Wartsila Oyj Abp · OMXHEX:WRT1V

Wartsila Oyj Abp — Q3 2020 Earnings Presentation

27 slides from Wartsila Oyj Abp's earnings presentation, Oct 23, 2020

  1. Slide 1: 23 October 2020, Jaakko Eskola, President & CEO

    23 OCTOBER 2020 JAAKKO ESKOLA, PRESIDENT & CEO

  2. Slide 2: Mix supported third quarter profitability, but COVID-19 continues to impact customer decision making

    < — a 177) & me | = MIX SUPPORTED THIRD QUARTER PROFITABILIT 19 Y, BUT COVID- CONTINUES TO IMPACT CUSTOMER DECISION MAKING

  3. Slide 3: Key figures

    KEY FIGURES MEUR 7-9/2020 CHANGE 1-9/2020 CHANGE Order intake 981 +0% 3,240 -14% of which services 521 -23% 1,641 -16% Order book 5,265 -12% Net sales 995 -11% 3,385 -3% of which services 499 -14% 1,602 -9% Book-to-bill 0.99 +0.11 0.96 -0.12 Comparable operating result 61 +55% 172 -32% % of net sale

  4. Slide 4: Vessel orders remain depressed

    VESSEL ORDERS REMAIN DEPRESSED Total vessel contracting Specialised tonnage Number of vessels Million CGT Number of vessels 250 5.0 90 Merchant Offshore Offshore Special vessels LPG carriers Cruise and ferry Special vessels 4.5 80 Cruise and ferry LNG carriers 3 months moving average in CGT 200 4.0

  5. Slide 5: Energy markets saw some decline

    ENERGY MARKETS SAW SOME DECLINE Market for gas and liquid fuel power plants <500 MW MW, 12m rolling 25,000 20,000 15,000 10,000 5,000 13% 14% 15% 14% 17% 9% 8% 9% 0 Q417-Q318 Q118-Q418 Q218-Q119 Q318-Q219 Q418-Q319 Q119-Q419 Q219-Q120 Q319-Q220 Wärtsilä Others The total market, including also power

  6. Slide 6: Order intake

    ORDER INTAKE Third quarter development 3% (5) 33% Marine Power MEUR, 12m rolling 42% (27) Marine Systems 7,000 Order intake (46) by business area Voyage Energy 6,000 Portfolio Business 5,000 4% (7) 18% (15) 4,000 3,000 2,000 Q3 Services 0% 47% Order intake 1,000 by business type Equipment (30) 53% 9

  7. Slide 7: Order book

    ORDER BOOK Order book by business area Order book delivery schedule MEUR MEUR 7,000 1.60 3,000 6,000 1.40 2,500 1.20 5,000 2,000 1.00 4,000 0.80 1,500 3,000 0.60 1,000 2,000 0.40 1,000 500 0.20 0 0.00 0 31.3.2018* 30.9.2018* 31.3.2019** 30.9.2019** 31.3.2020 30.9.2020 Delivery Delivery next Delivery

  8. Slide 8: Net sales

    NET SALES Third quarter development 4% (5) 38% Marine Power MEUR, 12m rolling (38) Marine Systems 6,000 35% Net sales (29) by business area Voyage Energy 5,000 Portfolio Business 4,000 5% 17% (5) (22) 3,000 2,000 Q3 -11% Services 1,000 Net sales 50% by business type 50% Equipment 1,118 995 (48) (52)

  9. Slide 9: Comparable operating result

    COMPARABLE OPERATING RESULT Review period development MEUR, 12m rolling MEUR 600 12% 350 10% 9.6% 300 500 10% 8.8% 8% 7.9% 7.4% 7.3% 400 8% 250 6.8% 6% 200 300 6% 5.1% 150 4% 200 4% 100 2% 100 2% 50 0 0% 0% Q418-Q319 Q119-Q419 Q219-Q120 Q319-Q220 Q419-Q320 0 Comparable operating result Comparable op

  10. Slide 10: Cash flow from operating activities

    CASH FLOW FROM OPERATING ACTIVITIES Review period development MEUR MEUR 700 500 600 400 500 300 400 200 300 100 200 0 100 0 -100 2015 2016 2017 2018 2019 1-9/2019 1-9/2020 10 © Wärtsilä 23 October 2020 INTERIM REPORT JANUARY-SEPTEMBER 2020

  11. Slide 11: © Wärtsilä

    c ve WARTSILA q WARTSILA

  12. Slide 12: Marine Power

    MARINE POWER MARINE POWER MEUR Order intake 700 600 500 400 • Order intake decreased by 9% to 300 EUR 410 million (449), burdened by: 200 • Idling of cruise vessels 100 • Customers adjusting capital and operating 0 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 expenditures to market conditions • Net sal

  13. Slide 13: Net sales from installations under agreement

    MARINE POWER NET SALES FROM INSTALLATIONS UNDER AGREEMENT MEUR, 12m rolling 400 Wärtsilä to provide a 5-year maintenance agreement to the world’s 350 largest NGO hospital ship 300 • When completed in 2021, Global Mercy will be 250 powered by four Wärtsilä 32 engines 200 • The comprehensive agreement

  14. Slide 14: Marine Systems

    MARINE SYSTEMS MARINE SYSTEMS MEUR Order intake 300 250 200 • Order intake increased by 16% to 150 EUR 174 million (150) 100 • Reduced fuel spreads lessening demand 50 for scrubber investments 0 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 • Good development in gas solutions • Net sales decreased by 31

  15. Slide 15: Voyage

    VOYAGE VOYAGE MEUR Order intake 120 100 80 • Order intake decreased by 36% to EUR 44 60 million (69) 40 • Pressurised by the COVID-19 impact on 20 demand in the cruise segment 0 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 • Growth in fleet optimisation orders • Net sales decreased by 9% to EUR 54 mill

  16. Slide 16: Number of connected vessels almost doubled year-on-year

    VOYAGE NUMBER OF CONNECTED VESSELS ALMOST DOUBLED YEAR-ON-YEAR – NUMBER OF VESSELS IN ORDER BOOK STEADILY INCREASING Number of connected vessels +94% A profit-sharing contract with Brittany Ferries results in a reduction of exhaust emissions • Within six months following the installation of energy m

  17. Slide 17: Energy

    ENERGY ENERGY MEUR Order intake 700 600 500 400 • Order intake increased by 23% to 300 EUR 319 million (260), still affected by: 200 • Postponed decision making 100 • Site access constraints 0 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 • Net sales increased by 6% to EUR 347 million (328) MEUR Net sal

  18. Slide 18: Energy installed base covered by long-term service agreements

    ENERGY ENERGY INSTALLED BASE COVERED BY LONG-TERM SERVICE AGREEMENTS MW 14,000 30% Optimised maintenance solution enhancing availability and reliability of a 12,000 25% 200 MW Cambodian power plant 10,000 20% • Wärtsilä signed a 5-year tailored optimised 8,000 maintenance agreement with SchneiTec, 1

  19. Slide 19: Outlook

    Near-term demand is expected to improve from current levels. However, visibility remains limited, and the prevailing market conditions make the outlook uncertain. Based on the current order book, net sales for 2020 is expected to decline by appr. 10% (EUR 5,170 million in 2019). Profitability is exp

  20. Slide 20: © Wärtsilä

    © Wärtsilä

  21. Slide 21: January–September order intake by customer segment

    JANUARY–SEPTEMBER ORDER INTAKE BY CUSTOMER SEGMENT Marine Businesses Energy Marine Power Equipment 5% 39% 5% 10% 26% 14% 1% Other 12% (16) (18) (33) (4) (13) (10) (23) (0) 20% (18) Industrials Services 17% 12% 15% 12% 16% 26% 2% (15) (25) (14) (12) (22) 28% (28) (10) (2) Marine Systems 4% Independen

  22. Slide 22: Orders received for energy equipment globally

    ORDERS RECEIVED FOR ENERGY EQUIPMENT GLOBALLY Europe 85 (24) Asia Americas 249 (525) 728 (325) Utilities IPP’s Africa and (Independent Middle East Power Producers) 80 (345) Industrials Others ORDER INTAKE 1-9/2020: 1,142 MW (1,189) 22 © Wärtsilä 23 October 2020 INTERIM REPORT JANUARY-SEPTEMBER 2020

  23. Slide 23: Net sales by business type

    NET SALES BY BUSINESS TYPE Third quarter development 27% (25) MEUR MEUR, 12m rolling Marine 47% Businesses 1,800 3,000 Spare parts EUR 605 million (50) (734) Field service 1,600 2,500 14% (15) Service agreements 1,400 Service projects 5% 7% (6) Equipment 1,200 2,000 (4) 1,000 1,500 800 22% (23) 600

  24. Slide 24: Net sales bridge

    NET SALES BRIDGE MEUR 24 © Wärtsilä 23 October 2020 INTERIM REPORT JANUARY-SEPTEMBER 2020

  25. Slide 25: Working capital

    WORKING CAPITAL MEUR 4,000 16% 3,000 14% 14.2% 11.5% 11.2% Other non-interest-bearing liabilities 2,000 12% 10.2% Advances received 1,000 431 10% Trade payables 563 581 732 0 490 8% Other non-interest-bearing receivables 8.5% Trade receivables -1,000 6% Inventories -2,000 4% Working capital Working

  26. Slide 26: Gearing

    GEARING Review period development 0.50 0.50 0.40 0.40 0.30 0.30 0.20 0.20 0.10 0.10 0.00 0.00 2015 2016 2017 2018 2019 30.9.2019 30.9.2020 26 © Wärtsilä 23 October 2020 INTERIM REPORT JANUARY-SEPTEMBER 2020

  27. Slide 27: Thank you

    THANK YOU Further information: NATALIA VALTASAARI Vice President, Investor Relations Tel: +358 (0) 10 709 5637 E-mail: natalia.valtasaari@wartsila.com

Wartsila Oyj Abp — Q3 2020 Earnings Presentation on 6ix