Wartsila Oyj Abp · OMXHEX:WRT1V
Wartsila Oyj Abp — Wärtsilä — Non-Deal Roadshow (September 2015)
53 slides from Wartsila Oyj Abp's roadshow presentation, Sep 23, 2015
Slide 1: Welcome to Wärtsilä China
WELCOME TO WÄRTSILÄ CHINA INVESTORS VISIT IN SHANGHAI (SEP. 23 2015) James Han President of Wärtsilä China 1 © Wärtsilä Investors visit Sep. 23 2015
Slide 2: Wärtsilä China Today
Wärtsilä China Today • 20+ years history in China • Well positioned for SP and Service business • One of Wartsila biggest market with annual revenues of ~10% of group sales • Broad manufacturing footprint through JVs and fully owned companies. • In the marine market, certain leading Chinese ship own
Slide 3: Major Milestone of Wärtsilä in China
Major Milestone of Wärtsilä in China 2002 Integration of John Crane-Lips operation in Shanghai following global 1986 1994 1998 acquisition in Establishing Establishing Establishing April 2002 1978 Wärtsilä Diesel Shanghai Dalian Signing of (China) Ltd., Representative Representative Hong Kong as 199
Slide 4: Major Milestone of Wärtsilä in China
Major Milestone of Wärtsilä in China 2012 2005 Wärtsilä acquired the Hamworthy plc group. Wärtsilä acquired Deutz medium and high speed JV Contract Signed to engine marine service establish Wärtsilä Yuchai business and started to Engine Company Ltd. handle the business from April. 2011 2007 Inaugura
Slide 5: Wärtsilä Footprints in China
Wärtsilä Footprints in China WCN, Dalian Rep. Office WCN Shanhaiguan Shipyard Service Station WCN, Beijing Rep. Office Wärtsilä Services (Shanghai) Co Ltd Tianjin Representative Office Wärtsilä CME Zhenjiang Propeller Co Ltd FPPs, CPPs, shaft lines, blades and hubs Cosco-Shipyard Total Automation Co
Slide 6: Chinese Economy and Market Update
Chinese Economy and Market Update • China economy further slowed down with headwinds both externally and internally, despite 7% GDP expansion in H1. • Export fell by 6.1% yoy in Aug and imports shrank by 13.6%. However exports to US and ASEAN increased by 6.1% and 5.6% respectively. • PMI slipped to
Slide 7: Growth opportunities in China
Growth opportunities in China MOVE TO A URBANIZATION & FOCUS ON GREEN DRIVE FOR SUSTAINABLE SURGING OF MIDDLE ECONOMY INNOVATION & HIGH ECONOMIC GROWTH CLASS END MANUFACTURING PATTERN • Transform from • ~ 70% of population • Shift to renewable • Move up the labor Invest/export focused will live in t
Slide 8: The most important market for Marine Solutions
The most important market for Marine Solutions POSITIVE GOVERNMENT WORLD LEADING POLICY POSITION DEVELOPMENTS TO MEET CHALLENGES SUPPORTING MARINE INDUSTRY • No.1 trading nation • Shift from Merchant to with biggest offshore and special, • Drive technology shipping fleets from standard low value inn
Slide 9: Power market opportunities for Energy Solutions
Power market opportunities for Energy Solutions 9 NATIONAL POLICY STRONG GROWTH WORLD LEADING PUSH FOR CLEAN FROM GAS-FIRED POSITION ENERGY POWER PLANT • Largest power production & • Develop >1,000 NGDE projects • Current installed gas ~36 GW, will consumption country with 50 GW new capacity by reac
Slide 10: 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 11: 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 12: 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 13: Wärtsilä China manufacturing facilities
Wärtsilä China manufacturing facilities We provide market leading products 13 © Wärtsilä Investors visit Sep. 23 2015
Slide 14: 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) 14 14 © Wärtsilä 14 © © Wärtsilä Wärtsilä Investors visit Sep. 23 2015
Slide 15: 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 1515 ©© Wärtsilä Wärtsilä Investors v
Slide 16: 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 Industry Corporation 16 16© Wärtsi
Slide 17: 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 17 © Wärtsilä Investors visit Sep. 23 2015
Slide 18: Wärtsilä Yuchai Engine Co., Ltd / Zhuhai
Wärtsilä Yuchai Engine Co., Ltd / Zhuhai • 50/50 Joint venture owned by Wärtsilä and Yuchai Marine Power Co., Ltd (YCMP), a subsidiary of Guangxi Yuchai Group. • Location: Zhuhai, Guangdong Province, China • Products: Wärtsilä 20, Wärtsilä 26, Wärtsilä 32 series of engines and generating sets. • Tot
Slide 19: Wärtsilä China Growth Strategy
Wärtsilä China Growth Strategy Launch key initiatives 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 organization to be more agile and react
Slide 20: Development of partnership in China continues: CWEC
Development of partnership in China continues: CWEC, a new 4-stroke engine Joint Venture between CSSC and Wärtsilä Joining the forces of two major players in marine business sector Largest shipbuilding group in China Global leader in complete lifecycle and in the world power solutions for marine ind
Slide 21: CWEC Video
CWEC Video Play Video 21 © Wärtsilä Investors visit Sep. 23 2015
Slide 22: Wärtsilä Marine Solutions
WÄRTSILÄ MARINE SOLUTIONS Hans Laheij, Area Sales Director, Marine Solution Sales, Middle East and Asia 22 / 36 © Wärtsilä © Wärtsilä Doc.ID: Revision: Status:
Slide 23: Market environment
Market environment 23
Slide 24: China, South Korea and Japan dominate in the shipbuilding market
China, South Korea and Japan dominate in the shipbuilding market Builder Country shares ( CGT) Others Europe U.S.A United Kingdom South Korea Japan China P.R Other Asia 100% Other Asia 90% Uni ted Kingdom China P.R CGT 80% 37.4% GT 70% 40% U.S.A 60% Ja pa n CGT 50% 21.1% GT 22.2% 40% 30% Europe Sout
Slide 25: Contracting Activity Development – All vessels
Contracting Activity Development – All vessels Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT 250 5,0 227 4,5 210 200 4,0 187 167 3,5 162 150 3,0 Number of vessels 134 Million CGT 129128 126 122 123 122 123 118 117 2,5 113 113 114 106107 107 101 102 102 102 95 94 9
Slide 26: Contracting Activity - Builders
Contracting Activity - Builders 2015 total contracting activity = 692 vessels and 19,0 Million CGT Builders 2015 YTD, Number of vessels Builders 2015 YTD, CGT YTD Builders, No of vessels Spain YTD Builders, CGT Germany 1% 3% Finland Vietnam RoW 3% RoW 2% Philippines 12% 5% Philippines 3% 2% Spain 3%
Slide 27: Contracting Activity - Owners
Contracting Activity - Owners 2015 total contracting activity = 692 vessels and 19,0 Million CGT YTD Owners, No of vessels Owners 2015 YTD, Number of vessels OwnersYTD Owners, 2015 YTD, CGTCGT Japan 13% Japan 17% RoW China P.R. 39% Row 11% 49% China P.R. 10% Greece 9% Greece 9% Denmark Singapore 9%
Slide 28: Source: Bloomberg business
$44.68 Source: 28 Bloomberg business © Wärtsilä
Slide 29: Oil Price Development
Oil Price Development 46.81 Source: Bloomberg business 29 © Wärtsilä
Slide 30: Offshore is Highly Sensitive to Oil Price Development
Offshore is Highly Sensitive to Oil Price Development Break-even oil price for offshore projects (fields not yet in production, Q1 2015) 33%-73 % of offshore projects 30% feasible between 60 and 80 USD/bbl 25% 0%-33% of offshore projects More than 73% of offshore feasible with the price below projec
Slide 31: Examples of significant projects in China
Examples of significant projects in China GOTLAND ROPAX Ferry Full scope on main equipment Length 200m LNG powered speed 28.5 knots 1650 PAX 1750 Lane m. Evergas 27’500cbm LEG Carrier Full SCOPE on main equipment 31 © Wärtsilä
Slide 32: Wärtsilä Marine Solutions
Wärtsilä Marine Solutions 32 WÄRTSILÄ Marine Solution / Hans Laheij
Slide 33: Wärtsilä Marine Solution's Strategic Goal
Wärtsilä Marine Solution’s Strategic Goal Marine Solution’s strategic goal To be recognized as the leading provider of innovative products and integrated solutions in the marine and offshore oil & gas industry. Efficiency Gas and dual-fuel Environmental solutions solutions LEADER IN OFFERING THROUGH
Slide 34: The most complete marine offering on earth
The most complete marine offering on earth 34
Slide 35: A Comprehensive Product Portfolio
A Comprehensive Product Portfolio Automation Ballast water Compressors Engines & Exhaust gas cleaning management generating sets Gas systems Gears Inert gas Oil separation Power electric systems Propulsors Pumps & valves Seals, bearings & Waste & fresh water Ship design services stern tubes manageme
Slide 36: Wärtsilä Marine Solutions in China
Wärtsilä Marine Solutions in China Wärtsilä Marine Solutions has been growing fast in China. In order to further grow it is important to focus on key differentiators that will ensure Marine Solutions continued success in China. Tazama Pipelines Limited Management Tanzania Zambia Our Offering People
Slide 37: Wärtsilä Qiyao Diesel Company Ltd. (Shanghai)
Wärtsilä Qiyao Diesel Company Ltd. (Shanghai) 37
Slide 38: Shareholder Information – Wärtsilä & SMDERI / CSIC
Shareholder Information – Wärtsilä & SMDERI / CSIC CSIC (China Shipbuilding Industry Corporation): a state owned enterprise group and one of China’s largest shipbuilding and ship repairing groups in China. CSIC has 3 listed companies, 28 non- listed companies and 28 R&D institutes in China, with in
Slide 39: WQDC Milestones 2005-2015
WQDC Milestones 2005-2015 Letter of Intent Auxpac 16 3.2.2005 launch event Introduction of 2.12.2013 Wartsila20 Genset Ground 15.1.2010 breaking 23.9.2005 100th Auxpac20 4.12.2007 1000th genset delivery 28.6.2012 Inauguration 29.06.2006 500th genset delivery 21.12.2009 JV Contract 21.4.2005 30.3.201
Slide 40: Business Scope
Business Scope The scope of business is to produce, assemble and finish the AUXPAC generating sets and relevant parts and assemblies designed by Wärtsilä, and to sell & commission its own products in China. Portfolio products: Wärtsilä Auxpac 20 Wärtsilä Auxpac 26 Wärtsilä 20 genset Wärtsilä Auxpac
Slide 41: Business Scope
Business Scope The Wärtsilä auxpac range is a pre-engineered generating set WQDC manufactures A16, A20 and A26 The Wärtsilä 20 “classic” genset is a custom designed generating set often used for special vessels and offshore Wärtsilä 20 Main Engine application for customers located in China 41
Slide 42: WQDC - State of the art factory
WQDC - State of the art factory Our WQDC assembly & testing factory designed and build according to Wärtsilä best practices Engine assembly takes place by means of “Lean” production lines WQDC has a high level of focus on EHS in all aspects of the factory design and operations Transport of engines i
Slide 43: WQDC Factory layout
WQDC Factory layout Small Washing Goods Technical area Painting Storage Reception room Quality Insp. Step 4 Step 3 Step 2 Step 1 Step 5 Step 0 Test run Dispatching Elec. Ass. Assembly area Big Washing Machine Finishing Step 0 Step 5 Step 4 Step 3 Step 2 Step 1 Auxpac 20 & Wartsila 20 Assembly Line O
Slide 44: WQDC genset applications
WQDC genset applications 44 © Wärtsilä
Slide 45: Wärtsilä's support throughout WQDC operations
Wärtsilä’s support throughout WQDC operations WQDC Vital Network Functions Companies Material Production Finance Human Project & Sales & Supply Resource Contract Management Marketing Wärtsilä Supply Management Customers Quality MS 4 stroke JV Engineering Centre China Marine Solutions Sales Services
Slide 46: Wärtsilä's support throughout WQDC operations
Wärtsilä’s support throughout WQDC operations Wärtsilä Quality & EHS Wärtsilä Supply Management Management Our entire supply base is managed by Wärtsilä work processes and way of working Wärtsilä. From supplier selection, making are fully implemented in WQDC. WQDC uses frame contracts, supplier qual
Slide 47: Quality of the Components in our engines
Quality of the Components in our engines The engine quality is largely defined by the quality of the components that are assembled together. The selection of the supplier is done by Wartsila global sourcing as well as the continuous development of these suppliers In WQDC our engines include approx 6
Slide 48: Sales channels
Sales channels WQDC delivers engines worldwide depending upon customer needs The majority of our products are delivered in China since most Merchant ships are manufactured in China WQDC has 2 sales channels: our own WQDC Sales Team and Wärtsilä Marine Solutions Sales Team Customers inside China for
Slide 49: WQDC organisation set-up
WQDC organisation set-up Managing Director Assigned by Wärtsilä Financial Controller Sales Department Assigned by SMDERI Market development Customer relationship Finance Department Commercial negotiations Business Control & reporting Financial planning Project management Department Accounting & book
Slide 50: Management Systems
50 Management Systems ea eee DNV BUSINESS ASSURANCE _ MANAGEMENT SYSTEM CERTIFICATE _ 150 9001 2008 ny rte tong ore pw DET NORSKE VERITAS MANAGEMENT SYSTEM CERTIFICATE Wartsili Qiyao Diesel Company Ltd. (Shanghai) AUNPAC DNV) Det NorSKE VERITAS MANAGEMENT SYSTEM CERTIFICATE, Wairtsilii Qiyao Diesel
Slide 51: Quality, Delivery & Cost – in that order!
QUALITY, DELIVERY & COST – IN THAT ORDER! 51
Slide 52: Thank you for your attention!
Thank you for your attention! Any questions or comments? 52
Slide 53: Factory tour
Factory tour Rules for today’s factory tour * No PPE’s are needed since factory activities are temporarily stopped * Please walk through the middle of the factory * We will first walk to the goods reception area so that can start our tour by follow the production process 53