EUROPEAN REPORT
Rolls Royce Holdings’ 2022 Annual Report shows significant performance improvement compared to 2021. Its four business units posted revenue of £12.691 m (£10.947 m in 2021), gross profit of £2.477 m (£1.996 m in 2021) and operating profit of £652 m (£441 m in 2021). Civil aerospace business unit made 49% of the revenue, Defense 29%, and Power Systems 26%.
The Power Systems business unit is the home for the mtu brand developing and manufacturing power systems and solutions for commercial marine, industrial, defense and yachts as well as power generation. Headquartered in Germany, it closed the year with a record revenue of £3.347 m, a gain of 23 % comparing to the prior year. Orders for 2022 were £4.3 billion, 29% higher than the orders placed in 2021.
The main contributor to this revenue improvement comes from power generation products which 34% provided of total revenue. The second bestselling solutions and products are power systems for marine commercial and pleasure yachts industry contributing to the revenue result with 31%, followed by industrial with 25% and defense with 10%.
Operating profit was at £281 million. It went down slightly YoY, from 8.8% to 8.4%, due to high inflation, significant investments into R&D and write-downs of assets due to the war in Ukraine.
In 2022, Power Systems secured a long-term contract with the British army for 523 engines for Boxer vehicles to be delivered between 2022 and 2030. The five-year plus two in option contract was signed with the Royal Navy for service support for more than 90 mtu sets installed in five different types of vessels.
The contract with the leading UK luxury yacht manufacturer Ferretti Yachts was extended to 2027 for the continuous supply of marine engines and NautiQ bridge systems.
Power Systems agreed with the Dutch SemperPower to develop a large-scale battery storage system that supports the integration of renewable energy sources in the Netherlands; it’s the biggest in the country.
The main challenge in 2022 was supply chain and inventory management. The supply chain has been impacted by the turbulence in the Chinese economy present all year. The business suffered heightened disruption of the production and the output in-time delivery. Reopening of the Chinese economy and manufacturing facilities across China near the end of 2022 helped reduce the production cycle and stimulate the inventory management recovery.
One of the Rolls Royce Power Systems main priorities remains sustainability and net zero value emission by 2050. Actively working on sustainable projects, mtu developed and installed two Hybrid PowerPacks into the world’s first HybridFlex passenger train that ran from London to Aylesbury in the UK reducing CO2 emissions by up to 25%.
Power Systems also acquired a 54% stake in the German electrolyze stack company Hoeller Elektrolyzer to develop mtu electrolyzers for producing green hydrogen. Meanwhile, an agreement with a solar park with 3.7 MWp capacity in southern Germany was signed. The park will generate around four million kilowatt hours of electricity for Power Systems annually. This power generation source saves 1,300 tons of CO2 per year compared to electricity available through the German grid network.
Rolls-Royce is also taking actions to reduce greenhouse gas emissions in shipping. The engines of the mtu Series 2000 and Series 4000 will be approved for sustainable fuels such as e-diesel and HVO in 2023, enabling climate-neutral operation. New technologies such as methanol engines and CO2-free fuel cell systems are also already under development.
Superyacht manufacturers the Italian SanLorenzo and the German Lurssen are taking part into this revolutionary project. The hybrid PropulsionPack of the mtu Series 2000 and Series 4000 is planned to be launched in 2023. The new propulsion system integrates diesel engines with electric propulsion modules, batteries, gearboxes, control and monitoring system and other components accomplishing a maximal power of 10000 kW per boat. PSR
Natasa Mulahalilovic is Marine Pleasure Boat Analyst-Europe–Europe for Power Systems Research
