Rolls-Royce’s Power Systems division, MTU, has presented its balance sheet for 2023. The company achieved “very good” results in terms of revenue, earnings and cash flow.
According to the company, which is based in Friedrichshafen on Lake Constance, sales increased by 16% to €4.56 billion. Adjusted operating profit grew by 44% to €474 million with a margin of 10.4% (2022: 8.4%)[ds_preview].
Sales were primarily driven by energy systems, especially for data centres. Cost and price management measures led to a higher margin for the year as a whole and, in particular, to higher profits in the second half of the year, according to the statement.
“We are in a position of strength. The core business is going well and we are excellently positioned in our markets. We see growth potential in almost all markets, largely independent of global economic developments,” says Jörg Stratmann, CEO of Rolls-Royce Power Systems. “Our transformation with a strong focus on high-margin business and earnings is paying off.”
Rolls-Royce records an order intake worth €4.9 billion
Order intake in the Power Systems division amounted to €4.9 billion and was therefore on a par with the previous year, with a book-to-bill ratio of 1.1 and order coverage for new business for 2024 of around 80 %. Demand was particularly strong in the power generation, marine and government business areas. Cash flow from operating activities amounted to € 530 million with a cash conversion rate of 112% compared to € 185 million and 56% in the previous year.
The increase in adjusted operating profit is attributable to commercial optimization and strict cost management. A significant increase in earnings was achieved in the energy systems business, particularly with MTU emergency power systems for data centres. The improvement in the operating margin compared to the previous year was achieved despite a negative product mix effect.
Focus on batteries and sustainable yachts
Significant topics in the past year include the commissioning of one of the largest battery and energy storage systems in Europe, which helps to integrate renewable energies into the Dutch public power grid, and the implementation of the “From Bridge to Propeller” strategy for large yachts with the acquisition of yacht automation and bridge manufacturer Team Italia Marine.
“The consistent focus on markets in which we can be particularly successful will continue to be our strategy for the coming years,” says Stratmann. “We are concentrating on five strategic initiatives: power generation, marine, government business, battery storage and service. A particular highlight is the first investment in 20 years in the development of a new MTU engine platform. This will enable us to offer our customers a wider power range and form the basis for further developments in combustion engines with alternative fuels.”
“After taking the first steps towards implementing the new strategy last year, we are now working consistently on its further implementation and are convinced that thanks to it, we will set technological and economic standards in the industry,” says Jörg Stratmann.
