WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-SEPTEMBER October 2017 Jaakko Eskola, President & CEO. Wärtsilä PUBLIC

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1 WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-SEPTEMBER October 217 Jaakko Eskola, President & CEO 1 Wärtsilä PUBLIC 25 October 217 Q3 Result presentation 217

2 Highlights Q3/217 Order intake EUR 1,354 million, +19% Net sales EUR 1,178 million, +9% Book-to-bill 1.15 (1.6) Comparable operating result EUR 135 million (123), 11.4% of net sales (11.4) Earnings per share EUR.43 (.43) Cash flow from operating activities EUR 15 million (189) Order book at the end of the period EUR 5,75 million (5,24) 2

3 Strong development in order intake Third quarter development ,139 19% 5% 1,354 Services % Marine Solutions % Energy Solutions Q3/216 Q3/217 Q1-Q3 Q4 3

4 Net sales supported by power plant deliveries Third quarter development ,79 9% 3% 1,178 Services % Marine Solutions % Energy Solutions Q3/216 Q3/217 Q1-Q3 Q4 4

5 Net sales by business 1-9/217 Services 45% (48) Marine Solutions 27% (36) Energy Solutions 28% (16) 5

6 Book-to-bill 5 5 1, ,2 1, 3 5 3,8 2 5, ,4 1 5, /217 Order intake Net sales Book-to-bill, 6 Wärtsilä PUBLIC 25 October 217 Q3 Result presentation 217

7 Order book distribution Delivery current year Delivery next year Delivery later than next year 7

8 Operating result supported by changes in timing of deliveries 7 14% % 11.9% 12.2% 12.1% 12% 1% 4 Review period development 14% 35 12% 4 8% 3 1.2% 1.% 1% 3 2 6% 4% % 6% 1 2% 1 5 4% 2% % 1-9/ /217 % Comparable operating result % of net sales Items affecting comparability included costs related to restructuring programmes of EUR 4 million (2) in the third quarter of 217 and EUR 19 million (29) during the review period January-September. Figures for 213 include both discontinued and continuing operations. 8

9 SERVICES 9

10 SERVICES Services sales affected by challenges in offshore and low volumes from service projects Third quarter development % Q3/216 Q3/217 Q1-Q3 Q4 1 Wärtsilä PUBLIC 25 October 217 Q3 Result presentation 217

11 SERVICES Net sales distribution 1-9/217 By product area By segment Spare parts 5% (5) Field service 22% (23) Special vessels 7% (8) Offshore 8% (9) Navy 8% (8) Power plants 39% (38) Agreements 17% (15) Projects 1% (11) Merchant 23% (24) Cruise & ferry 15% (13) Total EUR 1,561 million (1,554) 11

12 MW SERVICES Installed base covered by service agreements 2 3% % 14 2% % 8 6 1% 4 2 5% /217 % MW under agreement Energy Solutions % of Energy Solutions installed base MW under agreement Marine Solutions % of Marine Solutions installed base 12 Wärtsilä PUBLIC 25 October 217 Q3 Result presentation 217

13 Ensuring certainty of operations and predictability of GasLog s LNG carriers A service agreement covering eight LNG carriers expands the cooperation between Wärtsilä and GasLog Wärtsilä s digital services allows for remote troubleshooting and tuning of engines as well as software updates Applying real-time installation data enables striving for optimum lifecycle utilisation 13

14 ENERGY SOLUTIONS 14

15 Q4/214 Q1/215 Q2/215 Q3/215 Q4/215 Q1/216 Q2/216 Q3/216 Q4/216 Q1/217 Q2/217 Q3/217 ENERGY SOLUTIONS Quotation activity by fuel type MW Multi-fuel Gas Liquid fuel 2 1 Calculated on a 12 months rolling basis 15 Wärtsilä PUBLIC 25 October 217 Q3 Result presentation 217

16 ENERGY SOLUTIONS Energy Solutions order intake developing well 1 8 Review period development Total EUR 1,184 million (947) % Utilities % 49% Independent power producers 1 2 Industrials Review period order intake by fuel in MW 4 2 Oil 51% Gas 49% Q1-Q3 Q4 16

17 ENERGY SOLUTIONS Order intake globally Europe 198 (1,49) 13 Asia 2,31 (395) 8 Americas 348 (726) , Utilities 329 Africa and Middle East 279 (385) IPP s (Independent Power Producers) Industrials 5 Order intake 1-9/217: 2,856 MW (2,555) 17

18 Contributing to the development of sustainable societies Wärtsilä will supply its third LNG receiving terminal to be located in Hamina, Finland The port of Hamina will be the first LNG receiving terminal in Finland connected to Finnish gas grid, offering security of supply to gas customers The LNG terminal is scheduled to be operational in August 22 18

19 ENERGY SOLUTIONS Market for gas and liquid fuel power plants, <5 MW Wärtsilä 14% (12) Other GT s 4% (4) GE 3% (31) MHI 14% (15) Siemens 19% (24) Ansaldo 19% (15) <5 MW market volume last 12 months: 24.8 GW (28.4) Total market volume last 12 months: 54.6 GW (58.) Market shares are calculated on a 12 months rolling basis, numbers in brackets are from the end of the previous period. Market data includes all Wärtsilä power plants and other manufacturers gas and liquid fuelled 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. 19

20 MARINE SOLUTIONS 2

21 Number of vessels Million CGT MARINE SOLUTIONS Improving market conditions supported vessel contracting Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT* 25 5, 4,5 2 4, 3, , 2,5 2, 1,5 1,,5, * Source: Clarkson Research Services, figures exclude late contracting * CGT= gross tonnage compensated with workload 21 Wärtsilä PUBLIC 25 October 217 Q3 Result presentation 217

22 MARINE SOLUTIONS Marine Solutions order intake supported by favourable contracting mix Gas carriers 26% Review period development Total EUR 1,112 million (1,28) Offshore 3% Special vessels 8% Cruise 31% Q1-Q3 Q4 Traditional merchant 17% Others 4% Navy 8% Ferry 3% 22

23 MARINE SOLUTIONS Market position of Wärtsilä s marine engines Medium-speed main engines Others 2% (17) Auxiliary engines Wärtsilä 13% (8) Caterpillar 1% (13) Wärtsilä 43% (4) Others 87% (92) MAN D&T 27% (3) Total market volume last 12 months: 2,982 MW (3,65) Total market volume last 12 months: 1,932 MW (1,68) Wärtsilä s market shares are calculated on a 12 months rolling basis, numbers in brackets are from the end of the previous period. The calculation is based on Wärtsilä s own data portal. 23

24 Developing technologies that enable a Smart Marine future Efficient and reliable remote control and monitoring capabilities are central to the enablement of intelligent shipping Wärtsilä recently successfully tested the remote control of ship operations using standard bandwidth onboard satellite communication Wärtsilä s capabilities in intelligent vessel navigation will be enhanced by the acquisition of Guidance Marine Kuva pitää vaihtaa, bonny kalvon kuva voisi sopia tähän 24

25 FINANCIALS 25

26 FINANCIALS Cash flow from operating activities affected by increased receivables 7 6 Review period development / /217 26

27 FINANCIALS Working capital % 1 4 Review period development 1 2 2% % % % % % 15% 1% 5% %* %* 2% 15% 1% 5% % % Working capital Total inventories Advances received Working capital / Net sales *Working capital / 12 months rolling net sales 27 Wärtsilä PUBLIC 25 October 217 Q3 Result presentation 217

28 FINANCIALS Gearing,5 Review period development,4,5,3,4,2,3,2,1,1, , Wärtsilä PUBLIC 25 October 217 Q3 Result presentation 217

29 Prospects for 217 unchanged Setti 1 Setti 1 The overall development in 217 is expected to be relatively unchanged from the previous year. Demand by business area is anticipated to develop as follows: Solid in Services with growth opportunities Good in Energy Solutions Solid in Marine Solutions 29

30 THANK YOU Further information: Natalia Valtasaari Director, Investor & Media Relations Tel () natalia.valtasaari@wartsila.com 3