Wartsila Oyj Abp · OMXHEX:WRT1V

Wartsila Oyj Abp — Wärtsilä — Non-Deal Roadshow (August 2022)

47 slides from Wartsila Oyj Abp's roadshow presentation, August 2022

  1. Slide 1: Shaping the decarbonisation of marine and energy

    WARTSILA SHAPING THE DECARBONISATION OF MARINE AND ENERGY ROADSHOW PRESENTATION AUGUST 2022 S|

  2. Slide 2: Market fundamentals

    MARKET FUNDAMENTALS MARINE will move with unprecedented speed towards decarbonisation ENERGY is moving towards a 100% renewables future Policies & regulations Policies & regulations  IMO target  EU: Carbon neutral by 2050  Access to capital  USA: carbon free electricity  Cost of carbon producti

  3. Slide 3: The Wärtsilä Way sets the scene for profitable growth

    The Wärtsilä Way sets the scene for profitable growth 3 © Wärtsilä

  4. Slide 4: Our value creation potential is based on two strategic themes

    OUR VALUE CREATION POTENTIAL IS BASED ON TWO STRATEGIC THEMES TRANSFORM 1 Decarbonisation creates new business opportunities 2 PERFORM Leverage market recovery and growth 4 © Wärtsilä

  5. Slide 5: Transform: decarbonisation creates new business opportunities

    TRANSFORM Decarbonisation creates new business opportunities  Maritime is going through an First Wärtsilä GridSolv unprecedented rate of 3 Quantum delivered in change, which is the USA accelerated by regulations and the demand for green transport. First real-life digital port call  Also, the energ

  6. Slide 6: Perform: ready to leverage market recovery and growth

    PERFORM We are ready to leverage market recovery and growth #1-3 in global markets "SET FOR 30" DECARBONISATION TARGETS: FINANCIAL TARGETS:  carbon neutral in our own  5% annual organic growth operations by 2030  12% operating margin  a product portfolio ready for zero carbon fuels by 2030 Clear

  7. Slide 7: Set to deliver long term shareholder value

    Set to deliver long term shareholder value We have clear Our balance sheet We have clear financial targets and financing capital allocation and are committed structure supports principles to realising them strategy execution 7 © Wärtsilä

  8. Slide 8: New financial targets reflect growth opportunities and increased profitability

    New financial targets reflect growth opportunities and increased profitability New targets Net sales 5% annual organic growth Profitability 12% operating margin Capital structure Gearing below 0.50 Dividend At least 50% of earnings 8 © Wärtsilä

  9. Slide 9: Good growth opportunities in services, energy, and marine new build recovery

    Good growth opportunities in services, energy, and marine new build recovery. Our installed base provides a strong foundation for services growth Key drivers Storage  Fast growing demand for energy storage and power system optimisation solutions Services  Increased share of wallet from existing cu

  10. Slide 10: We will reach our profitability target while maintaining R&D investments

    We will reach our profitability target while maintaining R&D investments at ~3% of net sales Key drivers  Marine and Energy Services growth  Thermal balancing power growth  Storage growth Starting point: Target: Operating margin 5.9%  Voyage turnaround and digital growth 12% operating margin (LT

  11. Slide 11: Ambitious decarbonisation targets for 2030

    Ambitious decarbonisation targets for 2030 To provide a product portfolio which will To become carbon neutral in be ready for zero carbon fuels our own operations 11 © Wärtsilä

  12. Slide 12: Supporting decarbonisation in marine

    SUPPORTING DECARBONISATION IN MARINE OWNERS WILL DECIDE MOVE FROM A SINGLE-FUEL INDUSTRY TO A MULTI-FUEL ONE ON TECHNOLOGY Distribution of fuel types for Decarbonisation 2050 (1.5ºC scenario), exajoule PARTNERS NOW: Carbon neutral and zero carbon fuels in maritime  Vessel life is 25-30 years HFO (H

  13. Slide 13: Vessel contracting expected to decline in 2022

    Vessel contracting expected to decline in 2022 No of ships, 2,000+ dwt Continuing accelerated fleet renewal 3 000 Accelerating supported by the fleet age profile Support from fleet renewal and potential increased consensus continued container and steady over fuelling and technology choices ordering

  14. Slide 14: Supporting decarbonisation in energy

    SUPPORTING DECARBONISATION IN ENERGY  Wind and solar are intermittent power sources THE KEY STEPS TO FRONT-LOAD NET ZERO Utilise Power-to-X and flexible thermal plants to provide carbon  Flexible balancing power neutral long-term storage. 5 Curtailment of needed to stabilize the power renewable sy

  15. Slide 15: Renewable energy plays a key role in energy sector emissions abatement

    Renewable energy plays a key role in energy sector emissions abatement Estimated growth of the addressable annual markets of thermal balancing (GW) and energy storage (GWh) 2020–2030: +30% p.a. Source: Bloomberg New Energy Outlook 2020, Source: Bloomberg New Energy Outlook 2021 Wärtsilä estimates at

  16. Slide 16: Order intake and order book improved

    ORDER INTAKE AND ORDER BOOK IMPROVED MEUR 7 000 6 000 5 000 4 000 3 000 2 000 1 000 0 2017 2018 2019 2020 2021 LTM/Q222 Marine Energy Portfolio Business Total order intake Order book 16 © Wärtsilä

  17. Slide 17: Intermittent renewables accelerating need for flexible balancing power

    Increasing adoption of intermittent renewable energy is accelerating the need for flexible balancing power Omaha PPD 156 MW - USA AGL 250 MWh - Australia Wärtsilä’s technology The battery energy with fast-starting storage system will internal combustion support both thermal and engines will be used

  18. Slide 18: Net sales and comparable operating result increased

    NET SALES AND COMPARABLE OPERATING RESULT INCREASED MEUR MEUR % 6 000 700 14 5 000 600 12 500 10 4 000 400 8 3 000 300 6 2 000 200 4 1 000 100 2 0 0 0 2017 2018 2019 2020 2021 LTM/Q222 Equipment sales Service sales Comparable operating result Comparable operating result, % of net sales 18 © Wärtsilä

  19. Slide 19: Service net sales by business

    SERVICE NET SALES BY BUSINESS MEUR 3 000 2 500 2 000 1 500 1 000 500 0 2017 2018 2019 2020 2021 LTM Q2/22 Marine Power Marine Systems Voyage Energy Portfolio Business Services 19 © Wärtsilä

  20. Slide 20: Service orders and sales both increasing

    Service orders and sales both increasing Order intake Net sales MEUR MEUR, 12m rolling MEUR MEUR, 12m rolling 1 600 3 500 1 600 3 500 1 400 3 000 1 400 3 000 1 200 1 200 2 500 2 500 1 000 1 000 2 000 2 000 811 800 800 696 598 1 500 588 1 500 600 600 510 486 1 000 1 000 400 400 200 500 200 500 0 0 0

  21. Slide 21: Positive development in both Marine and Energy service business

    Positive development in both Marine and Energy service business Marine Power net sales from installations under Energy installed base covered by service agreements agreement MW MEUR, 12m rolling 400 16 000 30% 350 14 000 25% 300 12 000 20% 250 10 000 200 8 000 15% 150 6 000 10% 100 4 000 5% 50 2 000

  22. Slide 22: Wärtsilä and Carnival Corporation join forces in fleet decarbonisation

    Wärtsilä and Carnival Corporation join forces in fleet decarbonisation programme  As announced on 22 April, Wärtsilä is to deliver its new decarbonisation modelling service to Carnival Corporation, as the cruise group aims to reduce greenhouse gas emissions across its fleet.  Initially tasked with

  23. Slide 23: Decarbonisation services for Energy customers

    Wärtsilä introduced decarbonisation services to support Energy customers aiming at net zero CO2 emissions  As announced on 11 May, Wärtsilä’s strategy for shaping the decarbonisation of the energy sector is strengthened with the introduction of the company’s decarbonisation service concept.  Decar

  24. Slide 24: Strong balance sheet

    STRONG BALANCE SHEET MEUR 4-6/2022 4-6/2021 1-6/2022 1-6/2021 Cash flow from operating activities -90 245 -213 312 Working capital 168 73 Net interest-bearing debt 432 253 Gearing 0.21 0.12 Solvency, % 35.8 37.8 Basic earnings/share, EUR 0.09 0.06 -0.16 0.10 24 © Wärtsilä

  25. Slide 25: Committed to providing shareholder returns

    COMMITTED TO PROVIDING SHAREHOLDER RETURNS EUR 1,00 0,90 0,80 0,70 0,65 0,63 0,60 0,50 0,46 0,48 0,48 0,40 0,37 0,33 0,30 0,24 0,23 0,20 0,20 0,10 0,00 2017 2018 2019 2020 2021 Earnings per share Dividend per share 25 © Wärtsilä

  26. Slide 26: Strong presence in sustainable development indices

    Strong presence in sustainable development indices S&P Europe 350 ESG Index 26 © Wärtsilä

  27. Slide 27: Well-positioned for the decarbonisation transformation

    Wärtsilä is very well-positioned for the decarbonisation transformation Leader in Pioneer in  Carbon neutral & zero carbon fuels  Marine electric drivetrain - Available today: biofuels, methanol, up to 25% hydrogen blends - 2023: ammonia concept  Marine carbon capture - 2025: 100% hydrogen concep

  28. Slide 28: Continued investment in innovation

    WE CONTINUE INVESTING IN INNOVATION TO ENSURE A BROAD, INDUSTRY-LEADING SOLUTION OFFERING 3,7 2,9 175 141 2017 2018 2019 2020 2021 R&D expenditure, MEUR % of net sales © Wärtsilä

  29. Slide 29: Front-runner in alternative fuel engine technology

    Front-runner in alternative fuel engine technology 2021 2022 2023 2024 2025 Diesel FAME/HVO1) LNG Bio-methane Synthetic methane LPG Hydrogen blends Hydrogen 100% Technical concept Engines Ammonia Technical concept Methanol 1) FAME, HVO: biodiesel 29 © Wärtsilä

  30. Slide 30: Significant value creation potential

    SIGNIFICANT VALUE CREATION POTENTIAL 30 © Wärtsilä

  31. Slide 31: Financial development in Q2 2022

    FINANCIAL DEVELOPMENT IN Q2 2022 31 © Wärtsilä

  32. Slide 32: Service order intake increased by 36%

    Service order intake increased by 36%  Order intake increased by 25%  Net sales increased by 24%  Good progress in services:  Service order intake increased by 36%  Service net sales increased by 18%  Comparable operating result increased by 20%  Cost inflation, supply chain bottlenecks, Covi

  33. Slide 33: Exit from Russia and optimisation of European engine manufacturing footprint

    Exit from Russia and optimisation of European engine manufacturing footprint  Exit from the Russian market completed  All adjustments and closures were completed in accordance with local regulations  Financial impact in line with the provisions taken in the first quarter, no material impact on ou

  34. Slide 34: Key figures

    Key figures MEUR 4-6/2022 4-6/2021 CHANGE 1-6/2022 1-6/2021 CHANGE Order intake 1,440 1,154 25% 2,820 2,398 18% of which services 811 598 36% 1,543 1,290 20% Order book 5,936 5,238 13% of which current year deliveries 2,732 2,225 23% Net sales 1,407 1,131 24% 2,639 2,078 27% of which services 696 58

  35. Slide 35: Second quarter highlights

    Second quarter highlights Net sales Comparable operating result MEUR %, 12m rolling Net sales EUR 1,407 MEUR MEUR, 12m rolling million 2 000 6 000 180 12,0% 1 800 160  18% increase in 1 600 5 000 140 10,0% service sales 1 407 1 400 1 220 4 000 120 8,0% 1 200 1 131 100 1 000 3 000 85 6,0% Comparable

  36. Slide 36: Order intake increased by 25%

    Order intake increased by 25% Equipment Services MEUR MEUR, 12m rolling MEUR MEUR, 12m rolling 1 600 3 500  Equipment order 1 600 3 500 intake increased by 1 400 3 000 1 400 3 000 13% 1 200 1 200 2 500 2 500 1 000 1 000  Service order intake 2 000 811 2 000 800 800 increased by 36% 629 1 500 598 1

  37. Slide 37: Strong order book

    Strong order book Despite removal of Russia related projects (MEUR 240) Order book by business Order book delivery schedule MEUR MEUR 7 000 1,40 3 000 6 000 1,20 2 500 5 000 1,00 2 000 4 000 0,80 1 500 3 000 0,60 1 000 2 000 0,40 1 000 0,20 500 0 0,00 0 30.6.2020 31.12.2020 30.6.2021 31.12.2021 30.6

  38. Slide 38: Governance

    GOVERNANCE © Wärtsilä

  39. Slide 39: Board of Management

    Board of Management Håkan Agnevall, Arjen Berends, Chief Sean Fernback, President, Tamara de Gruyter, President, Kari Hietanen, Corporate President & CEO Financial Officer Wärtsilä Voyage Wärtsilä Marine Systems Relations and Legal Affairs Roger Holm, President, Atte Palomäki, Communications, Sushil

  40. Slide 40: Board of Directors

    Board of Directors Tom Johnstone CBE, Chair Risto Murto, Deputy Chair of the Karen Bomba, President Morten H. Engelstoft, CEO & of the Board, President and Board, President & CEO of Varma of Smiths Interconnect EVP of A.P. Møller - Mærsk CEO of AB SKF 2003–2014 Mutual Pension Insurance Company 2017–

  41. Slide 41: Largest shareholders August 2022

    Largest shareholders 17 August 2022 # Name Shares Share % 1 Invaw Invest AB 104,711,363 17.70% 2 Varma Mutual Pension Insurance Company 31,768,252 5.37% 3 Ilmarinen Mutual Pension Insurance Company 15,326,503 2.59% 4 Elo Keskinäinen Työeläkevakuutusyhtiö 6,416,076 1.08% 5 The Social Insurance Instit

  42. Slide 42: Wärtsilä in brief

    WARTSILA IN BRIEF

  43. Slide 43: Key figures 2021

    KEY FIGURES 2021 MEUR 8 000 7 000 Order intake 6 000 5,735 MEUR 5 000 2021 4 000 Net sales, Net sales 3 000 geographical 4,778 MEUR 2 000 1 000 0 Comparable operating result 2017 2018 2019 2020 2021 357 MEUR Net sales Order intake Europe Asia Americas Other 7.5% of net sales Order book 2021 Net sale

  44. Slide 44: Investment case summary

    Clear financial Robust capital Strong track record in innovations Solid balance sheet targets and strong allocation principles commitment to MEUR and active portfolio Investing ~3% of net sales on R&D realise them management 800 35% yearly 700 30% Notable Extensive service network, 600 25% Today: en

  45. Slide 45: Main competitors and customer base

    MAIN COMPETITORS ENGINES OTHER MARINE SOLUTIONS OTHER ENERGY SOLUTIONS MAN Kongsberg GE Himsen Alfa Laval Siemens Rolls-Royce GE Tesla INNIO Siemens Fluence Schottel CUSTOMER BASE MARINE BUSINESSES ENERGY Ship owners Utilities Ship operators Independent Power Producers (IPPs) Ship management compani

  46. Slide 46: For more information, call us or visit our Investors page

    For more information, call us or visit our Investors page Next upcoming IR events:  30 September 2022 Pre-silent call with CFO  25 October 2022 Interim report January–September Wärtsilä Investor Relations: Hanna-Maria Heikkinen, Vice President, Investor Relations tel. +358 10 709 1461, email: hann

  47. Slide 47: Wärtsilä

    re, WARTSILA

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