Wartsila Oyj Abp · OMXHEX:WRT1V
Wartsila Oyj Abp — Wärtsilä — Q2 2014 Earnings Presentation
35 slides from Wartsila Oyj Abp's earnings presentation, Jul 18, 2014
Slide 1: Wärtsilä Corporation Interim Report January-June 2014
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-JUNE 2014 18 JULY 2014 Björn Rosengren, President & CEO © Wärtsilä
Slide 2: Highlights Q2/2014
Highlights Q2/2014 • Order intake EUR 1,163 million, +9% • Net sales EUR 1,132 million, -2% • Book-to-bill 1.03 • EBIT EUR 122 million, 10.8% of net sales (EUR 111 million or 9.6%) • EPS EUR 0.42 (0.39) • NEW Prospects revised: EBIT% before non-recurring items expected to be PIC • around 11.5%, net
Slide 3: Order intake supported by Ship Power and Services
Order intake supported by Ship Power and Services MEUR 5500 5000 4500 4000 Second quarter development MEUR 3500 1400 3000 1,163 1200 1,071 9% 2500 1000 9% Services 2000 800 Ship Power 1500 600 6% Power Plants 1000 400 500 12% 200 0 0 2010 2011 2012 2013 1-6/2014 Q2/2013 Q2/2014 Q1-Q2 Q3-Q4 3 © Wärts
Slide 4: Net sales in line with our expectations
Net sales in line with Net sales in line with our expectations expectations MEUR 5000 4500 4000 -7.6% 12% -1% 3500 Second quarter development MEUR 3000 1,152 1,132 1200 -2% 2500 1000 1% 2000 800 Services 1500 Ship Power 600 35% Power Plants 1000 400 -37% 500 200 0 0 2010 2011 2012 2013 1-6/2014 Q2/2
Slide 5: Net sales by business 1-6/2014
Net sales by business 1-3/2012 Net sales by business 1-6/2014 Ship Power 38% (28) Services 42% (44) Power Plants 20% (28) 5 © Wärtsilä
Slide 6: Book-to-bill ratio remains above one
Book-to-bill ratio remains above one MEUR 5500 1,2 1.07 1.05 1.05 1.07 5000 4500 1,0 0.88 4000 0,8 3500 3000 0,6 2500 2000 0,4 1500 1000 0,2 500 0 0,0 2010 2011 2012 2013 1-6/2014 Order intake Net sales Book-to-bill 6 © Wärtsilä
Slide 7: Order book distribution
Order book distribution Order book distribution MEUR 3500 3000 2500 2000 1500 1000 500 0 30.6.2013 30.6.2014 Delivery current year Delivery next year or later 7 © Wärtsilä
Slide 8: Profitability developed well
Profitability developed well MEUR 600 14% 12% 500 11.1% 11.2% 10.7% 10.9% 10% Second quarter development 400 MEUR 8% 140 12% 10.8% 300 120 9.6% 10% 6% 100 8% 200 80 4% 6% 60 4% 100 40 2% 20 2% 0 0% 0 0% 2010 2011 2012 2013 Q2/2013 Q2/2014 EBIT before non-recurring items EBIT% before non-recurring it
Slide 9: Continued uncertainty in power generation markets
Continued uncertainty in power generation markets 9 © Wärtsilä
Slide 10: Improvement in power plant quotations
Improvement in power plant quotations Quoted MW per Fuel Type 16000 14000 12000 10000 Others MW 8000 Natural gas 6000 4000 Heavy fuel oil 2000 0 Q2 Q3 Q4 Q1 Q3 Q1 Q2 Q3 Q4 Q2 Q4 Q2 Q3 Q1 Q3 Q1 Q2 Q4 Q2 Q4 Q1 Q3 Q1 Q1 Q2 Q4 Q1 Q3 Q1 Q4 Q2 Q4 Q3 Q1 Q3 Q2 Q4 Q2 2005 2006 2007 2008 2009 2010 2011 2012 2
Slide 11: Power Plants order intake by customer segment
Power Plants order intake by customer segment MEUR Review period development 2000 Total EUR 409 million (623) 1800 17% Utilities 1600 Industrials 55% 1400 IPP’s* 28% 1200 x% 1000 800 Review period order intake by fuel in MW 600 400 Oil Gas 200 48% 52% 0 2010 2011 2012 2013 1-6/2014 Q1-Q2 Q3-Q4 *IPP
Slide 12: Power Plants global order intake
Power Plants global order intake Europe 361 (220) Asia 284 (210) 3 50 30 37 Americas 76 (324) 308 217 Africa and Middle East 265 (359) 76 Utilities 118 IPP’s 130 Industrials 18 Order intake 1-6/2014: 986 MW (1,113) 12 © Wärtsilä
Slide 13: Turnkey power plant order from Saudi Arabia
Turnkey power plant order from Saudi Arabia • The 47 MW power plant will be located in the mountain desert close to Taif city • Equipment will be fast-track delivered by February 2015 and the power plant will enter commercial operation by October 2015 NEW • The power plant consists of five 20-cylind
Slide 14: Market for gas and liquid based power plants
Market for gas and liquid based power plants 2013 Total market 73.2 GW (75.4) 2.6% 1.1% 3.3% 2.9% GE Siemens 19.8% MHI 48.2% Wärtsilä Alstom Ansaldo 22.1% Other GTs Includes all Wärtsilä power plants and other manufacturers’ gas and liquid fuelled power plants with prime movers above 5 MW, as well a
Slide 15: Marine markets active, especially within the gas carrier segment
Marine markets active, especially within the gas carrier segment 15 © Wärtsilä
Slide 16: Vessel contracting development
# of vessels 50 0 100 150 200 250 01.09 16 © Wärtsilä 02.09 03.09 04.09 05.09 06.09 07.09 08.09 Merchant 09.09 10.09 11.09 12.09 01.10 02.10 03.10 04.10 05.10 Offshore 06.10 07.10 08.10 * CGT= gross tonnage compensated with workload 09.10 10.10 11.10 12.10 01.11 02.11 03.11 04.11 05.11 Source: Clark
Slide 17: Vessel contracting in specialised segments
# of vessels 10 20 30 40 50 70 80 60 0 17 © Wärtsilä 01.09 02.09 03.09 04.09 05.09 06.09 07.09 08.09 09.09 10.09 11.09 12.09 01.10 02.10 03.10 04.10 05.10 06.10 07.10 08.10 09.10 10.10 11.10 12.10 01.11 02.11 Source: Clarkson Research Services, figures exclude late contracting 03.11 04.11 05.11 06.1
Slide 18: Ship Power order intake developed favourably
Ship Power order intake developed favourably MEUR 1800 Review period development Total EUR 875 million (827) 1500 1200 Offshore Gas carriers 30% 37% 900 Navy 600 5% Special vessels 300 4% Cruise Traditional Others and ferry merchant 1% 3% 0 18% 2010 2011 2012 2013 1-6/2014 Q1-Q2 Q3-Q4 18 © Wärtsilä
Slide 19: Finnlines selects Wärtsilä's systems to reduce Baltic Sea environmental impact
Finnlines selects Wärtsilä’s systems to reduce Baltic Sea environmental impact • Order to supply exhaust gas cleaning systems to six Finnlines vessels operating in the Baltic and North Sea • Wärtsilä’s scrubber systems enable compliance with the new environmental regulations when NEW operating on he
Slide 20: Joint venture ordering continues active
Joint venture ordering continues active MEUR 600 • Joint venture order intake totalled 550 EUR 92 million (113) during 500 January-June 2014 450 • Wärtsilä’s share of ownership in 400 these companies is 50%, and the 350 results are reported as a share of 300 result of associates and joint ventures 2
Slide 21: Ship Power market: market position of Wärtsilä's marine engines
Ship Power market Market position of Wärtsilä’s marine engines Medium-speed main engines Low-speed main engines Auxiliary engines Mitsubishi Wärtsilä 1%(1) 2%(3) Wärtsilä Others 11%(9) 20%(20) Wärtsilä 52%(51) Caterpillar 11%(6) MAN D&T Others 17%(23) MAN D&T 88%(90) 98%(97) Total market volume last
Slide 22: Services customers interest in long-term partnerships increasing
Services customers interest in long-term partnerships increasing 22 © Wärtsilä
Slide 23: Services net sales development remains stable
Services net sales development remains stable MEUR 2000 1800 0% 5% -3% Second quarter development 1600 MEUR 1400 600 1200 1% 468 465 500 1000 400 800 300 600 400 200 200 100 0 0 2010 2011 2012 2013 1-6/2014 Q2/2013 Q2/2014 Q1-Q2 Q3-Q4 23 © Wärtsilä
Slide 24: Services net sales distribution 1-6/2014
Services net sales distribution 1-6/2014 Field service 25%(27) Spare parts 52%(50) Contracts 17%(16) Projects 6%(7) Total EUR 903 million (899) 24 © Wärtsilä
Slide 25: Strong interest for services agreements in LNG industry
Strong interest for services agreements in LNG industry • Technical management agreements covering a total of 15 vessels signed with three Greek LNG ship owners during Q2/2014 • The agreement will enable higher availability, increased engine performance and optimised maintenance intervals • The serv
Slide 26: Development of new Power Plants service agreements
Development of new Power Plants service agreements MW 4500 90% 4000 80% 3500 70% 57% 58% 57% 3000 60% 53% 51% 2500 50% 2000 40% 31% 1500 30% 1000 20% 500 10% 0 0% 2009 2010 2011 2012 2013 Q2/2014 12m rolling O&M and maintenance agreements Power Plants deliveries % of delivered MWs 26 © Wärtsilä
Slide 27: Fleet utilisation
Fleet utilisation Fleet utilisation Anchored Vessels & Fleet Development* 35% 22500 Nr of Active Vessels Percent Anchored 30% 22000 21500 25% 21000 20% 20500 15% 20000 12.11 03.12 06.12 09.12 12.12 03.13 06.13 09.13 12.13 03.14 06.14 Anchored Active Fleet Fleet Average Speed, knots** 10,5 10,0 9,5 9
Slide 28: Solid financial standing
Solid financial standing 28 © Wärtsilä
Slide 29: Favourable development in operating cash flow
Favourable development in operating cash flow MEUR 700 600 Review period development 500 MEUR 200 400 180 160 300 140 120 100 200 80 60 100 40 20 0 0 2010 2011 2012 2013 1-6/2013 1-6/2014 29 © Wärtsilä
Slide 30: Focus on working capital development
Focus on working capital development MEUR 2000 25% 1800 Review period development 1600 20% MEUR 1400 1600 12% 1200 15% 10.9%* 1400 10% 1000 1200 9.8% 8% 1000 7.1%* 800 10% 6.7% 800 6% 600 5.6% 465 600 508 4% 400 313 5% 339 2.6% 235 400 200 118 2% 200 0 0% 0 0% 2010 2011 2012 2013 30.6.2013 30.6.2014
Slide 31: Gearing remains low
Gearing remains low 0,50 Review period development 0,40 0,50 0,30 0,40 0,30 0,20 0,20 0,10 0,10 0,00 0,00 30.6.2013 30.6.2014 -0,10 2010 2011 2012 2013 31 © Wärtsilä
Slide 32: Market outlook
Market outlook • Power Plants: Power generation markets closely follow the global macro-economic situation. Based on the market challenges seen during the first half year and the revised GDP forecasts for 2014, the overall market for NEW liquid and gas fuelled power generation is expected to continu
Slide 33: Wärtsilä and CSSC to join forces in 2-stroke engine joint venture
Wärtsilä and China State Shipbuilding Corporation to join forces in 2-stroke engine joint venture • Wärtsilä and China State Shipbuilding Corporation (CSSC) have signed an agreement to establish a joint venture, which will take over Wärtsilä’s 2-stroke engine business • CSSC will own 70% and Wärtsil
Slide 34: Prospects for 2014 revised
Prospects for 2014 revised Wärtsilä estimates its profitability for 2014 to be around 11.5%, due to the two-stroke business transaction. Net sales are expected to grow by around 5%. 34 © Wärtsilä
Slide 35: IR Contact
IR Contact: Natalia Valtasaari Director, Investor Relations Tel. +358 (0) 40 187 7809 E-mail: natalia.valtasaari@wartsila.com