Slide 1: Wärtsilä Corporation Interim Report January-March 2018
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-MARCH 2018 24 April 2018 Jaakko Eskola, President & CEO 1 © Wärtsilä PUBLIC 24 April 2018 Q1 Result presentation
Slide 2: Order intake and net sales developed well in the equipment businesses
ORDER INTAKE AND NET SALES DEVELOPED WELL IN THE EQUIPMENT BUSINESSES 2 © Wärtsilä PUBLIC 24 April 2018 Q1 Result presentation
Slide 3: Highlights Q1/2018
Highlights Q1/2018 • Order intake EUR 1,507 million, +7% • Net sales EUR 1,066 million, +6% • Book-to-bill 1.41 (1.41) • Comparable operating result EUR 88 million (82), which represents 8.3% of net sales (8.1) • Earnings per share EUR 0.10 (0.09) • Cash flow from operating activities EUR -42 millio
Slide 4: Good development in order intake
Good development in order intake MEUR 6 000 5 500 First quarter development 5 000 MEUR 4 500 1 800 4 000 1 600 1,507 3 500 1,413 1 400 7% 3 000 1 200 Services 2 500 0% 1 000 Marine 2 000 800 Solutions 31% 1 500 600 1 000 Energy 400 2% Solutions 500 200 0 0 2014 2015 2016 2017 2018 Q1/2017 Q1/2018 Q1
Slide 5: Net sales favoured equipment deliveries
Net sales favoured equipment deliveries MEUR 5 500 5 000 First quarter development 4 500 MEUR 4 000 1 200 3 500 1,066 1,005 1 000 6% 3 000 2 500 800 Services 0% 2 000 600 Marine 13% Solutions 1 500 400 1 000 Energy 200 12% Solutions 500 0 0 2014 2015 2016 2017 2018 Q1/2017 Q1/2018 Q1 Q2-Q4 Compariso
Slide 6: Net sales by business 1-3/2018
Net sales by business 1-3/2018 Marine Solutions 25% (23) Services 50% (53) Energy Solutions 25% (24) Comparison figures for 2017 have been restated due to the internal reorganisation of service activities and the adoption of IFRS 15. 6 © Wärtsilä PUBLIC 24 April 2018 Q1 Result presentation
Slide 7: Book-to-bill
Book-to-bill MEUR 6 000 1,6 5 500 1.41 1,4 5 000 4 500 1.15 1,2 1.03 1.06 4 000 0.98 1,0 3 500 3 000 0,8 2 500 0,6 2 000 1 500 0,4 1 000 0,2 500 0 0,0 2014 2015 2016 2017 1-3/2018 Order intake Net sales Book-to-bill Comparison figures for 2017 have been restated due to the adoption of IFRS 15. 7 © W
Slide 8: Order book distribution
Order book distribution MEUR 3 500 3 000 2 500 2 000 1 500 1 000 500 0 31.3.2017 31.3.2018 Delivery current year Delivery next year or later Comparison figures for 2017 have been restated due to the adoption of IFRS 15. 8 © Wärtsilä PUBLIC 24 April 2018 Q1 Result presentation
Slide 9: Operating result
Operating result MEUR 700 14% 12.2% 12.1% 11.9% 11.7% First quarter development 600 12% MEUR 120 14% 500 10% 100 12% 400 8% 10% 80 8.3% 8.1% 300 6% 8% 60 6% 200 4% 40 4% 100 2% 20 2% 0 0% 0 0% 2014 2015 2016 2017 Q1/2017 Q1/2018 Comparable operating result % of net sales Comparison figures for 2017
Slide 10: Services
SERVICES 10 © Wärtsilä PUBLIC 24 April 2018 Q1 Result presentation
Slide 11: Services' net sales development stable
SERVICES Services’ net sales development stable MEUR 2 600 2 400 First quarter development 2 200 2 000 MEUR 1 800 600 534 535 1 600 500 1 400 0% 1 200 400 1 000 300 800 600 200 400 100 200 0 0 2014 2015 2016 2017 2018 Q1/2017 Q1/2018 Q1 Q2-Q4 Comparison figures for 2017 have been restated due to the
Slide 12: Net sales distribution 1-3/2018
SERVICES Net sales distribution 1-3/2018 By product area By segment Special vessels 8% (7) Oil&Gas Field service 4% (4) 21% (22) Offshore 4% (4) Navy Spare parts 8% (9) Power plants 49% (54) 34% (34) Agreements 23% (16) Merchant 22% (25) Cruise & ferry Projects 21% (18) 7% (8) Total EUR 535 million
Slide 13: Installed base covered by service agreements
SERVICES Installed base covered by service agreements 20 000 30% 18 000 25% 16 000 14 000 20% 12 000 MW 10 000 15% 8 000 10% 6 000 4 000 5% 2 000 0 0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1/2018 MW under agreement – Energy Solutions MW under agreement – Marine Solutions % of Energy Solution
Slide 14: American Hydro contracted to increase efficiency of Brookfield's Bear Swamp station
American Hydro is contracted to increase the efficiency of Brookfield’s Bear Swamp Pumped Storage Generating Station • The order scope consists of the design, model testing, manufacturing and installation of two 330 MW upgraded, reversible pump- turbine runners and motor-generator rotors • Modernisi
Slide 15: Energy Solutions
ENERGY SOLUTIONS 15 © Wärtsilä PUBLIC 24 April 2018 Q1 Result presentation
Slide 16: Quotation activity by fuel type
ENERGY SOLUTIONS Quotation activity by fuel type MW 60 000 50 000 40 000 Multi-fuel 30 000 Gas Liquid fuel 20 000 10 000 0 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017 Q2/2017 Q3/2017 Q4/2017 Q1/2018 Calculated on a 12 months rolling basis 16 © Wärtsilä PUBLIC 24 April 201
Slide 17: Energy Solutions' order intake on a healthy level
ENERGY SOLUTIONS Energy Solutions’ order intake on a healthy level First quarter development MEUR Total EUR 414 million (405) 1 800 1 600 Utilities 33% 1 400 67% Independent power producers 1 200 Industrials 1 000 800 First quarter order intake 600 by fuel in MW 400 Oil Gas 200 48% 52% 0 2014 2015 2
Slide 18: Order intake globally
ENERGY SOLUTIONS Order intake globally Asia 441 (457) Europe 70 (198) 10 Americas 186 (126) 215 226 60 51 135 Africa and Middle East 132 (51) Utilities 132 IPP’s (Independent Power Producers) Industrials Order intake 1-3/2018: 828 MW (832) 18 © Wärtsilä PUBLIC 24 April 2018 Q1 Result presentation
Slide 19: Improving the reliability and security of the South Australian power system
Improving the reliability and security of the South Australian power system • A new 211 MW power plant will enable AGL Energy Limited to respond to fluctuations that are inherent to renewable generation • The benefits of Wärtsilä’s smart power generation solution include high efficiency, fast respon
Slide 20: Market for gas and liquid fuel power plants, <500 MW
ENERGY SOLUTIONS Market for gas and liquid fuel power plants, <500 MW Other GT’s 1% MHI 10% GE Ansaldo 30% 16% Wärtsilä 19% Siemens 24% <500 MW market volume: 20.1 GW (25.2) Total market volume: 46.8 GW (54.9) Market shares are calculated on a 12 months rolling basis, numbers in brackets are from th
Slide 21: Marine Solutions
MARINE SOLUTIONS 21 © Wärtsilä PUBLIC 24 April 2018 Q1 Result presentation
Slide 22: Solid activity in the marine markets
MARINE SOLUTIONS Solid activity in the marine markets Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT * 250 5,0 4,5 200 4,0 3,5 Number of vessels 150 3,0 * Million CGT 2,5 100 2,0 1,5 50 1,0 0,5 0 0,0 01.09 03.09 05.09 07.09 09.09 11.09 01.10 03.10 05.10 07.10 09.10
Slide 23: Strong growth in Marine Solutions' order intake
MARINE SOLUTIONS Strong growth in Marine Solutions’ order intake MEUR 1 800 First quarter development Total EUR 357 million (273) 1 500 Offshore Gas carriers 2% (2) Special vessels 5% (39) 1 200 5% (7) 900 Traditional Cruise merchant 38% (23) 600 43% (17) 300 0 2014 2015 2016 2017 2018 Navy Ferry 6%
Slide 24: Wärtsilä acquires Transas to accelerate its Smart Marine vision
Wärtsilä acquires Transas to Kuva accelerate its Smart Marine vision pitää • Transas is a global market leader in vaihtaa, marine navigation solutions, professional training and simulation services, and ship bonny traffic control kalvon • The acquisition plays a key role in the development of smart
Slide 25: Market position of Wärtsilä Marine Solutions
MARINE SOLUTIONS Market position of Wärtsilä Marine Solutions TRADITIONAL SPECIAL GAS CARRIERS CRUISE & FERRY OFFSHORE NAVY MERCHANT VESSELS Top player Challenger Top player Mid-player Mid-player Challenger • Gas systems • Auxiliary engines • Main engines • Main engines • Main engines • Auxiliary en
Slide 26: Financials
FINANCIALS 26 © Wärtsilä PUBLIC 24 April 2018 Q1 Result presentation
Slide 27: Cash flow from operating activities
FINANCIALS Cash flow from operating activities MEUR 700 600 Review period development MEUR 50 500 40 400 30 20 300 10 0 200 -10 -20 100 -30 -40 0 -50 2014 2015 2016 2017 Q1/2017 Q1/2018 27 © Wärtsilä PUBLIC 24 April 2018 Q1 Result presentation
Slide 28: Working capital
FINANCIALS Working capital MEUR 1 600 25% 1 400 Review period development 20% MEUR 1 200 1 600 25% 1 000 1 400 15% 20% 1 200 800 11.5% 10.8% 14.6%* 10.2% 1 000 15% 563 10% 11.6%* 600 543 800 726 6.8% 490 561 10% 400 5.2% 600 313 5% 251 400 5% 200 200 0 0% 0 0% 2013 2014 2015 2016 2017 31.3.2017 31.3
Slide 29: Gearing
FINANCIALS Gearing 0,50 Review period development 0,40 0,50 0,30 0,40 0,30 0,20 0,20 0,10 0,10 0,00 0,00 2014 2015 2016 2017 31.3.2017 31.3.2018 29 © Wärtsilä PUBLIC 24 April 2018 Q1 Result presentation
Slide 30: Prospects for 2018 unchanged
Setti 1 Setti 1 Prospects for 2018 unchanged The demand for Wärtsilä’s services and solutions in 2018 is expected to improve somewhat from the previous year. Demand by business area is anticipated to be as follows: • Good in Services • Good in Energy Solutions • Solid in Marine Solutions 30 © Wärtsi
Slide 31: Thank you
THANK YOU Further information: Natalia Valtasaari Director, Investor & Media Relations Tel. +358 (0) 10 709 5637 E-mail: natalia.valtasaari@wartsila.com 31 © Wärtsilä PUBLIC 24 April 2018 Q1 Result presentation