated at the UN climate conference in Glasgow and being installed next year at the port of Duisburg. The Rolls-Royce Group is supporting its corporate strategy with a €400 million investment in climate friendly 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," emphasised 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 realised."
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. The 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 utilisation is proof of returning confidence and intend to invest across all segments”, said Schell.
Power Systems has reorganised 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 Schell.
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 Schell.
The British technology group, Rolls-Royce, supports this strategy and is prioritising 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 realise significant value from our transformation towards climate-friendly technologies. This confirms our course," underlined 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 boosting 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 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 Schell.
