Wartsila Oyj Abp · OMXHEX:WRT1V
Wartsila Oyj Abp — Wärtsilä — Investor Presentation (November 2012)
43 slides from Wartsila Oyj Abp's investor presentation, Nov 26, 2012
Slide 1: Brazil Takes Off
BRAZIL TAKES OFF Investor meeting Rio de Janeiro November 2012 (Handelsbanken) © Wärtsilä
Slide 2: Benchmarking Brazilian economy against other large economies
Benchmarking Brazilian economy against other large economies Brazil is uniquely positioned amongst world‟s top economies: Indeed, the size of its territory, population and GDP put Brazil in a prominent position among the largest economies in the world. Russia Bangladesh India Nigeria Australia Pakis
Slide 3: Where is Wärtsilä in Brazil
Where is Wärtsilä in Brazil Wärtsilä Brasil Ltda founded in 1990 Total 600+ employees today More than 25 power plants with installed power in excess of 2,5 GW New workshop to support the PP installations and local shipping market Existing location to support the local PP installations) and facilitat
Slide 4: Wärtsilä Brasil snapshot
Wärtsilä Brasil snapshot Recent key developments Current strengths Locations • Rio de Janeiro • Workshop type B • SP, PP & Services mgmt; Fin. & Adm. HR and IT • Recognized brand name • Manaus • Workshop type C • Large installed base (over 3 GW) • Service sales, Contract management, WLSA • Local pre
Slide 5: Boom in the economy
Boom in the economy © Wärtsilä
Slide 6: Summary Macroeconomics Brazil
Summary Macroeconomics Brazil The global financial crisis affects the Brazilian Banking System mainly by lack of USD-Liquidity, but not in terms of weak assets in the portfolio, credit losses, trading losses etc. This was prevented to a large extend by the restrictive legal framework which doesn„t
Slide 7: Economic growth is expected to pick up from 2013 onwards
Economic growth is expected to pick up from 2013 onwards Real GDP and annual growth % BRL bn % 2 000 9 1 800 8 1 600 7 1 400 6 1 200 5 1 000 4 800 3 600 2 400 1 200 0 0 -1 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012e 2013e 2014e 2015e 2016e 2017e Real GDP IMF GDP estimate Actual
Slide 8: At this point the economy rests on quite strong fundamentals
At this point the economy rests on quite strong fundamentals… … enabling the central bank to lower the steering rate * Inflation has been at historically low levels … Central bank steering rate 12-month IPCA inflation and inflation targets (%) Since January 2009, the % central bank has cut SELIC 30
Slide 9: However, some risks will always prevail
… however, some risks will always prevail 1. A reversal in global A new recession cycle in central economies would likely be accompanied by higher risk aversion to risk and lower investor appetite for emerging market investments. economic recovery 2. The expansionary For the past decade, government
Slide 10: Pre-salt reserves are likely to turn Brazil into a true oil major
Pre-salt reserves are likely to turn Brazil into a true oil major… World Proven Oil Reserves by Country 264 Including pre-salt potential Brazil’s proven oil reserves as 138 1) per year-end 2007 amounted 150 2) to 13 bn boe of which roughly 115 83- 90% is offshore, compared to 120 102 113 100 98 the
Slide 11: The new Petrobras President's initiative of realistic targets
The new Petrobras President’s initiative of realistic targets Petrobras’ domestic oil production forecasts (OGX could offer upside) kboe/day 5 000 4 000 3 000 4 200 3 775 2 000 3 350 2 925 2 500 2 341 2 181 2 022 2 022 2 022 2 004 1 971 1 855 1 792 1 778 1 684 1 000 1 540 1 500 1 493 1 336 1 271 0 2
Slide 12: Main obstacles when doing business in Brazil
Main obstacles when doing business in Brazil • Bureaucracy and complex tax legislation • Lack of skilled manpower, specially in the shipbuilding & offshore market • Expensive real estate in the main cities • Lack and/or expensive financing solutions • Local content rules potentially affecting compet
Slide 13: Environmental solutions and gas technology priority
The development of environmental solutions and gas technology will be our priority in meeting the evolving needs of our customers. © Wärtsilä
Slide 14: Luiz Barcellos
Luiz Barcellos Name: Luiz Barcellos Age: 54 Mechanical engineer Married, 2 daughters Wärtsilä: Working at WBR since Nov. 1997 1st contact with Wärtsilä in 1987 Long experience in shipbuilding and marine businesses Current position: General Manager Ship Power Director Wärtsilä Brasil © Wärtsilä
Slide 15: Ship Power's focus on growth
Ship Power’s focus on growth OUR STRATEGIC GOAL To be recognised as the leading solutions provider in the marine industry for: Gas and dual-fuel Environmental Efficiency solutions solutions LEADER IN OFFERING THROUGH • Lifecycle solutions for ship owners and operators • Enhanced system integration f
Slide 16: Life after pre-salt
Life after pre-salt Petrobras‟ CEO presentation 20th September 2012 © Wärtsilä
Slide 17: Construction of 137 Units: Drilling, Production and Vessels
Construction of 137 Units: Drilling, Production and Vessels 23 PU contracted 15 to be contracted 28 Drilling Rigs contracted 5 to be contracted 49 Ships contracted Petrobras‟ CEO presentation 20th September 2012 © Wärtsilä
Slide 18: DRU - 50 Drilling Rigs: 2012-2020
DRU - 50 Drilling Rigs: 2012 - 2020 Petrobras‟ CEO presentation 20th September 2012 © Wärtsilä
Slide 19: FPSO - 38 Production Units: 2012-2020
FPSO - 38 Production Units: 2012 - 2020 Petrobras‟ CEO presentation 20th September 2012 © Wärtsilä
Slide 20: P-63 Papa-Terra (Genset Modules)
P-63 Papa-Terra (Genset Modules) • More than 100MWe • 6x 18V50DF in 3 modules • Wärtsilä design and manufacture • Running on tri-fuel: treated crude, MDO and treated well gas • Reducing Carbon Footprint with as much as 93,000 tons per year • Fully operational modules • Official test concluded in Oct
Slide 21: Tankers - 49 Promef's Ships: 2012-2020
Tankers - 49 Promef’s Ships: 2012 - 2020 Petrobras‟ CEO presentation 20th September 2012 © Wärtsilä
Slide 22: Brazilian Shipbuilding Scenery
Brazilian Shipbuilding Scenery Today’s business environment Petrobras demand Demand assured for the coming years (2012-2020) in the world‟s largest E&P investment program: • 47 Shipyards; • 38 Production platforms; • 11New yards under construction; • 50 Drill rigs; • 59.000 workers directly employed
Slide 23: Brazilian Shipbuilding Scenery: Main Shipyards
Brazilian Shipbuilding Scenery Main Shipyard and Construction Sites Erin – Manaus (AM) Eisa (RJ) © Wärtsilä
Slide 24: DWT under construction
DWT under construction © Wärtsilä
Slide 25: The world needs affordable, clean, flexible and reliable power
The world needs affordable, clean, flexible and reliable power. © Wärtsilä
Slide 26: Jorge Alcaide
Jorge Alcaide Name: Jorge Alcaide Age: 47 Mechanical engineer – 1988 MBA in Energy Business –2005 Married, 3 children Wärtsilä: Working at WBR since Jan 2008 Long experience in the Power market since 1997 Current position: Regional Director, Power Plants © Wärtsilä
Slide 27: From where the Brazilian electricity comes?
From where the Brazilian electricity comes? Total installed capacity: 127 GW (July 2012) Brazil Annual growth: 4% per year Hydro has limited growth potential (Amazon jungle) © Wärtsilä
Slide 28: The Interconnected grid - 95,500 km and growing
The Interconnected grid – 95,500 km and growing • Annual increase of 3,000 km; • 230kV = 41,500 km • 345kV = 9,800 km • 440kV = 6,700 km • 500kV = 33,200 km • 600kV = 1,600 km [DC] • 750kV = 2,700 km Source: ONS © Wärtsilä
Slide 29: To put it in perspective - From Finland to Portugal
To put it in prospective - From Finland to Portugal Isolated Grid 3.750 3.900 km km 4 000 BRAZIL EUROPE km © Wärtsilä
Slide 30: Brazilian energy market - overview
Brazilian energy market – overview 98% of total consumption is in the interconnected area National energy by generation type Total installed capacity: 127 GW (July 2012) ISOLATED AREA 6,4% 1,3% 10,5% INTERCONNECTED 5,8% 1,5% Gas AREA 7,6% Coal 1,6% Biomass Nuclear Hydro Oil All hydro power Imported
Slide 31: Economic growth to drive the increase in installed power
Economic growth to drive the increase in installed power Annual change in GDP vs. increase in National energy demand (TWh / year) electrical energy consumption (% p.a.) % TWh 10 8 1 000 6 4 2 0 500 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 -2 -4 -6 2008 Financial Crisis 2
Slide 32: Energy consumption Real x Forecast
Energy consumption Real x Forecast (TWh x year) 1000 900 800 700 600 Growth 4% + per year 500 400 300 200 100 0 Real Forecasted Brazil – Real Electrial Energy Consumption 1995 / 2010 © Wärtsilä
Slide 33: Brazilian Energy Market: future opportunities
Brazilian Energy Market: future opportunities • Demand Growth: over 5,000 MW per year for the – Government forecasts minimum 4% load next years! growth per year until 2020 New hydro plants are designed to be – New large hydroelectric projects are no run-of-rivers need of thermal back- longer avail
Slide 34: Auction in brief: New electricity is purchased through auction
Auction in brief: New electricity is purchased through auction Annual energy auction system in brief • Purchase of new energy to meet consumption growth • Electricity demand based on distribution companies evaluation • Three types of auctions for new energy • A-3 (thermal and biofuel IPP projects; C
Slide 35: Power plants installed capacity
Power plants Installed capacity Brazil - December 2012 • 25 Power Plants + 4 under constrution = 29 total • 2,283 MW installed capacity + 356MW under construction = 2,639MW • 1,836 MW under O&M contract Gera Manaus – 85MW Petrolina – 140MW Termocabo – 52MW Linhares – 204MW (Gas) Borborema – 175MW Ma
Slide 36: Services business landscape
Services business landscape © Wärtsilä
Slide 37: Robson Campos
Robson Campos Name: Robson Campos Age: 42 Lawyer – 1995 Corporate Finance – 2004 Married, 2 children Wärtsilä: Working at WBR since Jul 1990 Long experience in the Finance, Power and Services market since 1995 Current position: President, Wärtsilä Brazil Head of Services © Wärtsilä
Slide 38: Wärtsilä Brazil Services today
Wärtsilä Brazil Services today • Strong presence in Brazil • High quality services, especially in propulsion and O&M • O&M agreement or maintenance agreement for every power plant commissioned since 2002 • Established relationships with Offshore customers • Underlying market potential in both power
Slide 39: Workshop - Niterói
Workshop – Niterói - Opening Ceremony Q1 2013 - Service for: engines, thrusters, Electrical and Automation, etc. - Training Center for yards, local manufacturing and operators. © Wärtsilä
Slide 40: SUBRA: Activities & locations
SUBRA: Activities & locations Electrical & Service agreements Engine services Propulsion services Training services automation services Service projects • Service locations and workshops – Rio de Janeiro: Area 2332 m² (B type) – Manaus: Area 3400 m² (C type) • Power Plants and Offshore O&M and maint
Slide 41: Services Key future target segments
Services Key future target segments Growth area: Offshore services Strategy: Capture the after-sales to the suppliers to the Brazilian offshore market. Main focus: Partner-up with them from DAY 1 they are commencing work off the Brazilian coast. • Footprint in offshore market • Merchant fleet Growth
Slide 42: Developing Local Manufacturing
Developing Local Manufacturing …to create a business model meeting a volatile volume demand and high local content requirements Multi Product Factory © Wärtsilä
Slide 43: Thank you!
WARTSILA f&. WARTSILA