Wartsila Oyj Abp · OMXHEX:WRT1V

Wartsila Oyj Abp — Wärtsilä — Investor Day (November 2013)

23 slides from Wartsila Oyj Abp's investor day presentation, Nov 14, 2013

  1. Slide 1: Solid Financial Position

    SOLID FINANCIAL POSITION MARCO WIRÉN Executive Vice President & CFO 1 © Wärtsilä 14 November 2013 MARCO WIRÉN

  2. Slide 2: 2013 developing as expected

    2013 developing as expected • Slight decrease in order intake – Delays in power plant customers’ decision-making mainly offset by good activity in shipping markets • Continued growth in sales • Good development in cash flow, working capital 10.2% of net sales • Joint ventures illustrating improved p

  3. Slide 3: Financial highlights

    Financial highlights MEUR 6-9/2013 6-9/2012 1-9/2013 1-9/2012 2012 Order intake 1 097 1 275 3 520 3 583 4 940 Order book at the end of the period 4 568 4 724 4 492 Net sales 1 209 1 087 3 243 3 191 4 725 Operating result before non-recurring items 138 113 319 328 517 % of net sales 11.4 10.4 9.8 10.

  4. Slide 4: Net sales growth exceeds World GDP

    Net sales growth exceeds World GDP Wärtsilä’s growth 2004 – 2013 GDP growth 2004 – 20131 9.0% 5 260 6.2% 4 725 4 612 4 553 4 209 3 763 3 190 2 520 2 225 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Note 1: World nominal GDP growth, USD denominat

  5. Slide 5: Strong presence in emerging markets

    Strong presence in emerging markets Net sales by business area and region 1-9/2013 39% 56% 34% 9% 56% 8% Europe 11% 46% 46% Asia 3% 26% Americas 71% Middle East and Africa Services Power Plants Ship Power 5 © Wärtsilä 14 November 2013 MARCO WIRÉN

  6. Slide 6: Limited exposure to forex risk

    Limited exposure to forex risk Net sales by currency 2012 Sensitivity analysis 17% Impact of EUR exchange rate 3% EUR compared to other currencies: USD NOK • +/- 10% would result in -/+ 4% 21% 59% Other currencies change in net sales • Impact on profitability would be marginal 6 © Wärtsilä 14 Novemb

  7. Slide 7: Flexible cost base

    Flexible cost base Operating costs Operating costs by type 2012 2012 Material and 13% Services 26% Variable 3% Employee benefit Fixed expenses 25% 59% Depreciation and 74% amortisation Other operating expenses 7 © Wärtsilä 14 November 2013 MARCO WIRÉN

  8. Slide 8: Solid profitability over the cycle

    Solid profitability over the cycle MEUR 6000 16,0% Elements of a robust business model has 14,0% maintained our profitability over the cycle 5000 • Capacity streamlining actions for 12,0% Ship Power and PowerTech 4000 • Flexible business model 10,0% • Strong Services business brings stability in flu

  9. Slide 9: Profitable growth towards 14% EBIT

    Profitable growth towards 14% EBIT Our key Smart Power Gas as a fuel Environmental growth Generation solutions areas… • Energy efficient • Forerunner in • A market leading solutions gas technology and environmental player • Fuel and operational dual-fuel applications • Superior customer network flex

  10. Slide 10: Prioritized actions

    Prioritized actions • Focusing on key strategic growth areas enables growth even in challenging markets • Strengthen presence in emerging markets • Maintain flexibility in operations • Focus on internal efficiency • Continued focus on financial position 10 © Wärtsilä 14 November 2013 MARCO WIRÉN

  11. Slide 11: Cash flow and capex

    CASH FLOW AND CAPEX 11 © Wärtsilä 14 November 2013 MARCO WIRÉN

  12. Slide 12: Good development in cash flow

    Good development in cash flow MEUR 1 000 15% 800 12% 663 600 9% 400 349 6% 278 261 232 200 153 3% 0 0% 2008 2009 2010 2011 2012 Q3/2013 Cash flow from operating activities % of Group sales Cash flow from operating activities: including changes in working capital, financial items, and taxes 12 © Wärt

  13. Slide 13: Group working capital development

    Group working capital development MEUR 2 000 10% 10% 9% 8% 1 500 6% 6% 1 000 3% 4% 459 465 500 235 2% 118 0 0% -2% -500 -4% -1 000 -6% -1 500 -8% -2 000 -10% 2009 2010 2011 2012 Working capital Total inventories Receivables Payables Advances received Working capital / Net sales 13 © Wärtsilä 14 Nove

  14. Slide 14: Maintenance capex historically below depreciation

    Maintenance capex historically below depreciation MEUR 600 500 400 300 200 100 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E Acquisitions and other share Expansion investments Maintenance investments Depreciation 14 © Wärtsilä 14 November 2013 MARCO WIRÉN

  15. Slide 15: Balanced maturity profiles for long-term loans and RCFs

    Balanced maturity profiles for long-term loans and RCFs Maturing long-term loans1 Maturing Revolving Credit Facilities2 MEUR MEUR 140,0 Average maturity: 52 months 180 Average maturity: 40 months Interest rate (average): 1,9% 160 120,0 140 100,0 120 80,0 100 80 60,0 60 40,0 40 20,0 20 0,0 0 2013 201

  16. Slide 16: Joint ventures – an expansion to growth markets

    Joint ventures – an expansion to growth markets Qingdao Qiyao Wärtsilä MHI Linshan Marine Wärtsilä-Hyundai Diesel Co., Ltd. Engine Company Ltd (QMD- Qingdao, China) (WHEC - Mokpo, South 2-stroke engines Korea) 4-stroke engines Wärtsilä TMH Diesel Engine Company LLC Strategic targets (WTEC - Penza, R

  17. Slide 17: Joint ventures – profitability enablers for Wärtsilä

    Joint ventures – profitability enablers for Wärtsilä MEUR 500 400 300 200 100 0 2009 2010 2011 2012 2013 Sales in JVs Sales in WCME JOINT VENTURES: WQDC: Wärtsilä Qiyao Diesel Co. Ltd., ownership 50% W20 auxiliary engines WHEC: Wärtsilä-Hyundai Engine Company Ltd., ownership 50% W50DF gas engines QM

  18. Slide 18: M&A strategy - growth beyond organic

    M&A strategy - growth beyond organic M&A activities continue to have an important role in our growth by improving our overall competitive position and customer offering 2008 2012 • International Combustion • MMI Engineering A/S Singapore Denmark, Dubai 2002 2006 • Hamworthy • Claus D. Christophel UK

  19. Slide 19: Power plant financing

    POWER PLANT FINANCING 19 © Wärtsilä 14 November 2013 MARCO WIRÉN

  20. Slide 20: Financing support for Power Plants customers

    Financing support for Power Plants customers • Power plant projects mainly in developing countries • Financing sources a mix of local, international, commercial, governmental, export credit agency and multilateral financing depending on project type and industry • We support our customers with finan

  21. Slide 21: PLN Arun – 184 MW project in Indonesia

    PLN Arun – 184 MW project in Indonesia Customer need Wärtsilä’s solution • International tender for a 184MW gas fired • Export credit guarantee and funding terms power plant to be located in northern negotiated with Finnvera Sumatra • Standard Chartered Bank appointed arranger of • Customer: PT Peru

  22. Slide 22: Our financial position supports future growth

    Our financial position supports future growth • Solid profitability, with target to reach 14% • Strong, unleveraged balance sheet • Working capital under control • Low capex need, current investments proceeding according to plan • Good access to liquidity and balanced loan maturity profile • Sound f

  23. Slide 23: Wärtsilä

    re, WARTSILA

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