Slide 1: Wärtsilä Corporation Interim Report January-September 2016
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-SEPTEMBER 2016 25 October 2016 Jaakko Eskola, President & CEO 1 © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation
Slide 2: Highlights Q3/2016
Highlights Q3/2016 • Order intake EUR 1,139 million, +5% • Net sales EUR 1,079 million, -12% • Book-to-bill 1.06 (0.89) • Comparable operating result EUR 123 million, 11.4% of net sales (EUR 160 million or 13.1%) • Earnings per share EUR 0.43 (0.49) • Cash flow from operating activities EUR 189 mill
Slide 3: Positive development in order intake
Positive development in order intake MEUR 5 500 5 000 Third quarter development 4 500 MEUR 4 000 1 600 3 500 1 400 1,086 5% 1,139 3 000 1 200 2% Services 2 500 1 000 2 000 800 Marine Solutions 1 500 600 -29% 1 000 400 Energy 97% Solutions 500 200 0 0 2012 2013 2014 2015 2016 Q3/2015 Q3/2016 Q1-Q3 Q4
Slide 4: Net sales affected by delivery schedules
Net sales affected by delivery schedules MEUR 5 500 5 000 Third quarter development 4 500 MEUR 4 000 1 400 1,222 3 500 1 200 -12% 1,079 3 000 1 000 2 500 -4% Services 800 2 000 Marine 600 Solutions 1 500 -13% 400 1 000 Energy -27% Solutions 500 200 0 0 2012 2013 2014 2015 2016 Q3/2015 Q3/2016 Q1-Q3
Slide 5: Net sales by business 1-9/2016
Net sales by business 1-9/2016 Services Marine Solutions 48% (45) 36% (33) Energy Solutions 16% (22) 5 © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation
Slide 6: Book-to-bill ratio
Book-to-bill ratio MEUR 5 500 1,4 5 000 1,2 4 500 1.11 1.05 1.05 1.06 0.98 4 000 1,0 3 500 0,8 3 000 2 500 0,6 2 000 1 500 0,4 1 000 0,2 500 0 0,0 2012 2013 2014 2015 1-9/2016 Order intake Net sales Book-to-bill 6 © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation
Slide 7: Order book distribution
Order book distribution MEUR 3 000 2 500 2 000 1 500 1 000 500 0 30.9.2015 30.9.2016 Delivery current year Delivery next year Delivery later than next year 7 © Wärtsilä PUBLIC 20 July 2016 Q2 Result presentation
Slide 8: Operating result impacted by lower delivery volumes
Operating result impacted by lower delivery volumes MEUR 700 14% 11.9% 12.2% Review period development 600 12% 11.2% 10.9% MEUR 450 14% 500 10% 400 12% 400 8% 350 11.5% 10% 300 10.2% 300 6% 250 8% 200 6% 200 4% 150 4% 100 100 2% 2% 50 0 0% 0 0% 2012 2013 2014 2015 1-9/2015 1-9/2016 Comparable operat
Slide 9: Energy Solutions
ENERGY SOLUTIONS 9 © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation
Slide 10: Strong ordering activity in Energy Solutions
ENERGY SOLUTIONS Strong ordering activity in Energy Solutions Review period development MEUR Total EUR 947 million (642) 1 800 Utilities 1 600 21% 20% Independent 1 400 power producers 58% 1 200 Industrials 1 000 800 Review period order intake 600 by fuel in MW 400 Oil Gas 200 59% 41% 0 2012 2013 20
Slide 11: Order intake globally
ENERGY SOLUTIONS Order intake globally Europe* 936 (1,037) 18 Asia 395 (174) 919 87 Americas 726 (246) 9 298 36 278 412 Africa and Middle East 498 (230) Utilities 55 IPP’s 215 228 (Independent Power Producers) Industrials Order intake 1-9/2016: 2,555 MW (1,687) *Turkish owners contributed to the hig
Slide 12: Market for gas and liquid fuel power plants, <500 MW
ENERGY SOLUTIONS Market for gas and liquid fuel power plants, <500 MW 1-6/2015 1-6/2016 Ansaldo Other GT’s Other GT’s 7.4% 0.4% Wärtsilä 1.9% Wärtsilä 16.0% 9.7% MHI GE MHI GE 19.5% 35.0% 17.7% 36.8% Siemens Siemens 27.9% 27.8% <500 MW market volume: 11.8 GW (12.6), -6% Total market volume: 37.2 GW
Slide 13: Marine Solutions
MARINE SOLUTIONS 13 © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation
Slide 14: Contracting volumes reflect weak marine market environment
MARINE SOLUTIONS Contracting volumes reflect weak marine market environment Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT * 250 5,0 4,5 200 4,0 3,5 Number of vessels 150 3,0 * Million CGT 2,5 100 2,0 1,5 50 1,0 0,5 0 0,0 01.09 03.09 05.09 07.09 09.09 11.09 01.10 0
Slide 15: Cruise & ferry supported Marine Solutions' order intake
MARINE SOLUTIONS Cruise & ferry supported Marine Solutions’ order intake MEUR 1 800 Review period development Total EUR 1,028 million (1,134) 1 500 Offshore Gas carriers 4% Special vessels 1 200 13% 10% 900 Traditional Cruise & 600 merchant ferry 19% 41% 300 Others 5% 0 Navy 2012 2013 2014 2015 2016
Slide 16: Wärtsilä to supply regasification system for Höegh LNG's FSRU conversion
Wärtsilä to supply regasification Kuva system for Höegh LNG’s FSRU conversion project pitää vaihtaa, • The conversion is planned to be carried out on a modern LNG vessel bonny • Conversion enables Höegh LNG to quickly capture new business kalvon opportunities • Wärtsilä’s system features kuva voisi
Slide 17: Strong position in marine engine market
MARINE SOLUTIONS Strong position in marine engine market Medium-speed main engines Auxiliary engines Others Wärtsilä 11% (14) 16% (13) Caterpillar 15% (6) Wärtsilä Others 50% (58) 84% (87) MAN D&T 24% (22) Total market volume last 12 months: Total market volume last 12 months: 2,358 MW (2,090) 3,617
Slide 18: Services
SERVICES 18 © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation
Slide 19: Services' year-to-date net sales stable
SERVICES Services’ year-to-date net sales stable MEUR 2 400 2 200 Third quarter development 2 000 MEUR 1 800 700 1 600 1 400 600 531 512 1 200 -4% 500 1 000 400 800 300 600 200 400 200 100 0 0 2012 2013 2014 2015 2016 Q3/2015 Q3/2016 Q1-Q3 Q4 19 © Wärtsilä PUBLIC 25 October 2016 Q3 result presentati
Slide 20: Net sales distribution 1-9/2016
SERVICES Net sales distribution 1-9/2016 Field service 23% (24) Spare parts 50% (51) Agreements 15% (17) Projects 11% (8) Total EUR 1,554 million (1,565) 20 © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation
Slide 21: Installed base covered by service agreements
SERVICES Installed base covered by service agreements 16 000 30% 14 000 25% 12 000 20% 10 000 MW 8 000 15% 6 000 10% 4 000 5% 2 000 0 0% 2009 2010 2011 2012 2013 2014 2015 1-9/2016 MW under agreement – Energy Solutions MW under agreement – Marine Solutions % of Energy Solutions’ installed base % of
Slide 22: SkyLight – a next generation fleet performance monitoring service
SkyLight – a next generation fleet performance monitoring service • SkyLight combines data about the ship’s movements with noon report and meteorological data, to model the vessel’s speed and fuel performance • Vessel performance records are stored in the cloud-based software, enabling more prompt r
Slide 23: Financials
FINANCIALS 23 © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation
Slide 24: Cash flow development
FINANCIALS Cash flow development MEUR 700 600 Review period development MEUR 400 500 350 400 300 250 300 200 200 150 100 100 50 0 0 2012 2013 2014 2015 1-9/2015 1-9/2016 24 © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation
Slide 25: Working capital development
FINANCIALS Working capital development MEUR 1 600 25% 1 400 Review period development 20% MEUR 1 200 1 600 25% 1 000 1 400 15% 20% 1 200 800 10.8% 9.8% 1 000 15% 543 10% 600 800 11.2%* 465 6.8% 10.5%* 5.2% 10% 600 522 540 400 313 5% 251 400 5% 200 200 0 0% 0 0% 2012 2013 2014 2015 30.9.2015 30.9.201
Slide 26: Gearing
FINANCIALS Gearing 0,50 Review period development 0,40 0,50 0,30 0,40 0,30 0,20 0,20 0,10 0,10 0,00 0,00 2012 2013 2014 2015 30.9.2015 30.9.2016 26 © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation
Slide 27: Market outlook
Market outlook Energy Solutions Marine Solutions Services Growth in electricity demand and the The outlook for the shipping and The service market outlook remains availability of international funding for shipbuilding markets remains solid with growth opportunities in infrastructure projects will co
Slide 28: Prospects for 2016 revised
Prospects for 2016 revised Wärtsilä expects its net sales to decline by around 5% and its profitability (comparable operating result as a percent of net sales) to be around 12%. 28 © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation
Slide 29: Thank you
THANK YOU Further information: Natalia Valtasaari Director, Investor & Media Relations Tel. +358 (0) 10 709 5637 E-mail: natalia.valtasaari@wartsila.com 29 © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation