Slide 1: Wärtsilä Corporation 2009 Result Presentation
WÄRTSILÄ CORPORATION 2009 RESULT PRESENTATION OLE JOHANSSON, PRESIDENT & CEO 28 JANUARY 2010 1 © Wärtsilä
Slide 2: 2009 – all time high net sales and operating income, strong cash flow
2009 – all time high net sales and operating income, strong cash flow • Net sales +14%, EUR 5,260 million • Operating income (before non-recurring items) at all time high, EUR 638 million, 12,1% of net sales • Order intake EUR 3,291 million (-41%). Measures initiated to reduce capacity • EPS EUR 4.3
Slide 3: Strong sales growth
Strong sales growth MEUR 5500 5000 14% Fourth quarter development 4500 MEUR 23% 1600 1 530 1 519 4000 1400 -1% 2% 3500 1200 18% 1000 3000 -7% 800 27% 2500 600 400 2000 3% 200 1500 0 Q4/2008 Q4/2009 1000 500 0 2005 2006 2007 2008 2009 Net sales Power Plants Ship Power Services 3 © Wärtsilä
Slide 4: Net sales by business 2009
Net sales by business 2009 Ship Power Power Plants 34% (33) 31% (27) Services 35% (40) 4 © Wärtsilä
Slide 5: Net sales by market area
Net sales by market area MEUR 6000 Strong presence in Asia 5000 4000 3000 2000 1000 0 2005 2006 2007 2008 2009 Asia Europe Americas Other 5 © Wärtsilä
Slide 6: Operating profit at all time high
Operating profit at all time high MEUR 14.4% 220 200 180 160 140 120 100 80 60 40 20 0 Q1 Q2 *) Q3 Q4 **) 2006 2007 2008 2009 *) Operating result before EUR 6 million nonrecurring restructuring items **) Operating result before EUR 40 million nonrecurring items 6 © Wärtsilä
Slide 7: Order intake
Order intake MEUR 6000 Fourth quarter development 5500 5000 1000 0% 4500 823 823 800 4000 15% 3500 600 3000 -64% 400 2500 2000 200 14% 1500 0 1000 Q4/2008 Q4/2009 500 0 2005 2006 2007 2008 2009 Order intake Power Plants Ship Power Services 7 © Wärtsilä
Slide 8: Order book
Order book MEUR 8000 6 883 -35% 7000 29% 6000 5000 4 491 4000 -43% 3000 2000 1000 -30% 0 2005 2006 2007 31.12.2008 31.12.2009 *) Order book Power Plants Ship Power Services *) Cancellations amounting to EUR 410 million have been deducted from the order book during the review period. Wärtsilä sees a
Slide 9: Order book distribution
Order book distribution MEUR 5000 4000 3000 2000 1000 0 31.12.2008 31.12.2009 Delivery next year Delivery next year + 9 © Wärtsilä
Slide 10: Ship Power market - contracting activity still low
Ship Power market - contracting activity still low All vessels Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in DWT 450 30 400 2009 25 350 80 70 # of vessels 60 300 20 50 40 # of vessels Million DWT 250 30 20 15 10 200 0 150 10 100 5 50 - 0 01.05 04.05 07.05 10.05 01.06
Slide 11: Ship Power short term prospect areas
Ship Power short term prospect areas Merchant: Offshore: Cruise & Ferry: Navy: Special vessels: •Multi purpose •Drilling and •Several cruise, •Steady flow of •Ice breakers vessels production passenger cargo smaller orders •Research •Gas carriers applications – and ferry projects vessels rigs, drills
Slide 12: Ship Power quarterly order intake
Ship Power quarterly order intake MEUR 900 800 700 600 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 Q1 Q2 Q3 Q4 12 © Wärtsilä
Slide 13: Ship Power - market development
Ship Power - market development Market position of Wärtsilä’s marine engines 2009 Medium-speed main engines Low-speed main engines Auxiliary engines Mitsubishi Wärtsilä 6%(5) 2%(4) Wärtsilä 12%(13) Others Wärtsilä 28%(17) 36%(31) MAN Diesel MAN Diesel Others 27%(45) 82%(82) 98%(96) Caterpillar (MAK)
Slide 14: Ship Power order book December 31, 2009
Ship Power order book December 31, 2009 All vessel segments represented RoRo LNG 5% 8% Offshore 26% Merchant Bulkers 54% 11% Container 7% Special vessels 7% Cruise & Ferry Tankers 6% 9% Navy Cargo Ship Design 5% 14% 1% EUR 2,553 million in total (4,486) 14 © Wärtsilä
Slide 15: Power Plant markets
Power Plant markets Market development and market shares Target markets per fuel 2005 - 2009 M W 25000 20000 13% 15000 (8) 10000 3% (20) 5000 46% (49) 0 2005 2006 2007 2008 2009 Wärtsilä’s market share June 2008 - LFO HFO GAS May 2009 Note I: Wärtsilä’s gas power plant target markets have changed af
Slide 16: Power Plants quarterly order intake
Power Plants quarterly order intake MEUR 600 500 400 300 200 100 0 *) 2004 2005 2006 2007 2008 2009 Q1 Q2 Q3 Q4 *) 2004 Iraq-orders 16 © Wärtsilä
Slide 17: Power Plants order intake by application 2009
Power Plants order intake by application 2009 MEUR 2000 1800 Grid stability Industrial 1600 & peaking self-generation Oil & 22% 24% 1400 gas 1200 1% 1000 Flexible baseload 800 52% 600 Renewable 2% 400 200 Gas 40% 0 Oil 58% 2005 2006 2007 2008 2009 17 © Wärtsilä
Slide 18: Power Plants order intake
Power Plants order intake Africa and Middle East still strongest region Order intake 2009: 2,007 MW (3,349) Asia 148 (207) Europe 649 (483) 7 18 525 123 Americas 441 (1,693) 79 371 45 Africa and Middle East 768 (965) 71 439 Flexible baseload 14 Industrial self-generation Oil & gas Grid stability & p
Slide 19: Power Plants order book December 31, 2009
Power Plants order book December 31, 2009 Oil & gas 1% Industrial self- Grid stability generation & peaking 18% 35% Flexible baseload 46% 19 © Wärtsilä
Slide 20: Services net sales
Services net sales Stable at a high level MEUR 2000 Fourth quarter development 1800 0% MEUR 18% 600 1600 495 504 500 2% 1400 22% 400 1200 16% 300 1000 200 800 100 600 0 Q4/2008 Q4/2009 400 200 0 2005 2006 2007 2008 2009 20 © Wärtsilä
Slide 21: Services – Net sales per quarter
Services – Net sales per quarter All time high quarter MEUR 600 500 400 300 200 100 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 Q1 Q2 Q3 Q4 21 © Wärtsilä
Slide 22: Services net sales distribution December 31, 2009
Services net sales distribution December 31, 2009 Field service 27% Spare parts 54% Contracts 12% Projects 7% 22 © Wärtsilä
Slide 23: Services installed engine base December 31, 2009
Services installed engine base December 31, 2009 Total installed base 166,127 MW Ship Power Power Plants In addition to Engine Services, Wärtsilä’s Services portfolio includes: Electrical & Automation Services, Propulsion Services, Boiler Services, O&M and Training Services 23 © Wärtsilä
Slide 24: Services: laid up vessels
Services The amount of laid up vessels has stabilised 18% 16% 14% % of Fleet 12% 10% 8% 6% 4% 2% Jun.08 Aug.08 Oct.08 Dec.08 Feb.09 Apr.09 Jun.09 Aug.09 Oct.09 Dec.09 Anchored * Idle** * Anchored (reported navigation status at anchor). Source Bloomberg (AISLive). More than 25 000 vessels (>299 GT) c
Slide 25: Strong cash flow
Strong cash flow MEUR 10-12/09 10-12/08 1-12/09 1-12/08 Cash flow before changes in working capital & financial items and taxes 251 234 743 626 Changes in working capital 25 -187 -179 -250 Financial items and taxes -68 -24 -215 -99 Cash flow from operating activities 207 23 349 278 Cash flow from in
Slide 26: Working capital development
Working capital development MEUR 2000 25% 1800 1600 20% 1400 1200 15% 1000 9.5% 800 9.2% 10% 7.0% 8.4% 600 5.5% 5.8% 482 400 5% 212 2.7% 267 206 176 200 155 102 0 0% 2003 2004 2005 2006 2007 2008 2009 Working Capital Total Inventories Advances Received Working Capital / Net Sales All figures relate
Slide 27: Committed loans December 31, 2009
Committed loans December 31, 2009 MEUR 1400 1200 1000 555 800 Total EUR 4 664 million 69 600 drawn 400 591 200 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 no revolving credits were drawn. In addition
Slide 28: Personnel development
Personnel development 20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 2005 2006 2007 2008 2009 Services Ship Power Power Plants Industrial Operations Administration 28 © Wärtsilä
Slide 29: Financial position
Financial position Solvency Gearing % 50 0,50 45 0,40 40 35 0,30 30 25 0,20 20 15 0,10 10 5 0,00 2005 2006 2007 2008 2009 0 2005 2006 2007 2008 2009 -0,10 29 © Wärtsilä
Slide 30: EPS and dividend/share
EPS and dividend/share EUR 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 2005 2006² 2007 2008 20091 EPS EPS excluding nonrecurring items Dividend Extra dividend 1 Dividend 2009 - Proposal of the Board 2 Includes one-off capital gains; Assa Abloy & Ovako 30 © Wärtsilä
Slide 31: Market outlook
Market outlook • Ship Power: Order intake is estimated to be moderately better in 2010 than in 2009. Overcapacity and prevailing conditions will lead to more intense competition and price pressure. • Power Plants: Order intake estimated to improve in 2010 provided that the financing sector recovery
Slide 32: Business risks
Business risks • Ship Power – Slippage of ship yard delivery schedules – Cancellation risk approximately EUR 500 million (EUR 650 million at end of Q3/09) • Power Plants – The impact from the financial crisis mainly seen in timing of bigger projects • Services – Possible reduction of maintenance and
Slide 33: Manufacturing capacity adjustments announced
Manufacturing capacity adjustments announced • Plans to adjust to the fundamental changes in the market by reducing manufacturing capacity • Plans to move the majority of propeller production and W20-generating set production to China, close to the main marine markets. • Aims at reducing approximate
Slide 34: Prospects for 2010
Prospects for 2010 Due to low demand in the shipbuilding sector we expect net sales to decline by 10- 20 percent in 2010. As a result a of stable service business, good demand for power plants and proper adaption of capacity, our operational profitability (EBIT% before nonrecurring items) should be
Slide 35: Annual Report 2009 publication and IR contact
Wärtsilä’s electronic Annual Report 2009 will be published during week 6 on our website. For more information please see the IR calendar at www.wartsila.com. IR Contact: Joséphine Mickwitz Director, Investor Relations Tel. +358 (0)10 7095216 E-mail: Presentation name / Author josephine.mickwitz@wart