Rolls-Royce Power Systems Business Unit: Improved Group results helped by transformation
Posted on August 04, 2023
- Rolls-Royce Group results significantly improved on prior period reflecting end-market growth and helped by transformation
- Power Systems revenue up 24%
- Robust order intake as demand for mtu products and solutions remains strong
Underlying sales for Rolls-Royce's Power Systems business unit increased 24% to £1.8 billion (€2 billion*) in the first half of 2023. The order cover for 2023 and 2024 is at record levels. "This significant sales growth in the often not so strong first half of the year is a success of our efforts to leverage existing potential and improve the performance of our business," says Dr. Jörg Stratmann, CEO of Rolls-Royce Power Systems. Operating profit remained roughly the same at £125m (€143m).
Order intake in Power Systems business was £1.9bn (€2,2bn), 14% lower than the prior period. Key awards in the period included delivery of further marine engines for yacht builder Ferretti, follow-up orders for rail power packs from Hitachi and a second contract to supply mtu generator packs for the US Navy frigate program. Demand remained strong despite increased pricing.
Underlying revenue was £1.8bn (€2bn), up 24%. Services revenues were up 10% reflecting increased end market activity. OE revenue grew by 33%, driven by strong order execution for stationary powergen equipment and continued strong sales of mobile power solutions in the marine and mining segments. Operating profit was £125m (€143m) with a 7.0% margin. For the remainder of the year as a whole, the Power Systems business anticipates a positive development with an improvement in the operating margin due to the impact of pricing actions, cost efficiencies and seasonally higher volumes.
"We are pursuing our chosen path of profitable growth - with initial successes already. We have successfully initiated and implemented numerous measures. We reliably support our customers worldwide in their goals with our products and solutions - for example, with our mtu engines, which have been approved for operation with alternative fuels such as HVO. In this way, we are making an important contribution to the energy transition in various industries," emphasises Jörg Stratmann.
* Figures in € are informative on the basis of fixed exchange rates. The figures in British £ are binding. The press release on the half-year results of the Rolls-Royce plc Group as a whole and further information on the Power Systems business unit can be found at www.rolls-royce.com
About Rolls-Royce Holdings plc
- Rolls-Royce develops and delivers complex power and propulsion solutions for safety-critical applications in the air, at sea and on land. Our products and service packages enable our customers to connect people, societies, cultures and economies together; they meet the growing need for power generation across multiple industries; and enable governments to equip their armed forces with the power to protect.
- Rolls-Royce has a presence in 48 countries and customers in more than 150, comprising over 250 commercial large aero engine customers, 160 armed forces and navies and approximately 40,000 active Power Systems customers. We are committed to becoming a net zero company by 2050 and we support our customers to do the same.
- Annual underlying revenue was £15.4bn in 2023, underlying operating profit was £1.6bn and free cash flow £1.3bn.
- Rolls-Royce Holdings plc is publicly traded company (LSE: RR., ADR: RYCEY, LEI: 213800EC7997ZBLZJH69).
- Rolls-Royce Power Systems is headquartered in Friedrichshafen in southern Germany and employs more than 10,500 people. The product portfolio includes mtu-brand high-speed engines and propulsion systems for ships, heavy land, rail and defence vehicles and for the oil and gas industry. The portfolio also includes diesel and gas systems and battery containers for mission critical, standby and continuous power, combined generation of heat and power, and microgrids. With its climate friendly technologies, Rolls-Royce Power Systems is helping to drive the energy transition.
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