Slide 1: Wärtsilä Corporation Interim Report January-June 2010
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-JUNE 2010 OLE JOHANSSON, PRESIDENT & CEO 21 JULY 2010 1 © Wärtsilä
Slide 2: Q2/10 Highlights
Q2/10 Highlights • Order intake EUR 1,117 million (42%) • Net sales EUR 1,131 million (-15%) • Operating result* EUR 117 million (-25%), 10.4% of net sales • EPS* 0.86 euro (1.06) • Cash flow from operating activities EUR 89 million (-95) * Excluding nonrecurring items 2 © Wärtsilä
Slide 3: Good growth in order intake
Good growth in order intake MEUR 6000 5500 Second quarter development MEUR 5000 1200 1 117 42% 4500 1000 4000 2% 800 785 3500 600 3000 215% 2500 400 2000 70% 200 1500 0 1000 Q2/2009 Q2/2010 500 0 2006 2007 2008 2009 1-6/2010 Order intake Power Plants Ship Power Services 3 © Wärtsilä
Slide 4: Order book unchanged compared to the previous quarter
Order book unchanged compared to the previous quarter MEUR 8000 7000 -26% 5 829 6000 38% 5000 4 315 4000 -40% 3000 2000 -16% 1000 0 2006 2007 2008 2009 30.6.2009 30.6.2010*) Order book Power Plants Ship Power Services *) Cancellations amounting to EUR 162 million have been deducted from the order bo
Slide 5: Order book distribution
Order book distribution MEUR 5000 4000 3000 2000 1000 0 30.6.2009 30.6.2010 Delivery current year Delivery next year + 5 © Wärtsilä
Slide 6: Net sales developed as expected
Net sales developed as expected MEUR 5500 5000 Second quarter development 14% 4500 MEUR 1400 1 333 4000 -15% 1 131 1200 23% 3500 1000 -1% 18% 800 3000 600 -42% 2500 400 2000 3% 200 1500 0 Q2/2009 Q2/2010 1000 500 0 2006 2007 2008 2009 1-6/2010 Net sales Power Plants Ship Power Services 6 © Wärtsilä
Slide 7: Net sales by business 1-6/2010
Net sales by business 1-6/2010 Ship Power Power Plants 27% (33) 31% (32) Services 42% (35) 7 © Wärtsilä
Slide 8: Good profitability
Good profitability MEUR 220 200 180 160 140 10.4% 120 100 80 60 40 20 0 Q1 Q2 Q3 Q4 2006 2007 2008 2009 2010 Operating result before nonrecurring items 8 © Wärtsilä
Slide 9: Ship Power market - vessel order development
Ship Power market - vessel order development Continued recovery in ordering activity All vessels Merchant Offshore Cruise and Ferry 140 Special vessels 3 months moving average in DWT 120 450 30 100 # of vessels 400 25 80 350 60 300 20 40 Million DWT # of vessels 250 20 15 0 200 11.09 01.09 03.09 05.
Slide 10: Ship Power order intake – clear signs of pick-up
Ship Power order intake – clear signs of pick-up MEUR 900 800 700 600 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 Q1 Q2 Q3 Q4 10 © Wärtsilä
Slide 11: Ship Power order intake by segment Q2/2010
Ship Power order intake by segment Q2/2010 Ship Design Navy 3% 6% Cruise & Ferry 8% Special vessels Offshore 11% 57% Merchant 14% Total EUR 213 million (67) 11 © Wärtsilä
Slide 12: Ship Power market
Ship Power market Market position of Wärtsilä’s marine engines Medium-speed main engines Low-speed main engines Auxiliary engines Mitsubishi Wärtsilä 3%(7) 1%(1) Wärtsilä 15%(11) Others Wärtsilä 37%(31) 37%(35) MAN Diesel Others MAN Diesel 82%(82) 99%(99) 22%(26) Caterpillar (MAK) 4%(8) Total market
Slide 13: Ship Power order book June 30, 2010
Ship Power order book June 30, 2010 All vessel segments represented RoRo LNG 4% 7% Bulkers Merchant 11% Offshore 50% 28% Containers 7% Special vessels 8% Tankers 8% Cruise & Ferry Cargo Navy 8% 13% 6% Ship Design 1% Total EUR 2,157 million (3,602) 13 © Wärtsilä
Slide 14: Power Plants order intake by application
Power Plants order intake by application MEUR 2000 Second quarter development MEUR 1800 500 437 1600 70% 400 1400 2489% 300 257 1200 -17% 200 1000 100 800 -74% 0 600 Q2/2009* Q2/2010 400 * No orders from Oil & Gas industry in Q209 200 Order intake by fuel Q2/2010 0 2006 2007 2008 2009 1-6/2010 Oil 1
Slide 15: Power Plants quarterly order intake
Power Plants quarterly order intake Strongest order intake since mid 2008 MEUR 600 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 Q1 Q2 Q3 Q4 15 © Wärtsilä
Slide 16: Power Plants order intake
Power Plants order intake Asia strongest region Order intake 1-6/2010: 1,492 MW (1,064) Asia 659 (0) Europe 118 (320) 55 118 Americas 499 (262) 110 72 494 357 Africa and Middle East 216 (482) 70 164 47 Flexible baseload 6 Industrial self-generation Oil & gas Grid stability & peaking 16 © Wärtsilä
Slide 17: Services – Net sales steady
Services – Net sales steady MEUR 2000 1800 Second quarter development 0% MEUR 500 1600 469 463 18% 400 -1% 1400 22% 1200 300 1000 200 800 100 600 0 Q2/2009 Q2/2010 400 200 0 2006 2007 2008 2009 1-6/2010 17 © Wärtsilä
Slide 18: Services – Net sales per quarter
Services – Net sales per quarter MEUR 600 500 400 300 200 100 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Q1 Q2 Q3 Q4 18 © Wärtsilä
Slide 19: Services – Net sales distribution 1-6/2010
Services – Net sales distribution 1-6/2010 Field service 24% Spare parts 54% Contracts 13% Projects 9% 19 © Wärtsilä
Slide 20: Services: Level of laid-up vessels starting to normalise
Services Level of laid-up vessels starting to normalise 20% 18% 16% 14% % of Fleet 12% 10% 8% 6% 4% 2% Mar.09 Mar.10 Sep.09 Nov.08 Nov.09 May.09 May.10 Jul.09 Jan.09 Jan.10 Anchored* Idle** * Anchored (reported navigation status at anchor). Source Bloomberg (AISLive). More than 25 000 vessels (>299
Slide 21: Strong cash flow
Strong cash flow MEUR 4-6/10 4-6/09 1-6/10 1-6/09 2009 Cash flow from operating activities 89 -95 270 -72 349 Cash flow from investing activities -14 -44 -25 -90 -163 Cash flow from financing activities -3 108 -171 81 -140 Cash and cash equivalents at end of period 331 118 331 118 244 21 © Wärtsilä
Slide 22: Net working capital development
Net working capital development MEUR 2000 25% 1800 MEUR 30 June 2010 1800 1600 20% 1600 1400 1400 1200 1200 15% 1000 1000 800 600 7.6%* 9.5% 800 9.2% 10% 314 8.4% 400 7.0% 600 5.8% 200 5.5% 482 0 400 2.7% 267 5% * Annualised Working 206 212 176 Capital / Net Sales 200 155 102 0 0% 2003 2004 2005 200
Slide 23: Committed loans June 30, 2010
Committed loans June 30, 2010 MEUR 1400 1200 1000 555 800 Total EUR 1 678 million 78 drawn 600 400 599 200 0 Drawn long- Current portion Drawn short- Undrawn revolving term loans of long-term term loans credits loans At the end of the reporting period, drawn revolving credits amounted to 0 euros. In
Slide 24: 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 2006 2007 2008 2009 30.6.2010 2006 2007 2008 2009 30.6.2010 -0,10 24 © Wärtsilä
Slide 25: Restructuring programmes
Restructuring programmes Initiated 2009 • Ship Power adjustment program • Reduction of 400-450 jobs • Expected annual savings of EUR 30 million, will take full effect by the end of 2010 • Programme proceeding according to plan, majority of savings have materialised Initiated 2010 • Reducing manufact
Slide 26: Market outlook
Market outlook • Ship Power: Ordering volumes will remain at lower levels than during the previous peak years. Competition and price pressure will remain intense. Order intake expected to clearly improve compared to 2009. • Power Plants: The power generation market recovery is expected to continue i
Slide 27: Prospects for 2010 reiterated
Prospects for 2010 reiterated • Net sales expected to decline by 10-20 percent. • Operational profitability (EBIT% before nonrecurring items) between 9-10%, well within the upper end of our long- term target range. 27 © Wärtsilä
Slide 28: IR Contact
IR Contact: Joséphine Mickwitz Director, Investor Relations Tel. +358 (0)10 7095216 E-mail: Presentation name / Author josephine.mickwitz@wartsila.com