Wartsila Oyj Abp · OMXHEX:WRT1V

Wartsila Oyj Abp — Wärtsilä — FY2006 Earnings Presentation

30 slides from Wartsila Oyj Abp's earnings presentation, Feb 6, 2007

  1. Slide 1: Wärtsilä Corporation 2006 Result Presentation

    WÄRTSILÄ CORPORATION 2006 RESULT PRESENTATION OLE JOHANSSON, PRESIDENT & CEO 6 FEBRUARY 2007 1 © Wärtsilä

  2. Slide 2: Highlights 2006

    Highlights 2006 • Order intake +32.4% • Order book +52.8% • Net sales +26.6% • Operating income +29.2% • Profitability 8.2% (8.0) • EPS EUR 3.72 (1.80), EUR 1.49 refers to capital gains • Good demand continues 2 © Wärtsilä

  3. Slide 3: Key figures 2006

    Key figures 2006 Net sales by business 2006 Ship Power Power Plants 30.9% (28.2) 29.3% (28.2) MEUR 2006 2005* Change(%) Net sales 3,189.6 2,520.3 26.6 Operating income 261.6 202.5 29.2 % of net sales 8.2 8.0 Income before taxes 446.8² 212.4¹ Earnings/share, EUR 3.72 1.80 Services 39.7% (43.4) 1 The

  4. Slide 4: Key figures

    Key figures MEUR Net sales Order intake Order book 52.8%4,438.9 4500 3500 5000 3,189.6 4,621.1 26.6% 4500 32.4% 4000 17.6% 3000 4000 3500 2,520.3 2500 3500 3,491.1 3000 2,905.7 15.9% 22.8% 12.4% 3000 2000 2500 2500 18.7% 2000 1500 31.5% 27.5% 2000 19.7% 985.9 1500 82.1% 1500 1,317.6 1000 773.5 1,100

  5. Slide 5: Comparable sales by market area 2002 - 2006

    Comparable sales by market area 2002 - 2006 MEUR 3500 3000 2500 Other 2000 America Europe 1500 Asia 1000 500 0 2002 2003 2004 2005 2006 5 © Wärtsilä

  6. Slide 6: Personnel development 2002 - 2006

    Personnel development 2002 - 2006 16000 14000 12000 10000 Engine Division Power Plants 8000 Ship Power Services 6000 4000 2000 0 2002 2003 2004 2005 2006 6 © Wärtsilä

  7. Slide 7: Order book distribution – good visibility for 2007 and beyond

    Order book distribution – good visibility for 2007 and beyond MEUR 2400 2200 2000 1800 1600 1400 Delivery next year 1200 Delivery next year + 1000 800 600 400 200 0 31.12.2005 31.12.2006 7 © Wärtsilä

  8. Slide 8: Delivered engine megawatts from own factories

    Delivered engine megawatts from own factories MW 5 500 5 000 4 500 4 000 3 500 3 000 2 500 2 000 1 500 1 000 500 0 2001 2002 2003 2004 2005 2006 E2007 Power Plants Ship Power Full-year estimate 8 © Wärtsilä

  9. Slide 9: Strong cash flow

    Strong cash flow MEUR 2006 2005 Cash flow from operating activities 302.4 76.0 Cash flow from investing activities 148.0 -178.3 Cash flow from financing activities -387.0 47.6 Liquid funds at the end of period 179.4 119.6 9 © Wärtsilä

  10. Slide 10: Strong financial position enables further growth

    Strong financial position enables further growth % Solvency Gearing 50 0,6 45 0,5 40 35 0,4 30 25 0,3 20 0,2 15 10 0,1 5 0 0 02 03 04 05 06 02 03 04 05 06 NOTE: 2002-2003 according to FAS, 2004- IFRS Convertible subordinated debentures treated as equity 10 © Wärtsilä

  11. Slide 11: EPS and dividend/share

    EPS and dividend/share EUR 4,0 3,5 3,0 Extra dividend 2,5 Dividend 2,0 EPS 1,5 1,0 0,5 0,0 -0,5 -1,0 2002 2003 2004 2005 2006 * *Board’s proposal NOTE: 2002-2003 according to FAS, 2004- IFRS 11 © Wärtsilä

  12. Slide 12: Vessel orders, # of vessels

    Vessel orders, # of vessels Tankers Bulk carriers Containers Others 3 months moving average dwt 350 16 300 14 12 250 Volume [million DWT] 10 # of vessels 200 8 150 6 100 4 50 2 0 0 01-03 04-03 07-03 10-03 01-04 04-04 07-04 10-04 01-05 04-05 07-05 10-05 01-06 04-06 07-06 10-06 Source: Based on data f

  13. Slide 13: Vessel orders - other vessels

    Vessel orders - other vessels, # of vessels LNG carriers LPG carriers Reefers Other dry > 5,000 dwt Offshore & other Cruise vessels Ro-Ro ferries 3 months moving average dwt 2 125 Volume [Million DWT] 100 # of vessels 75 1 50 25 0 0 01-03 04-03 07-03 10-03 01-04 04-04 07-04 10-04 01-05 04-05 07-05 1

  14. Slide 14: Net sales of Ship Power by vessel type

    Net sales of Ship Power by vessel type MEUR 1000 Bulk carriers Tankers 800 3% 12% Container ships Cruise & Ferry 14% 18% 600 Special vessels & other 11% General cargo 10% 400 LNG Offshore 3% 29% 200 0 2002 2003 2004 2005 2006 Others Tankers Bulk carriers Container ships 14 © Wärtsilä

  15. Slide 15: The market position of Wärtsilä's marine engines Q4/2006

    The market position of Wärtsilä’s marine engines Q4/2006 Own production Production by licensees Own production Medium-speed main engines Low-speed main engines Auxiliary engines Wärtsilä 51% (50) Wärtsilä 16% (17) Wärtsilä 6% (7) Comp. 3 3%(4) Others Comp. 2 13%(13) 23%(23) Comp. 1 Others Comp. 1 81

  16. Slide 16: The market position of Wärtsilä's propellers Q4/2006

    The market position of Wärtsilä’s propellers Q4/2006 Controllable pitch propellers Fixed pitch propellers Steerable thrusters (includes JV) Wärtsilä 36%(35) Wärtsilä 11%(18) Wärtsilä 11%(11) Others 64%(65) Others 89%(82) Others 89%(89) Wärtsilä own calculation based on: Lloyd’s Register – Fairplay &

  17. Slide 17: Global market development

    Global market development China growing fast in shipbuilding Vessel orders 2000 Vessel orders 2004 Vessel orders 2006 67,595,039 dwt 104,940,490 dwt 141,589,105 dwt Others 3% Others 5% Others 5% Europe 9% Europe 8% Europe 3% China 6% Korea 48% China 17% Korea 32% China 35% Korea 38% Japan 34% Japan

  18. Slide 18: Wärtsilä in China - growing presence

    Wärtsilä in China - growing presence Qingdao Qiyao Wärtsilä MHI Linshan Marine Diesel Co Ltd (QMD) Wärtsilä CME Zhenjiang Propeller Co., Ltd -Manufacturing of low-speed engines -Manufacturing of fixed pitch propellers (Starting operations in 2008) (Investments in additional capacity) Wärtsilä Qiyao

  19. Slide 19: Wärtsilä Hyundai Engine Company Ltd.

    Wärtsilä Hyundai Engine Company Ltd. To meet demand of growing LNG market • Joint Venture 50/50 with Hyundai Heavy Industries, Korea • New factory to produce Wärtsilä 50DF (dual- fuel engines) • Production volume: 100 engines a year • Additional capacity for LNG-carrier market • Investment EUR 58 mi

  20. Slide 20: Wärtsilä Ship Power

    Wärtsilä Ship Power MEUR Q4/06 Q4/05 Change(%) Ship Power net sales 2006 Net sales 404.3 265.5 52.3 Order intake 619.5 475.1 30.4 MEUR 2006 2005 Change(%) Net Sales 984.7 710.3 38.6 30.9% Order intake 2,270.5 1,545.3 46.9 Order book* 3,019.7 1,658.5 82.1 2006 new record year in orders received of to

  21. Slide 21: Services

    Services % Se rvices grow th per Q Se rvice s sha re of sa le s % 30 60 25 50 20 40 15 30 10 20 5 10 0 0 03 03 03 03 04 04 04 04 05 05 05 05 06 06 06 06 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 21 © Wärtsilä

  22. Slide 22: Wärtsilä Services

    Wärtsilä Services MEUR Q4/06 Q4/05 Change(%) Services net sales 2006 Net sales 350.4 315.0 11.2 MEUR 2006 2005 Change(%) Net Sales 1,266.5 1,093.1 15.9 Personnel* 8 539 7 200 18.6 39.7% Strong growth continued Offering complemented with automation services of total net sales * End of period 22 © Wär

  23. Slide 23: Power Plants - order intake 2006: 2,158 MW

    Power Plants - order intake 2006: 2,158 MW (2,075) Europe Asia 408 633 (308) (889) 163 245 526 108 (104) (204) (705) (184) Americas 407 (325) 170 237 Africa and Middle East (9) (317) 710 (552) 373 337 (106) (446) Gas Oil 23 © Wärtsilä

  24. Slide 24: Power Plants - target markets per fuel 2002 - 2006

    Power Plants - target markets per fuel 2002 - 2006 MW 18000 15000 12000 Wärtsilä’s 9000 market share 8.1% (7.8) 6000 23.0% (8.7) 3000 33.8% (44.2) 0 2002 2003 2004 2005 2006 HFO 1-60 MW LFO 3.5-60 MW GAS 3.5-60 MW Note I: Wärtsilä’s gas power plant target markets have changed since Wärtsilä stopped

  25. Slide 25: Gas power plant market

    Gas power plant market MW 18000 15000 Rec.engines 1,327 MW 12000 Wärtsilä 63.5% Wärtsilä Gas turbines 9000 8.1% (7.8) 9,044 MW Market potential 6000 for Wärtsilä 3000 0 2006 HFO 1-60 MW LFO 3.5-60 MW GAS 3.5-60 MW Note I: Wärtsilä’s gas power plant target markets have changed since Wärtsilä stopped

  26. Slide 26: Power Plants order intake by segment

    Power Plants order intake by segment Order intake by segment, MEUR Order intake by segment, MW 1200 2500 1000 2000 800 1500 600 1000 400 500 200 0 0 2004 2005 2006 2004 2005 2006 Industrial self generation Grid base load Industrial self generation Grid base load Ancilliary services Ancilliary servic

  27. Slide 27: Wärtsilä Power Plants

    Wärtsilä Power Plants MEUR Q4/06 Q4/05 Change(%) Power Plants net sales Net sales 227.8 193.7 17.6 Order intake 311.4 346.6 -10.1 MEUR 2006 2005 Change(%) 29.3% Net Sales 934.2 710.3 31.5 Order intake 1,027.3 865.2 18.7 Order book* 1,061.4 943.9 12.4 of total net sales Gas power plants over 50% of t

  28. Slide 28: Wärtsilä's holdings

    Wärtsilä’s holdings • Wärtsilä owns 7,270,350 B shares or 2.0% (4.7) of Assa Abloy shares. • The holding’s market value EUR 119,8 million (31 December 2006). • During the reporting period the operating companies of Oy Ovako Ab were sold. • Wärtsilä has recorded a tax-free capital gain of EUR 49.3 mi

  29. Slide 29: Wärtsilä's prospects in 2007

    Wärtsilä’s prospects in 2007 • Demand in the ship power and energy markets will remain active for Wärtsilä for at least the first half of 2007. • Based on the strong order book, Wärtsilä’s net sales are expected to grow this year by around 15%. • Profitability will exceed 9%. • Wärtsilä sees further

  30. Slide 30: Presentation name / Author

    Presentation name / Author

Wärtsilä — FY2006 Earnings Presentation on 6ix