Rolls-Royce Power Systems: strong 2021 results despite pandemic
Rolls-Royce business unit Power Systems ends the year 2021 with a satisfactory growth in profits despite pandemic.
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 that 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 (in the opening picture). “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.”
Rolls-Royce 2021 results: 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.
Sustainable solutions
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
In Berlin and Friedrichshafen, Power Systems is vigorously developing solutions based on hydrogen, the fuel of the future. The mtu fuel cell element for climate-neutral energy supply had its world premiere at the UN Climate Conference COP26 (below) 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.
Investments and partnerships
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.
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.
