Slide 1: Interim Report January-September 2012
INTERIM REPORT JANUARY-SEPTEMBER 2012 BJÖRN ROSENGREN, PRESIDENT & CEO 17 OCTOBER 2012
Slide 2: Highlights Q3/2012
Highlights Q3/2012 • Prospects for 2012 improved – Net sales to grow by 10-15% – Profitability to be 10.5-11% • Order intake EUR 1,275 million, +14% • Net sales EUR 1,087 million, +28% • Book-to-bill 1.17 (1.31) • EBIT EUR 113 million, 10.4% of net sales • EBITA EUR 122 million, 11.2% of net sales •
Slide 3: Good development in order intake
Good development in order intake MEUR 6000 5500 5000 4500 Third quarter development 4000 MEUR 1400 3500 14% 1 275 1 118 3000 1200 2500 1000 -6% Services 2000 800 Ship Power 99% 1500 600 Power Plants 1000 400 -3% 500 200 0 0 2008 2009 2010 2011 1-9/2012 Q3/2011 Q3/2012 3 © Wärtsilä
Slide 4: Growth in net sales
Growth in net sales MEUR 5500 5000 14% -13% 4500 -7.6% 4000 Third quarter development 3500 MEUR 1200 28% 1 087 3000 1000 2500 851 800 Services 2000 5% Ship Power 600 1500 Power Plants 72% 1000 400 500 200 25% 0 0 2008 2009 2010 2011 1-9/2012 Q3/2011 Q3/2012 4 © Wärtsilä
Slide 5: Net sales by business 1-9/2012
Net sales by business 1-9/2012 Ship Power 27% (24) Services 43% (44) Power Plants 29% (32) 5 © Wärtsilä
Slide 6: Book-to-bill ratio remains above one
Book-to-bill ratio remains above one MEUR 6000 1,4 5500 1.21 1.12 1,2 5000 1.07 4500 1,0 4000 3500 0.88 0,8 0.63 3000 2500 0,6 2000 0,4 1500 1000 0,2 500 0 0,0 2008 2009 2010 2011 1-9/2012 Order intake Net sales Book-to-bill 6 © Wärtsilä
Slide 7: Growth in order book
Growth in order book MEUR 7000 6000 17% 5000 4 724 4 042 4000 -2% 3000 Services 28% 2000 Ship Power Power Plants 1000 14% 0 2008 2009 2010 2011 30.9.2011 30.9.2012 7 © Wärtsilä
Slide 8: Order book distribution
Order book distribution MEUR 4000 3000 2000 1000 0 30.9.2011 30.9.2012 Delivery current year Delivery next year or later 8 © Wärtsilä
Slide 9: Profitability
Profitability MEUR 250 16% 14% 12.8% 200 11.9% 11.5% EBIT% 11.0% 11.1% 12% 12.1% target: 11.4% 11.1% 10-14% 10.7% 10% 150 10.4% 8% 100 6% 4% 50 2% 0 0% 2008 2009 2010 2011 2012 Q1 Q2 Q3 Q4 EBIT% before non-recurring items EBITA% before non-recurring items and intangible asset amortisation related to
Slide 10: Record order for approx. 600 MW power plant to Jordan
Record order for approx. 600 MW power plant to Jordan
Slide 11: Good level of quoted MW
Good level of quoted MW Quoted MW per Fuel Type 16000 14000 12000 MW 10000 Others 8000 Natural gas 6000 Heavy fuel oil 4000 2000 0 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2004 2005 2006 2007 2008 2009 2010 2011 2012 Share of natural ga
Slide 12: Quarterly order intake
Quarterly order intake MEUR 600 500 400 300 200 100 0 2005 2006 2007 2008 2009 2010 2011 2012 Q1 Q2 Q3 Q4 12 © Wärtsilä
Slide 13: Order intake by application
Order intake by application MEUR Review period development 2000 Total EUR 1,045 million (1,138) 1800 5% Industrial 8% 14% self-generation 1600 Flexible baseload 1400 Oil & gas Grid stability & 1200 73% peaking 1000 800 Review period order intake by fuel in MW 600 400 Oil 30% Gas 200 69% Renewables 0
Slide 14: Landmark power plant order
Landmark power plant order • A consortium headed by Wärtsilä awarded a turnkey contract to build a 573 MW tri-fuel power plant in Jordan • Wärtsilä’s share of overall order USD 334 million • Scope of supply 38 Wärtsilä 50DF multi-fuel engines • Tri-fuel capability provides unmatched flexibility, and
Slide 15: Global order intake
Global order intake Europe 79 (778) Asia 851 (514) 20 110 79 59 Americas 612 (428) 662 58 29 Africa and Middle East 871 (688) 189 337 95 Flexible baseload Industrial self-generation Grid stability & peaking Oil & gas 777 Order intake 1-9/2012: 2,414 MW (2,407) 15 © Wärtsilä
Slide 16: Market for gas and liquid based power plants
Market for gas and liquid based power plants H1 2012 Total market 28.8 GW 1.9%3.1% 3.5% 4.9% GE Siemens 32.2% MHI Wärtsilä 26.3% Ansaldo Alstom 28.1% Other gas turbines Market data includes all prime mover units over 5 MW and estimated output of steam turbines for combined cycles. The data is gather
Slide 17: Ship Power's year-on-year performance strong
Ship Power’s year-on-year performance strong
Slide 18: Vessel order development
# of vessels 20 40 80 100 120 140 60 0 18 © Wärtsilä 01.09 02.09 03.09 04.09 Merchant 05.09 06.09 07.09 08.09 09.09 Source: Clarkson Research Services 10.09 Offshore 11.09 12.09 01.10 02.10 *CGT= gross tonnage compensated with workload 03.10 04.10 05.10 06.10 07.10 08.10 Cruise and Ferry 09.10 10.10
Slide 19: Order intake increased by 65%
Order intake increased by 65% MEUR 2000 Review period development Total EUR 1,114 million (675) 1600 Merchant Offshore 28% 46% 1200 800 Other 1% Special vessels 400 11% Cruise & ferry Navy 4% 9% 0 2008 2009 2010 2011 1-9/2012 19 © Wärtsilä
Slide 20: Brazilian offshore markets active
Brazilian offshore markets active • Contract to supply main generating engines and thrusters for six new deep water drill ships to be built in Brazil • Each ship will be powered by six 16-cylinder Wärtsilä 32 main generating sets and six thrusters • Considerations in the award of the contract: – Str
Slide 21: Increasing activity in scrubber markets
Increasing activity in scrubber markets • Wärtsilä has to date 45 exhaust gas cleaning scrubbers delivered or on order, for a total of 23 vessels • Price range EUR 1-5 million, depending on size of vessel and technology of equipment • Wärtsilä’s scrubber portfolio is the widest in the market and con
Slide 22: Joint venture ordering activity
Joint venture ordering activity MEUR 600 • Order intake in the South Korean 550 joint venture producing dual-fuel 500 engines and the Chinese joint venture producing auxiliary engines 450 totalled EUR 175 million (216) during 400 the review period 350 January-September 2012 300 • Wärtsilä’s share of
Slide 23: Ship Power order book 30 September 2012
Ship Power order book 30 September 2012 RoRo LNG 2% 7% Bulkers 5% Containers 2% Offshore Merchant 30% Tankers 45% 9% Cargo 5% Others 2% Navy 9% Special Cruise & Ferry vessels 5% 8% 23 © Wärtsilä
Slide 24: Market position of Wärtsilä's marine engines
Market position of Wärtsilä’s marine engines Medium-speed main engines Low-speed main engines Auxiliary engines Mitsubishi Wärtsilä 2%(3) 5%(5) Wärtsilä Others 18%(22) 23%(25) Wärtsilä 48%(49) MAN Diesel 23%(19) Others MAN Diesel 95%(95) 80%(75) Caterpillar (MAK) 6%(7) Total market volume last 12 mo
Slide 25: Services growth trend continues, up 6% year to date
Services growth trend continues, up 6% year to date
Slide 26: Net sales development
Net sales development MEUR 2000 1800 0% 0% 0% Third quarter development 1600 MEUR 1400 500 5% 435 1200 412 400 1000 800 300 600 200 400 100 200 0 0 2008 2009 2010 2011 1-9/2012 Q3/2011 Q3/2012 26 © Wärtsilä
Slide 27: Net sales by quarter
Net sales by quarter MEUR 600 500 400 300 200 100 0 2005 2006 2007 2008 2009 2010 2011 2012 Q1 Q2 Q3 Q4 27 © Wärtsilä
Slide 28: Net sales distribution 1-9/2012
Net sales distribution 1-9/2012 Field service 24%(24) Spare parts 54%(53) Contracts 15%(16) Projects 7%(7) Total EUR 1,377 million (1,303) 28 © Wärtsilä
Slide 29: Steady development in power plant services
Steady development in power plant services • Power plants customers’ interest in Operations & Maintenance (O&M) agreements continues – 10-year O&M agreement signed with Gulf Power Ltd, a subsidiary of Gulf Energy Ltd, a market leader in the Kenyan energy sector • Agreement will cover the full operat
Slide 30: Development of Power Plants service agreements
Development of Power Plants service agreements MW 4500 90% 4000 80% 72% 3500 70% 57% 58% 3000 60% 53% 2500 50% 2000 40% 31% 1500 30% 1000 20% 500 10% 0 0% 2008 2009 2010 2011 1-9/2012 O&M and maintenance agreements Power Plants deliveries % of delivered MWs 30 © Wärtsilä
Slide 31: Fleet utilisation
Fleet utilisation Anchored* & Idle Vessels**, percent of fleet 26% Percent of Fleet 22% 18% 14% 10% 6% 2% Jun.11 Jul.11 Aug.11 Jan.12 Jun.12 Nov.11 Feb.11 Jul.12 Aug.12 Sep.12 Apr.11 May.12 Sep.11 Dec.11 Mar.11 Feb.12 Oct.11 May.11 Apr.12 Mar.12 Anchored Idle Fleet Average Speed***, knots Knots 10,5
Slide 32: Cash flow from operating activities
Cash flow from operating activities MEUR 700 600 500 400 300 200 100 0 -100 2008 2009 2010 2011 1-9/2012 32 © Wärtsilä
Slide 33: Net working capital development
Net working capital development MEUR 2000 25% 1800 1600 20% 1400 1200 15% 12.7%* 1000 800 9.2% 10% 6.8% 600 539 5.8% 482 .3.7% 400 5% 267 285 170 200 0 0% 2008 2009 2010 2011 30.9.2012 Net Working Capital Total Inventories Advances Received Net Working Capital / Net sales * Working Capital / Annuali
Slide 34: Committed loans September 2012
Committed loans 30 September 2012 MEUR 1600 1400 1200 532 1000 Total EUR 899 million 800 235 drawn 600 86 400 578 200 0 Drawn long- Current portion Drawn short- Undrawn term loans of long-term term loans revolving credits loans At the end of the reporting period, drawn revolving credits amounted to
Slide 35: Financial position
Financial position Solvency Gearing 50% 0,70 45% 0,60 40% 0,50 35% 30% 0,40 25% 0,30 20% 0,20 15% 10% 0,10 5% 0,00 0% 2008 2009 2010 2011 30.9.2012 -0,10 2008 2009 2010 2011 30.9.2012 35 © Wärtsilä
Slide 36: Organising for entrepreneurial drive
Organising for entrepreneurial drive • Change of organisational set up within Ship Power and Wärtsilä Industrial Operations to strengthen competitiveness and to serve customers more effectively • Aim to further increase the flexibility of operations and ensure faster decision making • Ship Power is
Slide 37: Market outlook
Market outlook • Power Plants: The power generation market is expected to remain active in 2012. • Ship Power: Robust contracting activity is expected for the offshore, gas carrier, and other specialised vessel markets. Full year vessel contracting expected to be lower than in 2011. • Services: The
Slide 38: Prospects for 2012 revised
Prospects for 2012 revised Wärtsilä expects its net sales for 2012 to grow by 10-15% (previously 5-10%) and its operational profitability (EBIT% before non- recurring items) to be 10.5-11% (previously 10-11%).
Slide 39: IR Contact: Pauliina Tennilä
IR Contact: Pauliina Tennilä Director, Investor Relations Tel. +358 (0) 40 570 5530 E-mail: pauliina.tennila@wartsila.com