Slide 1: Wärtsilä 2004
Wärtsilä 2004 Ole Johansson, President & CEO 4 February 2005 © Wärtsilä
Slide 2: Wärtsilä strategy
Wärtsilä strategy Ship Power and Service – growth through increased product range and aquisitions Power Plants – focus on the growing decentralized power generation market Technological leadership © Wärtsilä 2004 presentation 2
Slide 3: Highlights of the year 2004
Highlights of the year 2004 Group sales grew 5.1% to EUR 2,478.2 million Order intake grew 29.9 % Order book on record level Power Businesses result improved clearly : Q4 operating margin 9.2%; whole year 5.0% Strong cash flow Restructuring of engine manufacturing completed Propeller manufacturing s
Slide 4: Wärtsilä Group
Wärtsilä Group MEUR Q4/2004 Q4/2003² Net sales 816.2 722.1 Operational EBITA¹ 84.3 55.3 Operating income 77.7 -65.7 Profit before taxes 75.2 -69.3 EPS, EUR 0.53 -0.71 MEUR 2004 2003² Net sales 2,478.2 2,357.5 Operational EBITA¹ 158.8 127.0 Operating income 239.8 -18.4 Profit before taxes 236.5 -34.4
Slide 5: Cash flow
Cash flow MEUR 2004 2003 Cash flow from operating activities 207.3 192.1 Cash flow from investing activities 89.1 -22.2 Cash flow from financing activities -277.9 -205.8 Liquid funds at the end of period 168.5 150.0 © Wärtsilä 2004 presentation 5
Slide 6: Solvency and gearing
Solvency and gearing Solvency Gearing 50 1 45 0,9 40 0,8 35 0,7 30 0,6 25 0,5 20 0,4 15 0,3 10 0,2 5 0,1 0 0 99 00 01 02 03 Q4/04 99 00 01 02 03 Q4/04 Solvency 1 Gearing 1 Convertible subordinated debentures treated as equity © Wärtsilä 2004 presentation 6
Slide 7: Power Businesses
Power Businesses MEUR Q4/2004 Q4/2003 Change Net sales 739.4 671.0 10.2% EBIT 68.4 -84.2¹ % net sales 9.2% -12.6% Order intake 716.0 490.6 45.9% MEUR 2004 2003 Change Net sales 2,224.7 2,155.8 3.2% EBIT 111.6 -35.0¹ % net sales 5.0% -1.6% Order intake 2,791.4 2,148.7 29.9% Order book end of period 1
Slide 8: Power Businesses – Key figures
Power Businesses – Key figures MEUR Net sales Order intake Order book 2000 800 739.4 800 1,855.3 716.0 1800 700 671.0 700 1600 600 600 +3.3% +9.1% 490.6 +5.0% 1400 500 500 1,245.0 1200 400 400 1000 +110.6% +8.3% +57.2% 300 300 800 200 200 600 +14.5% +99.3% 100 400 100 +33.9% 200 0 0 Q4/03 Q4/04 Q4/0
Slide 9: Power businesses’ personnel development 2000 - 2004
Power businesses’ personnel development 2000 - 2004 12000 10000 8000 Service Engine-division 6000 Power Plants Ship Power 4000 2000 0 2000 2001 2002 2003 2004 © Wärtsilä 2004 presentation 9
Slide 10: Delivered engine megawatts from Wärtsilä factories
Delivered engine megawatts from Wärtsilä factories MW 5 000 4 000 3 000 2 000 1 000 0 1999 2000 2001 2002 2003 2004 2005 Power Plants Ship Power Estimate 2005 © Wärtsilä 2004 presentation 10
Slide 11: Ship Power
Ship Power MEUR Q4/2004 Q4/2003 Change Net sales 202.1 176.5 14.5% Order intake 276.5 138.7 99.3% MEUR 2004 2003 Change Net sales 631.2 686.1 -8.0% Order intake 836.7 626.4 33.6% Order book, end of period 812.7 606.8 33.9% Power Businesses net sales 2004: 2,224.7 Ship Power: 28 % © Wärtsilä 2004 pre
Slide 12: The market position of Wärtsilä’s marine engines 2004
The market position of Wärtsilä’s marine engines 2004 Own production Production of licensees Own production Medium speed Low speed Auxiliary engines main engines main engines Wärtsilä 34%(28%) Wärtsilä 18%(25%) Wärtsilä 9%(8%) Other engine manufacturers 66%(72%) Other engine manufacturers 82%(75%) O
Slide 13: Vessel orders
Vessel orders Tankers Bulk carriers Containers Others 3 months moving average 12 10 8 Volume [ million DWT ] 6 4 2 0 12-99 03-00 06-00 09-00 12-00 03-01 06-01 09-01 12-01 03-02 06-02 09-02 12-02 03-03 06-03 09-03 12-03 03-04 06-04 09-04 12-04 Source: Based on data from Clarkson Research Studies Note
Slide 14: Net sales and order intake of Ship Power
Net sales and order intake of Ship Power 900 800 700 600 500 400 300 200 100 0 1999 2000 2001 2002 2003 2004 Tankers Bulk carriers Container ships Others W ärtsilä Propulsion Order intake © Wärtsilä 2004 presentation 14
Slide 15: Service
Service Q4/2004 Q4/2003 Change% Net sales, MEUR 253.3 232.2 9.1% 2004 2003 Change% Net Sales, MEUR 936.8 885.5 5.8% Personnel, end of period 6,378 5,993 6.4% Long-term service agreements, MW 9,609 9,629 -0.2% O&M (operation and maintenance agreements), MW 2,569 2,289 12.2% Power Businesses net sales
Slide 16: Long-term service and O&M agreements
Long-term service and O&M agreements Active engine base 130,000 MW. Long-term service and O&M agreements cover 12,000 MW. MW MW 2500 10000 2250 9500 2000 9000 Long-term service agreements 1750 8500 O&M agreements 1500 8000 1250 7500 1000 7000 2000 2001 2002 2003 2004 © Wärtsilä 2004 presentation 16
Slide 17: Acquisition of DEUTZ marine engine service business
Acquisition of DEUTZ marine engine service business Wärtsilä will aquire the assets of the DEUTZ AG’s medium and large marine engine service business. The acquisition price is EUR 115 million. The business consists of original spare part sales, repair and maintenance. This deal will increase the ins
Slide 18: Power Plants
Power Plants MEUR Q4/2004 Q4/2003 Change Net sales 283.0 261.2 8.3% Order intake 211.7 134.7 57.2% Order intake, MW heavy fuel oil 252 232 8.9% Power Businesses gas 207 61 239.9% net sales BioPower, MWth + MWe 36 5 612.0% 2004: 2,224.7 Power Plants: 29 % MEUR 2004 2003 Change Net sales 651.9 577.5 1
Slide 19: Gas turbines and reciprocating engine orders
Gas turbines and reciprocating engine orders 1-60 MW unit size Total Market size 19,464 MW time period from June 2003 to May 2004 12% (4.8) HFO, total market: 2,533 MW, Wärtsilä share 70,8% GAS, total market: 8,204 MW, Wärtsilä share 4,8% 55% (32.1) 33% (61.3) Source: Diesel & Gas Turbine Worldwide
Slide 20: Power plant order intake 2004: 2,313 MW (1,468)
Power plant order intake 2004: 2,313 MW (1,468)* Europe Asia 402 439 (228) (432) 302 100 (117) (112) 290 Americas 150 (360) 347 (72) (331) 193 Africa and Middle East (322) 1,125 154 (476) (9) 44 1,082 (MW) (21) (455) Gas Oil *In brackets order intake for 2003 © Wärtsilä 2004 presentation 20
Slide 21: Imatra Steel
Imatra Steel MEUR Q4/2004 Q4/2003 Change Net sales 77.1 51.6 49.4% Operating income 9.4 2.6 257.9% % of net sales 12.1% 5.1% MEUR 2004 2003 Change Net sales 254.4 202.7 25.5% Operating income 20.4 0.7 % net sales 8.0% 0.3% Demand for both forgings and steels grew Imatra Steel’s net sales by market s
Slide 22: Outlook for the year 2005
Outlook for the year 2005 Power Businesses Full-year sales will increase 10-15 % based on strong order book. Profitability to fluctuate during quarters, first being weakest. Long-term profitability target reached by end of 2005. Wärtsilä adopted the new international accounting and reporting standar