Slide 1: Wärtsilä Corporation Interim Report January-June 2015
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-JUNE 2015 17 JULY 2015 Björn Rosengren, President & CEO © Wärtsilä
Slide 2: Highlights Q2/2015
Highlights Q2/2015 • Order intake EUR 1,159 million, +2% • Net sales EUR 1,230 million, +10% • Book-to-bill 0.94 (1.02) • EBIT EUR 137 million, 11.1% of net sales (EUR 132 million or 11.8%) • EBITA EUR 144 million, 11.7% of net sales (EUR 138 million or 12.4%) • EPS EUR 0.54 (0.42) • Cash flow from
Slide 3: Order intake growth supported by Services
Order intake growth supported by Services MEUR 5500 5000 Second quarter development 4500 MEUR 4000 1400 3500 1,138 1,159 1200 3000 2% Services 1000 2500 13% Marine 800 Solutions 2000 1500 600 Energy 2% Solutions 1000 400 500 200 -23% 0 0 2011 2012 2013 2014 2015 Q2/2014 Q2/2015 Q1-Q2 Q3-Q4 3 © Wärts
Slide 4: Net sales in line with our expectations
Net sales in line with our expectations Net sales developed well MEUR 5000 4500 4000 Second quarter development 3500 MEUR 1400 3000 1,230 1,116 1200 2500 10% Services 1000 2000 17% Marine 800 Solutions 1500 600 -15% Energy Solutions 1000 400 500 40% 200 0 0 2011 2012 2013 2014 2015 Q2/2014 Q2/2015 Q
Slide 5: Net sales by business 1-6/2015
Net sales by business 1-3/2012 Net sales by business 1-6/2015 Marine Solutions Services 30% (37) 47% (43) Energy Solutions 23% (20) 5 © Wärtsilä
Slide 6: Book-to-bill ratio remains above one
Book-to-bill ratio remains above one MEUR 5500 1,2 1.07 1.05 1.06 1.10 1.05 5000 4500 1,0 4000 0,8 3500 3000 0,6 2500 2000 0,4 1500 1000 0,2 500 0 0,0 2011 2012 2013 2014 1-6/2015 Order intake Net sales Book-to-bill 6 © Wärtsilä
Slide 7: Order book distribution
Order book distribution Order book distribution MEUR 3500 3000 2500 2000 1500 1000 500 0 30.6.2014 30.6.2015 Delivery current year Delivery next year or later 7 © Wärtsilä
Slide 8: Operating result and profitability
Operating result and profitability MEUR 600 14% 11.9% 12% Second quarter development 500 11.2% 11.1% 10.9% MEUR 10% 140 12% 400 10.8% 11.1% 120 10% 8% 300 100 8% 6% 80 200 6% 4% 60 4% 40 100 2% 20 2% 0 0% 0 0% 2011 2012 2013 2014 Q2/2014 Q2/2015 EBIT EBIT% EBIT is shown before non-recurring items. F
Slide 9: Challenging environment in the power generation markets
Challenging environment in the power generation markets 9 © Wärtsilä
Slide 10: Energy Solutions' quotation activity on a good level
Energy Solutions’ quotation activity on a good level MW 18 000 16 000 14 000 12 000 10 000 Multi-fuel 8 000 Gas 6 000 Liquid fuel 4 000 2 000 0 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 10 © Wärtsilä
Slide 11: Growth in Energy Solutions' order intake
Growth in Energy Solutions’ order intake MEUR Review period development 1800 Total EUR 475 million (409) 1600 10% Utilities 1400 41% 49% IPP’s* 1200 Industrials x% 1000 800 Review period order intake by fuel in MW 600 400 200 Oil Gas 56% 44% 0 2011 2012 2013 2014 2015 Q1-Q2 Q3-Q4 *IPP = Independent
Slide 12: Energy Solutions' orders globally
Energy Solutions’ orders globally Europe 698 (361) 4 58 Asia 111 (284) 636 31 40 Americas 239 (76) 40 239 Africa and Middle East 175 (265) 40 Utilities 135 IPP’s Industrials Order intake 1-6/2015: 1,222 MW (986) 12 © Wärtsilä
Slide 13: Market for gas and liquid fuel based power plants 1-3/2015
Market for gas and liquid fuel based power plants 1-3/2015 Total market Market <500 MW 9.7 GW (11.0) 4.7 GW (6.5) 0.4% 0.9% 7.2% 10.3% 20.1% 15.0% 43.3% 52.4% 29.0% 21.5% GE Siemens MHI Wärtsilä Other GTs Market data includes all Wärtsilä power plants and other manufacturers’ gas and liquid fuelled
Slide 14: Contracting volumes remain low
Contracting volumes remain low 14 © Wärtsilä
Slide 15: Vessel contracting activity
Vessel contracting activity Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT * 250 5 200 4 * # of vessels 150 3 Million CGT 100 2 50 1 0 0 06.15 01.09 03.09 05.09 07.09 09.09 11.09 01.10 03.10 05.10 07.10 09.10 11.10 01.11 03.11 05.11 07.11 09.11 11.11 01.12 03.12 05
Slide 16: Marine Solutions' order intake
Marine Solutions’ order intake MEUR 1800 Review period development Total EUR 728 million (823) 1500 Offshore 1200 15% Gas carriers 34% 900 Special vessels 10% 600 300 Cruise & Ferry Traditional 18% merchant Others Navy 0 16% 4% 3% 2011 2012 2013 2014 2015 Q1-Q2 Q3-Q4 16 © Wärtsilä
Slide 17: Joint venture ordering activity
Joint venture ordering activity MEUR 700 • Joint venture order intake 600 totalled EUR 140 million (92) 500 during January-June 2015 • Wärtsilä’s share of ownership 400 in these companies is 50%, and the results are reported as 300 a share of result of associates and joint ventures 200 100 0 Q1/2010
Slide 18: Strong position in marine engine market
Strong position in marine engine market Medium-speed main engines Auxiliary engines Wärtsilä Others 5% (4) 16% (16) Caterpillar 10% (13) Wärtsilä Others 59% (56) 95% (96) MAN D&T 15% (15) Total market volume last 12 months: Total market volume last 12 months: 4,988 MW (5,711) 4,078 MW (4,988) Wärtsi
Slide 19: Acquisition of L-3 Marine Systems International finalised
Acquisition of L-3 Marine Systems International finalised Key figures Marine Solutions MSI’s contribution MSI MEUR 1-6/2015 6/2015 1-6/2015 Order intake 728 41 161 Net sales 674 30 197 Order book, end of 2,785 519 519 period • The integration of MSI with Wärtsilä’s existing E&A business within Marin
Slide 20: Marine Solutions business to be adjusted to reflect the current market situation
Marine Solutions business to be adjusted to reflect the current market situation • Wärtsilä Marine Solutions plans to realign its organisation to maintain competitiveness in an environment of low demand • Approx. 600 jobs will be reduced, of which 160 in Finland • Wärtsilä seeks annual savings in th
Slide 21: Good activity in the service markets, market outlook remains positive
Good activity in the service markets, market outlook remains positive 21 © Wärtsilä
Slide 22: Services' net sales increased by 14% in 1-6/2015
Services’ net sales increased by 14% in 1-6/2015 MEUR 2000 Second quarter development 1800 MEUR 5% -3% 5% 1600 600 17% 548 1400 500 468 1200 400 1000 800 300 600 200 400 100 200 0 0 2011 2012 2013 2014 2015 Q2/2014 Q2/2015 Q1-Q2 Q3-Q4 22 © Wärtsilä
Slide 23: Services net sales distribution 1-6/2015
Services net sales distribution 1-6/2015 Field service 24%(25) Spare parts 51%(52) Contracts 17%(17) Projects 7%(6) Total EUR 1,034 million (903) 23 © Wärtsilä
Slide 24: Development of service agreements
Development of service agreements MW 14000 30% 12000 25% 10000 20% 8000 15% 6000 10% 4000 5% 2000 0 0% 2009 2010 2011 2012 2013 2014 30.6.2015 MW under agreement – Energy Solutions MW under agreement – Marine Solutions % of Energy Solutions’ installed base % of Marine Solutions’ installed base 24 ©
Slide 25: QuantiParts B.V. – a new subsidiary to trade spare parts
QuantiParts B.V. – a new subsidiary to trade spare parts for classic 4-stroke Wärtsilä engines • QuantiParts operates from the Netherlands and serves customers in the marine, locomotive and power plant industries worldwide • QuantiParts trades OEM spare parts for selected mature Wärtsilä medium- and
Slide 26: Solid financial standing
Solid financial standing 26 © Wärtsilä
Slide 27: Cash flow from operating activities
Cash flow from operating activities MEUR 700 600 Review period development MEUR 500 180 160 400 140 300 120 100 200 80 60 100 40 20 0 0 2011 2012 2013 2014 1-6/2014 1-6/2015 27 © Wärtsilä
Slide 28: Working capital
Working capital MEUR 1600 25% 1400 Review period development 20% 1200 MEUR 1800 25% 1000 1600 15% 1400 20% 800 1200 9.8% 10% 15% 600 1000 465 6.8% 800 5.6% 5.2% 8.3%* 10% 400 600 7.2%* 313 235 251 5% 404 400 339 5% 200 200 0 0% 0 0% 2011 2012 2013 2014 30.6.2014 30.6.2015 Working capital Total inven
Slide 29: Gearing impacted by L-3 MSI acquisition
Gearing impacted by L-3 MSI acquisition 0,50 Review period development 0,40 0,50 0,40 0,30 0,30 0,20 0,20 0,10 0,10 0,00 0,00 2011 2012 2013 2014 30.6.2014 30.6.2015 29 © Wärtsilä
Slide 30: Market outlook
Market outlook • Energy Solutions: Based on the market situation during 2014 and the GDP forecasts for 2015, the market for liquid and gas fuelled power generation is expected to remain challenging. • Marine Solutions: The outlook for the shipping and shipbuilding market environment is challenging.
Slide 31: Prospects for 2015 revised
Prospects for 2015 revised Wärtsilä expects its net sales for 2015 to grow by 5-10% and its operational profitability (EBIT% before non-recurring items) to be between 12.0-12.5%. The guidance includes the impact of the L-3 Marine Systems International acquisition. 31 © Wärtsilä
Slide 32: Company strategy fine-tuned
Company strategy fine-tuned • Environmental awareness and changing energy needs are increasingly steering investments in the markets in which we operate • We seek growth by offering energy efficient lifecycle solutions, gas based technology, as well as innovative solutions that leverage our project
Slide 33: A brand new medium-speed Wärtsilä engine launched in June
A brand new medium-speed Wärtsilä 31 engine launched in June • The Wärtsilä 31 engine is the marine industry’s most advanced, powerful, fuel efficient, fuel flexible, and environmentally sound engine • The engine achieved a Guinness World Records title for the most efficient 4-stroke diesel engine •
Slide 34: IR Contact: Natalia Valtasaari
IR Contact: Natalia Valtasaari Director, Investor Relations Tel. +358 (0) 40 187 7809 E-mail: natalia.valtasaari@wartsila.com