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© Wärtsilä
WÄRTSILÄ CORPORATIONINTERIM REPORT JANUARY-SEPTEMBER 2015
22 OCTOBER 2015Björn Rosengren,President & CEO
• Order intake EUR 1,086 million, -17%• Net sales EUR 1,222 million, +9%• Book-to-bill 0.89 (1.17)• EBIT EUR 160 million, 13.1% of net sales
(EUR 142 million or 12.7%)• EBITA EUR 170 million, 13.9% of net sales
(EUR 149 million or 13.3%) • EPS EUR 0.49 (0.43)• Cash flow from operating activities EUR -5 million (68)• Order book at the end of the period
EUR 5,112 million, +9%
EBIT is shown excluding non-recurring items.EBITA is shown excluding non-recurring items and purchase price allocation amortisation.
Highlights Q3/2015
2 © Wärtsilä
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0
200
400
600
800
1 000
1 200
1 400
1 600
Q3/2014 Q3/2015
-17%
-56%
10%
-12%
1,309
MEUR
Third quarter development
MEUR
3
Year to date order intake supported by Services
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
5 500
2011 2012 2013 2014 2015
1,086
Q1-Q3 Q4
EnergySolutions
MarineSolutions
Services
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0
200
400
600
800
1 000
1 200
1 400
Q3/2014 Q3/2015
Net sales in line with our expectations
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
2011 2012 2013 2014 2015
9%
12%
23%
-14%
1,117
MEUR
Third quarter development
MEUR
1,222
4
Net sales developing well
Q1-Q3 Q4
EnergySolutions
MarineSolutions
Services
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Net sales by business 1-3/2012
Marine Solutions33% (36)
Energy Solutions22% (22)
Services45% (43)
5
Net sales by business 1-9/2015
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1.07 1.05 1.05 1.06 1.03
0,0
0,2
0,4
0,6
0,8
1,0
1,2
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
5 500
2011 2012 2013 2014 1-9/2015
Order intake Net sales Book-to-bill
MEUR
6
Book-to-bill ratio remains above one
© Wärtsilä
Order book distribution
MEUR
7
Order book distribution
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
30.9.2014 30.9.2015
Delivery current year Delivery next year or later
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MEUR
8
Operating result and profitability in line with expectations
EBIT%EBIT
11.1% 10.9% 11.2%11.9%
0%
2%
4%
6%
8%
10%
12%
14%
0
100
200
300
400
500
600
2011 2012 2013 2014
EBIT is shown before non-recurring items. Figures for 2011-2013 include both discontinued and continuing operations.
Third quarter development
MEUR
12.7% 13.1%
0%
2%
4%
6%
8%
10%
12%
14%
0
20
40
60
80
100
120
140
160
180
Q3/2014 Q3/2015
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Macroeconomic uncertainty continues to effect power generation markets
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Energy Solutions’ quotation activity on a good level
Multi-fuel
Gas
Liquid fuel
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
Q1
/2012
Q2
/2012
Q3
/2012
Q4
/2012
Q1
/2013
Q2
/2013
Q3
/2013
Q4
/2013
Q1
/2014
Q2
/2014
Q3
/2014
Q4
/2014
Q1
/2015
Q2
/2015
Q3
/2015
MW
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0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2011 2012 2013 2014 2015
MEUR Review period developmentTotal EUR 642 million (792)
IPP’s*
Utilities
Industrials
Oil 64%
Gas36%
Review period order intake by fuel in MW
x%
11
Energy Solutions’ order intake impacted by delayed customer decision-making
44%
11%
44%
Q1-Q3 Q4
*IPP = Independent Power Producer
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40
584
31
Order intake 1-9/2015: 1,687 MW (1,716)
Americas 246 (539)
Asia 174 (326)
Africa and Middle East 230 (440)
UtilitiesIPP’sIndustrials
12
Energy Solutions’ orders globally
975
190
Europe 1,037 (410)
246
40
103
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GE62.3%
Alstom2.9%
Ansaldo2.8% Other GT’s
0.9%
1313
Siemens27.9%
GE35.0%
Wärtsilä9.7%
MHI19.5%
13
Market for gas and liquid fuel power plants, <500 MW
Market data includes all Wärtsilä power plants and other manufacturers’ gas and liquid fueled gas turbine based power plants with prime movers above 5 MW, as well as estimated output of steam turbines for combined cycles. The data is gathered from the McCoy Power Report.Other combustion engines not included. In engine technology Wärtsilä has a leading position.
Other GT’s0.5%
Ansaldo7.4%
1-6/2014 1-6/2015
Siemens10.4%
MHI10.4%
Wärtsilä9.4%
Market volume 1-6/2015: 12.6 GW (10.6), +19%
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Marine markets affected by low contracting and a weak sentiment in the offshore segment
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0
1
2
3
4
5
0
50
100
150
200
250
01.09
04.0907.09
10.09
01.10
04.10
07.10
10.10
01.11
04.11
07.11
10.11
01.12
04.12
07.12
10.12
01.13
04.1307.13
10.13
01.14
04.14
07.14
10.14
01.15
04.15
07.15
Mill
ion
CG
T
# of
ves
sels
Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT
15
Vessel contracting activity remains low
Source: Clarkson Research Services, figures exclude late contracting* CGT= gross tonnage compensated with workload
*
* 09.15
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0
300
600
900
1 200
1 500
1 800
2011 2012 2013 2014 2015
MEUR
Review period developmentTotal EUR 1,134 million (1,286)
Offshore11%
Traditional merchant
18%
Special vessels10%
16
Marine Solutions’ order intake impacted by market challenges
Others 5%
Q1-Q3 Q4
Gas carriers35%
Cruise & Ferry17%
Navy4%
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• Joint venture order intake totalled EUR 163 million (126) during January-September 2015
• Wärtsilä’s share of ownership in these companies is 50%, and the results are reported as a share of result of associates and joint ventures
MEUR
Marine Solutions order intake
Joint venture order intake, includes figures from Wärtsilä Hyundai Engine Company Ltd. and Wärtsilä Qiyao Diesel Company Ltd.
17
Joint venture ordering activity
0
100
200
300
400
500
600
700
Q1/2010
Q2/2010
Q3/2010
Q4/2010
Q1/2011
Q2/2011
Q3/2011
Q4/2011
Q1/2012
Q2/2012
Q3/2012
Q4/2012
Q1/2013
Q2/2013
Q3/2013
Q4/2013
Q1/2014
Q2/2014
Q3/2014
Q4/2014
Q1/2015
Q2/2015
Q3/2015
© Wärtsilä
Wärtsilä’s market shares are calculated on a 12 months rolling basis, numbers in brackets are from the end of the previous quarter. The calculation is based on Wärtsilä’s own data portal.
Wärtsilä63% (59)
Others 16% (16)
MAN D&T8% (15)
Caterpillar13% (10)
Total market volume last 12 months:4,519 MW (4,988)
Medium-speed main engines
Wärtsilä9% (5)
Auxiliary engines
Total market volume last 12 months:3,986 MW (4,078)
Others91% (95)
18
Strong position in marine engine market
© Wärtsilä
• The recently introduced Wärtsilä 31 engine, the world’s most efficient 4-stroke diesel engine, has been selected to power a new generation icebreaker
• The icebreaker will feature three 8-cylinder Wärtsilä 31 engines and Wärtsilä’s online monitoring systems
• Wärtsilä 31 engine is fuel efficient, reliable, flexible in operations and has outstanding performance in extreme environmental conditions
19
First Wärtsilä 31 engines selected to power an icebreaker
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Service market activity developing well
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0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
2011 2012 2013 2014 2015
-3%
0
100
200
300
400
500
600
Q3/2014 Q3/2015
MEUR
Third quarter development
MEUR
47212% 531
21
Continued growth in Services’ net sales
5%
Q1-Q3 Q4
5%
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Spare parts 51%(51)
Field service 24%(24)
Contracts 17%(17)
Projects8%(8)
22
Total EUR 1,565 million (1,375)
Services net sales distribution 1-9/2015
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0%
5%
10%
15%
20%
25%
30%
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
2009 2010 2011 2012 2013 2014 30.9.2015
23
MW
Development of service agreements
MW under agreement – Energy Solutions MW under agreement – Marine Solutions
% of Marine Solutions’ installed base% of Energy Solutions’ installed base
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Fleet utilisation
* Source Bloomberg. Sample of more than 25 000 vessels (>299 GT) covered by IHS AIS Live.** Source Bloomberg
Fleet Average Speed, knots**
Anchored Vessels & Fleet Development*
20 500
21 000
21 500
22 000
22 500
23 000
20%
22%
24%
26%
28%
03.13
06.13
09.13
12.13
03.14
06.14
09.14
12.14
03.15
06.15
09.15
Nr o
f Ac
tive
Vess
els
Perc
ent A
ncho
red
Anchored Active Fleet
8,48,68,89,09,29,49,6
03.13
06.13
09.13
12.13
03.14
06.14
09.14
12.14
03.15
06.15
09.15
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Solid financial standing
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Cash flow from operating activities
0
100
200
300
400
500
600
700
2011 2012 2013 2014
MEUR
0
50
100
150
200
250
1-9/2014 1-9/2015
Review period development
MEUR
© Wärtsilä
235
465
313251
5.6%
9.8%
6.8%5.2%
0%
5%
10%
15%
20%
25%
0
200
400
600
800
1 000
1 200
1 400
1 600
2011 2012 2013 2014
Working capital Total inventories Advances received Working capital / Net sales
MEUR
27
Working capital impacted by increased inventories
MEUR
Review period development
* Working capital / 12 months rolling net sales
3795228.2%*
10.5%*
0%
5%
10%
15%
20%
25%
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
30.9.2014 30.9.2015
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Gearing impacted by L-3 MSI acquisition
0,00
0,10
0,20
0,30
0,40
0,50
2011 2012 2013 2014 0,00
0,10
0,20
0,30
0,40
0,50
30.9.2014 30.9.2015
Review period development
© Wärtsilä
• Energy Solutions: The market for liquid and gas fuelled power generation is expected to remain challenging as economic uncertainty continues. The megatrend towards distributed, flexible gas-fired power generation is gaining further ground globally.
• Marine Solutions: The outlook for the shipping and shipbuilding markets remains challenging. Overcapacity continues to affect demand and low oil prices impact investments in offshore segment. Gas carrier contracting is expected to continue on a normalised level, while the outlook for cruise & ferry remains positive.
• Services: The overall service market outlook is positive with growth opportunities in selected regions and segments. Customers in both the marine and power plant markets continue to show healthy interest in long-term service agreements.
29
Market outlook
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Wärtsilä expects its net sales for 2015 to grow by 5-10% and its operational profitability (EBIT% before non-recurring items) to be between 12.0-12.5%. The guidance includes the impact of the L-3 Marine Systems International acquisition.
Prospects for 2015 unchanged
IR Contact:Natalia ValtasaariDirector, Investor Relations Tel. +358 (0) 40 187 7809E-mail: [email protected]
