Wartsila Oyj Abp · OMXHEX:WRT1V
Wartsila Oyj Abp — Wärtsilä — Non-Deal Roadshow (November 2021)
43 slides from Wartsila Oyj Abp's roadshow presentation, November 2021
Slide 1: Shaping the decarbonisation of Marine and Energy
Wärtsilä Shaping the decarbonisation of Marine and Energy Roadshow presentation November 2021 1 © Wärtsilä
Slide 2: Wärtsilä in brief
Wärtsilä in brief Wärtsilä is a global leader in innovative Net sales and order intake Comparable operating result technologies and lifecycle solutions for the marine and energy markets. We emphasise innovation in sustainable technology and services MEUR MEUR % to help our customers continuously imp
Slide 3: Technology leader in decarbonisation with significant value creation potential
As a technology leader in the decarbonisation transformation, Wärtsilä has significant value creation potential Decarbonisation will transform the world Pioneer and leading partner for decarbonisation Set for performance ▪ Electricity generation will grow by Leading Leading ▪ Well-positioned to leve
Slide 4: Our world
Our world 4 © Wärtsilä
Slide 5: Marine will move with unprecedented speed towards decarbonisation
Marine will move with an unprecedented speed towards decarbonisation Shipping generates approx. 2% of GHG emissions 1) Regulations & Markets Technology Connectivity and Data ▪ IMO target: 50% lower GHG in ▪ Focus on carbon neutral and ▪ Vessels as data pools - shipping by 2050 zero carbon fuels. Car
Slide 6: Energy is moving towards a 100% renewable future
Energy is moving towards a 100% renewable future Electricity and heat generate approx. 30% of GHG emissions 1) Growing electricity demand Policies & Regulations Technology disruption ▪ Electricity generation is ▪ EU: Carbon neutral by 2050 ▪ Wind and solar growing expected to grow by 3X, rapidly for
Slide 7: Transform – Decarbonisation creates new business opportunities
Transform – Decarbonisation creates new business opportunities 7 © Wärtsilä
Slide 8: Decarbonisation of Marine and Energy is accelerating
Decarbonisation of Marine and Energy is accelerating. Large regional variances in speed of change Share of carbon neutral and zero carbon fuels in maritime Share of renewables in global electricity generation (%) 100 Decarbonisation 2050 (1.5°C scenario) (%) Renewables Other IMO baseline Total elect
Slide 9: No silver bullet – era with numerous technologies and fuels
There is no silver bullet – entering an era with numerous technologies and fuels Future technologies … … In Marine … In Energy ▪ Fuels: ▪ Battery technologies: ▪ Rapid growth in intermittent - Hybrids / plug-in hybrids renewables drives growth in - Biofuels - Full electric balancing power Carbon neu
Slide 10: Wärtsilä is very well-positioned for the decarbonisation transformation
Wärtsilä is very well-positioned for the decarbonisation transformation Leader in Pioneer in ▪ Carbon neutral & zero carbon fuels ▪ Marine electric drivetrain - Available today: biofuels, methanol, up to 25% hydrogen blends - 2023: ammonia concept ▪ Marine carbon capture - 2025: 100% hydrogen concep
Slide 11: Leading decarbonisation through R&D and partnering
Leading the decarbonisation journey with a strong commitment to R&D and through partnering for a broad solution offering Proactive dialogue on customers’ specific Key takeaways technology roadmap ▪ Working with many of the new technologies for decades Competence & experience to engage in a credible
Slide 12: Perform – Leverage market recovery and growth
Perform – Leverage market recovery and growth 12 © Wärtsilä
Slide 13: Well-positioned as #1-3 in global markets
Wärtsilä well-positioned as #1-3 in global markets – focus on organic growth driven by decarbonisation and services. Complement with potential partnerships and bolt-on acquisitions Marine Power Voyage Marine Energy Non-core (60-70% hardware) Systems businesses Topline growth Continue active potentia
Slide 14: Growing Marine Power's transactional services business
Growing Marine Power’s transactional services business. Leveraging our installed base and capturing the needs of customers with smaller transaction amounts Categorisation per customer type Enablers for growth Spend ratio EUR/kW ▪ Leveraging digital solutions - Customer intelligence 1) - Automated le
Slide 15: Performance-based agreements have significant growth potential
Performance-based agreements have significant growth potential, both in Marine and Energy 25% of Spend ratio installed base Enablers for growth EUR/kW 2-5X ▪ Optimised asset performance for our customers Agreements & Performance-based agreements ▪ Leveraging connectivity, big data, machine learning
Slide 16: Green transition provides opportunity for retrofits and conversions
Green transition is expected to provide a notable opportunity for retrofits and conversions 4S/2S Marine HFO to LNG/ green fuels 1) Estimated total market size of EUR ~2.5bn 2) Future potential 4S Energy for conversions HFO to gas to green fuels 1) 1) depends on fuel availability 2) estimated total
Slide 17: Electricity demand growth accelerates demand for balancing power
Demand for electricity will grow by 3X with renewables being the way forward, thus accelerating the demand for balancing power Baseload Thermal balancing Energy storage Addressable annual market (GW) Addressable annual market (GW) Addressable annual market (GWh) - +30% p.a. +30% p.a. 2 1) 5 12 12 30
Slide 18: Energy storage business growing rapidly
Wärtsilä’s energy storage business is growing rapidly and is expected to become profitable within a few years Power system optimisation for the lowest energy cost, highest uptime and reliability Energy storage key facts Global #1-3 2021 order intake Solar Wind Thermal balancing Energy storage > EUR
Slide 19: Perform – Robust execution
Perform – Robust execution 19 © Wärtsilä
Slide 20: The Wärtsilä Way sets the scene for profitable growth
The Wärtsilä Way sets the scene for profitable growth Enabling sustainable societies through innovation in technology and services Shaping the decarbonisation of Marine and Energy - New financial targets - New decarbonisation targets Roadmap to improve performance and reach Target Position Customer
Slide 21: Strategic priorities to improve performance and reach Target Position
Strategic priorities to improve performance and reach Target Position Excel in creating customer value 1 We continuously evolve our understanding of and responsiveness to our customers to make them successful. ▪ Improve performance in existing businesses Develop high performing teams that make a dif
Slide 22: Ambitious sustainability targets for 2030
Ambitious sustainability targets for 2030 To provide a product portfolio which will To become carbon neutral in be ready for zero carbon fuels our own operations 22 © Wärtsilä
Slide 23: Why invest in Wärtsilä
Why invest in Wärtsilä 23 © Wärtsilä
Slide 24: Set to deliver long term shareholder value
Set to deliver long term shareholder value We have clear Our balance sheet We have clear financial targets and financing capital allocation and are committed structure supports principles to realising them strategy execution 24 © Wärtsilä
Slide 25: New financial targets reflect growth opportunities
New financial targets reflect growth opportunities and increased profitability New targets Net sales 5% annual organic growth Profitability 12% operating margin Capital structure Gearing below 0.50 Dividend At least 50% of earnings 25 © Wärtsilä
Slide 26: Good growth opportunities in services, energy and marine
Good growth opportunities in services, energy, and marine new build recovery. Our installed base provides a strong foundation for services growth Key drivers Storage ▪ Fast growing demand for energy storage and power system optimisation solutions Services ▪ Increased share of wallet from existing cu
Slide 27: Reaching profitability target while maintaining R&D at ~3%
We will reach our profitability target while maintaining R&D investments at ~3% of net sales Key drivers ▪ Marine and Energy Services growth ▪ Thermal balancing power growth ▪ Storage growth Starting point: Target: Operating margin 5.9% ▪ Voyage turnaround and digital growth 12% operating margin (LT
Slide 28: Committed to providing shareholder returns
Committed to providing shareholder returns Target: dividend of at least 50% of earnings 73%1) 71% 74% 131% 88% EUR 0.70 0.70 0.60 0.60 0.50 0.50 0.40 0.40 0.30 0.30 0.20 0.20 0.10 0.10 0.00 0.00 2016 2017 2018 2019 2020 EPS DPS 1) Dividend per earnings 28 © Wärtsilä
Slide 29: Strong cashflow driven by working capital efficiency
Strong cashflow driven by solid working capital efficiency programme. Working capital improved beyond volume fluctuations Working capital (MEUR) Cash flow from operating activities (MEUR) Key drivers Working capital % of sales Cash flow from operating activities % of sales ▪ New approach to receivab
Slide 30: Strong financial position and liquidity
Strength to make strategic investments and to support our capital allocation principles. Strong financial position and liquidity Net debt and gearing (MEUR) Solvency ratio Net debt Gearing-% Net debt Solvency ratio 800 35% 800 60% 30% 700 30% 700 48% 46% 50% 44% 600 600 41% 25% 38% 39% 500 40% 18% 5
Slide 31: Wärtsilä in sustainable development indices
Wärtsilä in sustainable development indices S&P Europe 350 ESG Index 31 © Wärtsilä
Slide 32: Financial development in Q3 2021
Financial development in Q3 2021 32 © Wärtsilä
Slide 33: Order intake, net sales and profitability increased
ORDER INTAKE, NET SALES, AND PROFITABILITY INCREASED • Order intake increased by 21%, growth in all businesses • Good progress in services: ̶ Order intake increased by 14% ̶ Net sales increased by 20% • Profitability improved • Covid-19 continued to have a negative impact on Wärtsilä’s business 33 ©
Slide 34: Broad-based positive development in key figures
BROAD-BASED POSITIVE DEVELOPMENT IN KEY FIGURES MEUR 7-9/2021 7-9/2020 CHANGE 1-9/2021 1-9/2020 CHANGE Order intake 1,186 981 21% 3,584 3,240 11% of which services 595 521 14% 1,903 1,641 16% Order book 5,325 5,265 1% of which current year deliveries 1,402 1,196 17% Net sales 1,103 995 11% 3,181 3,3
Slide 35: Third quarter highlights
THIRD QUARTER HIGHLIGHTS Net sales Comparable operating result MEUR MEUR, 12m rolling MEUR %, 12m rolling Net sales EUR 1,103 million 1,800 6,000 250 14.0% • 20% increase in 1,600 5,000 12.0% 200 service sales 1,400 10.0% 1,200 1,118 1,103 4,000 995 150 1,000 8.0% Comparable operating 3,000 800 resu
Slide 36: Order intake increased by 21%
ORDER INTAKE INCREASED BY 21% Equipment Services MEUR MEUR, 12m rolling MEUR MEUR, 12m rolling 1,000 3,500 1,000 3,500 • Order intake 900 900 increased across 800 3,000 800 3,000 all businesses 700 2,500 700 681 2,500 591 595 • Equipment order 600 2,000 600 521 2,000 500 460 500 intake increased 1,5
Slide 37: Slight increase in order book despite divestments
SLIGHT INCREASE IN ORDER BOOK DESPITE DIVESTMENTS BOOK-TO-BILL CONTINUED TO IMPROVE Order book by business Order book delivery schedule MEUR MEUR 7,000 1.20 3,000 6,000 1.00 2,500 5,000 0.80 2,000 4,000 0.60 1,500 3,000 0.40 1,000 2,000 1,000 0.20 500 0 0.00 0 30.9.2019* 31.3.2020 30.9.2020 31.3.202
Slide 38: Appendix
Appendix 38 © Wärtsilä
Slide 39: Wärtsilä Marine Power
Wärtsilä Marine Power Wärtsilä Marine Power leads the industry in its Net sales and order intake Comparable operating result journey towards a decarbonised and sustainable future. Our broad portfolio of engines, propulsion systems, hybrid technology, and integrated MEUR MEUR % powertrain systems del
Slide 40: Wärtsilä Marine Systems
Wärtsilä Marine Systems We at Wärtsilä Marine Systems support our Net sales and order intake Comparable operating result customers with high quality products and lifecycle services related to the gas value chain, exhaust treatment, shaft line, underwater repair and MEUR MEUR % electrical integration
Slide 41: Wärtsilä Voyage
Wärtsilä Voyage Wärtsilä Voyage transforms how vessels perform Net sales and order intake Comparable operating result their journeys and how ports manage their operations by leveraging the latest digital technologies. Using data and AI-driven software, MEUR MEUR % we deliver real-time insights into
Slide 42: Wärtsilä Energy
Wärtsilä Energy Wärtsilä Energy leads the transition towards a Net sales and order intake Comparable operating result 100% renewable energy future. We help our customers in decarbonisation by developing market-leading technologies. These cover future- MEUR MEUR % fuel enabled balancing power plants,
Slide 43: Wärtsilä
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