Slide 1: Wärtsilä Corporation Interim Report January-September 2019
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-SEPTEMBER 2019 25 October 2019 Jaakko Eskola, President & CEO 1 © Wärtsilä PUBLIC 25 October 2019 INTERIM REPORT JANUARY-SEPTEMBER 2019
Slide 2: Third quarter burdened by project related challenges and low equipment demand
Third quarter burdened by project related challenges and low equipment demand – services activity remains sound © Wärtsilä PUBLIC
Slide 3: Key figures Q3/2019
KEY FIGURES Q3/2019 Order intake EUR 979 million, -29% Order book at the end of the period EUR 6,294 million, +6% Net sales EUR 1,118 million, -16% Book-to-bill 0.88 (1.03) Comparable operating result EUR 39 million (141), or 3.5% of net sales (10.6) Earnings per share EUR -0.01 (0.17) Cash flow fro
Slide 4: Order intake weak in both equipment businesses – solid development in services
Order intake weak in both equipment businesses – solid development in services Rolling 12m, MEUR Third quarter development 7 000 28% (26) 6 000 Order intake Wärtsilä Marine 5 000 by business area Wärtsilä Energy 72% 4 000 (74) 3 000 2 000 Q3 31% -29% (53) 1 000 Services 1 372 Order intake 979 by bus
Slide 5: Decline in net sales due to concentration of deliveries towards Q4
Decline in net sales due to concentration of deliveries towards Q4 Rolling 12m, MEUR Third quarter development 6 000 31% (49) 5 000 Net sales Wärtsilä Marine by business area Wärtsilä Energy 4 000 69% (51) 3 000 2 000 Q3 -16% 1 000 48% 1 330 (57) Net sales Services 1 118 by business type Equipment 0
Slide 6: Book-to-bill
Book-to-bill Rolling 12m, MEUR 7 000 1,40 1,20 1,22 1,15 1,15 1,17 1,18 1,15 6 000 1,13 1,20 1,08 5 000 1,00 4 000 0,80 3 000 0,60 2 000 0,40 1 000 0,20 0 0,00 Q416-Q317 Q117-Q417 Q217-Q118 Q317-Q218 Q417-Q318 Q118-Q418 Q218-Q119 Q318-Q219 Q418-Q319 Order intake Net sales Book-to-bill 6 © Wärtsilä P
Slide 7: Order book distribution
Order book distribution MEUR 5 000 4 500 4 000 3 500 3 000 2 500 2 000 1 500 1 000 500 0 30.9.2018 30.9.2019 Delivery current year Delivery next year or later 7 © Wärtsilä PUBLIC 25 October 2019 INTERIM REPORT JANUARY-SEPTEMBER 2019
Slide 8: Comparable operating result burdened by project challenges
Comparable operating result burdened by project challenges Rolling 12m, MEUR Review period development 700 14% MEUR 11,7% 400 14% 600 11,2% 11,3% 11,1% 12% 350 12% 9,6% 500 10% 300 9,7% 10% 400 8% 250 7,3% 8% 200 300 6% 6% 150 200 4% 4% 100 100 2% 2% 50 0 0% 0 0% Q417-Q318 Q118-Q418 Q218-Q119 Q318-Q
Slide 9: Cost overruns in certain complex marine and energy projects
Cost overruns in certain complex marine and energy projects Projects affected: Financial impact: • Twelve marine gas solutions projects for • EUR 150 million one-time charge in full multiple gas tanker vessel series year 2019 result, of which EUR 84 million • One LNG terminal construction project re
Slide 10: Reasons identified and corrective actions taken
Reasons identified and corrective actions taken Main issues behind cost overruns: Corrective actions to strengthen sales • New technologies and applications and project execution processes: • Challenges related to new suppliers • Changes to the organisational structure to strengthen project manageme
Slide 11: Cash flow from operating activities
Cash flow from operating activities MEUR Review period development 700 MEUR 150 600 500 100 400 50 300 0 200 -50 100 0 -100 2015 2016 2017 2018 1-9/2018 1-9/2019 11 © Wärtsilä PUBLIC 25 October 2019 INTERIM REPORT JANUARY-SEPTEMBER 2019
Slide 12: Working capital
Working capital Review period development MEUR MEUR 1 500 20% 1 600 20% 17,3% 18% 1 400 1 250 15,4% 16% 15% 1 200 14% 1 000 11,5% 11,2% 1 000 10,8% 10,2% 870 12% 782 750 10% 800 10% 563 581 543 8% 490 600 500 5,2% 6% 5% 400 251 4% 250 200 2% 0 0% 0 0% 2014 2015 2016 2017 2018 30.9.2018 30.9.2019 Wor
Slide 13: Gearing
Gearing Review period development 0,50 0,50 0,40 0,40 0,30 0,30 0,20 0,20 0,10 0,10 0,00 0,00 2015 2016 2017 2018 30.9.2018 30.9.2019 13 © Wärtsilä PUBLIC 25 October 2019 INTERIM REPORT JANUARY-SEPTEMBER 2019
Slide 14: Wärtsilä Marine Business
Wärtsilä Marine Business © Wärtsilä PUBLIC
Slide 15: Vessel contracting remains subdued
WÄRTSILÄ MARINE BUSINESS Vessel contracting remains subdued Total vessel contracting Specialised tonnage Merchant Offshore Offshore Cruise and Ferry Special vessels LNG carriers LPG carriers 250 Cruise and Ferry Special vessels 5,0 80 3 months moving average in CGT 4,5 70 200 4,0 60 3,5 Number of ve
Slide 16: Marine order intake development
WÄRTSILÄ MARINE BUSINESS Order intake development QTD, MEUR Rolling 12m, MEUR Third quarter development 1 200 4 500 7% 23% 4 000 24% 1 000 3 500 Equipment order intake 5% 800 3 000 by segment 6% ◼ Cruise & Ferry 2 500 ◼ Offshore 600 3% 2 000 31% ◼ Navy ◼ Special Vessels 400 1 500 3% ◼ Merchant 11% 2
Slide 17: Marine installed base covered by long-term service agreements
WÄRTSILÄ MARINE BUSINESS Marine installed base covered by long-term service agreements MW 25 000 18% 16% 20 000 14% 12% 15 000 10% 8% 10 000 6% 5 000 4% 2% 0 0% 2014 2015 2016 2017 2018 30.9.2019 MW under agreement % of Marine installed base 17 © Wärtsilä PUBLIC 25 October 2019 INTERIM REPORT JANUAR
Slide 18: Marine net sales development
WÄRTSILÄ MARINE BUSINESS Net sales development QTD, MEUR Rolling 12m, MEUR 1 000 3 500 25% (26) 3 000 800 2 500 600 2 000 Third quarter development 1 500 51% 400 (45) EUR 776 million (680) 15% (17) 1 000 200 500 5% (7) 0 0 4% (5) 7-9/2018 10-12/2018 1-3/2019 4-6/2019 7-9/2019 Spare parts Field servi
Slide 19: Reducing emissions with a pure gas engine
REDUCING EMISSIONS WITH A PURE GAS ENGINE • The Wärtsilä 31SG pure gas engine was launched for marine market applications in September • The new engine further reduces the total cost of ownership and the environmental footprint for vessels operating in regions where there is a developed gas infrastr
Slide 20: Wärtsilä Energy Business
Wärtsilä Energy Business © Wärtsilä PUBLIC
Slide 21: Market for gas and liquid fuel power plants, <500 MW
WÄRTSILÄ ENERGY BUSINESS Market for gas and liquid fuel power plants, <500 MW Rolling 12m, MW 30 000 25 000 20 000 15 000 10 000 5 000 15% 19% 21% 17% 13% 14% 15% 14% 0 Q416-Q317 Q117-Q417 Q217-Q118 Q317-Q218 Q417-Q318 Q118-Q418 Q218-Q119 Q318-Q219 Wärtsilä Others The total market, including also po
Slide 22: Energy order intake development
WÄRTSILÄ ENERGY BUSINESS Order intake development QTD, MEUR Rolling 12m, MEUR Third quarter development 1 000 2 500 18% 900 800 2 000 Equipment order intake 700 by segment 600 1 500 500 ◼ Utilities 82% ◼ Independent Power Producers 400 1 000 ◼ Industrials 300 16% ◼ Others 30% 200 500 100 Services or
Slide 23: Orders received for power plants globally
WÄRTSILÄ ENERGY BUSINESS Orders received for power plants globally Europe 24 (231) Asia 480 (1,056) Americas 240 (306) Utilities IPP’s Africa and (Independent Middle East Power Producers) 262 (275) Industrials Order intake 1-9/2019: 1,005 MW (1,868) 23 © Wärtsilä PUBLIC 25 October 2019 INTERIM REPOR
Slide 24: Energy installed base covered by long-term service agreements
WÄRTSILÄ ENERGY BUSINESS Energy installed base covered by long-term service agreements MW 14 000 30% A guaranteed asset performance agreement with a 12 000 25% Hungarian power provider 10 000 extended by five years 20% 8 000 • The agreement covers a 27.65 15% MW combined heat and power 6 000 plant 4
Slide 25: Energy net sales development
WÄRTSILÄ ENERGY BUSINESS Net sales development QTD, MEUR Rolling 12m, MEUR 800 2 500 22% (14) 2 000 600 1 500 41% (69) Third quarter 400 development 7% (3) 1 000 EUR 342 million (650) 200 500 20% (9) 0 0 7-9/2018 10-12/2018 1-3/2019 4-6/2019 7-9/2019 10% (4) Wärtsilä Energy, equipment Spare parts Fi
Slide 26: Collaborating for innovation and a renewable energy future
COLLABORATING FOR TO REACH LIFECYCLE A 100% INNOVATION RENEWABLE ENERGY FUTURE • Wärtsilä Wärtsilä’s hybrid, and dual-fuel Q Power Oy, asolution Finnish pioneer establishes in biomethanisation, the new Wasalinesigned RoPax a ferry cooperation as a benchmark agreement in efficiency to accelerate and
Slide 27: Prospects
PROSPECTS The demand for Wärtsilä’s services and solutions in the coming twelve months is expected to be somewhat below that of the previous twelve months. Demand by business area is anticipated to be as follows: • Soft in Wärtsilä Marine Business • Weak in Wärtsilä Energy Business (downgraded from
Slide 28: Thank you
THANK YOU Further information: Natalia Valtasaari Vice President, Investor Relations Tel. +358 (0) 10 709 5637 E-mail: natalia.valtasaari@wartsila.com