Slide 1: Wärtsilä Corporation Interim Report January-March 2011
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-MARCH 2011 OLE JOHANSSON, PRESIDENT & CEO 20 APRIL 2011 1 © Wärtsilä
Slide 2: Q1/11 Highlights
Q1/11 Highlights • Net sales EUR 1,083 million, +18% • Order intake EUR 979 million, +11% • Operating result EUR 113 million, 10.4% of net sales • Cash flow from operating activities EUR 133 million • EPS EUR 0.38 (0.34) Operating result and EPS are shown excluding nonrecurring items. EPS figures ha
Slide 3: Growth in net sales
Growth in net sales Q1 on Q1 development MEUR 1400 MEUR 1200 18% 1 083 5500 1000 922 7% 800 5000 14% -13% 600 6% 4500 400 47% 4000 200 23% 0 3500 Q1/2010 Q1/2011 3000 Q1 on Q4 development 2500 MEUR 1600 1 462 1400 -26% 2000 Development from Q4/10 1200 1 083 1500 1000 -15% 800 1000 -21% 600 500 400 -
Slide 4: Net sales by business 1-3/2011
Net sales by business 1-3/2011 Ship Power Power Plants 27% (30) 32% (26) Services 41% (44) 4 © Wärtsilä
Slide 5: Emerging markets approx. 54% of 2010 net sales
Emerging markets approx. 54% of 2010 net sales Developed Emerging markets markets 46% 54% 5 © Wärtsilä
Slide 6: Order intake at healthy levels
Order intake at healthy levels Q1 on Q1 development MEUR 1200 11% 979 1000 881 MEUR 800 6000 6% 600 5500 400 92% 5000 200 4500 -5% 0 4000 Q1/2010 Q1/2011 3500 3000 Q1 on Q4 development MEUR 1200 2500 1 003 -2% 979 1000 2000 8% 800 1500 1000 600 400 -3% 500 -20% 0 200 2007 2008 2009 2010 1-3/2011 0 Q
Slide 7: Book-to-bill
Book-to-bill MEUR 6000 1,60 1.50 5500 1,40 5000 1.21 4500 1,20 4000 0.90 1,00 3500 0.88 3000 0,80 0.63 2500 0,60 2000 1500 0,40 1000 0,20 500 0 0,00 2007 2008 2009 2010 1-3/2011 Order intake Net sales Book-to-bill 7 © Wärtsilä
Slide 8: Order book
Order book MEUR 7000 6000 -15% 5000 4 330 4000 10% 3 669 3000 -24% 2000 1000 -14% 0 2007 2008 2009 2010 31.3.2010 31.3.2011 Power Plants Ship Power Services 8 © Wärtsilä
Slide 9: Order book distribution
Order book distribution MEUR 5000 4000 3000 2000 1000 0 31.3.2010 31.3.2011 Delivery current year Delivery next year + 9 © Wärtsilä
Slide 10: Solid profitability
Solid profitability MEUR 250 16% 14% 200 12.1% EBIT% 11.4% 10.7% 12% target: 10.4% 10.1% 10-14% 10% 150 8% 100 6% 4% 50 2% 0 0% 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 Yearly EBIT% 10 © Wärtsilä
Slide 11: Ship Power market - vessel order development
Ship Power market - vessel order development All vessels Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in DWT 450 30 400 25 350 300 20 # of vessels Million DWT 250 15 200 150 10 100 5 50 - 0 01.05 03.05 05.05 07.05 09.05 11.05 01.06 03.06 05.06 07.06 09.06 11.06 01.07 03
Slide 12: Ship Power order intake by segment
Ship Power order intake by segment MEUR Q1 on Q4 development 2800 MEUR 200 -3% 178 25% 2400 173 333% 150 -26% 2000 -27% 100 1600 -22% 50 1200 39% 0 800 Q4/2010 Q1/2011 400 0 2007 2008 2009 2010 1-3/2011 Merchant Offshore Cruise & Ferry Special vessels Navy Ship Design 12 © Wärtsilä
Slide 13: Ship Power quarterly order intake
Ship Power quarterly order intake MEUR 900 800 700 600 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 13 © Wärtsilä
Slide 14: Ship Power market
Ship Power market Market position of Wärtsilä’s marine engines Medium-speed main engines Low-speed main engines Auxiliary engines Mitsubishi Wärtsilä 4%(3) 3%(4) Wärtsilä Others 11%(13) 16%(18) Wärtsilä 42%(42) MAN Diesel 27%(25) MAN Diesel Others Caterpillar 85%(84) 97%(96) (MAK) 15%(15) Total mark
Slide 15: Ship Power order book 31 March 2011
Ship Power order book 31 March 2011 All vessel segments represented RoRo LNG 4% 5% Bulkers 13% Merchant Offshore 49% 26% Containers 6% Special vessels 10% Tankers 9% Cruise & Ferry 7% Cargo Navy 12% 6% Ship Design 2% Total EUR 1,699 million (2,242) 15 © Wärtsilä
Slide 16: Wärtsilä is a frontrunner in LNG-fuelled ships
Wärtsilä is a frontrunner in LNG-fuelled ships Target to strengthen leading position in gas engine technology • Rising interest in natural gas as a marine fuel – Enviromental drivers and competitive natural gas prices • Wärtsilä’s dual fuel technology in over 60 LNG carriers Contract awarded by STX
Slide 17: Power Plants - Market demand remained on a good level
Power Plants - Market demand remained on a good level Quoted MW per Fuel Type 16000 14000 12000 10000 Others MW 8000 6000 4000 Natural gas 2000 0 Heavy fuel oil Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2004 2005 2006 2007 2008 2009 2010 2011 Share of nat
Slide 18: Power Plants order intake by application
Power Plants order intake by application MEUR 2000 Q1 on Q4 development MEUR 1800 400 -20% 1600 317 -51% 300 1400 253 1200 200 -49% 1000 100 800 202% 0 600 Q4/2010 Q1/2011 400 200 Order intake by fuel Q1/2011 in MW 0 2007 2008 2009 2010 1-3/2011 Oil Gas 38% 62% Industrial self- Flexible Grid stabili
Slide 19: Power Plants quarterly order intake
Power Plants quarterly order intake MEUR 600 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 19 © Wärtsilä
Slide 20: Power Plants order intake
Power Plants order intake Europe strongest region Asia 103 (52) Europe 307 (64) 40 86 57 Americas 152 (46) 222 26 6 92 Africa and Middle East 120 (295) 34 Flexible baseload 58 62 Industrial self-generation Oil & gas Grid stability & peaking Order intake 1-3/2011: 682 MW (457) 20 © Wärtsilä
Slide 21: Power Plants market
Power Plants market Gas turbine and engine manufacturers 2008 2009 2010 Other CEs 2.2 Other CEs 0.9 Other CEs 1.9 Other GTs 5.1 Other GTs 3.2 Other GTs 3.9 Wärtsilä 3.3 Ansaldo 1.8 Ansaldo 1.3 Ansaldo 4.2 MHI 2.0 Alstom 1.9 Alstom 5.3 Wärtsilä 3.2 Wärtsilä 2.0 GE 39.5 Alstom 2.5 GE 18.7 GE 23.7 MHI
Slide 22: Services net sales showed growth
Services net sales showed growth MEUR 2000 1800 Q1 on Q1 development 0% 0% MEUR 500 1600 439 409 7% 18% 400 1400 1200 300 1000 200 800 100 600 0 Q1/2010 Q1/2011 400 200 0 2007 2008 2009 2010 1-3/2011 22 © Wärtsilä
Slide 23: Services - Net sales by quarter
Services - Net sales by quarter MEUR 600 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 23 © Wärtsilä
Slide 24: Services net sales distribution 1-3/2011
Services net sales distribution 1-3/2011 Field service 22%(23) Spare parts 55%(55) Contracts 15%(13) Projects 8%(9) Numbers in brackets are from Q1/2010. 24 © Wärtsilä
Slide 25: Breakthrough contract for marine services
Breakthrough contract for marine services Target to grow through service agreements Continued interest in maintenance agreements seen in marine and power plant markets • Reduction of fixed costs • Enhanced performance and reliability Maintenance support agreement signed with Royal Caribbean Cruises
Slide 26: Cash flow from operating activities
Cash flow from operating activities MEUR 700 Q1 on Q1 development MEUR 600 200 181 500 150 133 400 100 300 50 200 0 Q1/2010 Q1/2011 100 0 2007 2008 2009 2010 1-3/2011 26 © Wärtsilä
Slide 27: Working capital development
Working capital development MEUR 2000 25% 1800 MEUR 31 March 2011 1600 20% 1400 1400 1200 1000 1200 15% 800 1000 600 800 9.2% 10% 3.3%* 400 8.4% 7.0% 142 600 5.5% 5.8% 200 482 3.7% 0 400 5% * Annualised Working 212 2.7% 267 Capital / Net Sales 176 170 200 155 102 0 0% 2004 2005 2006 2007 2008 2009 2
Slide 28: Committed loans March 2011
Committed loans 31 March 2011 MEUR 1400 1200 1000 550 800 Total EUR 2 618 million 600 63 drawn 400 553 200 0 Drawn long- Current portion Drawn short- Undrawn revolving term loans of long-term term loans credits loans At the end of the reporting period, drawn revolving credits amounted to 0 euros. In
Slide 29: Financial position
Financial position Solvency Gearing % 50 0,70 45 0,60 40 0,50 35 30 0,40 25 0,30 20 0,20 15 10 0,10 5 0,00 0 2007 2008 2009 2010 1-3/2011 -0,10 2007 2008 2009 2010 1-3/2011 29 © Wärtsilä
Slide 30: Restructuring programmes
Restructuring programmes • Personnel reductions of approx. 1,800 targeted, 1,500 employees reduced to date. • Expected annual savings approx. EUR 130 million, of which EUR 60 million recognised by end of 2010 and remainder will gradually materialise during 2011. • Nonrecurring restructuring costs ap
Slide 31: Market outlook
Market outlook • Ship Power: Price pressure in markets will continue. Order intake in 2011 expected to be moderately better than in 2010. • Power Plants: Recovery in the power generation market is expected to continue in 2011. Order intake estimated to remain at a good level in 2011. • Services: A s
Slide 32: Prospects for 2011 reiterated
Prospects for 2011 reiterated Wärtsilä expects its net sales for 2011 to grow 3-5% and operational profitability (EBIT% before nonrecurring items) to be around 11% 32 © Wärtsilä
Slide 33: IR Contact: Pauliina Tennilä, Director, Investor Relations
IR Contact: Pauliina Tennilä Director, Investor Relations Tel. +358 (0) 40 570 5530 E-mail: pauliina.tennila@wartsila.com Presentation name / Author