Wartsila Oyj Abp · OMXHEX:WRT1V
Wartsila Oyj Abp — Wärtsilä — Investor Presentation (June 2013)
33 slides from Wartsila Oyj Abp's investor presentation, Jun 7, 2013
Slide 1: Welcome to Wärtsilä China
WELCOME TO WÄRTSILÄ CHINA 1 © Wärtsilä 7 June 2013
Slide 2: Wärtsilä China today
Wärtsilä China today • 20+ years history in China • Strong manufacturing footprint through JVs, fully owned companies and 2-stroke engine licensing • In marine market, some leading Chinese ship owners and shipyards are not only Wärtsilä customers, but also JV partners • Wärtsilä Services provides se
Slide 3: Major milestones of Wärtsilä in China
Major milestones of Wärtsilä in China 1998 Establishing Dalian 1996 Representative 1986 First Investment in Office Establishing Wärtsilä 1994 Taicang Electric 1978 Diesel (China) Ltd., Power Co., Ltd. Establishing Shanghai (partial ownership) Signing of licensee Hong Kong as Joint Representative Off
Slide 4: Major milestones of Wärtsilä in China
Major milestones of Wärtsilä in China 2012 Wärtsilä (Suzhou) Marine Equipment Co., Ltd became a 2005 wholly-owned Wärtsilä acquired Deutz Wärtsilä company medium and high speed through the global engine marine service acquisition of 2002 business and started to Hamworthy Integration of John handle t
Slide 5: Wärtsilä footprint in China
Wärtsilä footprint in China WCN, Dalian Rep. Office Dalian Marine Diesel Works WCN Shanhaiguan Shipyard Service Station WCN, Beijing Rep. Office Qingdao Qiyao Wärtsilä MHI Linshan Marine Diesel Co Ltd Low-speed engines Wärtsilä Ventures Wärtsilä CME Zhenjiang Propeller Co Ltd FPPs, CPPs, shaft lines
Slide 6: Wärtsilä Services in China
Wärtsilä Services in China We provide total and 24/7 services Shanhaiguan Engine Services Propulsion System Dalian Automation Boiler HRDD In-situ Machining Shanghai Training Reconditioning Zhoushan Guangzhou Taipei Longxue Kaohsiung Yiulian Hong Kong 50 largest Repair Yards in China that dock foreig
Slide 7: Major Wärtsilä Services workshops in China
Major Wärtsilä Services workshops in China Shanghai Guangzhou Hong Kong • Established: 1999 • Established : 1994 • Established: 1991 • Location: Tangzhen Shanghai • Location: Nansha, Guangzhou • Located in Hong Kong United Dockyards (HUD) • Main activities: • Field service covering – Reconditioning
Slide 8: Service cooperation with Chinese shipyards
Service cooperation with Chinese shipyards Shanhaiguan Shanghai Guangzhou 2008 2010 2010 Zhoushan Shenzhen 2011 2011 In order to serve customers better, Wärtsilä China entered a cooperation with major shipyards in China. A team of Wärtsilä experts is permanently stationed there and jointly provide a
Slide 9: Wärtsilä China manufacturing facilities
Wärtsilä China manufacturing facilities We provide market leading products 9 © Wärtsilä 7 June 2013
Slide 10: Delivery Centre – Thrusters, Seals, Bearings / Wuxi
Delivery Centre – Thrusters, Seals, Bearings / Wuxi Wärtsilä Propulsion (Wuxi) Co., Ltd Inauguration phase 2 November 2007 Employees: 161 (April 2013) 10 © Wärtsilä 7 June 2013 7 June 2013 Corporate Presentation
Slide 11: Delivery Centre – CPP & FPP / Zhenjiang
Delivery Centre – CPP & FPP / Zhenjiang Wärtsilä CME Zhenjiang Propeller Co., Ltd Founded in 2004 and new CPP factory inauguration in June 2011 Employees: 407 (April 2013) Joint Venture (Wärtsilä 55%, CSSC1 45%) Note: CSSC1 = China State Shipbuilding Corporation 11 © Wärtsilä 7 June 2013
Slide 12: Delivery Centre - Auxpac 20 & 26 / Shanghai
Delivery Centre - Auxpac 20 & 26 / Shanghai Wärtsilä Qiyao Diesel Company Ltd. (Shanghai) Inaugurated in 2006 Employees: 141 (April 2013) Joint Venture (Wärtsilä 50%, CSIC1 50%) Note: CSIC1 = China Shipbuilding Industry Corporation Note: 1 CSIC = China Shipbuilding 72013 June 2013 Industry Corporati
Slide 13: Delivery Centre - 2-stroke engines / Qingdao
Delivery Centre - 2-stroke engines / Qingdao 2-stroke engine QMD doers One million horsepower produced Qingdao Qiyao Wärtsilä MHI Linshan Marine Diesel Co., Ltd Inauguration April 2009 Employees: 490 (April 2013) Joint Venture (Wärtsilä 34%, CSIC1 50%, MHI2 16%) Note: 1 CSIC = China Shipbuilding Ind
Slide 14: Delivery Centre - Environment & Safety Product / Suzhou
Delivery Centre- Environment & Safety Product / Suzhou • Inauguration in 1998 (former Hamworthy Suzhou) • Employee: 103 (April 2013) • Products: sewage water treatment plants, inert gas systems, control panels 14 © Wärtsilä 7 June 2013
Slide 15: Sourcing in China
Sourcing in China • Supports both local needs in China (cost and short lead times) and export to Europe (cost) • Increasing part of our purchase volume will be sourced in China. • Significant part of our strategic sourcing organisation located in China –one critical factor for success • Other critic
Slide 16: New JV for Wärtsilä medium speed engines in China
New JV for Wärtsilä medium speed engines in China Wärtsilä -Yuchai Engine Ltd. Co. Location: Zhuhai, China Products: W20, W26, W32 Operations planned to start in 2014 16 © Wärtsilä 7 June 2013
Slide 17: Key success factors for doing business in China
Key success factors for doing business in China Strong brand with leading technologies Product portfolio meeting growing market demands and regulatory changes Forging strategic local partnerships with strong market players Localization of manufacturing / supply chain / innovation capability
Slide 18: Top 10 countries
Top 10 countries Norway 5% United Kingdom 3% China South Korea USA 3% Dominican 5% Republic 7% The Netherlands 8% 5% 3% 3% 4% Singapore Indonesia Brazil % of 2012 net sales 18 © Wärtsilä 7 June 2013 Corporate Presentation
Slide 19: Marine market trends and drivers in China
Marine market trends and drivers in China • Chinese shipbuilding is moving from low-cost merchant ships towards more complex high value vessels • Shipbuilding overcapacity will drive consolidation with government plans to support top shipyards • Growing intra-Asian trade and drive towards securing r
Slide 20: China has a good market share in merchant vessels
China has a good market share in merchant vessels… Merchant vessels: contracting volumes (DWT), share by region 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1983 2001 2012 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
Slide 21: …but now moving towards more complex & high value ships
…but now moving towards more complex & high value ships Offshore vessels: contracting volumes Special* vessels: contracting volume (GT), share by region (GT), share by region 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 1992 2003 1991 1993 1994 1995 1996 19
Slide 22: China is quickly moving towards more complex and high value ships
China is quickly moving towards more complex and high value ships both for energy security and shipbuilding competitiveness • China has a strong strategic ambition to China LNG Imports secure it’s energy import • There has been tremendous growth in LNG imports to China but LNG still represents only
Slide 23: Main state-owned shipyards – CSSC, CSIC & COSCO
Main state-owned shipyards – CSSC, CSIC & COSCO COSCO Dalian Wärtsilä Premises CSIC Bohai Wärtsilä Services centres CSIC Shanhaiguan CSIC Shipyards CSIC Dalian Shipbuild. CSSC Shipyards COSCO Shipyards CSIC Beihai COSCO Nantong + CSIC Xingang COSCO Qidong CSSC Jiangnan CSSC Changxing CSSC Waigaoqiao
Slide 24: Some of the main private / JV shipyards in China
Some of the main private / JV shipyards in China Wärtsilä Premises Wärtsilä Services centres CSIC Shipyards Yantai CIMC Raffles Shipyard CSSC Shipyards New Times & New Century S/Ys COSCO Shipyards NACKS Private / JV Shipyards Rongsheng SHI Sino-Pacific Offshore Qidong Xin Ya Ouhua Shipyard Private/J
Slide 25: Opportunities for power industry in China
Opportunities for power industry in China Ambitious national Policy maker is shifting Power generating Wind power has been target being set to to support low carbon capacity to grow to ~ developed at brisk slash the carbon economy with clean 1,500 GW by 2020 pace with total emission level in 2020 en
Slide 26: Wärtsilä Power Plants history in China
Wärtsilä Power Plants history in China 1990’s to early 2000 when availability of electricity from grid could not meet increasing demand, Wärtsilä focuses on captive power plants for industrial parks. 2000 – 2005 China ramped up the construction of large coal fired power plants. Wärtsilä targets the
Slide 27: Potential NGDE projects in China by 2020
Potential NGDE projects in China by 2020 By 2015 By 2020 • Complete the main • CHP/CCHP widely used in CHP/CCHP equipments 5 GW Installed Chinese cities development through • 50 GW installed (3.5% total demonstration projects Localization will reach 60% installed capacity) • To have independent loca
Slide 28: The competition is tough but outside engines it is more fragmented
The competition is tough but outside engines it is more fragmented * Propulsion ** E&A LGE Gas Systems 2-stroke SHIP POWER Flow Systems 4-stroke medium speed •Local pumps makers Ship Design EGCS BWMS IGS Environmental SDARI solutions MARIC • Major Shipyards 28 © Wärtsilä June 7, 2013
Slide 29: The very competitive market demands multiple offerings
The very competitive market demands multiple offerings in terms of products, solutions, pricing and services to differentiate Himsen Local Rolls- Japanese Wärtsilä MAN Caterpillar (Hyundai) Chinese Royce Import brands Established Global Engine Brand Strong focus on Gas Extensiv
Slide 30: Growth drivers in China
Growth drivers in China World second largest economy and biggest trading nation Sustained GDP growth expected to continue 2015 and beyond: starting to rival US in economic scale One fifth of world population with rapidly rising middle class population and urbanization Domestic consumption
Slide 31: Wärtsilä China Future Strategy
Wärtsilä China Future Strategy Launch key initiatives (e.g. 4-stroke engine JV) to support long term growth Strengthen high level customer contacts and external relationships (government, JV partners, etc) to ensure business success. Simplify operating model with entrepreneurial driven organiz
Slide 32: Wärtsilä can offer integrated solution & support local Chinese yards
Wärtsilä can offer integrated solution & support local Chinese yards in technically complex vessels to address ship-owner’s concerns 32 © Wärtsilä 7 June 2013
Slide 33: WARTSILA.COM
WARTSILA.COM © WARTSILA