Slide 1: Wärtsilä Corporation Interim Report January-September 2011
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-SEPTEMBER 2011 BJÖRN ROSENGREN, PRESIDENT & CEO 19 OCTOBER 2011 1 © Wärtsilä
Slide 2: Q3/11 Highlights
Q3/11 Highlights • Net sales EUR 851 million, -18% • Order intake EUR 1,118 million, +11% • Order intake in joint ventures EUR 182 million (68) • Book-to-bill increased to 1.31 (0.97) • Operating result EUR 94 million, 11.0% of net sales • EPS EUR 0.28 (0.41) • Wärtsilä acquired Cedervall Operating
Slide 3: Net sales developed as expected
Net sales developed as expected Q3 on Q3 development MEUR 1400 MEUR 1200 -18% 1 039 5500 1000 -5% 851 800 5000 14% -13% 600 -29% 4500 400 -24% 4000 200 23% 0 3500 YoY Q3/2010 Q3/2011 -4% 3000 Q3 on Q2 development 2500 MEUR 1400 -18% 2000 1200 Development from Q4/10 1 036 1000 1500 -9% 851 800 1000 6
Slide 4: Net sales by business 1-9/2011
Net sales by business 1-9/2011 Ship Power Power Plants 24% (27) 32% (31) Services 44% (42) 4 © Wärtsilä
Slide 5: Good growth in order intake
Good growth in order intake Q3 on Q3 development MEUR 1400 1200 11% 1 118 1 004 MEUR 1000 5% 6000 800 5500 600 11% 5000 400 19% 4500 200 0 4000 Q3/2010 Q3/2011 3500 3000 Q3 on Q2 development MEUR 1400 2500 1200 1 170 -4% 1 118 2000 1000 1500 2% 800 1000 600 -36% 500 400 0 200 2007 2008 2009 2010 1-9
Slide 6: Book-to-bill ratio above one
Book-to-bill ratio above one MEUR 6000 1,60 1.50 5500 1,40 5000 1.21 4500 1,20 1.10 4000 0.88 1,00 3500 3000 0,80 0.63 2500 0,60 2000 1500 0,40 1000 0,20 500 0 0,00 2007 2008 2009 2010 1-9/2011 Order intake Net sales Book-to-bill 6 © Wärtsilä
Slide 7: Order book development
Order book development MEUR 7000 6000 -5% 5000 4 243 20% 4 042 4000 3000 -15% 2000 1000 -3% 0 2007 2008 2009 2010 30.9.2010 30.9.2011 Power Plants Ship Power Services 7 © Wärtsilä
Slide 8: Order book distribution
Order book distribution MEUR 4000 3000 2000 1000 0 30.9.2010 30.9.2011 Delivery current year Delivery next year + 8 © Wärtsilä
Slide 9: Solid profitability
Solid profitability MEUR 250 16% 14% 200 12.1% Q3: EBIT% 11.4% 10.7% 11.0% 12% target: 10.1% 10-14% 10% 150 8% 100 6% 4% 50 2% 0 0% 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 Yearly EBIT% 9 © Wärtsilä
Slide 10: Ship Power market - contracting activity
10 © Wärtsilä # of vessels - 50 100 150 200 250 300 350 400 01.05 450 03.05 05.05 All vessels Source: Clarkson Research Services Limited 07.05 09.05 11.05 Cruise and Ferry 01.06 03.06 05.06 07.06 09.06 11.06 01.07 03.07 05.07 07.07 09.07 Merchant 11.07 01.08 03.08 Special vessels 05.08 07.08 09.08 1
Slide 11: Ship Power order intake by segment
Ship Power order intake by segment MEUR 2800 Third quarter development Total EUR 196 million (176) 2400 2000 Merchant Offshore 30%(19) 25%(54) 1600 Navy 1200 Offshore 11%(9) Ship Design Cruise 2%(3) 54% & ferry 800 20%(2) Special vessels 400 11%(12) 0 2007 2008 2009 2010 1-9/2011 Numbers in brackets
Slide 12: Good ordering activity in joint ventures
Good ordering activity in joint ventures MEUR 400 • Order intake grew significantly in the Korean joint venture Wärtsilä Hyundai Engine Company Ltd 350 (WHEC) – 44 orders for LNG carriers have been placed 300 during 2011 – WHEC received dual-fuel engine orders for 250 16 LNG vessels during the revie
Slide 13: 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 2%(2) 3%(3) Wärtsilä Others 18%(17) 17%(17) Wärtsilä 46%(44) MAN Diesel 21%(23) MAN Diesel Others Caterpillar 80%(81) 97%(97) (MAK) 16%(16) Total mark
Slide 14: Ship Power order book 30 September 2011
Ship Power order book 30 September 2011 All vessel segments represented RoRo LNG 2% 5% Bulkers 9% Merchant Offshore 41% Containers 33% 5% Tankers 10% Cargo Special vessels 10% 8% Ship Design Cruise & Ferry Navy 7% 2% 8% Total EUR 1,740 million (2,038) 14 © Wärtsilä
Slide 15: Power Plants – quotation activity
Power Plants – quotation activity MW Quoted MW per Fuel Type 16000 14000 12000 10000 8000 Others 6000 4000 Natural gas 2000 0 Heavy fuel oil 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 Q1 Q2 Q3 2004 2005 2006 2007 2008 2009 2010 2011 Share of natural gas is co
Slide 16: Power Plants quarterly order intake
Power Plants quarterly order intake MEUR 600 500 11% 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 16 © Wärtsilä
Slide 17: Power Plants order intake by application
Power Plants order intake by application MEUR Third quarter development 2000 Total EUR 466 million (393) 1800 Grid stability Oil & gas & peaking 1% (0) 14% (31) 1600 Industrial 1400 self-generation 45% (37) 1200 Flexible baseload 1000 39% (33) 800 600 400 Order intake by fuel Q3/2011 in MW 200 0 Oil
Slide 18: Power Plants order intake
Power Plants order intake EMEA regions strongest Europe 778 (304) Asia 514 (1,081) 112 190 318 422 Americas 428 (704) 243 6 102 26 211 Africa and Middle East 688 (253) 89 Flexible baseload 258 Industrial self-generation Oil & gas 430 Grid stability & peaking Order intake 1-9/2011: 2,407 MW (2,342) 1
Slide 19: Power Plants market
Power Plants market Gas turbine and engine manufacturers H2/2009 - H1/2010 H2/2010 - H1/2011 Other CEs* 1.4 Other CEs* 2.0 Other turbines 2.4 Other turbines 2.3 Ansaldo 1.4 Ansaldo 2.0 Rolls Royce 1.5 Alstom 2.7 Wärtsilä 3.2 Hitachi 1.6 GE Wärtsilä 2.4 24.4 GE MHI MHI Total market 21.7 5.9 Total mar
Slide 20: Services net sales development
Services net sales development MEUR 2000 1800 Q3 on Q3 development 0% 0% MEUR 500 1600 YoY 435 -5% 412 18% 0% 400 1400 1200 300 1000 200 800 100 600 0 Q3/2010 Q3/2011 400 200 0 2007 2008 2009 2010 1-9/2011 20 © Wärtsilä
Slide 21: Services - Net sales by quarter
Services - Net sales by quarter MEUR 600 500 -9% 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 21 © Wärtsilä
Slide 22: Services net sales distribution 1-9/2011
Services net sales distribution 1-9/2011 Field service 24%(24) Spare parts 53%(54) Contracts 16%(13) Projects 7%(9) Numbers in brackets are from 1-9/2010 22 © Wärtsilä
Slide 23: Development of Power Plants service agreements
Development of Power Plants service agreements MW 4500 60% 57% 4000 53% 49% 50% 3500 3000 40% 2500 29% 31% 30% 2000 1500 20% 1000 10% 500 0 0% 2007 2008 2009 2010 1-9/2011 O&M and maintenance agreements Power Plants deliveries % of delivered MWs 23 © Wärtsilä
Slide 24: Cash flow from operating activities
Cash flow from operating activities MEUR 700 Q3 on Q3 development MEUR 250 600 222 219 200 500 150 400 100 300 50 200 0 Q3/2010 Q3/2011 100 0 2007 2008 2009 2010 1-9/2011 24 © Wärtsilä
Slide 25: Working capital development
Working capital development MEUR 2000 25% 1800 30 September 2011 MEUR 1600 20% 1400 1400 1200 1000 1200 15% 800 1000 600 9.2% 3.1%* 800 10% 400 8.4% 7.0% 200 122 600 5.5% 5.8% 482 3.7% 0 400 5% * Working Capital / 212 2.7% 267 Annualised Net Sales 176 170 200 155 102 0 0% 2004 2005 2006 2007 2008 20
Slide 26: Committed loans September 2011
Committed loans 30 September 2011 MEUR 1400 1200 1000 548 800 Total EUR 11 604 million 600 drawn 86 400 507 200 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 euro
Slide 27: 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 2007 2008 2009 2010 30.9.2011 -0,10 2007 2008 2009 2010 30.9.2011 27 © Wärtsilä
Slide 28: Restructuring programmes
Restructuring programmes • Personnel reductions of approx. 1,800 targeted, this target has nearly been reached • Expected annual savings approx. EUR 130 million, of which EUR 60 million recognised by end of 2010 and the remainder will gradually materialise during 2011 • Nonrecurring restructuring co
Slide 29: Market outlook
Market outlook • Ship Power: An intense competition and price pressure prevails in the market. Wärtsilä expects Ship Power’s order intake in 2011 to be significantly better than in the previous year. • Power Plants: Recovery in the power generation market expected to continue in 2011. Wärtsilä Power
Slide 30: Prospects for 2011 reiterated
Prospects for 2011 reiterated Wärtsilä expects its net sales for 2011 to decline by 0-5% compared to last year and operational profitability (EBIT% before nonrecurring items) to be around 11%. 30 © Wärtsilä
Slide 31: IR Contact: Pauliina Tennilä
IR Contact: Pauliina Tennilä Director, Investor Relations Tel. +358 (0) 40 570 5530 E-mail: pauliina.tennila@wartsila.com Presentation name / Author