Slide 1: Wärtsilä Corporation Interim Report January-September 2010
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-SEPTEMBER 2010 OLE JOHANSSON, PRESIDENT & CEO 20 OCTOBER 2010 1 © Wärtsilä
Slide 2: Q3/10 Highlights
Q3/10 Highlights • Order intake EUR 1,004 million (+38%) • Net sales EUR 1,039 million (-11%) • Operating result* EUR 117 million (-13%), 11.2% of net sales • EPS* EUR 0.83 (0.87) • Cash flow from operating activities EUR 222 million (214) * Excluding nonrecurring items 2 © Wärtsilä
Slide 3: Strong growth in order intake
Strong growth in order intake MEUR 6000 5500 Third quarter development MEUR 5000 1200 38% 1 004 4500 1000 4000 800 725 3500 -10% 600 3000 160% 2500 400 2000 131% 200 1500 0 1000 Q3/2009 Q3/2010 500 0 2006 2007 2008 2009 1-9/2010 Order intake Power Plants Ship Power Services 3 © Wärtsilä
Slide 4: Order book
Order book MEUR 8000 7000 -21% 6000 5 351 21% 5000 4 243 4000 -37% 3000 2000 -2% 1000 0 2006 2007 2008 2009 30.9.2009 30.9.2010 Order book Power Plants Ship Power Services 4 © Wärtsilä
Slide 5: Order book distribution
Order book distribution MEUR 5000 4000 3000 2000 1000 0 30.9.2009 30.9.2010 Delivery current year Delivery next year + 5 © Wärtsilä
Slide 6: Net sales developed as expected
Net sales developed as expected MEUR 5500 5000 Third quarter development 14% 4500 MEUR 1400 4000 1 167 -11% 1200 23% 1 039 3500 1000 3% 18% 800 3000 600 -27% 2500 400 2000 -11% 200 1500 0 Q3/2009 Q3/2010 1000 500 0 2006 2007 2008 2009 1-9/2010 Net sales Power Plants Ship Power Services 6 © Wärtsilä
Slide 7: Net sales by business 1-9/2010
Net sales by business 1-9/2010 Ship Power Power Plants 27% (33) 31% (31) Services 42% (35) 7 © Wärtsilä
Slide 8: Strong profitability
Strong profitability MEUR 220 200 180 160 140 11.2% 120 100 80 60 40 20 0 Q1 Q2 Q3 Q4 2006 2007 2008 2009 2010 Operating result before nonrecurring items 8 © Wärtsilä
Slide 9: Ship Power market – vessel order development
Ship Power market – vessel order development Continued recovery in ordering activity All vessels Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in DWT 450 30 400 25 350 300 20 Million DWT # of vessels 250 15 200 150 10 100 5 50 - 0 01.05 03.05 05.05 07.05 09.05 01.06 03.0
Slide 10: Ship Power order intake
Ship Power order intake Recovery continued MEUR 900 800 700 600 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 Q1 Q2 Q3 Q4 10 © Wärtsilä
Slide 11: Ship Power order intake by segment Q3/2010
Ship Power order intake by segment Q3/2010 Ship Design Cruise & Ferry 3% 2% Special vessels 18% Offshore 43% Merchant 33% Total EUR 176 million (68) 11 © Wärtsilä
Slide 12: Ship Power market
Ship Power market Market position of Wärtsilä’s marine engines Medium-speed main engines Low-speed main engines Auxiliary engines Mitsubishi Wärtsilä 3%(3) 3%(1) Wärtsilä 12%(15) Others Wärtsilä 29%(37) 32%(37) MAN Diesel Others MAN Diesel 85%(82) 97%(99) 31%(22) Caterpillar (MAK) 8%(4) Total market
Slide 13: Ship Power order book Sept. 30, 2010
Ship Power order book Sept. 30, 2010 All vessel segments represented RoRo LNG 4% 6% Bulkers 11% Merchant Offshore 47% 30% Containers 6% Tankers 8% Special vessels 8% Cargo Cruise & Ferry 12% 7% Ship Design Navy 2% 6% Total EUR 2,038 million (3,230) 13 © Wärtsilä
Slide 14: Power Plants - Market demand remains strong
Power Plants - Market demand remains strong Quoted MW per Fuel Type 14000 12000 10000 8000 Others MW 6000 Natural gas 4000 2000 Heavy fuel oil 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2004 2005 2006 2007 2008 2009 2010 Share of natural gas is consistently in
Slide 15: Power Plants order intake by application
Power Plants order intake by application MEUR 2000 Third quarter development MEUR 1800 500 1600 131% 393 400 1400 487% 300 1200 1285% 170 200 1000 184% 100 800 -60% 0 600 Q3/2009 Q3/2010 400 200 Order intake by fuel Q3/2010 0 2006 2007 2008 2009 1-9/2010 Oil Gas 54% 46% Industrial self- Flexible Gri
Slide 16: Power Plants quarterly order intake
Power Plants quarterly order intake MEUR 600 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 Q1 Q2 Q3 Q4 16 © Wärtsilä
Slide 17: Power Plants order intake
Power Plants order intake Asia strongest region Order intake 1-9/2010: 2,342 MW (1,382) Asia 1,081 (90) Europe 304 (400) 78 239 Americas 704 (280) 55 72 317 9 1 686 405 227 Africa and Middle East 253 (612) 164 47 Flexible baseload Industrial self-generation 42 Oil & gas Grid stability & peaking 17 ©
Slide 18: Services – Net sales stable
Services – Net sales stable MEUR 2000 1800 Third quarter development 0% MEUR 500 1600 435 424 18% 400 3% 1400 22% 1200 300 1000 200 800 100 600 0 Q3/2009 Q3/2010 400 200 0 2006 2007 2008 2009 1-9/2010 18 © Wärtsilä
Slide 19: Services – Net sales per quarter
Services – Net sales per quarter MEUR 600 500 400 300 200 100 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Q1 Q2 Q3 Q4 19 © Wärtsilä
Slide 20: Services – Net sales distribution 1-9/2010
Services – Net sales distribution 1-9/2010 Field service 24% Spare parts 54% Contracts 13% Projects 9% 20 © Wärtsilä
Slide 21: Services: Level of laid-up vessels normalised
Services Level of laid-up vessels normalised 20% 18% 16% 14% % of Fleet 12% 10% 8% 6% 4% 2% Oct.09 Aug.09 Dec.09 Aug.10 Apr.09 Apr.10 Feb.09 Jun.09 Feb.10 Jun.10 Anchored * Idle** * Anchored (reported navigation status at anchor). Source Bloomberg (AISLive). More than 25 000 vessels (>299 GT) covere
Slide 22: All time high cash flow
All time high cash flow MEUR 7-9/10 7-9/09 1-9/10 1-9/09 2009 Cash flow from operating activities 222 214 491 142 349 Cash flow from investing activities 21 -23 -3 -113 -163 Cash flow from financing activities 11 -45 -159 36 -140 Cash and cash equivalents at end of period 578 262 578 262 244 22 © Wä
Slide 23: Net working capital development
Net working capital development MEUR 2000 25% 1800 MEUR 30 Sept. 2010 1600 1600 20% 1400 1400 1200 1200 15% 1000 800 1000 600 5.6%* 9.5% 800 9.2% 10% 400 229 8.4% 7.0% 600 5.8% 200 5.5% 482 0 400 2.7% 267 5% * Annualised Working 206 212 176 Capital / Net Sales 200 155 102 0 0% 2003 2004 2005 2006 20
Slide 24: Committed loans Sept. 30, 2010
Committed loans Sept. 30, 2010 MEUR 1400 1200 1000 565 800 Total EUR 1 688 million 88 drawn 600 400 599 200 0 Drawn long- Current portion Drawn short- Undrawn revolving term loans of long-term term loans credits loans At the end of the reporting period, drawn revolving credits amounted to 0 euros. I
Slide 25: 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 2006 2007 2008 2009 30.9.2010 2006 2007 2008 2009 30.9.2010 -0,10 25 © Wärtsilä
Slide 26: Restructuring measures
Restructuring measures Restructuring measures • May 2009: Ship Power adjustment program • January 2010: Adaption of manufacturing capacity initiated • October 2010: Processes initiated for reduction of 400 jobs in global staff functions Impacts of all restructuring measures • Personnel to be reduced
Slide 27: Market outlook
Market outlook • Ship Power: Ordering volumes will remain at lower levels than during peak years. Competition and price pressure will remain intense. Wärtsilä Ship Power’s order intake in 2010 expected to clearly improve over 2009. • Power Plants: The power generation market recovery is expected to
Slide 28: Prospects for 2010 improved
Prospects for 2010 improved • Net sales expected to decline by approximately 15 percent. • Operational profitability (EBIT% before nonrecurring items) expected to be better than earlier estimated and to exceed 10%. 28 © Wärtsilä
Slide 29: IR Contact
IR Contact: Joséphine Mickwitz Director, Investor Relations Tel. +358 (0)10 7095216 E-mail: Presentation name / Author josephine.mickwitz@wartsila.com