Slide 1: Interim Report January-September 2018
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-SEPTEMBER 2018 23 October 2018 Jaakko Eskola, President & CEO 1 © Wärtsilä PUBLIC 23 October 2018 Interim Report January-September 2018
Slide 2: Good development in net sales
GOOD DEVELOPMENT IN NET SALES 2 © Wärtsilä PUBLIC 23 October 2018 Interim Report January-September 2018
Slide 3: Highlights Q3/2018
Highlights Q3/2018 • Order intake stable at EUR 1,372 million • Order book at the end of the period EUR 5,918 million, +16% • Net sales EUR 1,330 million, +13% • Book-to-bill 1.03 (1.15) • Comparable operating result EUR 141 million (131), which represents 10.6% of net sales (11.2) • Earnings per sh
Slide 4: Marine Solutions and Services driving order intake
Marine Solutions and Services driving order intake MEUR 6 000 5 500 Third quarter development 5 000 MEUR 4 500 1 800 4 000 1 600 3 500 1,354 1,372 1 400 1% 3 000 1 200 Services 17% 2 500 1 000 Marine 2 000 800 Solutions 55% 1 500 600 1 000 Energy 400 -65% Solutions 500 200 0 0 2014 2015 2016 2017 20
Slide 5: Net sales boosted by growth in newbuild deliveries
Net sales boosted by growth in newbuild deliveries MEUR 5 500 5 000 Third quarter development 4 500 MEUR 4 000 1 600 3 500 1,330 1 400 3 000 1,175 13% 1 200 2 500 1% Services 1 000 2 000 800 Marine 9% Solutions 1 500 600 1 000 400 Energy 39% Solutions 500 200 0 0 2014 2015 2016 2017 2018 Q3/2017 Q3/
Slide 6: Net sales by business 1-9/2018
Net sales by business 1-9/2018 Marine Solutions 24% (23) Services 46% (49) Energy Solutions 30% (28) Comparison figures for 2017 have been restated due to the internal reorganisation of service activities and the adoption of IFRS 15. 6 © Wärtsilä PUBLIC 23 October 2018 Interim Report January-Septemb
Slide 7: Book-to-bill
Book-to-bill MEUR 6 000 1,6 5 500 5 000 1.22 4 500 1.15 1,2 1.03 1.06 4 000 0.98 3 500 3 000 0,8 2 500 2 000 1 500 0,4 1 000 500 0 0,0 2014 2015 2016 2017 1-9/2018 Order intake Net sales Book-to-bill Comparison figures for 2017 have been restated due to the adoption of IFRS 15. 7 © Wärtsilä PUBLIC 2
Slide 8: Order book distribution
Order book distribution MEUR 5 000 4 500 4 000 3 500 3 000 2 500 2 000 1 500 1 000 500 0 30.9.2017 30.9.2018 Delivery current year Delivery next year or later Comparison figures for 2017 have been restated due to the adoption of IFRS 15. 8 © Wärtsilä PUBLIC 23 October 2018 Interim Report January-Sep
Slide 9: Comparable operating result affected by the sales mix
Comparable operating result affected by the sales mix MEUR 700 14% 12.2% 12.1% 11.9% 11.7% Review period development 600 12% MEUR 400 14% 500 10% 350 12% 400 8% 300 9.7% 9.7% 10% 250 300 6% 8% 200 6% 200 4% 150 4% 100 100 2% 50 2% 0 0% 0 0% 2014 2015 2016 2017 1-9/2017 1-9/2018 Comparable operating
Slide 10: Wärtsilä's Smart Technology Hub to be built in Vaasa, Finland
Wärtsilä’s Smart Technology Hub Kuva to be built in Vaasa, Finland pitää • The new centre for research, vaihtaa, development and production is the latest tangible step in Wärtsilä's Smart Marine bonny and Smart Energy visions. • The hub will enable more agile and kalvon efficient testing and develop
Slide 11: Services
SERVICES 11 © Wärtsilä PUBLIC 23 October 2018 Interim Report January-September 2018
Slide 12: Steady development in Services' net sales
SERVICES Steady development in Services’ net sales MEUR 2 600 2 400 Third quarter development 2 200 2 000 MEUR 1 800 700 1 600 569 572 600 1 400 1% 500 1 200 1 000 400 800 300 600 200 400 200 100 0 0 2014 2015 2016 2017 2018 Q3/2017 Q3/2018 Q1-Q3 Q4 Comparison figures for 2017 have been restated due
Slide 13: Net sales distribution 1-9/2018
SERVICES Net sales distribution 1-9/2018 By product area By segment Others Special vessels 2% (2) 7% (7) Field service Oil&Gas 23% (23) 4% (3) Offshore 4% (4) Navy Spare parts 7% (8) Power plants 48% (49) 33% (35) Agreements 21% (17) Merchant 24% (23) Cruise & ferry Projects 18% (17) 9% (11) Total E
Slide 14: Installed base covered by service agreements
SERVICES Installed base covered by service agreements 25 000 30% 25% 20 000 20% MW 15 000 15% 10 000 10% 5 000 5% 0 0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 1-9/2018 MW under agreement – Energy Solutions MW under agreement – Marine Solutions % of Energy Solutions’ installed base % of Marine S
Slide 15: Energy Solutions
ENERGY SOLUTIONS 15 © Wärtsilä PUBLIC 23 October 2018 Interim Report January-September 2018
Slide 16: Quotation activity by fuel type
ENERGY SOLUTIONS Quotation activity by fuel type MW 60 000 50 000 40 000 Multi-fuel 30 000 Gas Liquid fuel 20 000 10 000 0 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017 Q2/2017 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 Calculated on a 12 months rolling basis 16 © Wärtsilä PUB
Slide 17: Energy Solutions' order intake impacted by postponed investment decisions
ENERGY SOLUTIONS Energy Solutions’ order intake impacted by postponed investment decisions Review period development MEUR Total EUR 921 million (1,184) 1 800 6% 1 600 Utilities 1 400 44% 50% Independent power producers 1 200 Industrials 1 000 800 Review period order intake 600 by fuel in MW 400 Oil
Slide 18: Ordering activity highest in Asia
ENERGY SOLUTIONS Ordering activity highest in Asia Asia 1,056 (2,031) Europe 231 (198) 26 10 369 Americas 306 (348) 661 221 10 51 Africa and Middle East 275 (279) Utilities 246 83 60 IPP’s (Independent Power Producers) Industrials 132 Order intake 1-9/2018: 1,868 MW (2,856) 18 © Wärtsilä PUBLIC 23 O
Slide 19: Market for gas and liquid fuel power plants, <500 MW
ENERGY SOLUTIONS Market for gas and liquid fuel power plants, <500 MW Other GT’s 2% Ansaldo 7% Siemens Wärtsilä 28% 17% MHI GE 22% 24% <500 MW market volume: 20.7 GW (18.1) Total market volume: 44.2 GW (49.8) Market shares are calculated on a 12 months rolling basis, numbers in brackets are from the
Slide 20: Marine Solutions
MARINE SOLUTIONS 20 © Wärtsilä PUBLIC 23 October 2018 Interim Report January-September 2018
Slide 21: Gradual recovery in vessel contracting
MARINE SOLUTIONS Gradual recovery in vessel contracting Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT * 250 5,0 4,5 200 4,0 3,5 Number of vessels 150 3,0 * Million CGT 2,5 100 2,0 1,5 50 1,0 0,5 0 0,0 1/2009 4/2009 7/2009 10/2009 1/2010 4/2010 7/2010 10/2010 1/201
Slide 22: Marine Solutions' order intake supported by scrubbers
MARINE SOLUTIONS Marine Solutions’ order intake supported by scrubbers and continued activity in the cruise and ferry segment MEUR 1 800 Review period development Total EUR 1,291 million (972) 1 500 Offshore Gas carriers 6% (3) Special vessels 1 200 12% (28) 5% (8) 900 Traditional Cruise merchant 24
Slide 23: Financials
FINANCIALS 23 © Wärtsilä PUBLIC 23 October 2018 Interim Report January-September 2018
Slide 24: Cash flow from operating activities
FINANCIALS Cash flow from operating activities MEUR 700 600 Review period development MEUR 180 500 160 400 140 120 300 100 80 200 60 100 40 20 0 0 2014 2015 2016 2017 1-9/2017 1-9/2018 24 © Wärtsilä PUBLIC 23 October 2018 Interim Report January-September 2018
Slide 25: Working capital
FINANCIALS Working capital MEUR 1 600 25% 1 400 Review period development 20% MEUR 1 200 1 600 25% 1 000 1 400 15% 20% 1 200 800 11.5% 15.4%* 10.8% 10.2% 1 000 15% 10% 12.6%* 600 543 563 782 800 6.8% 490 632 10% 400 5.2% 600 313 5% 251 400 5% 200 200 0 0% 0 0% 2013 2014 2015 2016 2017 30.9.2017 30.9
Slide 26: Gearing
FINANCIALS Gearing 0,50 Review period development 0,40 0,50 0,30 0,40 0,30 0,20 0,20 0,10 0,10 0,00 0,00 2014 2015 2016 2017 30.9.2017 30.9.2018 26 © Wärtsilä PUBLIC 23 October 2018 Interim Report January-September 2018
Slide 27: Prospects for 2018
Setti 1 Setti 1 Prospects for 2018 The demand for Wärtsilä’s services and solutions in 2018 is expected to improve somewhat from the previous year. Demand by business area is anticipated to be as follows: • Solid in Services (lowered from good) • Good in Energy Solutions • Good in Marine Solutions 2
Slide 28: Wärtsilä redesigns organisation to enhance customer value
Wärtsilä redesigns organisation to Kuva enhance customer value pitää • Wärtsilä Marine Business and Wärtsilä vaihtaa, Energy Business will cover both new sales and services for the respective markets. bonny • Forming two business areas aims at: • Accelerating growth and the implementation of the kal
Slide 29: Thank you
THANK YOU Further information: Natalia Valtasaari Director, Investor Relations Tel. +358 (0) 10 709 5637 E-mail: natalia.valtasaari@wartsila.com 29 © Wärtsilä PUBLIC 23 October 2018 Interim Report January-September 2018