Wartsila Oyj Abp · OMXHEX:WRT1V

Wartsila Oyj Abp — Wärtsilä — Investor Day (March 2012)

19 slides from Wartsila Oyj Abp's investor day presentation, Mar 29, 2012

  1. Slide 1: Wärtsilä's Strong Financial Position

    WÄRTSILÄ’S STRONG FINANCIAL POSITION RAIMO LIND Executive Vice President, CFO 1 © Wärtsilä 29 March 2012 RAIMO LIND

  2. Slide 2: Contents

    Contents Topic 3 Growth over the cycle – fulfils targeted levels 4 Net sales – emphasis on high growth areas 5 Net sales by currency – small impact on profitability 6 Operating costs by currency – diversification shows 7 Joint venture performance – supporting strategy 8 Customer financing – solid pr

  3. Slide 3: Growth over the cycle – fulfills targeted levels

    Growth over the cycle – fulfills targeted levels Sales Acquisitions (cumulative) Growth % (incl. acquisitions) Sales, MEUR Sales growth 6,000 60% Acquisitions ~2.5 % of the growth 5,000 50% 4,000 CAGR ~ 40% 8.9%* 3,000 30% 27 % 23 % 2,000 20% 18 % 13 % 14 % 1,000 10% 5-10% 3% 0 0% -7 % -8 % -1,000 -

  4. Slide 4: Net sales – emphasis on high growth areas

    Net sales – emphasis on high growth areas Forecasted GDP growth 20121 Net sales by market area 2011 (MEUR): Global 2,4 Euro A rea -­‐1,3 UK 0,2 520 Emerging Europe 2,8 12% 1,249 Latin A merica 3,7 30% US 2,0 845 20% Emerging A sia 6,9 Europe Japan 1,2 Asia The Americas Africa and Middle East 4,2 594

  5. Slide 5: Net sales by currency – small impact on profitability

    Net sales by currency – small impact on profitability Net sales by currency 2011: Sensitivity analysis Impact of EUR exchange rate 18% compared to other currencies 2012: 2% • +/- 10% (compared to Feb 2012) 13% EUR would result in -/+ 4% change in net 68% USD sales NOK • Impact on profitability would

  6. Slide 6: Operating costs by currency – diversification shows

    Operating costs by currency – diversification shows Operating costs by currency 2011: 28% 5% 61% EUR 6% USD NOK Other currencies 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0% 2007 2008 2009 2010 2011 6 © Wärtsilä 29 March 2012 RAIMO LIND

  7. Slide 7: Joint venture performance – supporting strategy

    Joint venture performance – supporting strategy Growing sales Strategic target MEUR • Gain market share in the main growth 300 markets 250 +2 3 % • Team up with the leading local players +1 8 % 200 • Establish manufacturing capacity within 150 the main markets 100 50 Outcome 0 2009 2010 2011 • Marke

  8. Slide 8: Customer financing – solid project close

    Customer financing – solid project close Uncertainty in the financial markets has an impact on investments • Projects may be delayed because of increased level of scrutiny by financiers • Some weaker projects may not proceed at all • Financially solid projects can always attract financing Wärtsilä h

  9. Slide 9: Customer support in financing: Seaboard 108 MW barge

    Customer support in financing: Seaboard 108 MW barge Export Credit Agency (ECA) transaction with Wärtsilä’s offering: a 12-year Finnvera guarantee and financing for a combined cycle floating power barge • Engineering, Procurement, Construction (EPC) project • Arranging Export Guarantee and funding K

  10. Slide 10: Impact of purchase price allocations on profitability

    Impact of purchase price allocations on profitability MEUR 6,000 15% 5,000 14% 4,000 13% 3,000 12% 2,000 11% 1,000 10% 0 9% 2008 2009 2010 2011 Net Sales EBIT % EBITA % EBITA % (bef. depreciation of PPA) (bef. all intang. depreciation) EBITDA % 10 © Wärtsilä 29 March 2012 RAIMO LIND

  11. Slide 11: Working capital development – volatile but under control

    Working capital – volatile but under control MEUR % of 12 month cumulative sales 800 12% 700 600 9% 591 500 511 482 400 6% 354 300 310 332 314 276 285 268 267 200 212 228 232 3% 176 175 170 164 142 100 123 116 100 102 107 102 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

  12. Slide 12: Services working capital – favourable trend continues

    Services working capital – favourable trend continues MEUR 2,000 40% 31 % 31 % 1,500 27 % 30% 24 % 25 % 20 % 1,000 17 % 20% 493 462 500 344 393 369 367 10% 311 0 0% -500 -10% 2005 2006 2007 2008 2009 2010 2011 Working capital Total inventories Receivables Payables Working capital / Net sales 12 © Wä

  13. Slide 13: Solid cash flow from operating activities

    Solid cash flow from operating activities MEUR 1,000 15% Average 333 MEUR or 8.3% of sales 800 12% 663 600 9% 431 400 349 6% 302 278 232 200 3% 76 0 0% 2005 2006 2007 2008 2009 2010 2011 Cash flow from operating activities % of Group sales Cash flow from operating activities: including changes in wo

  14. Slide 14: Low maintenance capex needs

    Low maintenance capex needs Acquisitions Other shares Investments in growth / process development Investments in maintenance Investments % of sales (no acq. & shares) Depreciation Depreciation w/o acquisition intangibles Investments and depreciations MEUR Investments % of sales 600 9% 8% 500 7% 400

  15. Slide 15: Good maturity profiles and RCFs secure financing

    Good maturity profiles and RCFs secure financing Long-term loans1 Revolving Credit Facilities3 MEUR MEUR Pension loans Term loans EIB loan (undrawn) RCFs Maturing RCFs 700 600 Maturity (average)2: Maturity (average): 567 494 600 40 months 500 33 months Interest rate (average) 2: 3.0% 500 400 400 300

  16. Slide 16: Acquisition of Hamworthy enhances growth

    Acquisition of Hamworthy enhances growth Transaction • Acquisition closed on Jan31st closed • Hamworthy will be consolidated into Wärtsilä FY12 numbers from February • Total consideration is GBP 381m (EUR 455m), while net price of GBP Price paid 326m (EUR 399m) due to Hamworthy’s cash balance at clo

  17. Slide 17: Sales guidance for 2012 – growth expected

    Sales guidance for 2012 – growth expected Sales, EUR millions 200+ Expected Ship Power and Power Plants order intake within 2012 for 2012 delivery 250-300 Expected Hamworthy sales for 2012 (11 months) 1850 Services’ sales for 2012, assuming flat sales 600 of which Services’ order book for 2012 2900

  18. Slide 18: Financial strength and solid outlook for growth

    Financial strength and solid outlook for growth • Resilient profitability • Unleveraged balance sheet • Good cash flow • W Cap under control • Financing secured • Solid outlook for 2012 • Growth agenda has substance 18 © Wärtsilä 29 March 2012 RAIMO LIND

  19. Slide 19: © Wärtsilä 29 March 2012 RAIMO LIND

    19 © Wärtsilä 29 March 2012 RAIMO LIND

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