Wartsila Oyj Abp · OMXHEX:WRT1V

Wartsila Oyj Abp — Wärtsilä — Q2 2003 Earnings Presentation

24 slides from Wartsila Oyj Abp's earnings presentation, Jul 31, 2003

1. Slide 1: Wärtsilä Corporation Interim Report January-June 2003

   Wärtsilä Corporation Interim Report January-June 2003 Ole Johansson President & CEO 31 July 2003 © Wärtsilä

2. Slide 2: Group structure

   Group structure Holding Assa Assa Power Divisions Abloy Abloy Engine division 7.6% 7.6% Marine Power Plants Service © Wärtsilä Q2/2003 presentation 2

3. Slide 3: Group structure

   Group structure Holding Assa Assa Power Divisions Abloy Abloy Engine division 7.6% 7.6% Marine Service Power Plants © Wärtsilä Q2/2003 presentation 3

4. Slide 4: Revision of the corporate strategy

   Revision of the corporate strategy Focus on ship power systems and service „ shipbuilding concentrates to Asia, price competition more stringent „ acquisitions „ production in China Power Plants business structure re-examined „ no significant recovery on the power plant market Capacity utilisation i

5. Slide 5: Shipyard orderbook

   Shipyard orderbook Korea Japan China Others 150 125 Volume [ million dwt ] 100 75 50 25 0 12-96 06-97 12-97 06-98 12-98 06-99 12-99 06-00 12-00 06-01 12-01 06-02 12-02 Source: Based on data from Clarkson Research Studies Note: Cargo vessels > 5,000 dwt, Other vessels > 2000 grt © Wärtsilä Q2/2003 pr

6. Slide 6: Shipyard orders and deliveries

   Shipyard orders and deliveries July 2002 - June 2003 Vessel deliveries Vessel orders Others Others Europe 1% 10% 5% Asia 94% Asia Europe 52% 38% Total deliveries: 75 million dwt Total orders: 76 million dwt Data Source: Clarkson Research Studies Lloyds-Register Fairplay Note: vessels > 100 gt © Wärt

7. Slide 7: Expanding the scope of supply

   Expanding the scope of supply System Device management controls Services Support Power out systems „ alternator „ propulsion Connected systems © Wärtsilä Q2/2003 presentation 7

8. Slide 8: Wärtsilä group

   Wärtsilä group MEUR Q2/2003 Q2/2002 Net sales 538.5 701.4 Operational EBIT 16.2 33.6 EBIT 16.2 144.7 EPS, EUR 0.22 1.60 MEUR 1-6/2003 1-6/2002 2002 Net sales 1,026.6 1,282.3 2,519.0 Operational EBIT 21.1 37.7 77.8 EBIT 21.1 148.8 188.9 Profit before taxes 15.6 147.3 170.4 EPS, EUR 0.13 1.58 2.05 © W

9. Slide 9: Cashflow

   Cashflow MEUR 1-6/2003 1-6/2002 2002 Cashflow from operating activities 3.9 28.3 55.4 Cashflow from investing activities -9.3 -212.9 -286.5 Cashflow from financing activities -44.0 212.6 232.3 Liquid funds at the end of period 136.5 212.5 185.8 © Wärtsilä Q2/2003 presentation 9

10. Slide 10: Solvency and gearing

    Solvency and gearing Solvency Gearing 50 1,2 45 1 40 35 0,8 30 25 0,6 20 0,4 15 10 0,2 5 0 0 98 99 00 01 02 1- 98 99 00 01 02 1-6/03 6/03 -0,2 Solvency 1 Solvency 2 Gearing 1 Gearing 2 © Wärtsilä Q2/2003 presentation 10

11. Slide 11: Power Divisions’ profitability

    Power Divisions’ profitability Operating profit and EBIT-% by quarter 2000-2003 MEUR % 60 8 6 40 4 20 2 0 0 1-3/00 4-6/00 7-9/00 1-3/01 4-6/01 7-9/01 1-3/02 4-6/02 7-9/02 1-3/03 4-6/03 10-12/00 10-12/01 10-12/02 -2 -20 -4 -40 -6 -8 -60 -10 -80 Operating profit -12 Operating result incl. restructurin

12. Slide 12: Power Divisions – key figures

    Power Divisions – key figures MEUR Net sales Order intake Order book 649.5 1.392,8 511.9 1.372,8 +7,7% 1.206,6 483.2 +4.8% 342.3 +25,3% +11.2% -62.6% +209.7% -16,7% -16.9% +25.6% Q2/02 Q2/03 Q2/02 Q2/03 30.12.02 30.6.02 30.6.03 Marine Power Plants Service © Wärtsilä Q2/2003 presentation 12

13. Slide 13: Power Divisions

    Power Divisions MEUR Q2/2003 Q2/2002 Change Net sales 483.2 649.5 -25.6% EBIT 14.0 30.7 -54.4% % of net sales 2.9% 4.7% Order intake 511.9 342.3 49.5% MEUR 1-6/2003 1-6/2002 Change 2002 Net sales 916.3 1,176.5 -22.1% 2,319.9 EBIT 22.3 32.1 -30.5% 74.6 % of net sales 2.4% 2.7% 3.2% Order intake 1,102

14. Slide 14: Delivered engine megawatts from Wärtsilä factories

    Delivered engine megawatts from Wärtsilä factories MW 5 000 4 000 3 000 2 000 1 000 0 1998 1999 2000 2001 2002 1-6/2003 Power Plants Marine Note! Does not include Biopower and licensing. © Wärtsilä Q2/2003 presentation 14

15. Slide 15: Marine

    Marine MEUR Q2/2003 Q2/2002 Change 2002 Net sales 176.3 212.1 -16.9% 763.4 Order intake 130.2 103.7 25.6% 506.7 Order book, end of period 616.4 739.9 -16.7% 617.7 Power Divisions net sales Q2/2003 MEUR 483.2 „ Marine 36% © Wärtsilä Q2/2003 presentation 15

16. Slide 16: Vessel orders

    Vessel orders Tankers Bulk carriers Containers Others 3 months moving average 10 9 8 7 Volume [ million dwt ] 6 5 4 3 2 1 0 12-99 03-00 06-00 09-00 12-00 03-01 06-01 09-01 12-01 03-02 06-02 09-02 12-02 03-03 06-03 Source: Based on data from Clarkson Research Studies Note: Cargo vessels > 5,000 dwt ©

17. Slide 17: Vessel orderbook

    Vessel orderbook Tankers Bulk carriers Containers Others 150 125 Volume [ million dwt ] 100 75 50 25 0 12-96 06-97 12-97 06-98 12-98 06-99 12-99 06-00 12-00 06-01 12-01 06-02 12-02 06-03 Source: Based on data from Clarkson Research Studies Note: Cargo vessels > 5,000 dwt © Wärtsilä Q2/2003 presentat

18. Slide 18: Net sales of Marine division by vessel type

    Net sales of Marine division by vessel type MEUR 800 600 400 200 0 1998PF 1999 2000 2001 2002 1-6/2003 Wärtsilä Propulsion others container ships bulk carriers tankers Note! 1998 incl. Grandi Motori Trieste © Wärtsilä Q2/2003 presentation 18

19. Slide 19: Power Plants

    Power Plants MEUR Q2/2003 Q2/2002 Change 2002 Net sales 81.5 217.9 -62.6% 666.0 Order intake 137.8 44.5 209.7% 427.9 Order intake (MW), diesel 238 75 217.3% 539 gas 50 32 56.3% 293 Biopower, MW th 46 28 64,3% 107 Order book, end of period 391.0 312.1 25.3% 255.2 Power Divisions net sales Q2/2003 EUR

20. Slide 20: Power plant order intake 1-6/2003

    Power plant order intake 1-6/2003: 616 MW (475) Europe 115 (107) Asia 110 (70) 74 41 (57) (50) 80 30 America ƒ in addition Biopower (60) (10) 39 (220) 128 (107) 30 9 (201) (19) Africa and other regions 352 (77) 350 2 (16) Gas (61) Oil © Wärtsilä Q2/2003 presentation 20

21. Slide 21: Service

    Service Q2/2003 Q2/2002 Change 2002 Net sales, MEUR 217.6 207.6 4.8% 843.4 Personnel, end of period 5,839 5,314 9.9% 5,644 Long-term service agreements, MW 9,867 9,321 5.9% 9,756 O&M (operation and maintenance) agreements, MW 2,182 1,824 19.6% 2,056 Power Divisions net sales Q2/2003 EUR 483.2 millio

22. Slide 22: Long-term service and O&M contracts

    Long-term service and O&M contracts „ O&M contacts’ rapid growth continues „ Long-term service and O&M contracts cover 12,049 MW „ Active engine base 128,000 MW MW MW 2,500 10,000 9,500 2,000 O&M contracts 9,000 Long-term 1,500 service agreements 8,500 1,000 8,000 500 7,500 0 7,000 2000 2001 2002 1-

23. Slide 23: Imatra Steel

    Imatra Steel Key figures, MEUR Q2/2003 Q2/2002 Change 2002 Net sales 55.5 52.6 5.5% 200.4 Operating profit 2.2 2.9 3.2 % of net sales 4.0% 5.5% 1.6% Imatra Steel’s net sales by „ sale of Billnäs Spring Works market segment 2002 „ impact on profits neutral after write-down of fixed assets Trucks 52%

24. Slide 24: Outlook for year 2003

    Outlook for year 2003 ƒ Power Divisions „ sales and operational profitability on last year’s level „ streamlining measures will continue „ restructuring provision will burden the 2003 result ƒ Imatra Steel „ increased sales „ operational result will improve © Wärtsilä Q2/2003 presentation 24

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