Slide 1: Wärtsilä Corporation Interim Report January-June 2011
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-JUNE 2011 OLE JOHANSSON, PRESIDENT & CEO 20 JULY 2011 1 © Wärtsilä
Slide 2: Q2/11 Highlights
Q2/11 Highlights • Net sales EUR 1,036 million, -8% • Order intake EUR 1,170 million, +5% • Book-to-bill increased to 1.13 (0.99) • Operating result EUR 117 million, 11.3% of net sales • Cash flow from operating activities EUR -49 million • EPS EUR 0.39 (0.43) Operating result and EPS are shown excl
Slide 3: Slight decrease in net sales
Slight decrease in net sales Q2 on Q2 development MEUR 1400 MEUR 1200 1 131 -8% 1 036 5500 1000 -2% 800 5000 14% -13% 600 -19% 4500 400 -8% 4000 200 23% 0 3500 Q2/2010 Q2/2011 3000 Q2 on Q1 development 2500 MEUR 1400 -4% 2000 1200 Development 1 083 from Q4/10 1 036 1000 1500 3% 800 1000 600 -24% 400
Slide 4: Net sales by business 1-6/2011
Net sales by business 1-6/2011 Ship Power Power Plants 24% (27) 34% (31) Services 42% (42) 4 © Wärtsilä
Slide 5: Solid order intake
Solid order intake Q2 on Q2 development MEUR 1400 1200 1 117 5% 1 170 MEUR 1000 -5% 6000 800 5500 600 44% 5000 400 200 -4% 4500 0 4000 Q2/2010 Q2/2011 3500 3000 Q2 on Q1 development MEUR 1400 2500 1200 20% 1 170 2000 979 1000 1500 -20% 800 1000 600 77% 500 400 0 200 66% 2007 2008 2009 2010 1-6/2011
Slide 6: Book-to-bill ratio exceeds one
Book-to-bill ratio exceeds one MEUR 6000 1,60 1.50 5500 1,40 5000 1.21 4500 1,20 4000 1.01 1,00 3500 0.88 3000 0,80 0.63 2500 0,60 2000 1500 0,40 1000 0,20 500 0 0,00 2007 2008 2009 2010 1-6/2011 Order intake Net sales Book-to-bill 6 © Wärtsilä
Slide 7: Order book development
Order book development MEUR 7000 6000 -12% 5000 4 315 6% 4000 3 779 3000 -19% 2000 1000 -12% 0 2007 2008 2009 2010 30.6.2010 30.6.2011 Power Plants Ship Power Services 7 © Wärtsilä
Slide 8: Order book distribution
Order book distribution MEUR 4000 3000 2000 1000 0 30.6.2010 30.6.2011 Delivery current year Delivery next year + 8 © Wärtsilä
Slide 9: Improved profitability
Improved profitability MEUR 250 16% 14% 200 12.1% Q2; EBIT% 11.4% 10.7% 11.3% 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 Yearly EBIT% 9 © Wärtsilä
Slide 10: Ship Power market - contracting activity continued stable
Ship Power market - contracting activity continued stable 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 01.05 04.05 07.05 10.05 01.06 04.06 07.06 10.06 01.07 04.07 07.07 1
Slide 11: Ship Power quarterly order intake
Ship Power quarterly order intake MEUR 900 800 700 600 500 400 77% 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 11 © Wärtsilä
Slide 12: Ship Power order intake by segment
Ship Power order intake by segment MEUR 2800 Second quarter development Total EUR 306 million (173) 2400 Merchant 2000 19%(29) Ship Design 3%(6) 1600 Offshore Special 54%(27) vessels 1200 12%(15) Offshore 54% Cruise & ferry 800 2%(16) Navy 9%(7) 400 0 2007 2008 2009 2010 1-6/2011 Dual-fuel engine or
Slide 13: 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%(4) 3%(3) Wärtsilä Others 17%(11) 17%(16) Wärtsilä 44%(42) MAN Diesel 23%(27) MAN Diesel Others Caterpillar 81%(85) 97%(97) (MAK) 16%(15) Total mark
Slide 14: Ship Power order book June 2011
Ship Power order book 30 June 2011 All vessel segments represented RoRo LNG 3% 4% Bulkers 10% Merchant Offshore 42% Containers 33% 5% Tankers 10% Cargo Special vessels 10% 9% Ship Design Cruise & Ferry Navy 6% 2% 7% Total EUR 1,753 million (2,157) 14 © Wärtsilä
Slide 15: Delivering total solutions
Delivering total solutions Target to be the leading system integrator in the ship building industry Benefits of single-source supply capability: • Reduced building time and lower costs • Minimised project risks • Ship design key to early lifecycle entry Several significant orders for delivery of tot
Slide 16: Power Plants - Markets remain solid
Power Plants - Markets remain solid Quoted MW per Fuel Type 16000 14000 12000 10000 Others MW 8000 6000 Natural gas 4000 2000 Heavy fuel 0 oil 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 2004 2005 2006 2007 2008 2009 2010 2011 Share of natural gas is con
Slide 17: Power Plants quarterly order intake
Power Plants quarterly order intake MEUR 600 500 66% 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 17 © Wärtsilä
Slide 18: Power Plants order intake by application
Power Plants order intake by application MEUR Second quarter development 2000 Total EUR 419 million (253) 1800 1600 Grid stability Industrial & peaking self-generation 1400 31% (12) 37% (28) 1200 Oil & gas Flexible 1000 0% (6) baseload 800 33% (55) 600 400 Order intake by fuel Q2/2011 in MW 200 0 Oi
Slide 19: Power Plants order intake
Power Plants order intake EMEA regions strongest Europe 550 (118) Asia 298 (659) 66 84 6 242 208 Americas 199 (499) 243 92 81 Africa and Middle East 440 (216) 26 Flexible baseload 118 Industrial self-generation Oil & gas 323 Grid stability & peaking Order intake 1-6/2011: 1,487 MW (1,492) 19 © Wärts
Slide 20: Power Plants market
Power Plants market Gas turbine and engine manufacturers 2008 2009 2010 Other CEs 2.2 Other CEs 0.9 Other CEs 1.9 Other turbines 5.1 Other turbines 3.2 Other tubines 3.9 Wärtsilä 3.3 Ansaldo 1.8 Ansaldo 1.3 Ansaldo 4.2 MHI 2.0 Alstom 1.9 Alstom 5.3 Wärtsilä 3.2 Wärtsilä 2.0 Total market GE GE 39.5 A
Slide 21: Smart Power Generation: Elering
Smart Power Generation: Elering Target to grow strongly in the large utility gas power plants • Market for gas driven power plants growing • Ramp down of older coal based generation and uncertainty over nuclear power will increase demand for gas based generation • Demand increasing also in emerging
Slide 22: Services net sales stable
Services net sales stable MEUR 2000 1800 Q2 on Q2 development 0% 0% MEUR 500 1600 463 452 -2% 18% 400 1400 1200 300 1000 200 800 100 600 0 Q2/2010 Q2/2011 400 200 0 2007 2008 2009 2010 1-6/2011 22 © Wärtsilä
Slide 23: Services - Net sales by quarter
Services - Net sales by quarter MEUR 600 500 3% 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 23 © Wärtsilä
Slide 24: Services net sales distribution 1-6/2011
Services net sales distribution 1-6/2011 Field service 23%(24) Spare parts 54%(54) Contracts 15%(13) Projects 8%(9) Numbers in brackets are from 1-6/2010 24 © Wärtsilä
Slide 25: Development of Power Plants service agreements
Development of Power Plants service agreements MW 4500 60% 57% 4000 53% 51% 50% 3500 3000 40% 2500 29% 31% 30% 2000 1500 20% 1000 10% 500 0 0% 2007 2008 2009 2010 1-6/2011 O&M and maintenance agreements Power Plants deliveries % of delivered MWs 25 © Wärtsilä
Slide 26: Continued interest in marine service agreements
Continued interest in marine service agreements Target to grow through service agreements Continued interest in maintenance agreements seen in marine and power plant markets • Reduction of fixed costs • Enhanced performance and reliability Technical management contract signed with Ceres LNG Services
Slide 27: Cash flow from operating activities
Cash flow from operating activities MEUR 700 Q2 on Q2 development MEUR 200 600 150 500 89 100 400 50 0 300 -50 -49 200 -100 Q2/2010 Q2/2011 100 0 2007 2008 2009 2010 1-6/2011 27 © Wärtsilä
Slide 28: Working capital development
Working capital development MEUR 2000 25% 1800 30 June 2011 MEUR 1600 20% 1400 1200 1400 1000 1200 15% 800 1000 600 6.5%* 800 9.2% 10% 400 8.4% 276 7.0% 200 600 5.5% 5.8% 482 3.7% 0 400 5% * Annualised Working 212 2.7% 267 Capital / Net Sales 176 170 200 155 102 0 0% 2004 2005 2006 2007 2008 2009 20
Slide 29: Committed loans June 2011
Committed loans 30 June 2011 MEUR 1200 1000 800 520 4 600 Total EUR 80 607 million drawn 400 523 200 0 Drawn long- Current portion Drawn short- Undrawn revolving term loans of long-term term loans credits loans At the end of the reporting period, drawn revolving credits amounted to 0 euro. In additi
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 1-6/2011 -0,10 2007 2008 2009 2010 1-6/2011 30 © Wärtsilä
Slide 31: Restructuring programmes
Restructuring programmes • Personnel reductions of approx. 1,800 targeted, over 1,700 employees reduced to date. • Expected annual savings approx. EUR 130 million, of which EUR 60 million recognised by end of 2010 and the remainder will gradually materialise during 2011. • Nonrecurring restructuring
Slide 32: Market outlook
Market outlook • Ship Power: Competition and price pressure among shipbuilding suppliers expected to remain intense. Ship Power order intake expected to be significantly better in 2011 than in 2010. • Power Plants: Recovery in the power generation market expected to continue in 2011. Power Plants’ o
Slide 33: Prospects for 2011 revised
Prospects for 2011 revised Due to weaker than expected marine service markets and the timing of power plant deliveries, Wärtsilä expects its net sales for 2011 to decline by 0-5% compared to last year. We reiterate our expectation that operational profitability (EBIT% before nonrecurring items) will
Slide 34: IR Contact: Pauliina Tennilä
IR Contact: Pauliina Tennilä Director, Investor Relations Tel. +358 (0) 40 570 5530 E-mail: pauliina.tennila@wartsila.com Presentation name / Author