Slide 1: Wärtsilä Corporation 2005
Wärtsilä Corporation 2005 Ole Johansson, President & CEO 7 February 2006 © Wärtsilä
Slide 2: Mission and Vision
Mission and Vision Mission We provide lifecycle power solutions to enhance the business of our customers, whilst creating better technologies that benefit both the customer and the environment. Vision We will be the most valued business partner of all our customers. © Wärtsilä 2
Slide 3: Highlights of the year 2005
Highlights of the year 2005 Power Businesses Order intake grew 25.1% to EUR 3,491.1 million (2,791.4) Order book reached all-time high, EUR 2,905.7 million (1,855.3), up 56.6% on the previous year Net sales rose to EUR 2,520.3 million (2,224.7) Profitability (EBITA) reached target level 8.0% (3.9) G
Slide 4: Markets in 2005 (1/2)
Markets in 2005 (1/2) Ship Power The good demand in the shipbuilding industry continued Number of orders for full year at good level, declining towards end of the year High activity level; Offshore Passenger and RoPax vessels LNG Trend from large to smaller vessels in containerships Decrease in volu
Slide 5: Markets in 2005 (2/2)
Markets in 2005 (2/2) Power Plants Power plant markets active globally Global gas power plant market grew Wärtsilä’s technology in the gas market being recognized © Wärtsilä 5
Slide 6: Power Businesses
Power Businesses MEUR Q4/2005 Q4/2004 Change Net sales 773.5 739.4 4.6% Operating income 86.1 90.8 -5.2% % net sales 11.1% 12.3% Order intake 1,100.5 716.0 53.7% MEUR 2005 2004 Change Net sales 2,520.3 2,224.7 13.3% Operating income 202.5 87.7 % net sales 8.0% 3.9% Order intake 3,491.1 2,791.4 25.1%
Slide 7: Power Businesses – Key figures
Power Businesses – Key figures MEUR Net sales Order intake Order book 900 1200 3200 1,100.5 2,905.7 800 739.4 773.5 2800 1000 700 2400 4.5% 22.6% 600 24.3% 800 716.0 2000 1,855.3 500 600 1600 25.5% 400 63.7% -31.6% 1200 300 400 104.1% 800 200 71.8% 31.4% 200 100 400 0 0 0 Q4/04 Q4/05 Q4/04 Q4/05 31.
Slide 8: Power businesses’ net sales by market area 2001-2005
Power businesses’ net sales by market area 2001-2005 MEUR 3000 2500 2000 Other America 1500 Europe Asia 1000 500 0 2001 2002 2003 2004 2005 © Wärtsilä 8
Slide 9: Power businesses’ personnel development 2001 - 2005
Power businesses’ personnel development 2001 - 2005 14000 12000 10000 Service 8000 Engine-division Power Plants 6000 Ship Power 4000 2000 0 2001 2002 2003 2004 2005 © Wärtsilä 9
Slide 10: Power Businesses - Order book distribution
Power Businesses - Order book distribution MEUR 2000 1800 1600 1400 1200 Next year delivery 1000 Next year + delivery 800 600 400 200 0 31.12.2004 31.12.2005 © Wärtsilä 10
Slide 11: Delivered engine megawatts from own factories
Delivered engine megawatts from own factories MW 4 500 4 000 3 500 3 000 2 500 2 000 1 500 1 000 500 0 2001 2002 2003 2004 2005 E2006 Power Plants Ship Power Estimate © Wärtsilä 11
Slide 12: Wärtsilä Group
Wärtsilä Group 2005 2004 Power Imatra MEUR Businesses Steel Group Group Net sales 2,520.3 119.1 2,638.8 2,478.2 EBITA 202.5 21.8 224.3 112.0 % of Net sales 8.0% 18.3% 8.5% 4.5% Profit before taxes 212.4 217.3 EPS (EUR) 1.80 1.42 © Wärtsiläpresentaatio Q1/2003 12
Slide 13: Cash flow
Cash flow MEUR 2005 2004 Cash flow from operating activities 76.0 220.1 Cash flow from investing activities -178.3 85.0 Cash flow from financing activities 47.6 -284.9 Liquid funds at the end of period 119.6 169.6 © Wärtsilä 13
Slide 14: Solvency and gearing
Solvency and gearing % Solvency Gearing 50 0,6 45 0,5 40 35 0,4 30 25 0,3 20 0,2 15 10 0,1 5 0 0 01 02 03 04 05 01 02 03 04 05 Solvency Gearing NOTE: 2001-2003 according to FAS, 2004- IFRS Convertible subordinated debentures treated as equity © Wärtsilä 14
Slide 15: EPS and dividend/share
EPS and dividend/share EUR 4,0 3,5 3,0 2,5 Extra dividend 2,0 Dividend EPS 1,5 1,0 0,5 0,0 -0,5 -1,0 2001 2002 2003 2004 2005 * *Board’s proposal NOTE: 2001-2003 according to FAS, 2004- IFRS © Wärtsilä 15
Slide 16: Businesses
Businesses © © Wartsila WARTSILA
Slide 17: Ship Power – High level of demand
Ship Power – High level of demand MEUR Q4/2005 Q4/2004 Change Net sales 265.5 202.1 31.4% Order intake 475.1 276.5 71.8% MEUR 2005 2004 Change Net sales 710.3 631.2 12.5% Order intake 1,545.3 836.7 84.7% Order book, end of period 1,658.5 812.7 104.1% Power Businesses net sales 2005: 2,520.3 Ship Pow
Slide 18: Global Market Development
Global Market Development Vessel orders 2000 Vessel orders 2004 Vessel orders 2005 Others 3% Others 5% Others 4% Europe 9% Europe 7% Europe 10% China 6% Korea 52% China 15% Korea 31% Korea 39% China 21% Japan 30% Japan 41% Japan 26% Market share of dwt. Vessels > 100gt. Source: Lloyd's register - Fa
Slide 19: Vessel Orders, # of vessels
Vessel Orders, # of vessels Tankers Bulk carriers Containers Others 3 months moving average dwt 300 12 250 10 Volume [million DWT] 200 8 # of vessels 150 6 100 4 50 2 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 Source: Based on data from Clarkson Research Studies © Wä
Slide 20: Vessel Orders, other vessels
Vessel Orders, other vessels # of vessels LNG carriers LPG carriers Reefers Other dry > 5,000 dwt Offshore & other Cruise vessels Ro-Ro ferries 3 months moving average dwt 2 75 Volume [Million DWT] # of vessels 50 1 25 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 Sourc
Slide 21: Net sales of Ship Power by vessel type
Net sales of Ship Power by vessel type 800 Tankers Cruise & Ferry 600 13% 24% Bulk carriers 4% Container ships 400 17% General cargo 10% LNG 3% Special vessels 200 & other Offshore 15% 14% 0 2000 2001 2002 2003 2004 2005 Tankers Bulk carriers Container ships Others © Wärtsilä 21
Slide 22: The market position of Wärtsilä’s marine engines Q4/2005
The market position of Wärtsilä’s marine engines Q4/2005 Own production Production by licensees Own production Medium speed main engines Low speed main engines Medium speed auxiliary engines Wärtsilä 45% (34) Wärtsilä 24% (18) Wärtsilä 8% (9) Comp. 2 3% Others Comp. 1 13% 24% Comp. 1 Others Comp. 2
Slide 23: Services
Services MEUR Q4/2005 Q4/2004 Change% Net sales 315.0 253.3 24.3% MEUR 2005 2004 Change% Net Sales 1,093.1 936.8 16.7% Personnel, end of period 7 200 6 378 12.9% Power Businesses net sales 2005: 2,520.3 Services: 43 % © Wärtsilä 2004 presentation 23
Slide 24: Services-development
Services-development DEUTZ marine service acquisition Acquisition of automation company Gerhardt Holding Co. Inc, USA New service companies in key ports: Hong Kong and Tallinn First global O&M contract in maritime industry with Reederei Blue Star GmbH © Wärtsilä 24
Slide 25: Active engine base development
Active engine base development MW 180000 160000 140000 120000 100000 80000 60000 40000 20000 0 2001 2002 2003 2004 2005 © Wärtsilä 25
Slide 26: Services - accelerating growth
Services - accelerating growth % Services growth per Q Services share of Power Businesses'sales % 30 60 25 50 20 40 15 30 10 20 5 10 0 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q3/05 Q4/05 © Wärtsilä 26
Slide 27: Power Plants
Power Plants MEUR Q4/2005 Q4/2004 Change Net sales 193.7 283.0 -31.6% Order intake 346.6 211.7 63.7% Order intake, MW heavy fuel oil 489 252 93.9% Power Businesses gas 345 207 66.5% net sales BioPower, MWth + MWe 17 36 -51.4% 2005: 2,520.3 Power Plants: 28 % MEUR 2005 2004 Change Net sales 710.3 651
Slide 28: Power Plant Market 1-60 MW Unit Size
Power Plant Market 1-60 MW Unit Size Reciprocating Engines 20000 18000 16000 14000 12000 LFO Gas MW 10000 2.0% 1.9% 1.4% 0.8% 0.6% HFO 8000 6000 4000 19.8% 19.3% 22.3% 19.2% 2000 13.6% 74.0% 53.0% 54.8% 49.3% 37.9% 0 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 from June to May Inside the colum
Slide 29: Power Plants -order intake 1-12/2005: 2,075 MW (2,313)
Power Plants -order intake 1-12/2005: 2,075 MW (2,313) Europe Asia 308 889 (402) (439) 104 204 705 184 (302) (100) (150) (290) Americas 325 (347) 9 317 Africa and Middle East (154) (193) 552 (1,125) 106 446 (44) (1,082) Gas Oil © Wärtsilä 29
Slide 30: Power Plants - Some selected orders from 2005
Power Plants - Some selected orders from 2005 ITALY RUSSIA PAKISTAN JAPAN Conselice, ValSenales Varandey Khairpur, Iskendarabad Tsuchiura-City BASELOAD, INTERMEDIATE BASELOAD BASELOAD BASELOAD Type: BIO-OIL, 2x18V46, 1x6L20 Type: CRUDE-OIL, 4xW18V32 Types: DUAL FUEL, 2x18V50DF Type: LFO, 5xW18V32 Ou
Slide 31: Wärtsilä’s holdings
Wärtsilä’s holdings The new company was accounted for as an associated company from 1st of May 2005 Wärtsilä’s ownership in the company is 26.5%. Wärtsilä’s share of the associated company’s result was EUR 10.4 million (5-12/2005) The holding’s balance sheet value EUR 106.1 million (31st December 20
Slide 32: Market outlook 2006
Market outlook 2006 Ship Power Demand remains strong, however uncertainty in general shipbuilding market increases Active segments in shipbuilding are offshore, LNG and cruise & ferry Power Plants The power plant market continues to be globally active Demand remains stable for HFO market and growing
Slide 33: Wärtsilä Outlook 2006
Wärtsilä Outlook 2006 Demand in the ship power and energy markets looks likely to remain favourable for Wärtsilä for at least the first half of the current year Based on the strong order book, Wärtsilä’s net sales are expected to grow this year by as much as 20% The profitability level reached in 20
Slide 34: THANK YOU!
YOU! e | WARTSILA