Wartsila Oyj Abp · OMXHEX:WRT1V
Wartsila Oyj Abp — Wärtsilä — Citi Global Industrials Conference 2011
33 slides from Wartsila Oyj Abp's conference presentation, Sep 22, 2011
Slide 1: Citi Global Industrials Conference
WÄRTSILÄ S CO CORPORATION O O Citi Global Industrials Conference 22 September 2011 VESA RIIHIMÄKI GROUP VICE PRESIDENT, POWER PLANTS 1 © Wärtsilä
Slide 2: This is Wärtsilä
This is Wärtsilä SHIP POWER POWER PLANTS SERVICES 2 © Wärtsilä
Slide 3: Q2/11 Highlights
Q2/11 Highlights • Net sales EUR 1,036 , million,, -8% • Order intake EUR 1,170 million, +5% • Book Book-to-bill to bill increased to 1.13 (0.99) • Operating result EUR 117 million, 11.3% of net sales • Cash flow from operating activities EUR -49 million • EPS EUR 0.39 (0.43) Operating result and EP
Slide 4: Net sales by business 1-6/2011
Net sales by business 1-6/2011 Ship Power Power Plants 24% (27) 34% (31) Services 42% (42) 4 © Wärtsilä
Slide 5: Our offering covers all key shipping segments
Our offering covers all key shipping segments Cruise Special Merchant Offshore Navy and Ferry Vessels 5 © Wärtsilä
Slide 6: Ship Power quarterly order intake
Ship Power quarterly order intake MEUR 900 800 700 600 500 400 77% 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 6 © Wärtsilä
Slide 7: Ship Power order intake by segment
Ship Power order intake by segment MEUR 2800 Second quarter development Total EUR 306 million (173) 2400 Merchant 2000 19%(29) Ship Design 3%(6) 1600 Offshore Special 54%(27) vessels 1200 12%(15) Offshore 54% Cruise & ferry 800 2%(16) Navy 9%(7) 400 0 2007 2008 2009 2010 1-6/2011 Dual-fuel engine or
Slide 8: Ship Power market: contracting activity
Ship Power market Contracting activity All vessels Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in DWT 450 30 400 25 350 300 20 WT els Million DW # of vesse 250 15 200 150 10 100 5 50 - 0 1.05 4.05 7.05 0.05 1.06 4.06 7.06 0.06 1.07 4.07 7.07 0.07 1.08 4.08 7.08 0.08 1.
Slide 9: Ship Power strategy
Ship Power strategy • Seek further g growth through g offering g lifecycle y solutions for ship p owners and operators • Be the leading system integrator in the ship building industry with further enhancement in our offering and capabilities • Complement the system integration success with the best
Slide 10: Short, medium and long term considerations
Short, medium and long term considerations Fundamentals show risks and The future brings interesting opportunities on the short term opportunities • Risks of downturn in global economy are • Ship owners base is shifting tangible • Good fundamentals for offshore • High oil prices represent a risk tow
Slide 11: Target markets and solutions
Target markets and solutions Flexible base- Grid stability Industrial Solutions for load power and peaking self-generation oil and gas generation industry Oil, d Oil dual-fuel lf l Liquid Li id bi biofuel f l Flexible Fl ibl gridid Combined C bi d hheatt Pumping P i and d and gas fired power plants
Slide 12: Power Plants quarterly order intake
Power Plants quarterly order intake MEUR 600 500 66% 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 12 © Wärtsilä
Slide 13: Power Plants - Markets remain solid
Power Plants - Markets remain solid Quoted MW per Fuel Type 16000 14000 12000 10000 Others MW W 8000 6000 Natural gas 4000 2000 Heavy fuel 0 oil 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 Q4 Q1 Q2 2004 2005 2006 2007 2008 2009 2010 2011 Share of natural gas is c
Slide 14: Power Plant strategy going forward
Power Plant strategy going forward • M Maintain i t i our lleading di position iti iin HFO power plants l t bby enhancing h i our value l proposition • Grow strongly in large utility gas power plants by capturing market share from other th ttechnologies h l i • Grow in power plants based on renewabl
Slide 15: Power Plants market
Power Plants market Gas turbine and engine manufacturers 2008 2009 2010 Other CEs 2.2 Other CEs 0.9 Other CEs 1.9 Other turbines 5.1 Other turbines 3.2 Other tubines 3.9 Wärtsilä 3.3 Ansaldo 1.8 Ansaldo 1.3 Ansaldo 4.2 MHI 2.0 Alstom 1.9 Alstom 5.3 Wärtsilä 3.2 Wärtsilä 2.0 Total market GE GE 39.5 A
Slide 16: Smart Power System
Smart Power System 16 © Wärtsilä
Slide 17: Smart Power Generation
Smart Power Generation 1) All in One! A unique combination of valuable features! Energy Efficiency Smart Power Generation Fuel Operational Flexibility Flexibility 2) The missing piece of the low carbon power system puzzle! Affordable Smart Power System Reliable Sustainable 17 © Wärtsilä
Slide 18: Operational flexibility vs. electrical efficiency
Operational flexibility vs. electrical efficiency CCGT’s 50% Electrical Wärtsilä efficiency, Flexicycle™ net Wärtsilä SC Aero- 40% GT’s C Coal Industrial GT’ GT’s Starting time Ramp rate Part load operation Nuclear Flexibilityy 30% Low Medium High Steam Power Plants Simple Cycle Combustion Engines 1
Slide 19: Benefits to power systems
Benefits to power systems Smart Power System • Secures the supply of affordable and sustainable power – Enable highest penetration of wind and solar power capacity – Maximizing the use of wind power capacity b minimizing by i i i i wind i d curtailment t il t Load curve, future ‐ high wind – Ensure
Slide 20: Smart Power Generation: Elering
Smart Power Generation: Elering Target to grow strongly in the large utility gas power plants • Market for gas driven power plants growing • Ramp down of older coal based generation and uncertainty over nuclear power will increase demand for gas based generation • Demand increasing also in emerging
Slide 21: All in one features
All in one features Smart Power Generation • Agility of dispatch • High plant reliability and availability – Megawatts to grid in 1 minute from start – Multiple units enable firm (n-2) power (n=number – 5 minutes to full load from start of installed units) – Fast shut down in 1 minute – Typical unit
Slide 22: Technology comparison
Technology comparison Electrical Normal starting efficiency Typical plant time to full load, Dynamic CO2, full load, % size, MW minutes capabilities g/kWh Nuclear 31 33 31-33 1000 - 2000 >2000 Poor - Coal 33-45 300 - 4000 >180 Poor 820 - 1050 CCGT gas 50-57 200 - 1500 80 Not good 370 SPG Gas engine
Slide 23: Services expertise areas
Services expertise areas Service Agreements Wärtsilä Services becomes the most valued business partner by understanding customers’ customers problems and assembling the appropriate solution to solve them. 23 © Wärtsilä
Slide 24: Services - Net sales by quarter
Services - Net sales by quarter MEUR 600 500 3% 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 24 © Wärtsilä
Slide 25: Services net sales distribution 1-6/2011
Services net sales distribution 1-6/2011 Field service 23%(24) Spare parts 54%(54) Contracts 15%(13) Projects 8%(9) Numbers in brackets are from 1-6/2010 25 © Wärtsilä
Slide 26: Services distribution per business
Services distribution per business Net sales distribution Installed base distribution Total 178,865 MW Ship Power Ship Power Power Plants Power Plants ~60% ~40% ~80% ~20% 26 © Wärtsilä
Slide 27: Services strategy
Services strategy • Maximize our market share with our present customer base and present portfolio • Constantly develop our offering proposition with value-enhancing value enhancing products in existing customer segments • Grow strongly with service agreements, together with Ship Power and Power Pla
Slide 28: Development of Power Plants service agreements
Development of Power Plants service agreements MW 4500 60% 57% 4000 53% 51% 50% 3500 3000 40% 2500 29% 9% 31% 30% 2000 1500 20% 1000 10% 500 0 0% 2007 2008 2009 2010 1-6/2011 O&M and maintenance agreements Power Plants deliveries % of delivered MWs 28 © Wärtsilä
Slide 29: Continued interest in marine service agreements
Continued interest in marine service agreements Target to grow through service agreements Continued interest in maintenance agreements seen in marine and power plant markets • Reduction of fixed costs • Enhanced performance and reliability Technical management contract signed with Ceres LNG Services
Slide 30: Market outlook
Market outlook • Ship Power: Competition and price pressure among shipbuilding suppliers expected to remain intense. Ship Power order intake expected to be significantly better in 2011 than in 2010. • Power Plants: Recovery in the power generation market expected to continue in 2011 Power Plants’ or
Slide 31: Prospects for 2011 revised
Prospects for 2011 revised Due to weaker than expected marine service markets and the timing of power plant deliveries, Wärtsilä expects its net sales for 2011 to decline by 0-5% compared to last year. y We reiterate our expectation that operational profitability (EBIT% before nonrecurring items) wi
Slide 32: Long-term growth and profitability
Long-term growth and profitability • Target to grow faster than global GDP • Operating profit margin (EBIT%) target 10-14% • Maintain gearing below 50% • Target to pay a dividend equivalent to 50% of earnings per share MEUR 6 000 16% 12.1% 11.4% 10.7% 14% 5 000 10.1% 12% 4 000 8 2% 8.2% 10% 3 000 8%
Slide 33: IR Contact: Pauliina Tennilä
IR Contact: Pauliina Tennilä Director Investor Relations Director, Tel. +358 (0) 40 570 5530 E-mail: pauliina.tennila@wartsila.com Presentation name / Author