Slide 1: Wärtsilä Corporation Interim Report January-September 2005
Wärtsilä Corporation Interim Report January-September 2005 Ole Johansson, President & CEO 28 October 2005 © 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: Our offering
Our offering Ship OEM services Power services Plants Engines Propulsors Ship Power systems O&M Competitors’ engines © Wärtsilä 3
Slide 4: Our offering … and we are seeking growth beyond the organic growth
Our offering …and we are seeking growth beyond the organic growth Non engine related services Ship OEM services Power services Plants Additional Engines products Propulsors Ship Power systems O&M Competitors’ engines Additional engine brands © Wärtsilä 4
Slide 5: Highlights of the third quarter, Power Businesses
Highlights of the third quarter, Power Businesses Demand for Ship Power and Power Plant solutions was strong Accelerating growth in Service business Order intake grew 45.5% to EUR 870.8 million (598.4) Net sales grew 20.3% to EUR 607.8 million (505.1) Profitability (EBITA) 7.2% © Wärtsilä 5
Slide 6: Wärtsilä Group
Wärtsilä Group MEUR Q3/2005¹ Q3/2004 Net sales 607.8 559.0 Operating income 43.5 38.3 Profit before taxes 36.9 36.5 EPS, EUR 0.32 0.24 MEUR 1-9/2005¹ 1-9/2004 2004 Net sales 1,865.3 1,662.0 2,478.2 Operating income 138.2 8.0 112.0 Profit before taxes 129.4 114.7 217.3 EPS, EUR 1.05 0.74 1.42 ¹ Imatr
Slide 7: Cash flow
Cash flow MEUR 1-9/2005 1-9/2004 2004 Cash flow from operating activities 14.0 93.3 220.1 Cash flow from investing activities -179.5 103.9 85.0 Cash flow from financing activities 125.1 -203.5 -284.9 Liquid funds at the end of period 133.2 145.5 169.6 © Wärtsilä 7
Slide 8: Solvency and gearing
Solvency and gearing % Solvency Gearing 50 0,7 45 0,6 40 35 0,5 30 0,4 25 0,3 20 15 0,2 10 0,1 5 0 0 00 01 02 03 04 Q3/05 00 01 02 03 04 Q3/05 Solvency Gearing NOTE: 2000-2003 according to FAS, 2004- IFRS Convertible subordinated debentures treated as equity © Wärtsilä 8
Slide 9: Power Businesses
Power Businesses MEUR Q3/2005 Q3/2004 Change% Net sales 607.8 505.1 20.3% Operating income 43.5 35.8 21.8% % net sales 7.2% 7.1% Order intake 870.8 598.4 45.5% MEUR 1-9/2005 1-9/2004 Change% 2004 Net sales 1,746.8 1,485.4 17.6% 2,224.7 Operating income 116.4 -3.2 87.7 % net sales 6.7% -0.2% 3.9% Ord
Slide 10: Power Businesses – Key figures
Power Businesses – Key figures MEUR Net sales Order intake Order book 2600 2,544.7 700 1000 0,0% 870.8 2200 607.8 900 600 800 1,855.3 1,870.3 505.1 1800 500 700 -8.5% -4.2% 598.4 19.8% 600 1400 400 500 56.0% 300 1000 400 22.5% 200 300 600 96.3% 200 119.1% 100 20.6% 100 200 0 0 Q3/04 Q3/05 Q3/04 Q3/0
Slide 11: Power Businesses - Order book distribution
Power Businesses - Order book distribution MEUR 1400 1200 1000 800 2004 2005 2006 600 2007 + 400 200 0 30.9.2004 30.9.2005 © Wärtsilä 11
Slide 12: Delivered engine megawatts from own factories
Delivered engine megawatts from own factories MW 5 000 4 000 3 000 2 000 1 000 0 2000 2001 2002 2003 2004 1-9/2005 Power Plants Ship Power Estimate 2005 © Wärtsilä 12
Slide 13: Ship Power – strong order intake
Ship Power – strong order intake MEUR Q3/2005 Q3/2004 Change 2004 Net sales 158.0 131.0 20.6% 631.2 Order intake 361.5 165.0 119.1% 836.7 Order book, end of period 1,444.5 736.0 96.3% 812.7 Power Businesses net sales Q3/2005 EUR 607.8 million. Ship Power 26% © Wärtsilä 13
Slide 14: Vessel orders volume
Vessel orders Tankers Bulk carriers Containers Others 3 months moving average 12 10 Volume [ million DWT ] 8 6 4 2 0 12-99 03-00 06-00 09-00 12-00 03-01 06-01 09-01 12-01 03-02 06-02 09-02 12-02 03-03 06-03 09-03 12-03 03-04 06-04 09-04 12-04 03-05 06-05 09-05 Source: Clarkson Research Studies Note:
Slide 15: Vessel orders
Vessel orders Tankers Cargo Offshore Large container Offshore Container feeders Cruise & Passenger Cruise & Passenger 1990 1995 2000 2005 Source: Clarkson Research Studies Note: Cargo vessels > 5,000 dwt © Wärtsilä 15
Slide 16: Net sales of Ship Power by vessel type
Net sales of Ship Power by vessel type 800 600 400 200 0 2000 2001 2002 2003 2004 1-9/2005 Tankers Bulk carriers Container ships Others © Wärtsilä 16
Slide 17: The market position of Wärtsilä’s marine engines Q3/2005
The market position of Wärtsilä’s marine engines Q3/2005 Own production Production of licensees Own production Medium speed main engines Low speed main engines Medium speed auxiliary engines Wärtsilä 41% (25) Wärtsilä 23% (19) Wärtsilä 11% (9) Others 59% (75) Others 77% (81) Others 89% (91) Total ma
Slide 18: Service
Service Q3/2005 Q3/2004 Change% 2004 Net sales, MEUR 273.4 228.3 19.8% 936.8 Personnel, end of period 6.937 6.303 10.1% 6.378 Long-term service agreements, MW 9,540 9,611 -0.7% 9,609 O&M (operation and maintenance agreements), MW 2,659 2,596 2.4% 2,569 Power Businesses net sales Q3/2005 EUR 607.8 mi
Slide 19: Accelerating Service growth
Accelerating Service growth % Se rvice grow th pe r Q Se rvice sha re of Pow e r Busine sse s'sale s % 25 60 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 © Wärtsilä 19
Slide 20: Power Plants - significant growth in gas power plant orders
Power Plants - significant growth in gas power plant orders MEUR Q3/2005 Q3/2004 Change 2004 Net sales 176.4 144.0 22.5% 651.9 Order intake 274.0 175.6 56.0% 1,019.5 Order intake, MW heavy fuel oil 307 337 -9.0% 1,664 gas 291 157 84.9% 649 BioPower, MWth 21 31 -32.4% 110 Order book, end of period 77
Slide 21: Power Plant Market 1-60 MW Unit Size
Power Plant Market 1-60 MW Unit Size Reciprocating Engines 20000 18000 16000 14000 12000 LFO MW 10000 2,0 % 1,9 % 1,4 % 0,8 % 0,6 % Gas 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 I
Slide 22: Order intake 1-9/2005: 1,224 MW (1,854)
Order intake 1-9/2005: 1,224 MW (1,854) Europe Asia 293 394 (273) (403) 284 9 215 180 (248) (25) (137) (266) Americas 295 (144) 9 287 Africa and Middle East (32) (112) 241 (1034) 72 169 (25) (1009) Gas Oil © Wärtsilä 22
Slide 23: 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 9.6 million (5-9/2005). The holding’s balance sheet value EUR 103.9 million. Wärtsilä has gra
Slide 24: Prospects in 2005 and 2006
Prospects in 2005 and 2006 The net sales of the Wärtsilä Power Businesses for the current year are estimated to grow approximately 15%. The full-year profitability (EBITA) of the Power Businesses is expected to be around 8%. Net sales in 2006 are estimated to increase by about 10% based on the curre
Slide 25: THANK YOU!
YOU! e | WARTSILA