Slide 1: Wärtsilä Corporation Interim Report January-September 2014
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-SEPTEMBER 2014 23 OCTOBER 2014 Björn Rosengren, President & CEO © Wärtsilä
Slide 2: Highlights Q3/2014
Highlights Q3/2014 • Order intake EUR 1,309 million, +21% • Net sales EUR 1,117 million, -7% • Book-to-bill 1.17 • EBIT EUR 142 million, 12.7% of net sales (EUR 148 million or 12.3%) • EPS EUR 0.43 (0.48) • Efficiency programme proceeding according to plan, EUR 10 million savings achieved in Q3 • Gu
Slide 3: Strong development in third quarter order intake
Strong development in third quarter order intake MEUR 5500 5000 4500 Third quarter development 4000 MEUR 3500 1400 1,309 3000 1200 1,086 21% 2500 1000 2% Services 2000 800 Ship Power 1500 600 24% Power Plants 1000 400 47% 500 200 0 0 2010 2011 2012 2013 1-9/2014 Q3/2013 Q3/2014 Q1-Q3 Q4 3 © Wärtsilä
Slide 4: Net sales in line with our expectations
Net sales in Net sales developed according toline with our expectations expectations MEUR 5000 4500 4000 Third quarter development 3500 MEUR 3000 1400 1,199 1200 -7% 2500 1,117 1000 9% 2000 Services 800 Ship Power 1500 6% 600 Power Plants 1000 400 -33% 500 200 0 0 2010 2011 2012 2013 1-9/2014 Q3/201
Slide 5: Net sales by business 1-9/2014
Net sales by business 1-3/2012 Net sales by business 1-9/2014 Ship Power 36% (28) Services 43% (42) Power Plants 22% (31) 5 © Wärtsilä
Slide 6: Book-to-bill ratio remains above one
Book-to-bill ratio remains above one MEUR 5500 1,2 1.07 1.10 5000 1.05 1.05 4500 1,0 0.88 4000 0,8 3500 3000 0,6 2500 2000 0,4 1500 1000 0,2 500 0 0,0 2010 2011 2012 2013 1-9/2014 Order intake Net sales Book-to-bill 6 © Wärtsilä
Slide 7: Order book distribution
Order book distribution Order book distribution MEUR 3500 3000 2500 2000 1500 1000 500 0 30.9.2013 30.9.2014 Delivery current year Delivery next year or later 7 © Wärtsilä
Slide 8: Profitability developed well
Profitability developed well MEUR 600 14% 12.1% 12% 500 11.1% 10.9% 10.7% 10% Third quarter development 400 MEUR 8% 160 12.3% 12.7% 14% 300 140 12% 6% 120 10% 100 200 8% 4% 80 6% 60 100 4% 2% 40 20 2% 0 0% 0 0% 2010 2011 2012 2013 Q3/2013 Q3/2014 EBIT before non-recurring items EBIT% before non-recu
Slide 9: Improved activity in smaller power plant orders
Improved activity in smaller power plant orders 9 © Wärtsilä
Slide 10: Power plant quotation activity on a high level
Power plant quotation activity on a high level Quoted MW per Fuel Type 18000 16000 14000 12000 Others 10000 MW 8000 Natural gas 6000 Heavy fuel oil 4000 2000 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 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2005 2006 2007 2008 200
Slide 11: Power Plants order intake picked up in the third quarter
Power Plants order intake picked up in the third quarter MEUR Review period development 2000 Total EUR 792 million (884) 1800 28% Utilities 1600 Industrials 51% 1400 IPP’s* 21% 1200 x% 1000 800 Review period order intake by fuel in MW 600 400 Oil Gas 200 46% 54% 0 2010 2011 2012 2013 1-9/2014 Q1-Q3
Slide 12: Power Plants' order intake evenly spread globally
Power Plants’ order intake evenly spread globally Europe 410 (300) Asia 326 (738) 99 56 3 Americas 539 (324) 53 308 217 65 185 Africa and Middle East 440 (424) 130 171 Utilities 290 IPP’s Industrials 140 Order intake 1-9/2014: 1,716 MW (1,786) 12 © Wärtsilä
Slide 13: Significant power plant order from Mexico
Significant power plant order from Mexico • Wärtsilä to supply a 139 MW flexicycle power plant for Energia del Caribe in Mexico • Scope of supply: EPC contract based on seven 50SG gas engines and a combined cycle • The capability to produce efficient, flexible and reliable energy, and ensure firm ca
Slide 14: Market for gas and liquid based power plants 1-6/2014
Market for gas and liquid based power plants 1-6/2014 Total market Market <500MW 23.4 GW (18.8) 10.6 GW (12.7) 2.8% 1.3% 0.4% 2.8% 0.9% 15.9% 9.4% 4.2% 10.4% 9.0% 44.0% 62.3% 10.4% 24.8% GE Siemens MHI Wärtsilä Alstom Ansaldo Other GTs Includes all Wärtsilä power plants and other manufacturers’ gas
Slide 15: Ship Power order intake supported by activity in gas carriers and cruise vessels
Ship Power order intake supported by activity in gas carriers and cruise vessels 15 © Wärtsilä
Slide 16: Vessel contracting development
Vessel contracting development Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT * 250 5 200 4 150 3 * # of vessels Million CGT 100 2 50 1 0 0 01.09 03.09 05.09 07.09 09.09 11.09 01.10 03.10 05.10 07.10 09.10 11.10 01.11 03.11 05.11 07.11 09.11 11.11 01.12 03.12 05.12
Slide 17: Ship Power order intake developed well
Ship Power order intake developed well MEUR 1800 Review period development Total EUR 1,286 million (1,176) 1500 Offshore 27% 1200 Gas carriers 40% 900 Navy 5% 600 Special vessels 5% 300 Cruise Traditional Others and ferry merchant 1% 11% 0 11% 2010 2011 2012 2013 1-9/2014 Q1-Q3 Q4 17 © Wärtsilä
Slide 18: Wärtsilä's gas handling systems for world's largest ethane carriers
Wärtsilä’s gas handling systems for world’s largest ethane carriers • Gas handling systems ordered for six new very large ethane carriers (VLECs), being built for the Reliance Group based in India • Scope of supply: complete cargo handling package for each ship, the solutions cover everything from l
Slide 19: Joint venture ordering continues active
Joint venture ordering continues active MEUR 600 • Joint venture order intake totalled 550 EUR 126 million (143) during 500 January-September 2014 450 • Wärtsilä’s share of ownership in 400 these companies is 50%, and the 350 results are reported as a share of 300 result of associates and joint vent
Slide 20: Ship Power market: market position of Wärtsilä's marine engines
Ship Power market Market position of Wärtsilä’s marine engines Medium-speed main engines Auxiliary engines Wärtsilä 2%(2) Others 21%(20) Wärtsilä Caterpillar 51%(52) 11%(11) MAN D&T 17%(17) Others 98%(98) Total market volume last 12 months: Total market volume last 12 months: 4,554 MW (4,139) 7,628
Slide 21: Focus on growth in Services is paying off
Focus on growth in Services is paying off 21 © Wärtsilä
Slide 22: Growth in Services net sales
Growth in Services net sales MEUR 2000 1800 Third quarter development 0% 5% -3% 1600 MEUR 600 1400 9% 472 1200 500 435 1000 400 800 300 600 200 400 200 100 0 0 2010 2011 2012 2013 1-9/2014 Q3/2013 Q3/2014 Q1-Q3 Q4 22 © Wärtsilä
Slide 23: Services net sales distribution 1-9/2014
Services net sales distribution 1-9/2014 Field service 24%(23) Spare parts 51%(53) Contracts 17%(17) Projects 8%(7) Total EUR 1,375 million (1,334) 23 © Wärtsilä
Slide 24: Continued interest for marine service agreements
Continued interest for marine service agreements • 5-year technical management agreement signed with Harvey Gulf International Marine LLC • Scope of supply: condition based maintenance and dynamic maintenance planning for 8 new offshore vessels • The agreement ensures ideal running conditions and re
Slide 25: Development of Service agreements
Development of Service agreements MW 14000 30% 12000 25% 10000 20% 8000 15% 6000 10% 4000 5% 2000 0 0% 2009 2010 2011 2012 2013 Q3 2014 MW under agreement - Power MW under agreement - Marine % of Total installed Base - Power % of Total installed Base - Marine 25 © Wärtsilä
Slide 26: Fleet utilisation
Fleet utilisation Fleet utilisation Anchored Vessels & Fleet Development* 35% 22500 Nr of Active Vessels Percent Anchored 30% 22000 25% 21500 20% 21000 15% 20500 03.12 06.12 09.12 12.12 03.13 06.13 09.13 12.13 03.14 06.14 09.14 Anchored Active Fleet Fleet Average Speed, knots** 10,5 10,0 9,5 9,0 8,5
Slide 27: Solid financial standing
Solid financial standing 27 © Wärtsilä
Slide 28: Cash flow from operating activities
Cash flow from operating activities MEUR 700 600 Review period development 500 MEUR 300 400 250 300 200 150 200 100 100 50 0 0 2010 2011 2012 2013 1-9/2013 1-9/2014 28 © Wärtsilä
Slide 29: Focus on working capital development
Focus on working capital development MEUR 2000 25% 1800 Review period development 1600 20% MEUR 1400 1600 12% 1200 15% 1400 10.3%* 10% 1000 1200 8.2%* 9.8% 8% 800 10% 1000 6.8% 800 6% 600 5.6% 465 600 488 4% 400 313 5% 379 2.6% 235 400 200 118 2% 200 0 0% 0 0% 2010 2011 2012 2013 30.9.2013 30.9.2014
Slide 30: Gearing remains low
Gearing remains low 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 30.9.2013 30.9.2014 -0,10 2010 2011 2012 2013 30 © Wärtsilä
Slide 31: Market outlook
Market outlook • Power Plants: Power generation markets closely follow the global macroeconomic development. Based on the difficult market situation seen during the three first quarters of the year and the revised GDP forecasts for 2014, the overall market for liquid and gas fuelled power generation
Slide 32: Prospects for 2014 revised
Prospects for 2014 revised Wärtsilä estimates its profitability for 2014 (EBIT% before non-recurring items) to be 11.5-12.0%. Wärtsilä reiterates its expectation that net sales will grow by around 5%. 32 © Wärtsilä
Slide 33: IR Contact: Natalia Valtasaari
IR Contact: Natalia Valtasaari Director, Investor Relations Tel. +358 (0) 40 187 7809 E-mail: natalia.valtasaari@wartsila.com