Slide 1: Wärtsilä Corporation Interim Report January-June 2008
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-JUNE 2008 OLE JOHANSSON, PRESIDENT & CEO 24 JULY 2008 1 © Wärtsilä
Slide 2: Excellent second quarter
Excellent second quarter • Net sales +37% • Operating result (EBIT) +67%, 11.2% of net sales • Strong activity in Power Plants offsets lower orders in Ship Power • EPS 0.96 (0.54) • Strong cash flow 2 © Wärtsilä
Slide 3: Strong order intake continued
Strong order intake continued MEUR 6000 Second quarter development 5500 5000 1600 5% 1 432 4500 1400 1 369 9% 4000 1200 1000 3500 800 -31% 3000 600 2500 400 2000 70% 200 1500 0 1000 Q2/2007 Q2/2008 500 0 2004 2005 2006 2007 1-6/2008 Order intake Power Plants Ship Power Services 3 © Wärtsilä
Slide 4: Order book at new record level
Order book at new record level MEUR 8000 7 479 7000 37% 6000 5 460 27% 5000 4000 31% 3000 2000 55% 1000 0 2004 2005 2006 30.6.2007 30.6.2008 Order book Power Plants Ship Power Services 4 © Wärtsilä
Slide 5: Order book distribution
Order book distribution MEUR 5500 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 30.6.2007 30.6.2008 Delivery current year Delivery next year + 5 © Wärtsilä
Slide 6: Delivered engine megawatts from own factories
Delivered engine megawatts from own factories MW 7000 6000 5000 4000 3000 2000 1000 0 2001 2002 2003 2004 2005 2006 2007 1-6/2008 Ship Power Power Plants Full-year estimate 6 © Wärtsilä
Slide 7: Net sales growing according to plan
Net sales growing according to plan MEUR 4000 3500 Second quarter development 18% MEUR 1 092 1100 3000 1000 37% 900 27% 797 2500 800 21% 700 13% 600 20% 2000 500 400 300 1500 143% 200 100 0 1000 Q2/2007 Q2/2008 500 0 2004 2005 2006 2007 1-6/2008 Net sales Power Plants Ship Power Services 7 © Wärtsil
Slide 8: Services brings stability to new equipment sales
Services brings stability to new equipment sales Net sales by business 1-6/2008 Ship Power Power Plants 31% (36) 23% (17) Services 45% (47) 8 © Wärtsilä
Slide 9: Strong operating profit in the second quarter
Strong operating profit in the second quarter MEUR 160 140 120 100 80 60 40 20 0 Q1 Q2 Q3 Q4 2005 2006 2007 2008 9 © Wärtsilä
Slide 10: Ship Power market - vessel order development
Ship Power market - vessel order development Merchant Cruise&Ferry Offshore & Special Vessels 3 months moving average in DWT 450 25 400 350 20 Million DWT 300 # vessels 15 250 200 10 150 100 5 50 0 0 01-03 04-03 07-03 10-03 01-04 04-04 07-04 10-04 01-05 04-05 07-05 10-05 01-06 04-06 07-06 10-06 01-0
Slide 11: Ship Power market - merchant vessel order development
Ship Power market - merchant vessel order development Tankers Bulkers Containers LNG carriers LPG carriers Reefers Other dry cargo 450 400 350 300 # vessels 250 200 150 100 50 0 01-03 04-03 07-03 10-03 01-04 04-04 07-04 10-04 01-05 04-05 07-05 10-05 01-06 04-06 07-06 10-06 01-07 04-07 07-07 10-07 01
Slide 12: Ship Power - market development
Ship Power - market development Market position of Wärtsilä’s marine engines Q2/2008 Medium-speed main engines Low-speed main engines Auxiliary engines Others Mitsubishi Wärtsilä 15%(14) 2%(3) 8%(6) Wärtsilä 16%(13) Wärtsilä 32%(36) MAN Diesel 24%(26) MAN Diesel Others Caterpillar (MAK) 82%(84) 92%(
Slide 13: Ship Power quarterly order intake
Ship Power quarterly order intake Good order intake for Q2/08 MEUR 800 700 600 500 400 300 200 100 0 Q1 Q2 Q3 Q4 2003 2004 2005 2006 2007 2008 13 © Wärtsilä
Slide 14: Ship Power order intake 1-6/2008
Ship Power order intake 1-6/2008 Merchant segment still dominant MEUR 2800 Merchant Offshore 2400 50% 25% 2000 1600 1200 800 Cruise & Ferry 400 10% Navy Special 4% 0 vessels 2004 2005 2006 2007 1-6/2008 11% 14 © Wärtsilä
Slide 15: Merchant segment order distribution
Merchant segment order distribution Merchant MEUR 50% 2800 RoRo Bulkers 6% 12% 2400 2000 Cargo 13% 1600 1200 Container 8% 800 400 Tankers 10% 0 2004 2005 2006 2007 1-6/2008 15 © Wärtsilä
Slide 16: Power Plants quarterly order intake
Power Plants quarterly order intake High ordering activity continued MEUR 800 700 600 500 400 300 200 100 0 *) Q1 Q2 Q3 Q4 2003 2004 2005 2006 2007 2008 *) 2004 Iraq-orders 16 © Wärtsilä
Slide 17: Power Plants order intake
Power Plants order intake Industrial self-generation MEUR 19% 1600 1400 1200 Grid stability 1000 & peaking 27% Flexible 800 baseload 52% 600 Oil & gas 400 3% Renewable 4% 200 Gas 43% 0 Oil 52% 2004 2005 2006 2007 1-6/2008 17 © Wärtsilä
Slide 18: Several important orders received
Several important orders received • Third order from the A-3 energy auction conducted in Brazil in 2007 • Tri-fuel power plant order to Togo • First order in the world for Combined Heat and Power plant running on jatropha 18 © Wärtsilä
Slide 19: Power Plants - order intake by region
Power Plants - order intake by region Order intake 1-6/2008: 1,980 MW (1,087) Asia 171 (194) Europe 303 (411) 45 258 Americas 986 (151) 408 126 45 Africa and Middle East 520 (331) 50 528 319 50 Flexible baseload Industrial self-generation 151 Oil & gas Grid stability & peaking 19 © Wärtsilä
Slide 20: Services Net Sales – 20% organic growth
Services Net Sales – 20% organic growth MEUR 1600 Second quarter development 1400 22% MEUR 500 454 1200 21% 16% 400 374 1000 17% 300 800 200 100 600 0 400 Q2/2007 Q2/2008 200 0 2004 2005 2006 2007 1-6/2008 20 © Wärtsilä
Slide 21: Added capabilities support growth
Added capabilities support growth Wärtsilä Services becomes the most valued business partner… Engine Services Automation Services Customer Relationship Customers Propulsion Services Management Operations & Management Reconditioning Services Training Services Ship Services Boiler Services … by unders
Slide 22: Expansion of the global Services network continued
Expansion of the global Services network continued Product Company 70 countries Network > 160 locations Workshop > 10 300 people Newest locations ~ 6 000 field service forces 22 © Wärtsilä July 23, 2008 Presentation name / Author
Slide 23: Acquisitions in 2008
Acquisitions in 2008 • Maritime Service AS in Norway - ship service, mechanical and reconditioning services • International Combustion Engineering A/S in Denmark and UAE - project engineering, service and repair of steam boilers and ancillary burner systems • Christophel Mess- und Regeltechnik GmbH
Slide 24: Strong cash flow continued
Strong cash flow continued MEUR 1-6/08 1-6/07 2007 Cash flow from operating activities 207 129 431 Cash flow from investing activities -75 -99 -214 Cash flow from financing activities -266 -76 -95 Liquid funds at the end of period 156 133 296 24 © Wärtsilä
Slide 25: Financial position
Financial position Solvency Gearing 50 0,30 % 45 0,25 40 35 0,20 30 0,15 25 20 0,10 15 0,05 10 5 0,00 2004 2005 2006 2007 30.6.2008 0 2004 2005 2006 2007 30.6.2008 -0,05 Convertible subordinated debentures treated as equity 25 © Wärtsilä
Slide 26: Market outlook remains favourable
Market outlook remains favourable • Ship Power; in Q3 ordering activity expected to continue at Q2 good level, slowdown foreseen Q4. Shorter visibility overall • Power Plants; market situation remains good, continued high ordering activity expected in all segments for the remaining part of the year
Slide 27: Wärtsilä's prospects for 2008 reiterated
Wärtsilä’s prospects for 2008 reiterated • Based on the strong order book, Wärtsilä’s net sales are expected to grow by about 25% in 2008 • Wärtsilä’s profitability varies considerably from one quarter to another • Full-year profitability will exceed 11% 27 © Wärtsilä
Slide 28: Presentation name / Author
Presentation name / Author