Wartsila Oyj Abp · OMXHEX:WRT1V
Wartsila Oyj Abp — Wärtsilä — Non-Deal Roadshow (June 2022)
40 slides from Wartsila Oyj Abp's roadshow presentation, June 2022
Slide 1: Shaping the Decarbonisation of Marine and Energy
WARTSILA SHAPING THE DECARBONISATION OF MARINE AND ENERGY ROADSHOW PRESENTATION JUNE 2022
Slide 2: Market Fundamentals
MARKET FUNDAMENTALS MARINE will move with unprecedented speed towards decarbonisation ENERGY is moving towards a 100% renewables future Policies & regulations Policies & regulations ▪ IMO target ▪ EU: Carbon neutral by 2050 ▪ Access to capital ▪ USA: carbon free electricity ▪ Cost of carbon producti
Slide 3: The Wärtsilä Way sets the scene for profitable growth
The Wärtsilä Way sets the scene for profitable growth 3 © Wärtsilä
Slide 4: Our value creation potential is based on two strategic themes
OUR VALUE CREATION POTENTIAL IS BASED ON TWO STRATEGIC THEMES 1 TRANSFORM Decarbonisation creates new business opportunities 2 PERFORM Leverage market recovery and growth 4 © Wärtsilä
Slide 5: Transform: Decarbonisation creates new business opportunities
TRANSFORM Decarbonisation creates new business opportunities ▪ Maritime is going through an First Wärtsilä GridSolv unprecedented rate of 3 Quantum delivered in change, which is the USA accelerated by regulations and the demand for green transport. First real-life digital port call ▪ Also, the energ
Slide 6: Perform: Ready to leverage market recovery and growth
PERFORM We are ready to leverage market recovery and growth #1-3 in global markets "SET FOR 30" DECARBONISATION TARGETS: FINANCIAL TARGETS: ▪ carbon neutral in our own ▪ 5% annual organic growth operations by 2030 ▪ 12% operating margin ▪ a product portfolio ready for zero carbon fuels by 2030 Clear
Slide 7: Set to deliver long term shareholder value
Set to deliver long term shareholder value We have clear Our balance sheet We have clear financial targets and financing capital allocation and are committed structure supports principles to realising them strategy execution 7 © Wärtsilä
Slide 8: New financial targets reflect growth opportunities and increased profitability
New financial targets reflect growth opportunities and increased profitability New targets Net sales 5% annual organic growth Profitability 12% operating margin Capital structure Gearing below 0.50 Dividend At least 50% of earnings 8 © Wärtsilä
Slide 9: Good growth opportunities in services, energy, and marine new build recovery
Good growth opportunities in services, energy, and marine new build recovery. Our installed base provides a strong foundation for services growth Key drivers Storage ▪ Fast growing demand for energy storage and power system optimisation solutions Services ▪ Increased share of wallet from existing cu
Slide 10: We will reach our profitability target while maintaining R&D investments
We will reach our profitability target while maintaining R&D investments at ~3% of net sales Key drivers ▪ Marine and Energy Services growth ▪ Thermal balancing power growth ▪ Storage growth Starting point: Target: Operating margin 5.9% ▪ Voyage turnaround and digital growth 12% operating margin (LT
Slide 11: Ambitious decarbonisation targets for 2030
Ambitious decarbonisation targets for 2030 To provide a product portfolio which will To become carbon neutral in be ready for zero carbon fuels our own operations 11 © Wärtsilä
Slide 12: Supporting decarbonisation in marine
SUPPORTING DECARBONISATION IN MARINE OWNERS WILL DECIDE MOVE FROM A SINGLE-FUEL INDUSTRY TO A MULTI-FUEL ONE ON TECHNOLOGY Distribution of fuel types for Decarbonisation 2050 (1.5ºC scenario), exajoule PARTNERS NOW: Carbon neutral and zero carbon fuels in maritime ▪ Vessel life is 25-30 years HFO (H
Slide 13: Vessel contracting expected to decline in 2022
Vessel contracting expected to decline in 2022 No of ships, 2,000+ dwt Continuing accelerated fleet renewal 3,000 Accelerating supported by the fleet age profile Support from fleet renewal and potential increased consensus continued container and steady over fuelling and technology choices ordering
Slide 14: Supporting decarbonisation in energy
SUPPORTING DECARBONISATION IN ENERGY ▪ Wind and solar are intermittent power sources THE KEY STEPS TO FRONT-LOAD NET ZERO Utilise Power-to-X and flexible thermal plants to provide carbon ▪ Flexible balancing power neutral long-term storage. 5 Curtailment of needed to stabilize the power renewable sy
Slide 15: Renewable energy plays a key role in energy sector emissions abatement
Renewable energy plays a key role in energy sector emissions abatement Estimated growth of the addressable annual markets of thermal balancing (GW) and energy storage (GWh) 2020–2030: +30% p.a. Source: Bloomberg New Energy Outlook 2020, Source: Bloomberg New Energy Outlook 2021 Wärtsilä estimates at
Slide 16: Order intake and order book improved
ORDER INTAKE AND ORDER BOOK IMPROVED MEUR 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2017 2018 2019 2020 2021 LTM/Q122 Marine Energy Portfolio Business Total order intake Order book 16 © Wärtsilä
Slide 17: Increasing renewable adoption accelerates need for flexible balancing power
Increasing adoption of intermittent renewable energy is accelerating the need for flexible balancing power Omaha PPD 156 MW - USA AGL 250 MWh - Australia Wärtsilä’s technology The battery energy with fast-starting storage system will internal combustion support both thermal and engines will be used
Slide 18: Net sales and comparable operating result increased
NET SALES AND COMPARABLE OPERATING RESULT INCREASED MEUR MEUR % 6,000 700 14 5,000 600 12 500 10 4,000 400 8 3,000 300 6 2,000 200 4 1,000 100 2 0 0 0 2017 2018 2019 2020 2021 LTM/Q122 Equipment sales Service sales Comparable operating result Comparable operating result, % of net sales 18 © Wärtsilä
Slide 19: Service net sales by business
SERVICE NET SALES BY BUSINESS MEUR 3,000 2,500 2,000 1,500 1,000 500 0 2017 2018 2019 2020 2021 LTM Q1/22 Marine Power Marine Systems Voyage Energy Portfolio Business Services 19 © Wärtsilä
Slide 20: Service orders and sales both increasing
Service orders and sales both increasing Order intake Net sales MEUR MEUR, 12m rolling MEUR MEUR, 12m rolling 1,600 3,500 1,600 3,500 1,400 3,000 1,400 3,000 1,200 1,200 2,500 2,500 1,000 1,000 2,000 2,000 800 732 800 691 635 1,500 631 1,500 593 600 600 540 1,000 1,000 400 400 200 500 200 500 0 0 0
Slide 21: Positive development in both Marine and Energy service business
Positive development in both Marine and Energy service business Marine Power net sales from installations under Energy installed base covered by service agreements agreement MW MEUR, 12m rolling 400 16,000 30% 350 14,000 25% 300 12,000 20% 250 10,000 200 8,000 15% 150 6,000 10% 100 4,000 5% 50 2,000
Slide 22: Wärtsilä and Carnival Corporation join forces in fleet decarbonisation
Wärtsilä and Carnival Corporation join forces in fleet decarbonisation programme ▪ As announced on 22 April, Wärtsilä is to deliver its new decarbonisation modelling service to Carnival Corporation, as the cruise group aims to reduce greenhouse gas emissions across its fleet. ▪ Initially tasked with
Slide 23: Decarbonisation services for Energy customers aiming at net zero
Wärtsilä introduced decarbonisation services to support Energy customers aiming at net zero CO2 emissions ▪ As announced on 11 May, Wärtsilä’s strategy for shaping the decarbonisation of the energy sector is strengthened with the introduction of the company’s decarbonisation service concept. ▪ Decar
Slide 24: Strong balance sheet
STRONG BALANCE SHEET MEUR 1-3/2022 1-3/2021 Cash flow from operating activities -122 67 Working capital -18 243 Net interest-bearing debt 276 419 Gearing 0.14 0.20 Solvency, % 35.3 37.0 Basic earnings/share, EUR -0.24 0.04 24 © Wärtsilä
Slide 25: Committed to providing shareholder returns
COMMITTED TO PROVIDING SHAREHOLDER RETURNS EUR 1.00 0.90 0.80 0.70 0.65 0.63 0.60 0.50 0.46 0.48 0.48 0.40 0.37 0.33 0.30 0.24 0.23 0.20 0.20 0.10 0.00 2017 2018 2019 2020 2021 Earnings per share Dividend per share 25 © Wärtsilä
Slide 26: Strong presence in sustainable development indices
Strong presence in sustainable development indices S&P Europe 350 ESG Index 26 © Wärtsilä
Slide 27: Wärtsilä is very well-positioned for the decarbonisation transformation
Wärtsilä is very well-positioned for the decarbonisation transformation Leader in Pioneer in ▪ Carbon neutral & zero carbon fuels ▪ Marine electric drivetrain - Available today: biofuels, methanol, up to 25% hydrogen blends - 2023: ammonia concept ▪ Marine carbon capture - 2025: 100% hydrogen concep
Slide 28: We continue investing in innovation
WE CONTINUE INVESTING IN INNOVATION TO ENSURE A BROAD, INDUSTRY-LEADING SOLUTION OFFERING 3.7 2.9 175 141 2017 2018 2019 2020 2021 R&D expenditure, MEUR % of net sales © Wärtsilä
Slide 29: Significant value creation potential
SIGNIFICANT VALUE CREATION POTENTIAL 29 © Wärtsilä
Slide 30: Financial development in Q1 2022
FINANCIAL DEVELOPMENT IN Q1 2022 30 © Wärtsilä
Slide 31: Order intake increased, however a MEUR 200 write-down burdened operating result
Order intake increased, however a MEUR 200 write-down burdened operating result ▪ Order intake increased by 11% ▪ Equipment order intake increased by 17% ▪ Service order intake increased by 6% ▪ Net sales increased by 30% ▪ Service net sales increased by 17% ▪ Russia-Ukraine war intensified overall
Slide 32: The war between Russia and Ukraine and its impact on Wärtsilä
The war between Russia and Ukraine and its impact on Wärtsilä ▪ Wärtsilä strongly condemns the war in Ukraine. ▪ Wärtsilä has suspended all deliveries, sales, orders, and bidding to Russia and complies with all sanctions applicable to its operations. ▪ In the current environment, it is not viable fo
Slide 33: Key figures
Key figures MEUR 1-3/2022 1-3/2021 CHANGE Order intake 1,380 1,244 11% of which services 732 691 6% Order book 6,107 5,399 13% of which current year deliveries 3,334 2,961 Net sales 1,231 946 30% of which services 631 540 17% Book-to-bill 1.12 1.32 Operating result -147 36 % of net sales -11.9 3.8 C
Slide 34: First quarter highlights
First quarter highlights Net sales Comparable operating result MEUR %, 12m rolling Net sales EUR 1,231 MEUR MEUR, 12m rolling million 2,000 6,000 180 14.0% 1,800 160 ▪ 17% increase in 12.0% 1,600 5,000 140 service sales 1,400 10.0% 1,231 4,000 120 1,170 1,200 100 8.0% 1,000 946 3,000 Comparable oper
Slide 35: Order intake increased by 11%
Order intake increased by 11% Equipment Services MEUR MEUR, 12m rolling MEUR MEUR, 12m rolling 1,600 3,500 1,600 3,500 ▪ Equipment order 1,400 3,000 1,400 intake increased 3,000 1,200 1,200 by 17% 2,500 2,500 1,000 2,000 1,000 2,000 ▪ Service order 800 800 732 613 648 1,500 635 691 1,500 intake incr
Slide 36: Increase in order book
Increase in order book Book-to-bill decreased Order book by business Order book delivery schedule MEUR MEUR 7,000 1.40 4,500 4,000 6,000 1.20 3,500 5,000 1.00 3,000 4,000 0.80 2,500 3,000 0.60 2,000 1,500 2,000 0.40 1,000 1,000 0.20 500 0 0.00 0 31.3.2020 30.9.2020 31.3.2021 30.9.2021 31.3.2022 Deli
Slide 37: © Wärtsilä
© Wärtsilä
Slide 38: Key figures 2021
KEY FIGURES 2021 MEUR 8,000 7,000 Order intake 6,000 5,735 MEUR 5,000 2021 4,000 Net sales, Net sales 3,000 geographical 4,778 MEUR 2,000 1,000 0 Comparable operating result 2017 2018 2019 2020 2021 357 MEUR Net sales Order intake Europe Asia Americas Other 7.5% of net sales Order book 2021 Net sale
Slide 39: Dividend, financial targets and innovation track record
Clear financial Robust capital Strong track record in innovations Solid balance sheet targets and strong allocation principles commitment to MEUR and active portfolio Investing ~3% of net sales on R&D realise them management 800 35% yearly 700 30% Notable Extensive service network, 600 25% Today: en
Slide 40: Wärtsilä
re, WARTSILA