Wartsila Oyj Abp · OMXHEX:WRT1V
Wartsila Oyj Abp — Wärtsilä — Non-Deal Roadshow (March 2022)
31 slides from Wartsila Oyj Abp's roadshow presentation, March 2022
Slide 1: Shaping the decarbonisation of marine and energy
WARTSILA SHAPING THE DECARBONISATION OF MARINE AND ENERGY ROADSHOW PRESENTATION MARCH 2022
Slide 2: Market fundamentals
MARKET FUNDAMENTALS MARINE will move with unprecedented speed towards decarbonisation ENERGY is moving towards a 100% renewables future Policies & regulations Policies & regulations ▪ IMO target ▪ EU: Carbon neutral by 2050 ▪ Access to capital ▪ USA: carbon free electricity ▪ Cost of carbon producti
Slide 3: The Wärtsilä Way sets the scene for profitable growth
The Wärtsilä Way sets the scene for profitable growth 3 © Wärtsilä
Slide 4: Our value creation potential is based on two strategic themes
OUR VALUE CREATION POTENTIAL IS BASED ON TWO STRATEGIC THEMES 1 TRANSFORM Decarbonisation creates new business opportunities 2 PERFORM Leverage market recovery and growth 4 © Wärtsilä
Slide 5: Transform: decarbonisation creates new business opportunities
TRANSFORM Decarbonisation creates new business opportunities ▪ Maritime is going through an First Wärtsilä GridSolv unprecedented rate of 3 Quantum delivered in change, which is the USA accelerated by regulations and the demand for green transport. First real-life digital port call ▪ Also, the energ
Slide 6: Perform: ready to leverage market recovery and growth
PERFORM We are ready to leverage market recovery and growth #1-3 in global markets "SET FOR 30" DECARBONISATION TARGETS: FINANCIAL TARGETS: ▪ carbon neutral in our own ▪ 5% annual organic growth operations by 2030 ▪ 12% operating margin ▪ a product portfolio ready for zero carbon fuels by 2030 Clear
Slide 7: Set to deliver long term shareholder value
Set to deliver long term shareholder value We have clear Our balance sheet We have clear financial targets and financing capital allocation and are committed structure supports principles to realising them strategy execution 7 © Wärtsilä
Slide 8: New financial targets reflect growth opportunities and increased profitability
New financial targets reflect growth opportunities and increased profitability New targets Net sales 5% annual organic growth Profitability 12% operating margin Capital structure Gearing below 0.50 Dividend At least 50% of earnings 8 © Wärtsilä
Slide 9: Good growth opportunities in services, energy, and marine new build recovery
Good growth opportunities in services, energy, and marine new build recovery. Our installed base provides a strong foundation for services growth Key drivers Storage ▪ Fast growing demand for energy storage and power system optimisation solutions Services ▪ Increased share of wallet from existing cu
Slide 10: We will reach our profitability target while maintaining R&D investments
We will reach our profitability target while maintaining R&D investments at ~3% of net sales Key drivers ▪ Marine and Energy Services growth ▪ Thermal balancing power growth ▪ Storage growth Starting point: Target: Operating margin 5.9% ▪ Voyage turnaround and digital growth 12% operating margin (LT
Slide 11: Ambitious decarbonisation targets for 2030
Ambitious decarbonisation targets for 2030 To provide a product portfolio which will To become carbon neutral in be ready for zero carbon fuels our own operations 11 © Wärtsilä
Slide 12: Supporting decarbonisation in marine
SUPPORTING DECARBONISATION IN MARINE OWNERS WILL DECIDE MOVE FROM A SINGLE-FUEL INDUSTRY TO A MULTI-FUEL ONE ON TECHNOLOGY Distribution of fuel types for Decarbonisation 2050 (1.5ºC scenario), exajoule PARTNERS NOW: Carbon neutral and zero carbon fuels in maritime ▪ Vessel life is 25-30 years HFO (H
Slide 13: Vessel contracting history and forecast by segment
Vessel contracting history and forecast by segment Growing replacement demand Accelerated Continuing accelerated fleet renewal No of ships, 2,000+ dwt following implementation of fleet renewal supported by the fleet age profile 2,500 environmental regulations, and steady and potential increased cons
Slide 14: Supporting decarbonisation in energy
SUPPORTING DECARBONISATION IN ENERGY ▪ Wind and solar are intermittent power sources THE KEY STEPS TO FRONT-LOAD NET ZERO Utilise Power-to-X and flexible thermal plants to provide carbon ▪ Flexible balancing power neutral long-term storage. 5 Curtailment of needed to stabilize the power renewable sy
Slide 15: Renewable energy plays a key role in energy sector emissions abatement
Renewable energy plays a key role in energy sector emissions abatement Estimated growth of the addressable annual markets of thermal balancing (GW) and energy storage (GWh) 2020–2030: +30% p.a. Source: Bloomberg New Energy Outlook 2020, Source: Bloomberg New Energy Outlook 2021 Wärtsilä estimates at
Slide 16: Order intake and order book improved in 2021
ORDER INTAKE AND ORDER BOOK IMPROVED IN 2021 MEUR 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2017 2018 2019 2020 2021 Marine Energy Portfolio Business Total order intake Order book 16 © Wärtsilä
Slide 17: Increasing adoption of intermittent renewable energy is accelerating need for balancing power
Increasing adoption of intermittent renewable energy is accelerating the need for flexible balancing power Omaha PPD 156 MW - USA AGL 250 MWh - Australia Wärtsilä’s technology The battery energy with fast-starting storage system will internal combustion support both thermal and engines will be used
Slide 18: Net sales and comparable operating result increased in 2021
NET SALES AND COMPARABLE OPERATING RESULT INCREASED IN 2021 MEUR MEUR % 5,300 700 14 5,200 600 12 5,100 5,000 500 10 4,900 400 8 4,800 300 6 4,700 4,600 200 4 4,500 100 2 4,400 4,300 0 0 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Comparable operating result Net sales Comparable operating resu
Slide 19: Strong cash flow and balance sheet
STRONG CASH FLOW AND BALANCE SHEET MEUR 1-12/2021 1-12/2020 Cash flow from operating activities 731 681 Working capital -100 257 Net interest-bearing debt 4 394 Gearing 0.00 0.18 Solvency, % 38.6 38.1 Basic earnings/share, EUR 0.33 0.23 19 © Wärtsilä
Slide 20: Committed to providing shareholder returns
COMMITTED TO PROVIDING SHAREHOLDER RETURNS EUR 1.00 0.90 0.80 0.70 0.65 0.63 0.60 0.50 0.46 0.48 0.48 0.40 0.37 0.33 0.30 0.24 0.23 0.20 0.20 0.10 0.00 2017 2018 2019 2020 2021 Earnings per share Dividend per share 20 © Wärtsilä
Slide 21: Strong presence in sustainable development indices
Strong presence in sustainable development indices S&P Europe 350 ESG Index 21 © Wärtsilä
Slide 22: Wärtsilä is very well-positioned for the decarbonisation transformation
Wärtsilä is very well-positioned for the decarbonisation transformation Leader in Pioneer in ▪ Carbon neutral & zero carbon fuels ▪ Marine electric drivetrain - Available today: biofuels, methanol, up to 25% hydrogen blends - 2023: ammonia concept ▪ Marine carbon capture - 2025: 100% hydrogen concep
Slide 23: We continue investing in innovation
WE CONTINUE INVESTING IN INNOVATION TO ENSURE A BROAD, INDUSTRY-LEADING SOLUTION OFFERING 3.7 2.9 175 141 2017 2018 2019 2020 2021 R&D expenditure, MEUR % of net sales © Wärtsilä
Slide 24: Significant value creation potential
SIGNIFICANT VALUE CREATION POTENTIAL 24 © Wärtsilä
Slide 25: Financial development in Q4 2021
FINANCIAL DEVELOPMENT IN Q4 2021 25 © Wärtsilä
Slide 26: Moving in the right direction in 2021
MOVING IN THE RIGHT DIRECTION IN 2021: ORDERS, NET SALES, OPERATING RESULT, AND CASH FLOW ALL IMPROVED • Order intake increased by 32%, growth in all businesses • Good progress in services: ̶ Order intake increased by 17% ̶ Net sales increased by 11% • Profitability improved • Strong cash flow • Cov
Slide 27: Positive development in all key figures
POSITIVE DEVELOPMENT IN ALL KEY FIGURES MEUR 10-12/2021 10-12/2020 CHANGE 1-12/2021 1-12/2020 CHANGE Order intake 2,150 1,118 92% 5,735 4,359 32% of which services 753 626 20% 2,656 2,267 17% Order book 5,859 5,057 16% of which current year deliveries 3,763 3,298 14% Net sales 1,597 1,220 31% 4,778
Slide 28: Fourth quarter highlights
FOURTH QUARTER HIGHLIGHTS Net sales Comparable operating result MEUR MEUR, 12m rolling MEUR %, 12m rolling Net sales EUR 1,597 million 2,000 6,000 250 14.0% • 16% increase in 1,800 1,684 1,597 5,000 202 12.0% 1,600 200 service sales 1,400 10.0% 1,220 4,000 158 1,200 150 8.0% Comparable operating 1,0
Slide 29: Order intake increased by 92%
ORDER INTAKE INCREASED BY 92% Equipment Services MEUR MEUR, 12m rolling MEUR MEUR, 12m rolling 1,600 3,500 1,600 3,500 • Order intake 1,398 1,400 increased across 1,400 3,000 3,000 all businesses 1,200 2,500 1,200 2,500 1,000 1,000 • Equipment order 829 2,000 726 753 2,000 800 800 intake increased 1
Slide 30: Increase in order book
INCREASE IN ORDER BOOK BOOK-TO-BILL CONTINUED TO IMPROVE Order book by business Order book delivery schedule MEUR MEUR 7,000 1.40 4,500 4,000 6,000 1.20 3,500 5,000 1.00 3,000 4,000 0.80 2,500 3,000 0.60 2,000 1,500 2,000 0.40 1,000 1,000 0.20 500 0 0.00 0 31.12.2019* 30.6.2020 31.12.2020 30.6.2021
Slide 31: Wärtsilä
re, WARTSILA