Wartsila Oyj Abp · OMXHEX:WRT1V
Wartsila Oyj Abp — Wärtsilä — Investor Day (2007)
38 slides from Wartsila Oyj Abp's investor day presentation, 2007
Slide 1: Welcome
Welcome OLE JOHANSSON , PRESIDENT & CEO 1 © Wärtsilä
Slide 2: Wärtsilä's prospects
Wärtsilä’s prospects Prospects for 2007 unchanged • Based on the strong order book, Wärtsilä’s net sales are expected to grow this year by around 15%. Profitability will exceed 9% Prospects for 2008 • In 2008 Wärtsilä’s net sales will grow about 25%, profitability will improve • Investments in capac
Slide 3: Current market situation – threat or possibility for Wärtsilä?
CURRENT MARKET SITUATION – THREAT OR POSSIBILITY FOR WÄRTSILÄ? OLE JOHANSSON , PRESIDENT & CEO 3 © Wärtsilä
Slide 4: Our environment
Our environment • Growth in world economy slowing down • High energy prices are here to stay • Shipping is the enabler of globalisation • We have seen only the beginning of the pressures to reduce emissions (particles, NOx, CO2) • Shortfall in availability of key personnel • Need for further special
Slide 5: Our environment
Our environment • Growth in world economy slowing down • High energy prices are here to stay • Shipping is the enabler of globalisation • We have seen only the beginning of the pressures to reduce emissions (particles, NOx, CO2) • Shortfall in availability of key personnel • Need for further special
Slide 6: World economy sources 2008
World economy sources 2008 12 Growth rate % China Revision 17/10/2007 10 India Netherlands Russia 8 Latin America Africa Others 6 4 Finland USA EU Japan 2 0 0 20 40 60 80 100 Share of world economy % Source: IMF 10/2007 6 © Wärtsilä
Slide 7: China to be nr 1 – no matter how you count
China to be nr 1 – no matter how you count Pulling its weight New driving force China is also making the largest contribution The major emerging markets have become the to world growth at market prices. main engines of world growth. For the first time, China and India are making the largest country-
Slide 8: GDP Growth in Selected Countries
GDP Growth in Selected Countries 15 Annual percent change 10 5 0 -5 -10 -15 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 China India Japan Russia United States EU Source: International Monetary Fund (IMF) 8 © Wärtsilä
Slide 9: World GDP and Trade Volume
World GDP and Trade Volume 14 Annual percent change 12 10 8 6 4 2 0 -2 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 GDP (Costant Prices) Linear (GDP) Trade Volume (Goods and Services) Linear (Trade volume) Source: International Monetary Fund (IMF) 9 © Wärtsilä
Slide 10: World GDP and Trade Volume
World GDP and Trade Volume Advanced Economies Emerging / Developing Economies 18 18 Meur 16 16 14 14 12 12 10 10 8 8 6 6 4 4 2 2 0 0 -2 -2 1998 2000 2002 2004 2006 2008 1998 2000 2002 2004 2006 2008 GDP (Costant Prices) Import volume of goods Source: International Monetary Fund (IMF) 10 © Wärtsilä
Slide 11: Our environment
Our environment • Growth in world economy slowing down • High energy prices are here to stay • Shipping is the enabler of globalisation • We have seen only the beginning of the pressures to reduce emissions (particles, NOx, CO2) • Shortfall in availability of key personnel • Need for further special
Slide 12: Raw material prices
Raw material prices Commodity price indices, January 2003 = 100 450 Projections 400 350 300 250 200 150 100 50 0 2003 2004 2005 2006 2007 2008 Metals Food Beverages Agricultural raw materials Average petroleum spot price Source: International Monetary Fund (IMF) 12 © Wärtsilä
Slide 13: High energy prices are here to stay
High energy prices are here to stay • There is a premium on efficiency • Total efficiency a priority • Demand for upgrades and quality overhauls • Resort to cheaper fuels emissions permitting Our R & D will continue to focus on efficiency while our global services support customers’ operations 13 ©
Slide 14: Our environment
Our environment • Growth in world economy slowing down • High energy prices are here to stay • Shipping is the enabler of globalisation • We have seen only the beginning of the pressures to reduce emissions (particles, NOx, CO2) • Shortfall in availability of key personnel • Need for further special
Slide 15: Shipping is a great industry, facing a challenge
”Shipping is a great industry, facing a challenge”1) • ”Shipping carries over 90% of world trade • It is the most cost-efficient and energy-efficient primary mode of transportation • Barring an unforseen dramatic downturn in the global economy, shipping is forecast to continue its strong growth, wit
Slide 16: Our environment
Our environment • Growth in world economy slowing down • High energy prices are here to stay • Shipping is the enabler of globalisation • We have seen only the beginning of the pressures to reduce emissions (particles, NOx, CO2) • Shortfall in availability of key personnel • Need for further special
Slide 17: Pressure to reduce emissions
Pressure to reduce emissions Only primary methods (combustion) reduce CO2 (and fuel consumption) • High entry barriers Multiple ways to reduce Sox (Various fuels and secondary methods) • Refurbishing opportunity Work closely with customers and competition to develop new methods for emission manageme
Slide 18: Our environment
Our environment • Growth in world economy slowing down • High energy prices are here to stay • Shipping is the enabler of globalisation • We have seen only the beginning of the pressures to reduce emissions (particles, NOx, CO2) • Shortfall in availability of key personnel • Need for further special
Slide 19: Availability of personnel - Challenge for customers
Availability of personnel - Challenge for customers Opportunity for Wärtsilä • Skilled seafarers in short supply • Modern machinery require new skills (electronics, emissions..) • Short harbor times do not permit shopping • High fuel price requires efficient operation 19 © Wärtsilä
Slide 20: Availability of personnel - Business opportunity for Wärtsilä
Availability of personnel - Business opportunity for Wärtsilä • Becomes HR challenge • Total headcount 15,811 people at end of Q3/07 • Addition Q1-Q3/07 1,465 people, new recruitment over 2,000 • Attractiveness • Training 20 © Wärtsilä
Slide 21: Our environment
Our environment • Growth in world economy slowing down • High energy prices are here to stay • Shipping is the enabler of globalisation • We have seen only the beginning of the pressures to reduce emissions (particles, NOx, CO2) • Shortfall in availability of key personnel • Need for further special
Slide 22: Wärtsilä's offering covers all key shipping segments
Wärtsilä’s offering covers all key shipping segments Merchant Special vessels Offshore Navy Cruise and ferry 22 © Wärtsilä
Slide 23: The shipping markets - Cruise & Ferry
The shipping markets - Cruise & Ferry Norway Finland Germany France Italy Greece Japan USA Owners Builders Markets • Carnival • Fincantieri • Cruise shipping • Royal Caribbean • Aker Yards • Passenger vessels • Grimaldi Group • Meyer Werft • Car & Passenger Ferries • MSC • Austal • Mega yachts Build
Slide 24: Cruise and ferry outlook
Cruise and ferry outlook • Continued demand growth in cruise • Ferry market expected to be steady • Mega Yachts ordering still active and ships getting bigger 24 © Wärtsilä
Slide 25: The shipping markets - Merchant
The shipping markets - Merchant China Greece Japan USA South Korea Owners Builders Markets • Cosco, China • Hyundai • Container shipping • AP Möller/Maersk, • Samsung • Oil&Gas Transport Denmark • Daewoo • Dry bulk cargo • CSG, China • CSSC • Car transport • MOL, Japan • CSIC • NYK, Japan Builder co
Slide 26: Merchant vessel outlook
Merchant vessel outlook • Ship earnings on high level • Bulk Carrier market red hot • Container growth continues • Tanker prospects a concern • Car carrier and Ro-Ro more steady 26 © Wärtsilä
Slide 27: The shipping markets - Offshore
The shipping markets - Offshore Norway United Kingdom Denmark India USA Owners Builders Markets • Cosco, China • ABG • Oil&Gas Singapore • AP Möller/Maersk, • Keppel production Denmark • Aker • Oil&Gas • CSG, China • Samsung Exploration • MOL, Japan • Yangzhou • NYK, Japan Dayang Builder countries O
Slide 28: Offshore outlook
Offshore outlook • Continued investment into offshore platforms • FPSO and drillship market active • Ordering boom of supply vessels seems to have eased off 28 © Wärtsilä
Slide 29: The shipping markets - Special Vessels
The shipping markets - Special Vessels Russia Spain Japan USA South Korea China Owners Builders Markets • Chinese Government • Hyundai • Fishing vessels • AP Möller , DK • Samsung • Tugs, dredgers Indonesia • Indian Government • Daewoo • Ice breakers • SMIT, NL • CSSC • Research vessels • Crowley, U
Slide 30: Special vessels outlook
Special vessels outlook • The least cyclical market • Port expansions create demand for tugs • Demand growing for dredgers 30 © Wärtsilä
Slide 31: Shipyard order books are record high
Shipyard order books are record high • China and South Korea dominate • New building prices on record level • Material and component costs extreme • Availability of equipment a concern 31 © Wärtsilä
Slide 32: Wärtsilä Ship Power Segment portfolio
Wärtsilä Ship Power Segment portfolio 2-stroke 4-stroke Seals & Power & Segments engines engines Gensets Propulsors Bearings Automation Ship Design Merchant Offshore Cruise&Ferry Special Vessels Navy 32 © Wärtsilä
Slide 33: Wärtsilä Ship Power competitive landscape
Wärtsilä Ship Power competitive landscape 2-stroke 4-stroke Propul- Seals & Power & Ship Fuel Companies engines engines Gensets Turbines sors Bearings Autom. Design cells Wärtsilä MAN Mitsubishi Heavy Caterpillar Rolls-Royce Tognum/MTU Niigata Hyundai/Himsen Schottel Converteam Siemens ABB Kawasaki
Slide 34: Shipping company earnings have increased dramatically
Shipping company earnings have increased dramatically A weighted average earnings index for all sectors 42 $ ‘000 / day 38 34 30 26 22 18 14 10 6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 ClarkSea Index 34 © Wärtsilä
Slide 35: Newbuilding prices have never been this high
Newbuilding prices have never been this high New building Price Indices 240 Index 220 200 180 160 140 120 100 80 60 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Bulkers Tankers Containers 35 © Wärtsilä
Slide 36: Long-term market outlook
Long-term market outlook • Contracting of big merchant ships is expected to slow down • In the period 2008-13 small ships will form a larger proportion of contracts than large ships and will not suffer the same magnitude of downturn as the larger ships. Contracting of small ships is expected to rema
Slide 37: Conclusions
Conclusions • The strong orderbooks give time to react • The pressures on emissions and efficiency requires technologies • Quality services will be in high demand we will continue to develop our product offering in terms of new products as well as services to match these new demand patterns 37 © Wär
Slide 38: © Wärtsilä
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