Slide 1: Wärtsilä Corporation Interim Report January-June 2016
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-JUNE 2016 20 July 2016 Jaakko Eskola, President & CEO 1 © Wärtsilä PUBLIC 20 July 2016 Q2 Result presentation
Slide 2: Highlights Q2/2016
Highlights Q2/2016 • Order intake EUR 1,194 million, +3% • Net sales EUR 1,196 million, -3% • Book-to-bill 1.00 (0.94) • Comparable operating result EUR 122 million, 10.2% of net sales (EUR 137 million or 11.1%) • Earnings per share EUR 0.19 (0.54)* • Cash flow from operating activities EUR 202 mill
Slide 3: Solid development in order intake
Solid development in order intake MEUR 5 500 5 000 Second quarter development 4 500 MEUR 4 000 1 600 3 500 1 400 1,159 3% 1,194 3 000 1 200 -9% Services 2 500 1 000 2 000 800 Marine Solutions 1 500 600 -8% 1 000 400 Energy 62% Solutions 500 200 0 0 2012 2013 2014 2015 2016 Q2/2015 Q2/2016 Q1-Q2 Q3-Q
Slide 4: Net sales on a stable level
Net sales on a stable level MEUR 5 500 5 000 Second quarter development 4 500 MEUR 4 000 1 400 1,230 3 500 1,196 1 200 -3% 3 000 1 000 Services 2 500 -1% 800 2 000 Marine 600 Solutions 1 500 23% 400 1 000 Energy -33% Solutions 500 200 0 0 2012 2013 2014 2015 2016 Q2/2015 Q2/2016 Q1-Q2 Q3-Q4 4 © Wärt
Slide 5: Net sales by business 1-6/2016
Net sales by business 1-6/2016 Services Marine Solutions 48% (47) 36% (30) Energy Solutions 16% (23) 5 © Wärtsilä PUBLIC 20 July 2016 Q2 Result presentation
Slide 6: Book-to-bill ratio
Book-to-bill ratio MEUR 5 500 1,4 5 000 1.14 1,2 4 500 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 1-6/2016 Order intake Net sales Book-to-bill 6 © Wärtsilä PUBLIC 20 July 2016 Q2 Result presentation
Slide 7: Order book distribution
Order book distribution MEUR 3 500 3 000 2 500 2 000 1 500 1 000 500 0 30.6.2015 30.6.2016 Delivery current year Delivery next year or later 7 © Wärtsilä PUBLIC 20 July 2016 Q2 Result presentation
Slide 8: Operating result affected by fewer power plant deliveries and tight competition
Operating result affected by fewer power plant deliveries and tight competition MEUR 700 14% 11.9% 12.2% Review period development 600 12% 11.2% 10.9% MEUR 240 14% 500 10% 200 12% 10.7% 400 8% 9.5% 10% 160 300 6% 8% 120 6% 200 4% 80 4% 100 2% 40 2% 0 0% 0 0% 2012 2013 2014 2015 1-6/2015 1-6/2016 Com
Slide 9: Energy Solutions
ENERGY SOLUTIONS 9 © Wärtsilä PUBLIC 20 July 2016 Q2 Result presentation
Slide 10: Quotation activity on a good level
ENERGY SOLUTIONS Quotation activity on a good level MW 18 000 16 000 14 000 12 000 Multi-fuel 10 000 Gas 8 000 Liquid fuel 6 000 4 000 2 000 0 Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016 Q2/2016 10 © Wärtsilä PUBLIC 20 July 2016 Q2 Result p
Slide 11: Power plant orders developed well
ENERGY SOLUTIONS Power plant orders developed well Review period development MEUR Total EUR 616 million (475) 1 800 14% Utilities 1 600 28% Independent 1 400 power producers 57% 1 200 Industrials 1 000 800 Review period order intake 600 by fuel in MW 400 Oil Gas 200 69% 31% 0 2012 2013 2014 2015 201
Slide 12: Order intake globally
ENERGY SOLUTIONS Order intake globally Europe* 920 (698) 18 Asia 368 (111) 903 60 9 Americas 299 (239) 298 36 47 215 Africa and Middle East 299 (175) Utilities IPP’s 100 199 (Independent Power Producers) Industrials Order intake 1-6/2016: 1,886 MW (1,222) *Turkish owners contributed to the high leve
Slide 13: Market for gas and liquid fuel power plants, <500 MW
ENERGY SOLUTIONS Market for gas and liquid fuel power plants, <500 MW 1-3/2015 1-3/2016 Other GT’s Other GT’s MHI 0.9% Siemens 0.8% 10.2% 10.9% Wärtsilä 15.0% GE Wärtsilä MHI 52.4% 20.4% 34.6% Siemens 21.5% GE 33.3% <500 MW market volume: 4.3 GW (4.7), -9% Total market volume: 17.7 GW (9.7), +82% Ma
Slide 14: Wärtsilä awarded five major power plant projects in Argentina
Wärtsilä awarded five major power plant projects in Argentina • EEQ contracts for three power plants, with a combined output of 192 MW, signed with Industrias J.F.Secco S.A. • Two additional projects are expected to be included in Wärtsilä’s Q3 order book • The plants will support the development of
Slide 15: Marine Solutions
MARINE SOLUTIONS 15 © Wärtsilä PUBLIC 20 July 2016 Q2 Result presentation
Slide 16: Limited contracting of new vessels
MARINE SOLUTIONS Limited contracting of new vessels 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 * Million CGT 150 3,0 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 03.10 05.10 07.10 09.10 1
Slide 17: Continued healthy demand in the cruise & ferry segment
MARINE SOLUTIONS Continued healthy demand in the cruise & ferry segment MEUR 1 800 Review period development Total EUR 741 million (728) 1 500 Gas carriers Offshore 11% 4% Special vessels 1 200 8% 900 Traditional Cruise & 600 merchant ferry 19% 43% 300 Others 6% 0 Navy 2012 2013 2014 2015 2016 8% Q1
Slide 18: Joint venture ordering activity
MARINE SOLUTIONS Joint venture ordering activity MEUR 700 600 500 400 300 200 100 0 Q1/2011 Q2/2011 Q3/2011 Q4/2011 Q1/2012 Q2/2012 Q3/2012 Q4/2012 Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016 Q2/2016 Marine Solutions order intake Joint vent
Slide 19: Sound demand for electrical and automation solutions
Sound demand for electrical and Kuva automation solutions pitää vaihtaa, Order received to supply turnkey electrical solutions for four new RoRo ferries. bonny The integrated systems include all kalvon products and services available from Wärtsilä SAM Electronics, a leading kuva voisi supplier of co
Slide 20: Strong position in marine engine market
MARINE SOLUTIONS Strong position in marine engine market Medium-speed main engines Auxiliary engines Wärtsilä Others 13% (13) 14% (15) Caterpillar 6% (5) Wärtsilä Others 58% (60) 87% (87) MAN D&T 22% (20) Total market volume last 12 months: Total market volume last 12 months: 2,090 MW (2,307) 4,498
Slide 21: Services
SERVICES 21 © Wärtsilä PUBLIC 20 July 2016 Q2 Result presentation
Slide 22: Services net sales on a good level
SERVICES Services net sales on a good level MEUR 2 400 2 200 Second quarter development 2 000 MEUR 1 800 700 1 600 1 400 600 548 542 1 200 -1% 500 1 000 400 800 300 600 200 400 200 100 0 0 2012 2013 2014 2015 2016 Q2/2015 Q2/2016 Q1-Q2 Q3-Q4 22 © Wärtsilä PUBLIC 20 July 2016 Q2 Result presentation
Slide 23: Net sales distribution 1-6/2016
SERVICES Net sales distribution 1-6/2016 Field service 24% (24) Spare parts 51% (51) Agreements 15% (17) Projects 9% (7) Total EUR 1,042 million (1,034) 23 © Wärtsilä PUBLIC 20 July 2016 Q2 Result presentation
Slide 24: Development of installed base covered by service agreements
SERVICES Development of installed base covered by service agreements 14 000 30% 12 000 25% 10 000 20% 8 000 MW 15% 6 000 10% 4 000 5% 2 000 0 0% 2009 2010 2011 2012 2013 2014 2015 1-6/2016 MW under agreement – Energy Solutions MW under agreement – Marine Solutions % of Energy Solutions’ installed ba
Slide 25: Acquisitions support Services' growth strategy
Acquisitions support Services’ growth strategy The acquisition of Eniram is a key step in our digital development, enabling us to strengthen our competences in data analytics, modelling and performance optimization. American Hydro supports our expansion in renewables, by enhancing our existing hydro
Slide 26: Financials
FINANCIALS 26 © Wärtsilä PUBLIC 20 July 2016 Q2 Result presentation
Slide 27: Cash flow improved in the second quarter
FINANCIALS Cash flow improved in the second quarter MEUR 700 600 Review period development MEUR 200 500 180 400 160 140 300 120 100 200 80 60 100 40 20 0 0 2012 2013 2014 2015 1-6/2015 1-6/2016 27 © Wärtsilä PUBLIC 20 July 2016 Q2 Result presentation
Slide 28: Working capital
FINANCIALS Working capital 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% 12.1%* 600 800 465 6.8% 8.3%* 5.2% 600 602 10% 400 313 5% 404 251 400 5% 200 200 0 0% 0 0% 2012 2013 2014 2015 30.6.2015 30.6.2016 Working cap
Slide 29: 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 30.6.2015 30.6.2016 29 © Wärtsilä PUBLIC 20 July 2016 Q2 Result presentation
Slide 30: Market outlook
Market outlook Energy Solutions Marine Solutions Services The market for liquid and gas fuelled The outlook for the shipping and The service market outlook is positive power generation is expected to shipbuilding markets remains with growth opportunities in selected remain challenging as economic ch
Slide 31: Prospects for 2016 unchanged
Prospects for 2016 unchanged Wärtsilä expects its net sales for 2016 to grow by 0-5% and its profitability (comparable operating result as a percent of net sales) to be 12.5-13.0% 31 © Wärtsilä PUBLIC 20 July 2016 Q2 Result presentation
Slide 32: Thank you
THANK YOU Further information: Natalia Valtasaari Director, Investor & Media Relations Tel. +358 (0) 10 709 5637 E-mail: natalia.valtasaari@wartsila.com 32 © Wärtsilä PUBLIC 20 July 2016 Q2 Result presentation