Wartsila Oyj Abp · OMXHEX:WRT1V
Wartsila Oyj Abp — Wärtsilä — Investor Day (May 2018)
18 slides from Wartsila Oyj Abp's investor day presentation, May 31, 2018
Slide 1: Good strategy implementation delivers shareholder value
GOOD STRATEGY IMPLEMENTATION DELIVERS SHAREHOLDER VALUE Marco Wirén, CFO and Executive Vice President 1 © Wärtsilä PUBLIC 31 May 2018 Marco Wirén
Slide 2: Attractive long-term investment
ATTRACTIVE LONG-TERM INVESTMENT <50% ≥50% GROW FASTER REACH 14% MAINTAIN GEARING DELIVER DIVIDEND THAN GLOBAL GDP PROFITABILITY BELOW 50% OF ≥50% OF EPS Focus on strengthening Enhanced performance Unleveraged balance OVER THE CYCLE position in strategic growth through continuous sheet supports growt
Slide 3: Growth and profitability drivers
GROWTH AND PROFITABILITY DRIVERS INCREASING INVESTING IN IMPROVING REDUCING ENVIRONMENTAL SOFTWARE SAFETY CUSTOMERS’ AWARENESS ROBOTICS AND AI OPEX › Smart strategies with increased customer value › Operational excellence and digitalisation › New business models and innovation › Bolt-on M&A and port
Slide 4: Global slowdown has affected our sales development…
Global slowdown has affected our sales development… GDP growth Wärtsilä’s sales growth MEUR MEUR 120 000 6% 8 000 6% 1% 1% 100 000 7% 6 000 5 260 80 000 5 029 4 612 4 725 4 607 4 779 4 801 4 923 4 553 4 209 60 000 4 000 3 763 3 190 40 000 8% 2 000 2% 20 000 13% 0 0 2006 2007 2008 2009 2010 2011 2012
Slide 5: …while recent strong order book build-up supports future growth
…while recent strong order book build-up supports future growth Order book development MEUR 6 000 NEW MARINE SOLUTIONS 4% EQUIPMENT 6 months – 2.5 years 5 000 BUSINESSES 4 000 ENERGY SOLUTIONS 3 000 6 months – 2 years 2 000 1 000 SERVICES TRANSACTIONAL ≤ 3 months 0 2013 2014 2015 2016 2017 LONG-TERM
Slide 6: Actions in place to reach our profitability target
Actions in place to reach our profitability target 800 16% How to reach 14% EBIT? 700 14,0 % 14% • Challenging operating environment but signs of 12,1% 11,9% 12,2% 12,1% 12,0% market recovery, driving growth and profitability 600 12% • Increased efficiency 500 10% – Operational excellence 400 8% – S
Slide 7: Operational excellence and digitalisation driving efficiency gains
OPERATIONAL EXCELLENCE AND DIGITALISATION DRIVING EFFICIENCY GAINS 7 © Wärtsilä PUBLIC 31 May 2018 Marco Wirén
Slide 8: Operational excellence improving productivity and efficiency throughout the product lifecycle
Operational excellence improving productivity and efficiency throughout the product lifecycle EXAMPLES OF INITIATIVES ENGINES PRODUCTION IMPROVED FIELD SERVICE DIGITAL PERFORMANCE FLOW IMPROVEMENT ORDER INTAKE PROCESS – MANAGEMENT IN SEVERAL SERVICE UNITS › Material availability and logistics › Valu
Slide 9: Operational excellence improving productivity and efficiency throughout the product lifecycle
Operational excellence improving productivity and efficiency throughout the product lifecycle IMPACT ENGINES PRODUCTION IMPROVED FIELD SERVICE DIGITAL PERFORMANCE FLOW IMPROVEMENT ORDER INTAKE PROCESS – MANAGEMENT IN SEVERAL SERVICE UNITS › 30% productivity improvement in › Time-to-quote reduced by
Slide 10: Robotics are driving further efficiencies
Robotics are driving further efficiencies • First software robots in 2015 Steady increase in automated Release activity over last twelve • Over 100 processes handed processes months over with significant benefits 120 gained 100 • Currently deploying 80 Artificial Intelligence 60 • Expanding from sup
Slide 11: Customer needs in center of portfolio management
Customer needs in center of portfolio management › Adapting to changing 2015 2016 2017 2018 markets with active • Acquisition of L-3 • Divestment • Divestment of • Acquisition of portfolio management Marine Systems of 2-stroke engine Funa Electrical Lock-N-Stitch International business safety and •
Slide 12: Implications of smart strategies on capital allocation
IMPLICATIONS OF SMART STRATEGIES ON CAPITAL ALLOCATION 12 © Wärtsilä PUBLIC 31 May 2018 Marco Wirén
Slide 13: Strong operating cash flow with over 2.3 BEUR generated over the past five years
Strong operating cash flow with over 2.3 BEUR generated over the past five years Operating cash flow development Cash flow composition 2017 MEUR 700 663 800 724 -102 613 600 578 700 -6 -119 600 500 452 430 -67 500 400 430 349 400 300 255 232 300 200 153 200 100 100 0 0 2009 2010 2011 2012 2013 2014
Slide 14: Unleveraged balance sheet ensures investing capability
Unleveraged balance sheet ensures investing capability Net debt/equity & Net debt/EBITDA Total debt of Wärtsilä group MEUR (current average interest 1.1%) 600 567 1,00 800 726 700 646 500 586 0,80 600 531 372 500 400 401 0,60 400 300 276 300 273 234 170 0,40 200 200 96 70 150 100 44 18 0 94 0,20 0 1
Slide 15: Increasing R&D investments to maintain technology leadership
Increasing R&D investments to maintain technology leadership MEUR • Seamless integration of 160 3,5% hardware and software 140 3,0% • R&D allocation moving more to software and 120 2,5% digital to support our 100 smart strategies 2,0% • Focus on optimised 80 1,5% performance and 60 operational flexi
Slide 16: Investing into smart strategies
Investing into smart strategies • Digital transformation – Investing in culture change to secure digitalisation enablers • Offering – Investments to apply digitalisation in our existing products and solutions • Acquisitions focus: – Acquiring technology and capabilities to develop our smart offering
Slide 17: Delivering shareholder value
Delivering shareholder value Total shareholder return • Financial development Return index is in line with the 250 targets • Growth elements are 200 in place • Driving more efficient 150 operations • Further developing our smart offering 100 50 2013 2014 2015 2016 2017 2018 Wärtsilä OMXH 17 © Wärtsi
Slide 18: Thank you
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