Wartsila Oyj Abp · OMXHEX:WRT1V
Wartsila Oyj Abp — Wärtsilä — SEB Enskilda Finnish Industrials Seminar (March 2011)
38 slides from Wartsila Oyj Abp's conference presentation, Mar 23, 2011
Slide 1: Wärtsilä Corporation – SEB Enskilda Finnish Industrials Seminar
WÄRTSILÄ CORPORATION SEB ENSKILDA FINNISH INDUSTRIALS SEMINAR OLE JOHANSSON, PRESIDENT & CEO 23 MARCH 2011 1 © Wärtsilä
Slide 2: 2010 – Solid performance at all levels
2010 – Solid performance at all levels • Order intake EUR 4,005 million, +22% • Net sales EUR 4,553 million, -13% • Operating result EUR 487 million, 10.7% of net sales • All time high cash flow EUR 663 million (349) • EPS EUR 3.35 (4.30) • Dividend proposal 1.75 euro per share (1.75) and extra divi
Slide 3: Order intake increased
Order intake increased MEUR 6000 5500 Fourth quarter development MEUR 5000 1200 22% 4500 1 003 1000 4000 823 800 3500 8% 600 3000 227% 2500 400 2000 200 5% 1500 0 1000 Q4/2009 Q4/2010 500 0 2006 2007 2008 2009 2010 Order intake Power Plants Ship Power Services 3 © Wärtsilä
Slide 4: Order book
Order book MEUR 8000 7000 -16% 6000 5000 4 491 16% 3 795 4000 3000 -29% 2000 1000 -5% 0 2006 2007 2008 31.12.2009 31.12.2010 Order book Power Plants Ship Power Services 4 © Wärtsilä
Slide 5: Order book distribution
Order book distribution MEUR 5000 4000 3000 2000 1000 0 31.12.2009 31.12.2010 Delivery next year Delivery next year + 5 © Wärtsilä
Slide 6: Net sales developed as expected
Net sales developed as expected MEUR 5500 5000 Fourth quarter development 14% -13% 4500 MEUR 1600 1 519 1 462 4000 1400 -4% 23% 1200 3500 2% 18% 1000 3000 -31% 800 2500 600 400 2000 21% 200 1500 0 Q4/2009 Q4/2010 1000 500 0 2006 2007 2008 2009 2010 Net sales Power Plants Ship Power Services 6 © Wärt
Slide 7: Net sales by business 2010
Net sales by business 2010 Ship Power Power Plants 26% (34) 34% (31) Services 40% (35) 7 © Wärtsilä
Slide 8: Net sales by market area
Net sales by market area Strong presence in Asia MEUR 6000 5000 4000 3000 2000 1000 0 2006 2007 2008 2009 2010 Asia Europe Americas Other 8 © Wärtsilä
Slide 9: Solid profitability
Solid profitability MEUR 220 200 180 10.9% 160 140 120 100 80 60 40 20 0 Q1 Q2 Q3 Q4 2006 2007 2008 2009 2010 Operating result before nonrecurring restructuring items 9 © Wärtsilä
Slide 10: Ship Power - market drivers
Ship Power - market drivers • Global demand for new vessels, in particular regarding ships built for seaborne cargo transportation, offshore oil exploration and support, cruise and ferry services, and for naval contracting. • Development of the global economy and its impact on trade and needed trans
Slide 11: Ship Power market – vessel order development
Ship Power market – vessel order development 2010 contracting activity stronger than expected All vessels Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in DWT 450 30 400 25 350 300 20 Million DWT # of vessels 250 15 200 150 10 100 5 50 - 0 01.05 03.05 05.05 07.05 09.05 1
Slide 12: Ship Power quarterly order intake
Ship Power quarterly order intake MEUR 900 800 700 600 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 Q1 Q2 Q3 Q4 12 © Wärtsilä
Slide 13: Ship Power order intake by segment Q4/2010
Ship Power order intake by segment Q4/2010 Offshore strongest segment Ship Design Navy 4% 2% Cruise & Ferry 21% Offshore 34% Special vessels 19% Merchant 20% Total EUR 178 million (54) 13 © Wärtsilä
Slide 14: 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%(3) 4%(3) Wärtsilä Others 13%(12) 18%(29) Wärtsilä 42%(32) MAN Diesel 25%(31) MAN Diesel Others Caterpillar 84%(85) 96%(97) (MAK) 15%(8) Total marke
Slide 15: Ship Power order book Dec. 31, 2010
Ship Power order book Dec. 31, 2010 All vessel segments represented LNG RoRo 5% 3% Bulkers 11% Merchant Offshore 45% 31% Containers 6% Tankers 8% Special vessels 9% Cargo 12% Cruise & Ferry Ship Design Navy 8% 2% 5% Total EUR 1,825 million (2,553) 15 © Wärtsilä
Slide 16: Wärtsilä is a frontrunner in LNG fuelled ships
Wärtsilä is a frontrunner in LNG fuelled ships • Wärtsilä has received an order to supply gas engines and equipment for Viking Line’s new environmentally sound passenger ferry • Wärtsilä has installed dual fuel technology in over 60 LNG carriers Contract awarded by STX Finland Oy • Four Wärtsilä 8L5
Slide 17: Power Plants - market trends and drivers
Power Plants - market trends and drivers • Growth of electricity demand • Increasing need for flexibility – Electrification – Increasing daily, weekly and seasonal – GDP growth demand fluctuation – Increasing standard of living – Rapid introduction of intermittent renewable energy (wind & solar) • S
Slide 18: Power Plants - Market demand remains strong
Power Plants - Market demand remains strong Quoted MW per Fuel Type 16000 14000 12000 10000 Others MW 8000 6000 Natural gas 4000 Heavy fuel 2000 oil 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 2004 2005 2006 2007 2008 2009 2010 Share of natural gas is consis
Slide 19: Power Plants order intake by application
Power Plants order intake by application MEUR 2000 Fourth quarter development MEUR 1800 400 5% 1600 317 300 948% 300 1400 1200 200 28% 1000 100 800 -6% 0 600 Q4/2009 Q4/2010 No orders from Grid stability and peaking in Q4/2010 400 200 Order intake by fuel Q4/2010 0 2006 2007 2008 2009 2010 Oil Gas 4
Slide 20: 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 20 © Wärtsilä
Slide 21: Power Plants order intake
Power Plants order intake Asia strongest region Order intake 2010: 3,175 MW (2,007) Asia 1,346 (148) Europe 762 (649) 105 689 Americas 745 (441) 80 317 55 9 924 9 405 260 Africa and Middle East 321 (768) 175 65 Flexible baseload Industrial self-generation 81 Oil & gas Grid stability & peaking 21 © W
Slide 22: Power Plants order book Dec. 31, 2010
Power Plants order book Dec. 31, 2010 Grid stability and peaking 19% Flexible baseload 61% Oil & gas 9% Industrial self- generation 11% Total EUR 1,299 million (1,362) 22 © Wärtsilä
Slide 23: Services – Net sales stable
Services – Net sales stable MEUR 2000 1800 Fourth quarter development 0% 0% MEUR 600 1600 516 504 2% 18% 500 1400 22% 400 1200 300 1000 200 800 100 600 0 Q4/2009 Q4/2010 400 200 0 2006 2007 2008 2009 2010 23 © Wärtsilä
Slide 24: Services – Net sales by quarter
Services – Net sales by quarter Q4/2010 all time high MEUR 600 500 400 300 200 100 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Q1 Q2 Q3 Q4 24 © Wärtsilä
Slide 25: Service contract development
Service contract development MEUR MW 350 16000 300 14000 12000 250 10000 200 8000 150 6000 100 4000 50 2000 0 0 2007 2008 2009 2010 Net sales Total MW (O&M and Maintenance) 25 © Wärtsilä
Slide 26: Services – Net sales distribution 2010
Services – Net sales distribution 2010 Field service 24% Spare parts 53% Contracts 14% Projects 9% 26 © Wärtsilä
Slide 27: Services installed engine base Dec. 31, 2010
Services installed engine base Dec. 31, 2010 Total installed base 176,015 MW Ship Power Power Plants In addition to Engine Services, Wärtsilä’s Services portfolio includes: Electrical & Automation Services, Propulsion Services, Boiler Services, Environmental Services, O&M and Training Services 27 ©
Slide 28: Services – Laid up vessels
Services Laid up vessels decreased from early 2010 % of Fleet * Anchored (reported navigation status at anchor). Source Bloomberg (AISLive). More than 25 000 vessels (>299 GT) covered. ** Idle (no movement for 19 days for containerships, others 35 days). Source Lloyd’s MIU. Around 15 000 vessels (>2
Slide 29: Services – Broken up vessels and fleet average speed
Services Broken up vessels and fleet average speed Fleet Average Speed 12,0 11,5 11,0 Knots 10,5 10,0 9,5 9,0 Vessels Broken Up 20 15 # Ships / Week 10 5 0 29 © Wärtsilä
Slide 30: All time high cash flow from operating activities
All time high cash flow from operating activities MEUR 700 Fourth quarter development MEUR 600 250 207 200 500 171 150 400 100 300 50 200 0 Q4/2009 Q4/2010 100 0 2006 2007 2008 2009 2010 30 © Wärtsilä
Slide 31: Working capital development
Working capital development MEUR 2000 25% 1800 1600 20% 1400 1200 15% 1000 800 9.5% 9.2% 10% 8.4% 7.0% 600 5.5% 5.8% 482 3.7% 400 2.7% 5% 212 267 206 176 170 200 155 102 0 0% 2003 2004 2005 2006 2007 2008 2009 2010 Working Capital Total Inventories Advances Received Working Capital / Net Sales All f
Slide 32: 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 2010 -0,10 2006 2007 2008 2009 2010 32 © Wärtsilä
Slide 33: Restructuring measures
Restructuring measures Restructuring measures • May 2009: Ship Power adjustment program • January 2010: Adaption of manufacturing capacity initiated • October 2010: Processes initiated for reduction of 400 jobs in global staff functions Impacts of all restructuring measures • Personnel to be reduced
Slide 34: Market outlook
Market outlook • Ship Power: Competition and price pressure among shipbuilding suppliers will continue. Order intake in 2011 expected to be moderately better than in 2010. • Power Plants: Recovery in the power generation market is expected to continue in 2011. Order intake estimated to remain at a g
Slide 35: Wärtsilä in Japan
Wärtsilä in Japan Wärtsilä Japan’s share of net sales around 1% • All Wärtsilä personnel are safe • The natural disaster did not have a direct impact on Wärtsilä facilities Some important sub-suppliers are located in Japan • No direct impact from the natural disaster • Should power shortages result
Slide 36: Long-term growth and profitability
Long-term growth and profitability • Target to grow faster than global GDP • Operating profit margin target 10-14% MEUR 6 000 16% 12.1% 14% 5 000 11.4% 10.7% 10.1% 12% 4 000 8.2% 10% 3 000 8% 6% 2 000 4% 1 000 2% 0 0% 2006 2007 2008 2009 2010 Net sales Operating profit, % 36 © Wärtsilä
Slide 37: Prospects for 2011
Prospects for 2011 Wärtsilä expects its net sales for 2011 to grow 3-5% and operational profitability (EBIT% before nonrecurring items) to be around 11%. 37 © Wärtsilä
Slide 38: IR Contact
IR Contact: Pauliina Tennilä Director, Investor Relations Tel. +358 (0)10 7095498 E-mail: pauliina.tennila@wartsila.com
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