Rolls-Royce Power Systems recorded a record order, with £119 million in the first half of the year. According to the company, order intake of £2.1bn was 53% higher than the prior period and included the highest quarter for order intake on record with strongest growth in demand in power generation, governmental and industrial end markets. In some market segments, production capacities for 2023 are already fully utilized.
Rolls-Royce achieved a record order in the first half of 2022
Underlying revenue of £1.4bn (€1.6m*) was up 20%. (H1 2021: £1.18bn / €1.36 bn). Aftermarket services grew 17% with increased activity in both stationary and mobile solutions. OE revenue was up 21% with particularly strong sales in power generation, marine and governmental end markets.
Underlying operating profit was £119m (€142m) (2021: £41m / €47m), up £80m (€95m) giving an operating margin of 8.7%. The 17% increase in research and development costs reflects investment in new product development and transitioning products to sustainable fuel alternatives to help customers towards net-zero emissions. Trading cash outflow was £(76)m (€(90))m (2021: £71m / €82m) with a negative cash conversion as inventory increased to meet growth demand and to manage the supply chain challenges. A dedicated taskforce is in place to mitigate risk and accelerate OE deliveries. It also reflected the investment in a 54% stake in electrolysis stack specialist Hoeller Electrolyzer. “The good news is that demand for our products and solutions is very strong. In order to be able to supply our customers reliably, we are already holding strategic talks with suppliers for next year. Our consistent crisis management is working,” says Andreas Schell, CEO of Rolls-Royce Power Systems.
Looking at the next future
In order to contribute to the security of Germany and allied nations and to be able to meet the increased demand for mtu engines for military applications resulting from the turnaround in security policy, Power Systems is building up capacity. The business unit plans to hire up to around 450 additional employees over the next ten years, depending on the specific order situation. New machines are also to be procured and larger assembly lines built at the plants in Friedrichshafen. The top strategic issue of climate neutrality concerns Power Systems in many ways. As part of Rolls-Royce’s Net Zero strategy, Power Systems aims to achieve complete climate neutrality by 2050. Purchasing 4 million kilowatt hours of electrical energy annually from the new solar farm in Tengen, southern Germany, saves 1,300 tonnes of CO2 annually compared to the German electricity mix. “With ambitious interim targets for 2030, we aim to be completely climate neutral by 2050 across all global sites and areas from production to supply chains to our product portfolio, i.e. in all three recognized categories Scope 1, 2 and 3. The company’s own sustainable power generation is a key element in saving greenhouse gas emissions,” says Dr Otto Preiss, COO and Chief Technology Officer.
If you mention sustainability…
An important milestone was the release of the mtu series 1600 and 4000 power generation engines for sustainable and synthetic fuels. By the end of 2023, a large proportion of the engines will have been approved for this purpose in order to relieve customers’ greenhouse gas footprint. In July, the first own test bench for mtu hydrogen engines went into operation at the Augsburg site.
The business unit “Sustainable Power Solutions”, which was newly created a year ago to deal with sustainable system solutions, is continuously expanding its portfolio. One step in this direction was the complete takeover of the previous majority subsidiary Rolls-Royce Solutions Berlin GmbH (formerly Qinous), which forms the core of the Microgrid Competence Centre. A strong focus is on the hydrogen strategy. The acquisition of 54 per cent of the shares in the electrolysis stack specialist Hoeller Electrolyzer enables Power Systems to develop its own mtu electrolysers, which will be on the market in a few years. With them, customers will be able to produce “green” hydrogen with electrical energy from renewable sources. And as part of a lighthouse project for the future container terminal in the port of Duisburg funded by the German Ministry of Economics, Power Systems is providing the first hydrogen-powered mtu energy supply systems: three mtu fuel cell systems and two hydrogen-fuelled mtu combined heat and power plants to supply CO2-free energy from 2023.