Slide 1: Wärtsilä Corporation Interim Report January-March 2006
Wärtsilä Corporation Interim Report January-March 2006 Ole Johansson, President & CEO 4 May 2006 © Wärtsilä
Slide 2: First-quarter highlights 2006
First-quarter highlights 2006 Net sales from comparable operations grew to EUR 591.9 million (483.8) Operating income from comparable operations improved to EUR 35.9 million (29.3) Profitability 6.1% (6.0) Order intake grew 51.0% to EUR 1,023.4 million (678.0) Order book at new record level EUR 3,41
Slide 3: Key figures
Key figures Net sales by business Q1/2006 Ship Power Power Plants MEUR Q1/06 Q1/05 2005 25.6% (27.7) 23.6% (22.6) Net sales 591.9 483.8* 2,520.3* Operating income 35.9 29.3* 202.5* Income before taxes 40.0 42.2** 212.4 Earnings/share, EUR 0.55 0.33 1.80 Services 50,6% (49.2) * Wärtsilä’s business co
Slide 4: Key figures
Key figures MEUR Net sales Order intake Order book 3,415.4 700 1200 3200 2,905.7 19.0% 591.9 1,023.4 2800 600 1000 483.8 2400 500 800 48.7% 2,066.9 26.0% 678.0 2000 23.0% 400 600 1600 300 14.4% 27.8% 1200 400 113.5% 200 800 67.8% 13.3% 200 100 400 0 0 0 Q1/05 Q1/06 Q1/05 Q1/06 31.12.2005 31.3.2005 3
Slide 5: Order book distribution
Order book distribution MEUR 2000 1800 1600 1400 1200 Delivery current year 1000 Delivery next year, + 800 600 400 200 0 31.3.2005 31.3.2006 © Wärtsilä 5
Slide 6: Measures taken to increase capacity in 2007 and beyond
Measures taken to increase capacity in 2007 and beyond Acquisition of machining capacity of Diesel Technology Solutions BV (DTS) in the Netherlands. Increasing capacity for engine assembly and testing in Vaasa and Trieste. Focused global sourcing. Suppliers investing in additional capacity. © Wärtsi
Slide 7: Delivered engine megawatts from own factories
Delivered engine megawatts from own factories MW 4 500 4 000 3 500 3 000 2 500 2 000 1 500 1 000 500 0 2001 2002 2003 2004 2005 Q1/2006 Power Plants Ship Power Estimate © Wärtsilä 7
Slide 8: Cash flow
Cash flow MEUR Q1/2006 Q1/2005 2005 Cash flow from operating activities -1.7 6.9 76.0 Cash flow from investing activities -29.4 -125.8 -178.3 Cash flow from financing activities 26.9 88.6 47.6 Liquid funds at the end of period 114.8 140.7 119.6 © Wärtsilä 8
Slide 9: Solvency and gearing
Solvency and gearing % Solvency Gearing 50 0,6 45 0,5 40 35 0,4 30 25 0,3 20 0,2 15 10 0,1 5 0 0 02 03 04 05 Q1/06 02 03 04 05 Q1/06 NOTE: 2002-2003 according to FAS, 2004- IFRS Convertible subordinated debentures treated as equity © Wärtsilä 9
Slide 10: Business overview
Business overview © Wärtsilä
Slide 11: Wärtsilä Ship Power
Wärtsilä Ship Power MEUR Q1/06 Q1/05 Change Ship Power net sales Net sales 151.6 133.9 13.3% Order intake 501.5 298.9 67.8% Order book* 2,079.8 974.0 113.5% 25.6% Market segments important for Wärtsilä have remained active. Wärtsilä has been particularly successful in LNG, offshore and cruise. of to
Slide 12: Vessel Orders, # of vessels
Vessel Orders, # of vessels Tankers Bulk carriers Containers Others 3 months moving average dwt 300 14 250 12 10 Volume [million DWT] 200 # of vessels 8 150 6 100 4 50 2 0 0 01-03 04-03 07-03 10-03 01-04 04-04 07-04 10-04 01-05 04-05 07-05 10-05 01-06 Source: Based on data from Clarkson Research Stu
Slide 13: Vessel Orders, other vessels
Vessel Orders, other vessels # of vessels LNG carriers LPG carriers Reefers Other dry > 5,000 dwt Offshore & other Cruise vessels Ro-Ro ferries 3 months moving average dwt 2 100 Volume [Million DWT] 75 # of vessels 1 50 25 0 0 01-03 04-03 07-03 10-03 01-04 04-04 07-04 10-04 01-05 04-05 07-05 10-05 0
Slide 14: Net sales of Ship Power by vessel type
Net sales of Ship Power by vessel type 800 Tank e rs 8% Cruis e & Fe rry 600 Bulk carrie rs 20% 5% Containe r s hips 13% Ge ne ral cargo 3% 400 LNG 12% Spe cial ve s s e ls & othe r 17% Offs hore 200 22% 0 2002 2003 2004 2005 Q1/06 Tankers Bulk carriers Container ships Others © Wärtsilä 14
Slide 15: The market position of Wärtsilä's marine engines Q1/2006
The market position of Wärtsilä’s marine engines Q1/2006 Own production Production by licensees Own production Medium speed main engines Low speed main engines Medium speed auxiliary engines Wärtsilä 46% (45) Wärtsilä 27% (24) Wärtsilä 10% (8) Comp. 2 2% Others Comp. 1 13% 25% Comp. 1 Others Comp. 2
Slide 16: Wärtsilä Services
Wärtsilä Services MEUR Q1/06 Q1/05 Change Services net sales Net sales 299.7 237.9 26.0% Personnel* 7 388 6 489 13.9% Organic growth 16.6%. 50.6% Services for low-speed engines continued to increase. Increase in demand of project and automation services. Automation acquisition in Norway. of total ne
Slide 17: Services - market offering
Services - market offering Range of services Engine Services Automation Services Reconditioning Services Propulsion Services Training Services Ship Services Operations & Management Services Power & Industrial Services © Wärtsilä 17
Slide 18: Automation acquisitions
Automation acquisitions Supports Ship Power Supplier concept Total net sales (at purchase), MEUR 97 Supports growth in gas Personnel 723 Growth opportunities in Services AKPAS, Norway 2006 Decam + Elco Systems, Netherlands 2004 Gerhardt, USA 2005 Total Automation, Singapore, expected to close Q2/06
Slide 19: Services - accelerating growth
Services - accelerating growth % Se rvices grow th per Q Se rvice s sha re of sa le s % 30 60 25 50 20 40 15 30 10 20 5 10 0 0 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 © Wärtsilä 19
Slide 20: Wärtsilä Power Plants
Wärtsilä Power Plants MEUR Q1/06 Q1/05 Change Power Plants net sales Net sales 139.7 109.4 27.8% Order intake 138.0 120.7 14.4% Order book* 943.0 766.7 23.0% 23.6% Market active on a global basis. Majority of new orders for oil-driven power plants. Largest order in oil power plants was received from
Slide 21: Target markets per fuel 2001-2005
Target markets per fuel 2001-2005 MW 21000 18000 15000 12000 9000 Wärtsilä’s 6000 market share 7.8% 3000 8.7% 44.2% 0 2001 2002 2003 2004 2005 HFO 1-60 MW LFO 3.5-60 MW GAS 3.5-60 MW Note: Wärtsilä’s gas power plant target markets have changed since Wärtsilä stopped manufacturing and selling high sp
Slide 22: Gas power plant market
Gas power plant market MW 12000 9000 Rec.engines 2,992 MW Gas turbines Wärtsilä 19.8% Wärtsilä 4,582 MW 6000 7.8% Market potential for Wärtsilä 3000 0 2005 HFO 1-60 MW LFO 3.5-60 MW GAS 3.5-60 MW Note: Wärtsilä’s gas power plant target markets have changed since Wärtsilä stopped manufacturing and se
Slide 23: Power Plants - order intake Q1/06: 296.0 MW (306.0)
Power Plants - order intake Q1/06: 296.0 MW (306.0) Europe Asia 102 99 (45) (182) 0 102 89 10 (37) (8) (119) (63) Americas 53 (0) 0 53 Africa and Middle East (0) (0) 42 (79) 17 25 (0) (79) Gas Oil © Wärtsilä 23
Slide 24: Wärtsilä's holdings
Wärtsilä’s holdings The company was accounted for as an associated company from 1st of May 2005. Wärtsilä’s ownership in the company is 26.5%. Wärtsilä’s share of the associated company’s result was EUR 6.7 million (1-3/2006). The holding’s balance sheet value EUR 113.4 million (31st March 2006). Wä
Slide 25: Market outlook 2006
Market outlook 2006 Ship Power Offshore, LNG and cruise remain active. In the near future Wärtsilä sees ordering activity continuing on high level. Power Plants Market situation remains good. Geographically demand distributed evenly. © Wärtsilä 25
Slide 26: Wärtsilä Outlook 2006
Wärtsilä Outlook 2006 Demand in the ship power and energy markets looks likely to remain favourable for Wärtsilä for at least the following six months. Forecast for the year unchanged: Based on the strong order book, Wärtsilä’s net sales are expected to grow this year by as much as 20%. The profitab
Slide 27: Thank you!
Thank you! © Wärtsilä 27