Rolls-Royce Power Systems: Successful 1st half of 2024
Posted on August 01, 2024
- Underlying operating profit up 56%, underlying revenue up 6%, order intake up 26%·
- Energy supply for data centres and governmental business drive sales·
- Triple-digit million euro investment in new mtu engine platform·
- CEO Dr Jörg Stratmann: Half-year results confirm new strategic course
Rolls-Royce Power Systems significantly increased its operating results, sales and order intake in the first half of 2024. This was driven in particular by business activities in the power generation segment, with strong demand for data centre equipment, growing governmental business and effective efficiency measures.
Dr Jörg Stratmann, CEO of Rolls-Royce Power Systems said: "The strength of our new strategy presented in autumn 2023, with its focus on profitable growth, and the intensive commitment of teams throughout the company is reflected in these positive business figures. This half-year result confirms our strategic course. At the same time, we are creating the financial basis to position ourselves for the future: for the first time in 20 years, we are developing a new mtu engine platform. The triple-digit million euro amount that we will be investing in this over the coming years, underlines our confidence in this technology and its contribution to a successful energy transition. We are convinced that we will create clear added value for our customers with the new mtu engine platform and set new standards in our industry."
Order intake was €2.8bn* (£2.4bn*), 26% up versus the prior period, with a book-to-bill ratio of 1.3x. Underlying revenue was €2.2bn (£1.8bn), an increase of 6% versus the prior period.
Underlying operating profit grew by 56% to €222m (£189m), underlying operating margin rose by 3.3pts to 10.3% (H1 2023: 7.0%). The increase in underlying operating profit reflects continued commercial optimisation benefits, across all categories, notably in Power Generation, and cost efficiencies. A higher underlying operating profit margin in H2 2024, reflecting the typical seasonality of the business is expected.
Trading cash flow was €142m (£121m) with a conversion ratio of 64% versus €24m (£22m) and 18% last year. The increase in trading cash flow was mainly due to increased operating profit.
On 31 July Power Systems completed the disposal of the off-highway engines business in the lower power range. Power Systems is developing a highly efficient hydrogen reciprocating engine. In the Power Generation segment, Power Systems won major Battery Energy Storage Systems (BESS) contracts, including a contract with Latvia to install one of the largest BESS in the EU.
* Figures in € for information purposes based on the average exchange rate. The figures in £ 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 division can be found at www.rolls-royce.com
Press photos for download can be found at Media Centre (mtu-solutions.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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