Slide 1: Wärtsilä Corporation Interim Report January-March 2010
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-MARCH 2010 OLE JOHANSSON, PRESIDENT & CEO 23 APRIL 2010 1 © Wärtsilä
Slide 2: Q1/10 Highlights
Q1/10 Highlights • Net sales EUR 922 million (-26%) • Operating result * EUR 94 million (-28%), 10.2% of net sales • EPS EUR 0.68 * (0.89) • Order intake EUR 881 million (-8%) • Cash flow from operating activities EUR 181 million * Excluding nonrecurring items 2 © Wärtsilä
Slide 3: Order intake still low
Order intake still low MEUR 6000 First quarter development 5500 5000 1000 958 -8% 881 4500 800 4000 3% 3500 600 3000 -29% 400 2500 -17% 2000 200 1500 0 1000 Q1/2009 Q1/2010 500 0 2006 2007 2008 2009 1-3/2010 Order intake Power Plants Ship Power Services 3 © Wärtsilä
Slide 4: Order book unchanged compared to the end of the previous quarter
Order book unchanged compared to the end of the previous quarter MEUR 8000 -33% 7000 6 477 34% 6000 5000 4 330 4000 -46% 3000 2000 -24% 1000 0 2006 2007 2008 2009 31.3.2009 31.3.2010*) Order book Power Plants Ship Power Services *) Cancellations amounting to EUR 82 million have been deducted from th
Slide 5: Order book distribution
Order book distribution MEUR 5000 4000 3000 2000 1000 0 31.3.2009 31.3.2010 Delivery current year Delivery next year + 5 © Wärtsilä
Slide 6: Net sales low due to timing of deliveries
Net sales low due to timing of deliveries MEUR 5500 5000 First quarter development 14% 4500 MEUR 1400 4000 1 241 -26% 1200 23% 922 3500 1000 18% -6% 800 3000 600 -26% 2500 400 2000 -45% 200 1500 0 Q1/2009 Q1/2010 1000 500 0 2006 2007 2008 2009 1-3/2010 Net sales Power Plants Ship Power Services 6 ©
Slide 7: Net sales by business 1-3/2010
Net sales by business 1-3/2010 Ship Power Power Plants 30% (30) 26% (35) Services 44% (35) 7 © Wärtsilä
Slide 8: Good profitability
Good profitability MEUR 220 200 180 160 140 120 100 10.2% 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 Small signs of recovery Source: Clarkson Research Services Limited 9 © Wärtsilä
Slide 10: Ship Power order intake marginally up
Ship Power order intake marginally 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 market
Ship Power market Market position of Wärtsilä’s marine engines Medium-speed main engines Low-speed main engines Auxiliary engines Mitsubishi Wärtsilä 7%(6) 1%(2) Wärtsilä 11%(12) Others Wärtsilä 31%(28) 35%(36) MAN Diesel MAN Diesel Others 26%(27) 82%(82) 99%(98) Caterpillar (MAK) 8%(9) Total market
Slide 12: Ship Power order book March 31, 2010
Ship Power order book March 31, 2010 All vessel segments represented RoRo LNG 5% 7% Bulkers Merchant 12% Offshore 54% 25% Containers 7% Special vessels 7% Cruise & Ferry Tankers 7% 8% Navy Cargo 6% 15% Ship Design 1% Total EUR 2,242 million (4,127) 12 © Wärtsilä
Slide 13: Power Plants order intake by application
Power Plants order intake by application MEUR 2000 First quarter development MEUR 1800 400 -17% 1600 300 1400 -96% 1200 200 116% 1000 100 -88% 800 0 600 Q1/2009 Q1/2010 400 * No orders from Oil & Gas industry in Q109 200 Oil 24% 0 Renewable 3% Gas 2006 2007 2008 2009 1-3/2010 73% Industrial self- Fl
Slide 14: Power Plants quarterly order intake
Power Plants quarterly order intake MEUR 600 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 Q1 Q2 Q3 Q4 14 © Wärtsilä
Slide 15: Power Plants order intake
Power Plants order intake Africa and Middle East strongest region Order intake 1-3/2010: 457 MW (587) Asia 52 (0) Europe 64 (112) 27 25 Americas 46 (261) Africa and Middle East 295 (213) 246 44 Flexible baseload Industrial self-generation Oil & gas 6 Grid stability & peaking 15 © Wärtsilä
Slide 16: Services net sales, slow start of the year
Services net sales, slow start of the year MEUR 2000 1800 First quarter development 0% MEUR 500 1600 434 -6% 409 1400 18% 400 22% 1200 300 1000 200 800 100 600 0 Q1/2009 Q1/2010 400 200 0 2006 2007 2008 2009 1-3/2010 16 © Wärtsilä
Slide 17: 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 17 © Wärtsilä
Slide 18: Services net sales distribution 1-3/2010
Services net sales distribution 1-3/2010 Field service 23% Spare parts 55% Contracts 13% Projects 9% 18 © Wärtsilä
Slide 19: Lay-up situation eased towards the end of the quarter
Services Lay-up situation eased towards the end of the quarter 18% 16% 14% % of Fleet 12% 10% 8% 6% 4% 2% Aug.08 Oct.08 Dec.08 Feb.09 Apr.09 Jun.09 Aug.09 Oct.09 Dec.09 Feb.10 Anchored* Idle** * Anchored (reported navigation status at anchor). Source Bloomberg (AISLive). More than 25 000 vessels (>2
Slide 20: Strong cash flow
Strong cash flow MEUR 1-3/10 1-3/09 2009 Cash flow from operating activities 181 23 349 Cash flow from investing activities -11 -46 -163 Cash flow from financing activities -168 -27 -140 Cash and cash equivalents at the end of period 252 149 244 20 © Wärtsilä
Slide 21: Working capital development
Working capital development MEUR 2000 25% 1800 31 March 2010 MEUR 1800 1600 20% 1600 1400 1400 1200 1200 15% 1000 1000 800 9.0%* 9.5% 600 800 9.2% 10% 332 8.4% 400 7.0% 600 5.8% 482 200 5.5% 0 400 5% * Annualised Working 2.7% 267 206 212 176 Capital / Net Sales 200 155 102 0 0% 2003 2004 2005 2006 2
Slide 22: Committed loans March 31, 2010
Committed loans March 31, 2010 MEUR 1400 1200 1000 570 800 1 Total EUR 70 682 million 600 drawn 400 611 200 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. I
Slide 23: Financial position
Financial position Solvency Gearing % 50 0,50 45 0,40 40 35 0,30 30 25 0,20 20 15 0,10 10 5 0,00 2006 2007 2008 2009 31.3.2010 0 2006 2007 2008 2009 31.3.2010 -0,10 23 © Wärtsilä
Slide 24: Restructuring programmes
Restructuring programmes Adjusting Ship Power organisation (May 2009) • Adjustment program to reduce 400-450 jobs proceeding according to plan • Expected annual savings of EUR 30 million, will take full effect by the end of 2010 Reducing manufacturing capacity (January 2010) • Manufacturing of prope
Slide 25: Market outlook
Market outlook • Ship Power: Overcapacity will maintain ordering volumes at low levels and lead to more intense competition and price pressure. Order intake estimated to be moderately better in 2010 than in 2009. • Power Plants: Gradual recovery in power generation market along with improvements in
Slide 26: Prospects for 2010 reiterated
Prospects for 2010 reiterated • Net sales expected to decline by 10-20 percent. • Operational profitability (EBIT% before nonrecurring items) should be between 9-10%, well within the upper end of our long-term target range. 26 © Wärtsilä
Slide 27: IR Contact: Joséphine Mickwitz, Director, Investor Relations
IR Contact: Joséphine Mickwitz Director, Investor Relations Tel. +358 (0)10 7095216 E-mail: Presentation name / Author josephine.mickwitz@wartsila.com