Slide 1: Wärtsilä Corporation Interim Report January-March 2016
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-MARCH 2016 21 April 2016 Jaakko Eskola, President & CEO 1 © Wärtsilä PUBLIC 21 April 2016 Q1 Result presentation
Slide 2: Highlights Q1/2016
Highlights Q1/2016 • Order intake EUR 1,271 million, -1% • Net sales EUR 967 million, -2% • Book-to-bill 1.31 (1.30) • Comparable operating result EUR 84 million, 8.7% of net sales (EUR 100 million or 10.1%) • Earnings per share EUR 0.30 (0.43) • Cash flow from operating activities EUR -13 million (
Slide 3: Order intake developed well in the equipment businesses
Order intake developed well in the equipment businesses MEUR 5 500 5 000 First quarter development 4 500 MEUR 4 000 1 600 3 500 1 400 1,285 -1% 1,271 3 000 1 200 -12% Services 2 500 1 000 2 000 800 Marine Solutions 1 500 600 13% 1 000 400 Energy 9% Solutions 500 200 0 0 2012 2013 2014 2015 2016 Q1/2
Slide 4: Stable development in net sales
Stable development in net sales MEUR 5 500 5 000 First quarter development 4 500 MEUR 4 000 1 400 3 500 1 200 3 000 988 -2% 967 1 000 2 500 Services 800 3% 2 000 Marine 600 Solutions 1 500 4% 400 1 000 Energy -27% Solutions 500 200 0 0 2012 2013 2014 2015 2016 Q1/2015 Q1/2016 Q1 Q2-Q4 4 © Wärtsilä P
Slide 5: Net sales by business 1-3/2016
Net sales by business 1-3/2016 Services Marine Solutions 52% (49) 35% (32) Energy Solutions 14% (18) 5 © Wärtsilä PUBLIC 21 April 2016 Q1 Result presentation
Slide 6: Book-to-bill ratio
Book-to-bill ratio MEUR 5 500 1,4 1.31 5 000 1,2 4 500 1.05 1.05 1.06 0.98 4 000 1,0 3 500 0,8 3 000 2 500 0,6 2 000 1 500 0,4 1 000 0,2 500 0 0,0 2012 2013 2014 2015 1-3/2016 Order intake Net sales Book-to-bill 6 © Wärtsilä PUBLIC 21 April 2016 Q1 Result presentation
Slide 7: Order book distribution
Order book distribution MEUR 3 000 2 500 2 000 1 500 1 000 500 0 31.3.2015 31.3.2016 Delivery current year Delivery next year or later 7 © Wärtsilä PUBLIC 21 April 2016 Q1 Result presentation
Slide 8: Operating result and profitability
Operating result and profitability MEUR 700 14% 12.2% 11.9% First quarter development 600 12% 11.2% 10.9% MEUR 140 14% 500 10% 120 12% 400 8% 10.1% 100 10% 8.7% 300 6% 80 8% 60 6% 200 4% 40 4% 100 2% 20 2% 0 0% 0 0% 2012 2013 2014 2015 Q1/2015 Q1/2016 Comparable operating result % of net sales Items
Slide 9: Energy Solutions
ENERGY SOLUTIONS 9 © Wärtsilä PUBLIC 21 April 2016 Q1 Result presentation
Slide 10: Quotation activity on a satisfactory level
ENERGY SOLUTIONS Quotation activity on a satisfactory level MW 18 000 16 000 14 000 12 000 Multi-fuel 10 000 Gas 8 000 6 000 Liquid fuel 4 000 2 000 0 Q1/2013 Q4/2013 Q2/2014 Q1/2015 Q4/2015 Q2/2013 Q3/2013 Q1/2014 Q3/2014 Q4/2014 Q2/2015 Q3/2015 Q1/2016 10 © Wärtsilä PUBLIC 21 April 2016 Q1 Result
Slide 11: Solid power plant ordering activity
ENERGY SOLUTIONS Solid power plant ordering activity First quarter development MEUR Total EUR 312 million (287) 1 800 Utilities 1 600 Independent 1 400 power producers 1 200 Industrials 1 000 800 First quarter order intake 600 by fuel in MW 400 Oil Gas 200 65% 35% 0 2012 2013 2014 2015 2016 Q1 Q2-Q4
Slide 12: Order intake globally
ENERGY SOLUTIONS Order intake globally Europe* 564 (433) Asia 30 (20) 564 Americas 74 (75) 30 36 38 Africa and Middle East 199 (175) Utilities IPP’s 199 (Independent Power Producers) Industrials Order intake 1-3/2016: 868 MW (702) *Turkish owners contributed to the high level of activity in Europe.
Slide 13: Market for gas and liquid fuel power plants, <500 MW
ENERGY SOLUTIONS Market for gas and liquid fuel power plants, <500 MW 2014 2015 Alstom Other GT’s Wärtsilä Ansaldo 1.3% 0.4% 8.3% 3.8% Wärtsilä Other GT’s 10.7% 10.0% Siemens GE Ansaldo GE 13.2% 50.4% 10.4% 37.9% MHI MHI 14.6% 20.1% Siemens 18.8% <500 MW market volume: 29.5 GW (23.4), +26% Total mar
Slide 14: Wärtsilä enters the utility-scale solar business
Wärtsilä enters the utility-scale solar business Leveraging our global EPC expertise to help our customers reduce carbon emissions by offering hybrid solutions that couple solar PV parks with Smart Power Generation power plants in focus areas such as Africa, the Middle East, the Americas and Southea
Slide 15: Marine Solutions
MARINE SOLUTIONS 15 © Wärtsilä PUBLIC 21 April 2016 Q1 Result presentation
Slide 16: Limited demand for new vessels
MARINE SOLUTIONS Limited demand for new vessels 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 01.09 03.09 05.09 07.09 09.09 11.09 01.10 03.10 05.10 07.10 09.10 11.10
Slide 17: Order intake supported by strong activity in Cruise & Ferry
MARINE SOLUTIONS Order intake supported by strong activity in Cruise & Ferry MEUR 1 800 First quarter development Total EUR 379 million (336) 1 500 Gas carriers Offshore 11% 3% 1 200 Special vessels 11% Traditional 900 merchant 11% Others Cruise & 600 6% Ferry 48% 300 Navy 10% 0 2012 2013 2014 2015
Slide 18: Joint venture ordering activity
MARINE SOLUTIONS Joint venture ordering activity MEUR 700 600 500 400 300 200 100 0 Q1/2011 Q2/2011 Q3/2011 Q4/2011 Q1/2012 Q2/2012 Q3/2012 Q4/2012 Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016 Marine Solutions order intake Joint venture orde
Slide 19: Marine markets shifting towards gas
Marine markets Kuva shifting towards gas pitää vaihtaa, Wärtsilä has been awarded the contract to supply a comprehensive gas solution for the mid-life upgrading of two bonny Canadian RoPax ferries. Converting the ferries to operate on LNG fuel will make kalvon them environmentally sustainable. kuva
Slide 20: Strong position in marine engine market
MARINE SOLUTIONS Strong position in marine engine market Medium-speed main engines Auxiliary engines Wärtsilä Others 13% (12) 15% (18) Caterpillar 5% (7) Wärtsilä Others 60% (59) 87% (88) MAN D&T 20% (16) Total market volume last 12 months: Total market volume last 12 months: 2,307 MW (3,246) 5,273
Slide 21: Services
SERVICES 21 © Wärtsilä PUBLIC 21 April 2016 Q1 Result presentation
Slide 22: Steady progression in Services net sales
SERVICES Steady progression in Services net sales MEUR 2 400 2 200 First quarter development 2 000 MEUR 1 800 600 1 600 485 500 1 400 500 1 200 3% 400 1 000 800 300 600 200 400 100 200 0 0 2012 2013 2014 2015 2016 Q1/2015 Q1/2016 Q1 Q2-Q4 22 © Wärtsilä PUBLIC 21 April 2016 Q1 Result presentation
Slide 23: Net sales distribution 1-3/2016
SERVICES Net sales distribution 1-3/2016 Field service 24% (24) Spare parts 51% (53) Agreements 17% (17) Projects 8% (6) Total EUR 500 million (485) 23 © Wärtsilä PUBLIC 21 April 2016 Q1 Result presentation
Slide 24: Development of service agreements
SERVICES Development of service agreements 14 000 30% 12 000 25% 10 000 20% 8 000 MW 15% 6 000 10% 4 000 5% 2 000 0 0% 2010 2011 2012 2013 2014 2015 1-3/2016 MW under agreement – Energy Solutions MW under agreement – Marine Solutions % of Energy Solutions’ installed base % of Marine Solutions’ insta
Slide 25: A five-year maintenance agreement signed with Bonny Gas Transport Limited
A five-year maintenance agreement signed with Bonny Gas Transport Limited Wärtsilä will optimise maintenance and enhance engine performance for Bonny Gas Transport’s six new LNG carriers through dynamic maintenance planning and digital services. Image: Bonny Gas Transport Limited 25 © Wärtsilä PUBLI
Slide 26: Financials
FINANCIALS 26 © Wärtsilä PUBLIC 21 April 2016 Q1 Result presentation
Slide 27: Cash flow from operating activities
FINANCIALS Cash flow from operating activities MEUR 700 600 Review period development MEUR 50 500 40 400 30 300 20 10 200 0 100 -10 0 -20 2012 2013 2014 2015 Q1/2015 Q1/2016 27 © Wärtsilä PUBLIC 21 April 2016 Q1 Result presentation
Slide 28: 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 10.8% 14.2%* 9.8% 1 000 15% 543 10% 600 800 709 465 6.8% 5.2% 10% 600 400 313 6.2%* 251 5% 400 296 5% 200 200 0 0% 0 0% 2012 2013 2014 2015 31.3.2015 31.3.2016 Working cap
Slide 29: 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 2012 2013 2014 2015 31.3.2015 31.3.2016 29 © Wärtsilä PUBLIC 21 April 2016 Q1 Result presentation
Slide 30: Market outlook
Market outlook Energy Solutions Marine Solutions Services The market for liquid and gas fuelled The outlook for the shipping and The service market outlook is positive power generation is expected to shipbuilding markets remains with growth opportunities in selected remain challenging as economic ch
Slide 31: Plans for organisational adjustments to reflect the weak market situation
Plans for organisational adjustments to reflect the weak market situation • Wärtsilä plans to realign its Marine Solutions’ and Energy Solutions’ global operations to adjust to the weakened market situation and the tough competitive environment • Engine related R&D activities planned to be concentra
Slide 32: Prospects for 2016 unchanged
Prospects for 2016 unchanged Wärtsilä expects its net sales for 2016 to grow by 0-5% and its profitability (comparable operating result as a percent of net sales) to be 12.5-13.0% 32 © Wärtsilä PUBLIC 21 April 2016 Q1 Result presentation
Slide 33: Thank you
THANK YOU IR Contact: Natalia Valtasaari Director, Investor & Media Relations Tel. +358 (0) 40 187 7809 E-mail: natalia.valtasaari@wartsila.com 33 © Wärtsilä PUBLIC 21 April 2016 Q1 Result presentation