Slide 1: Interim Report January-June 2012
INTERIM REPORT JANUARY-JUNE 2012 BJÖRN ROSENGREN, PRESIDENT & CEO 18 JULY 2012
Slide 2: Highlights Q2/2012
Highlights Q2/2012 • Order intake EUR 1,198 million, +2% • Net sales EUR 1,099 million, +6% • Book-to-bill 1.09 (1.13) • EBIT EUR 113 million, 10.3% of net sales • EBITA EUR 123 million, 11.2% of net sales • EPS EUR 0.38 (0.35) EBIT is shown excluding non-recurring items. EBITA is shown excluding no
Slide 3: Steady development in order intake
Steady development in order intake MEUR 6000 5500 5000 4500 Second quarter development 4000 MEUR 1400 3500 1 170 1 198 3000 1200 2% 2500 1000 5% Services 2000 800 Ship Power 1500 600 46% Power Plants 1000 400 500 200 -33% 0 0 2008 2009 2010 2011 1-6/2012 Q2/2011 Q2/2012 3 © Wärtsilä
Slide 4: Growth in net sales
Growth in net sales MEUR 5500 5000 14% -13% 4500 -7.6% 4000 Second quarter development 3500 MEUR 1400 6% 3000 1200 1 099 2500 1 036 1000 Services 2000 -1% 800 Ship Power 1500 600 Power Plants 34% 1000 400 500 -2% 200 0 0 2008 2009 2010 2011 1-6/2012 Q2/2011 Q2/2012 4 © Wärtsilä
Slide 5: Net sales by business 1-6/2012
Net sales by business 1-6/2012 Ship Power 25% (24) Services 45% (42) Power Plants 30% (34) 5 © Wärtsilä
Slide 6: Book-to-bill ratio remains above one
Book-to-bill ratio remains above one MEUR 6000 1,4 5500 1.21 1,2 5000 1.10 1.07 4500 1,0 4000 3500 0.88 0,8 0.63 3000 2500 0,6 2000 0,4 1500 1000 0,2 500 0 0,0 2008 2009 2010 2011 1-6/2012 Order intake Net sales Book-to-bill 6 © Wärtsilä
Slide 7: Growth in order book
Growth in order book MEUR 7000 6000 19% 5000 4 515 4000 3 779 7% 3000 25% 2000 1000 20% 0 2008 2009 2010 2011 30.6.2011 30.6.2012 Power Plants Ship Power Services 7 © Wärtsilä
Slide 8: Order book distribution
Order book distribution MEUR 4000 3000 2000 1000 0 30.6.2011 30.6.2012 Delivery current year Delivery next year or later 8 © Wärtsilä
Slide 9: Profitability
Profitability MEUR 250 16% 14% 12.8% 200 11.9% 11.5% EBIT% 11.0% 11.2% 12% 12.1% target: 11.4% 11.1% 10-14% 10.7% 10% 150 10.3% 8% 100 6% 4% 50 2% 0 0% 2008 2009 2010 2011 2012 Q1 Q2 Q3 Q4 EBIT% before non-recurring items EBITA% before non-recurring items and intangible asset amortisation related to
Slide 10: Power plant markets active, some delays in larger investments
Power plant markets active, some delays in larger investments
Slide 11: High level of quoted MWs
High level of quoted MWs Quoted MW per Fuel Type 16000 14000 12000 Others MW 10000 8000 Natural gas 6000 Heavy fuel oil 4000 2000 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 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2004 2005 2006 2007 2008 2009 2010 2011 2012 Share of natural gas
Slide 12: Quarterly order intake
Quarterly order intake MEUR 600 500 400 300 200 100 0 2005 2006 2007 2008 2009 2010 2011 2012 Q1 Q2 Q3 Q4 12 © Wärtsilä
Slide 13: Order intake by application
Order intake by application MEUR Review period development 2000 Total EUR 591 million (672) 1800 Industrial 9% 16% 9% self-generation 1600 Flexible baseload 1400 Oil & gas 67% Grid stability & 1200 peaking 1000 800 Review period order intake by fuel in MW 600 400 Oil 39% Gas 200 61% 0 2008 2009 2010
Slide 14: Major power plant order from Azerbaijan
Major power plant order from Azerbaijan • Contract awarded to supply a 384 MW gas power plant to Azerbaijan to be operated for baseload production by Azerenerji JSC, the state-owned utility • Scope of supply includes 21 Wärtsilä 50SG engines running on natural gas, related auxiliaries and process eq
Slide 15: Global order intake
Global order intake Europe 19 (550) Asia 771 (298) 19 110 59 Americas 425 (199) 602 58 29 Africa and Middle East 186 (440) 110 229 59 Flexible baseload Industrial self-generation Grid stability & peaking Oil & gas 127 Order intake 1-6/2012: 1,401 MW (1,487) 15 © Wärtsilä
Slide 16: Market for gas and liquid based power plants
Market for gas and liquid based power plants 2011 Total market 100.8 GW 2.0% 8.8% 3.3% GE 3.3% Siemens 4.3% MHI 34.6% Alstom 14.4% Wärtsilä Russian 29.3% Other gas turbines Other combustion engines* Market data includes all prime mover units over 5 MW and estimated output of steam turbines for combi
Slide 17: Good development within specialised vessel segments
Good development within specialised vessel segments
Slide 18: Vessel order development
# of vessels 18 © Wärtsilä 0 20 40 60 80 100 120 140 01.09 02.09 03.09 04.09 Merchant 05.09 06.09 07.09 Source: Clarkson Research Services 08.09 09.09 Offshore 10.09 11.09 * CGT= gross tonnage compensated with workload 12.09 01.10 02.10 03.10 04.10 05.10 06.10 Cruise and Ferry 07.10 08.10 09.10 10.1
Slide 19: Order intake increased by 51%
Order intake increased by 51% MEUR 2000 Review period development Total EUR 723 million (479) 1600 Merchant Offshore 32% 43% 1200 800 Other 2% Special 400 vessels 7% Cruise Navy & ferry 12% 4% 0 2008 2009 2010 2011 1-6/2012 19 © Wärtsilä
Slide 20: Increasing activity in scrubber markets
Increasing activity in scrubber markets • Exhaust gas scrubbers enable efficient and economical reduction of SOx emissions in ships • Wärtsilä’s scrubber portfolio is the widest in the market and consists of: – Open-loop scrubbers, well established – Closed-loop scrubbers, in operation and new proje
Slide 21: Joint venture ordering activity
Joint venture ordering activity MEUR 600 • Order intake in the South Korean 550 joint venture producing dual-fuel engines and the Chinese joint 500 venture producing auxiliary engines 450 totalled EUR 148 million (33) during 400 the review period January-June 2012 350 • Wärtsilä’s share of ownership
Slide 22: Ship Power order book 30 June 2012
Ship Power order book 30 June 2012 RoRo LNG 1% 10% Bulkers 6% Merchant Offshore Containers 40% 38% 2% Tankers 13% Cargo 6% Others 2% Navy Cruise & Ferry Special 5% 8% vessels 13% 22 © Wärtsilä
Slide 23: Market position of Wärtsilä's marine engines
Market position of Wärtsilä’s marine engines Medium-speed main engines Low-speed main engines Auxiliary engines Mitsubishi Wärtsilä 3%(2) 5%(5) Wärtsilä Others 22%(24) 25%(26) Wärtsilä 49%(49) MAN Diesel 19%(15) Others Caterpillar MAN Diesel 95%(95) (MAK) 75%(74) 7%(10) Total market volume last 12 m
Slide 24: Stable development in the service markets
Stable development in the service markets
Slide 25: Net sales development
Net sales development MEUR 2000 1800 0% 0% 0% Second quarter development 1600 MEUR 1400 600 -1% 1200 500 452 449 1000 400 800 300 600 200 400 200 100 0 0 2008 2009 2010 2011 1-6/2012 Q2/2011 Q2/2012 25 © Wärtsilä
Slide 26: Net sales by quarter
Net sales by quarter MEUR 600 500 400 300 200 100 0 2005 2006 2007 2008 2009 2010 2011 2012 Q1 Q2 Q3 Q4 26 © Wärtsilä
Slide 27: Net sales distribution 1-6/2012
Net sales distribution 1-6/2012 Field service 24%(23) Spare parts 53%(54) Contracts 14%(15) Projects 9%(8) Total EUR 942 million (890) 27 © Wärtsilä
Slide 28: Interest in service agreements continues
Interest in service agreements continues • Several service agreements signed during the second quarter: – A 3-year O&M agreement with Sasol New Energy Holdings covering the 180 MW gas engine power plant project in Sasolburg, South Africa – A long-term O&M agreement for the 120 MW Hera power plant in
Slide 29: Development of Power Plants service agreements
Development of Power Plants service agreements MW 4500 140% 4000 115% 120% 3500 100% 3000 2500 80% 2000 57% 58% 53% 60% 1500 40% 31% 1000 20% 500 0 0% 2008 2009 2010 2011 1-6/2012 O&M and maintenance agreements Power Plants deliveries % of delivered MWs 29 © Wärtsilä
Slide 30: Services – Fleet utilisation
Services – Fleet utilisation Anchored* & Idle Vessels**, percent of fleet 26% 20% 14% 8% 2% May.11 Mar.12 Apr.12 Jan.11 Feb.11 Mar.11 Apr.11 Jun.11 Jul.11 Aug.11 Sep.11 Oct.11 Nov.11 Dec.11 Jan.12 Feb.12 May.12 Jun.12 Jul.12 Anchored Idle Fleet Average Speed***, knots 10,5 10,0 9,5 9,0 Mar.12 Jan.11
Slide 31: Cash flow from operating activities
Cash flow from operating activities MEUR 800 700 600 500 400 300 200 100 0 -100 -200 2008 2009 2010 2011 1-6/2012 31 © Wärtsilä
Slide 32: Net working capital development
Net working capital development MEUR 2000 25% 1800 • Increase in net working capital a result of: 1600 20% – Decrease in mainly project 1400 related accruals – Increase in inventories, due to: 1200 15% 13.0%* • Large deliveries scheduled 1000 for the remainder of the year 800 9.2% 10% • Certain cust
Slide 33: Committed loans 30 June 2012
Committed loans 30 June 2012 MEUR 1600 1400 1200 534 1000 Total EUR 942 million 800 262 drawn 86 600 400 594 200 0 Drawn long- Current portion Drawn short- Undrawn term loans of long-term term loans revolving credits loans At the end of the reporting period, drawn revolving credits amounted to 0 eur
Slide 34: 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% 2008 2009 2010 2011 30.6.2012 -0,10 2008 2009 2010 2011 30.6.2012 34 © Wärtsilä
Slide 35: Organising for entrepreneurial drive
Organising for entrepreneurial drive • Change of organisational set up within Ship Power and Wärtsilä Industrial Operations to strengthen competitiveness and to serve customers more effectively • Aim to further increase the flexibility of operations and ensure faster decision making • Ship Power wil
Slide 36: Market outlook
Market outlook • Power Plants: The power generation market is expected to remain active in 2012. • Ship Power: Full year vessel contracting expected to be somewhat lower than in 2011. Robust contracting activity is expected for the offshore, gas carrier, and other specialised vessel markets. • Servi
Slide 37: Prospects for 2012 reiterated
Prospects for 2012 reiterated Wärtsilä expects its net sales for 2012 to grow by 5-10% and its operational profitability (EBIT% before non-recurring items) to be 10-11%.
Slide 38: IR Contact
IR Contact: Pauliina Tennilä Director, Investor Relations Tel. +358 (0) 40 570 5530 E-mail: pauliina.tennila@wartsila.com