Slide 1: Wärtsilä Corporation 2011 Result Presentation
WÄRTSILÄ CORPORATION 2011 RESULT PRESENTATION BJÖRN ROSENGREN, PRESIDENT & CEO 27 JANUARY 2012 1 © Wärtsilä
Slide 2: 2011 – Growth in order intake, resilience in profitability
2011 – Growth in order intake, resilience in profitability • Order intake EUR 4,516 million, +13% • Joint venture order intake EUR 394 million (77) • Net sales EUR 4,209 million, -7.6% • Operating result EUR 469 million, 11.1% of net sales • Cash flow EUR 232 million (663) • EPS EUR 1.52 (1.68) • Di
Slide 3: Net sales slightly lower than expected
Net sales slightly lower than expected Q4 on Q4 development MEUR 1600 1 462 1400 -15% MEUR 1 238 5500 1200 -1% 1000 5000 800 14% -13% 600 -17% 4500 400 -28% 4000 -7,6% 200 23% 0 3500 Q4/2010 Q4/2011 3000 Q4 on Q3 development 2500 MEUR 1400 45% 1 238 2000 1200 Development from Q4/10 1000 1500 851 25%
Slide 4: Net sales by business 2011
Net sales by business 2011 Ship Power Power Plants 24% (26) 32% (34) Services 43% (40) 4 © Wärtsilä
Slide 5: Net sales by market area
Net sales by market area Asia represents nearly 40% of net sales MEUR 6000 5000 4000 3000 2000 1000 0 2007 2008 2009 2010 2011 Asia Europe Americas Other 5 © Wärtsilä
Slide 6: Net sales by country
Net sales by country Top 10 countries as a percent of 2011 net sales % of Country net sales China 9% Turkey 6% Norway 5% USA 5% the Netherlands 4% Brazil 4% Dominican Republic 3% Singapore 3% Bangladesh 3% South Korea 3% 6 © Wärtsilä
Slide 7: Order intake increased
Order intake increased Q4 on Q4 development MEUR 1400 1200 25% 1 250 1 003 MEUR 1000 -10% 6000 800 5500 600 83% 5000 400 47% 4500 200 0 4000 Q4/2010 Q4/2011 3500 3000 Q4 on Q3 development MEUR 1400 2500 1 250 1200 1 118 12% 2000 1000 1500 1% 800 1000 65% 600 500 400 0 200 2007 2008 2009 2010 2011 0%
Slide 8: Book-to-bill ratio above one
Book-to-bill ratio above one MEUR 6000 1,60 1.50 5500 1,40 5000 1.21 4500 1,20 1.07 4000 0.88 1,00 3500 3000 0,80 0.63 2500 0,60 2000 1500 0,40 1000 0,20 500 0 0,00 2007 2008 2009 2010 2011 Order intake Net sales Book-to-bill 8 © Wärtsilä
Slide 9: Order book development
Order book development MEUR 7000 6000 5000 6% 3 795 4 007 4000 17% 3000 -8% 2000 1000 18% 0 2007 2008 2009 31.12.2010 31.12.2011 Power Plants Ship Power Services 9 © Wärtsilä
Slide 10: Order book distribution
Order book distribution MEUR 4000 3000 2000 1000 0 31.12.2010 31.12.2011 Delivery next year Delivery next year + 10 © Wärtsilä
Slide 11: Resilient profitability
Resilient profitability MEUR 250 16% 14% 200 12.1% EBIT% 11.4% 10.7% 11.1% 12% target: 10.1% 10-14% 10% 150 8% 100 6% 4% 50 2% 0 0% 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 EBIT% before nonrecurring items 11 © Wärtsilä
Slide 12: Power Plants - market activity showed a clear rebound
Power Plants - market activity showed a clear rebound Quoted MW per Fuel Type 16000 14000 12000 10000 Others MW 8000 6000 Natural gas 4000 2000 Heavy fuel oil 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2004 2005 2006 2007 2008 2009 2010 2011 Sha
Slide 13: Power Plants quarterly order intake
Power Plants quarterly order intake MEUR 600 0% 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 13 © Wärtsilä
Slide 14: Power Plants order intake by application
Power Plants order intake by application 2011 development Total EUR 1,602 million (1,413) MEUR Grid stability & peaking 2000 11% (24) Oil & gas 1800 3% (12) 1600 Industrial self-generation 1400 32% (6) 1200 Flexible 1000 baseload 55% (58) 800 600 400 2011 order intake by fuel in MW 200 0 Oil Gas 200
Slide 15: Power Plants order intake
Power Plants order intake Good global spread Europe 788 (762) Asia 1,055 (1,346) 105 422 219 821 Americas 713 (745) 261 15 102 79 211 Africa and Middle East 784 (321) 322 Flexible baseload 261 Industrial self-generation Oil & gas 523 Grid stability & peaking Order intake 2011: 3,340 MW (3,175) 15 ©
Slide 16: Ship Power market – vessel order development
Ship Power market – vessel order development All vessels Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in DWT 450 30 400 25 350 300 20 # of vessels Million DWT 250 15 200 150 10 100 5 50 - 0 Source: Clarkson Research Services 16 © Wärtsilä
Slide 17: Ship Power order intake by segment
Ship Power order intake by segment MEUR 2800 2011 development Total EUR 1,000 million (657) 2400 2000 Merchant 21%(30) Offshore 1600 40%(41) Ship Design 3%(4) Special Offshore 1200 vessels 54% 15%(17) 800 Cruise Navy 400 7%(2) & ferry 10%(15) 0 2007 2008 2009 2010 2011 Numbers in brackets are from 1
Slide 18: Good ordering activity in joint ventures
Good ordering activity in joint ventures MEUR 550 • Order intake grew significantly in the South 500 Korean joint venture Wärtsilä Hyundai 450 Engine Company Ltd (WHEC) 400 – WHEC received dual-fuel engine orders for 34 LNG vessels during 2011 350 300 • Total order intake in WHEC and the Chinese 250
Slide 19: Ship Power market
Ship Power market Market position of Wärtsilä’s marine engines Medium-speed main engines Low-speed main engines Auxiliary engines Mitsubishi Wärtsilä 2%(2) 4%(3) Others Wärtsilä 20%(17) 22%(18) Wärtsilä 46%(46) MAN Diesel 22%(21) MAN Diesel Others Caterpillar 76%(80) 96%(97) (MAK) 12%(16) Total mark
Slide 20: Ship Power order book December 2011
Ship Power order book 31 December 2011 All vessel segments represented LNG 7% Bulkers 8% Merchant Containers Offshore 4% 37% 36% Tankers 8% Cargo 9% Ship Design 2% Special vessels Navy 10% 7% Cruise & Ferry 6% Total EUR 1,684 million (1,825) 20 © Wärtsilä
Slide 21: Services net sales development
Services net sales development MEUR 2000 1800 Q4 on Q4 development 0% 0% 0% MEUR 600 1600 516 513 -1% 18% 500 1400 400 1200 300 1000 200 800 100 600 0 Q4/2010 Q4/2011 400 200 0 2007 2008 2009 2010 2011 21 © Wärtsilä
Slide 22: Services - Net sales by quarter
Services - Net sales by quarter MEUR 600 25% 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 22 © Wärtsilä
Slide 23: Services net sales distribution 2011
Services net sales distribution 2011 Field service 24%(24) Spare parts 51%(53) Contracts 15%(14) Projects 10%(9) Numbers in brackets are from 1-12/2010 23 © Wärtsilä
Slide 24: Development of Power Plants service agreements
Development of Power Plants service agreements MW 4500 70% 4000 57% 60% 58% 3500 53% 50% 3000 2500 40% 2000 29% 31% 30% 1500 20% 1000 10% 500 0 0% 2007 2008 2009 2010 2011 O&M and maintenance agreements Power Plants deliveries % of delivered MWs 24 © Wärtsilä
Slide 25: Services distribution per business 2011
Services distribution per business 2011 Net sales distribution Installed base distribution Total EUR 1,816 million Total 180,160 MW Ship Power Ship Power Power Plants Power Plants In addition to Engine Services, Wärtsilä’s Services portfolio includes: Electrical & Automation Services, Propulsion Ser
Slide 26: Services – Fleet utilisation
Services – Fleet utilisation Anchored* & Idle Vessels** Percent of Fleet 22% 18% 14% 10% 6% 2% Jan.11 Feb.11 Jun.11 May.10 Jun.10 Jul.10 Aug.10 Sep.10 Nov.10 Dec.10 Mar.11 Aug.11 Sep.11 Oct.11 Dec.11 Oct.10 Apr.11 May.11 Jul.11 Nov.11 Anchored Idle Fleet Average Speed*** Knots 11,0 10,5 10,0 9,5 May
Slide 27: Cash flow from operating activities
Cash flow from operating activities MEUR 700 Q4 on Q4 development MEUR 600 200 171 150 500 100 400 50 0 300 -50 -71 200 -100 Q4/2010 Q4/2011 100 0 2007 2008 2009 2010 2011 27 © Wärtsilä
Slide 28: Net working capital development
Net working capital development MEUR 2000 25% 1800 1600 20% 1400 1200 15% 1000 800 9.0% 10% 8.4% 600 7.0% 5.5% 5.8% 6.8% 482 400 3.7% 5% 2.7% 267 285 212 176 170 200 155 102 0 0% 2004 2005 2006 2007 2008 2009 2010 2011 Net working Capital Total Inventories Advances Received Net working Capital / Net
Slide 29: Committed loans December 2011
Committed loans 31 December 2011 MEUR 1400 1200 494 1000 800 150 Total EUR 652 million 600 85 drawn 82 400 485 200 0 Drawn long- Current portion Drawn short- Undrawn long- Undrawn term loans of long-term term loans term loans revolving credits loans At the end of the reporting period, drawn revolvin
Slide 30: Financial position
Financial position Solvency Gearing 50% 0,70 45% 0,60 40% 0,50 35% 30% 0,40 25% 0,30 20% 0,20 15% 10% 0,10 5% 0,00 0% 2007 2008 2009 2010 31.12.2011 -0,10 2007 2008 2009 2010 31.12.2011 30 © Wärtsilä
Slide 31: EPS and dividend/share
EPS* and dividend/share EUR 2,50 2,00 1.44 1,50 0.90 1,00 0,50 0,00 2007 2008 2009 2010 2011** EPS Dividend Extra dividend * Earnings per share after non-recurring items **Dividend 2011 - Proposal of the Board 31 © Wärtsilä
Slide 32: Restructuring programmes
Restructuring programmes • Personnel reductions of approx. 1,800 targeted. This target has nearly been reached, the remaining reductions will materialise during 2012. • Expected annual savings approx. EUR 130 million, of which EUR 60 million recognised by end of 2010 and approx. EUR 60 million mater
Slide 33: Market outlook
Market outlook • Power Plants: The power generation market is expected to remain on a good level in 2012, but due to macroeconomic issues, significant growth is not foreseen. • Ship Power: Overall levels of contracting expected to be about the same or slightly lower than during 2011. The vessel cont
Slide 34: Three growth areas show interesting potential
Three growth areas show interesting potential • Wärtsilä aims to be the leader in complete lifecycle power solutions for the global marine markets and selected energy markets worldwide • We see growth opportunities in three areas: • Smart Power Generation concept • Dual-fuel engines and related syst
Slide 35: Long-term financial targets maintained
Long-term financial targets maintained • Target to grow faster than global GDP • Operating profit margin (EBIT%) target: – 14% at the peak of the cycle – maintain above 10% at the trough • Gearing below 50% • Our target is to pay a dividend equivalent to 50% of earnings per share 35 © Wärtsilä
Slide 36: Prospects for 2012
Prospects for 2012 Wärtsilä expects its net sales for 2012 to grow by 5-10% and its operational profitability (EBIT% before nonrecurring items) to be 10-11%. These estimates take into account the impact of the Hamworthy acquisition, which is expected to become effective on 31 January 2012. 36 © Wärt
Slide 37: Annual Report 2011 publication and IR contact
Wärtsilä’s electronic Annual Report 2011 will be published during week 7, 2012 on our website www.wartsila.com. IR Contact: Pauliina Tennilä Director, Investor Relations Tel. +358 (0) 40 570 5530 E-mail: pauliina.tennila@wartsila.com