WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-MARCH 211 OLE JOHANSSON, PRESIDENT & CEO 2 APRIL 211 1 Wärtsilä
Q1/11 Highlights Net sales EUR 1,83 million, +18% Order intake EUR 979 million, +11% Operating result EUR 113 million, 1.4% of net sales Cash flow from operating activities EUR 133 million EPS EUR.38 (.34) Operating result and EPS are shown excluding nonrecurring items. EPS figures have been calculated based on the new amount of shares. 2 Wärtsilä
Growth in net sales Q1 on Q1 development 55 14 12 1 922 18% 1 83 5 8 7% 45 14% -13% 6 4 6% 4 2 47% 35 23% Q1/21 Q1/211 3 25 2 15 16 14 12 1 Q1 on Q4 development 1 462-26% Development from Q4/1-15% 1 83 1 8 6-21% 5 27 28 29 21 1-3/211 4 2-4% Q4/21 Q1/211 Power Plants Ship Power Services 3 Wärtsilä
Net sales by business 1-3/211 Ship Power 27% (3) Power Plants 32% (26) Services 41% (44) 4 Wärtsilä
Emerging markets approx. 54% of 21 net sales Developed markets 46% Emerging markets 54% 5 Wärtsilä
Order intake at healthy levels Q1 on Q1 development 6 55 5 12 1 8 6 4 881 11% 6% 92% 979 45 2-5% 4 Q1/21 Q1/211 35 3 25 2 15 12 1 8 Q1 on Q4 development 1 3-2% 979 8% 1 6 5 4-3% 2-2% 27 28 29 21 1-3/211 Q4/21 Q1/211 Power Plants Ship Power Services 6 Wärtsilä
Book-to-bill 6 55 5 1.5 1.21 1,6 1,4 45 1,2 4 35.88.9 1, 3 25 2 15 1 5.63 27 28 29 21 1-3/211,8,6,4,2, Order intake Net sales Book-to-bill 7 Wärtsilä
Order book 7 6 5-15% 4 33 4 1% 3 669 3-24% 2 1-14% 27 28 29 21 31.3.21 31.3.211 Power Plants Ship Power Services 8 Wärtsilä
Order book distribution 5 4 3 2 1 31.3.21 31.3.211 Delivery current year Delivery next year + 9 Wärtsilä
Solid profitability 25 16% 2 1.1% 11.4% 12.1% 1.7% 1.4% 14% 12% EBIT% target: 1-14% 15 1% 8% 1 6% 5 4% 2% 27 28 29 21 211 % Q1 Q2 Q3 Q4 Yearly EBIT% 1 Wärtsilä
Ship Power market - vessel order development All vessels Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in DWT 45 3 4 35 25 3 2 25 2 15 15 1 1 5 5-1.5 3.5 5.5 7.5 9.5 11.5 1.6 3.6 5.6 7.6 9.6 11.6 1.7 3.7 5.7 7.7 9.7 11.7 1.8 3.8 5.8 7.8 9.8 11.8 1.9 3.9 5.9 7.9 9.9 11.9 1.1 3.1 5.1 7.1 9.1 11.1 1.11 3.11 # of vessels Million DWT Source: Clarkson Research Services Limited 11 Wärtsilä
Ship Power order intake by segment 28 24 2 16 12 8 2 15 1 5 Q1 on Q4 development 178-3% 25% 333% 173-26% -27% -22% 39% Q4/21 Q1/211 4 27 28 29 21 1-3/211 Merchant Offshore Cruise & Ferry Special vessels Navy Ship Design 12 Wärtsilä
Ship Power quarterly order intake 9 8 7 6 5 4 3 2 1 24 25 26 27 28 29 21 211 Q1 Q2 Q3 Q4 13 Wärtsilä
Ship Power market Market position of Wärtsilä s marine engines Medium-speed main engines Low-speed main engines Mitsubishi 4%(3) Auxiliary engines Wärtsilä 3%(4) Others 16%(18) Wärtsilä 42%(42) Wärtsilä 11%(13) MAN Diesel 27%(25) Caterpillar (MAK) 15%(15) MAN Diesel 85%(84) Others 97%(96) Total market volume last 12 months: 1,628 MW (1,639) Total market volume last 12 months: 17,22 MW (15,681) Total market volume last 12 months: 4,271 MW (3,88) Wärtsilä s market shares are calculated on a 12 months rolling basis, numbers in brackets are from the end of the previous quarter. Wärtsilä s own calculation is based on Marine Market Database. 14 Wärtsilä
Ship Power order book 31 March 211 All vessel segments represented LNG 5% RoRo 4% Merchant 49% Bulkers 13% Offshore 26% Containers 6% Special vessels 1% Tankers 9% Cargo 12% Navy 6% Ship Design 2% Cruise & Ferry 7% Total EUR 1,699 million (2,242) 15 Wärtsilä
Wärtsilä is a frontrunner in LNG-fuelled ships Target to strengthen leading position in gas engine technology Rising interest in natural gas as a marine fuel Enviromental drivers and competitive natural gas prices Wärtsilä s dual fuel technology in over 6 LNG carriers Contract awarded by STX Finland Oy Supply of gas engines and equipment for Viking Line s new environmentally sound passenger ferry Largest LNG fuelled passenger ferry Integrated scope of supply: Four Wärtsilä 8L5DF dual fuel engines Wärtsilä LNGPac and Compact Silencer System 16 Wärtsilä
Power Plants - Market demand remained on a good level Quoted MW per Fuel Type 16 14 12 1 8 6 4 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 MW Others Natural gas Heavy fuel oil 24 25 26 27 28 29 21 211 Share of natural gas is consistently increasing 17 Wärtsilä
Power Plants order intake by application 2 18 16 14 4 3 Q1 on Q4 development 317-2% -51% 253 12 1 8 2 1-49% 22% 6 4 2 Q4/21 Q1/211 Order intake by fuel Q1/211 in MW 27 28 29 21 1-3/211 Oil 38% Gas 62% Industrial selfgeneration Flexible baseload Grid stability & peaking Oil & Gas 18 Wärtsilä
Power Plants quarterly order intake 6 5 4 3 2 1 24 25 26 27 28 29 21 211 Q1 Q2 Q3 Q4 19 Wärtsilä
Power Plants order intake Europe strongest region Asia 13 (52) 86 Europe 37 (64) 57 4 Americas 152 (46) 222 26 6 92 Africa and Middle East 12 (295) 34 Flexible baseload Industrial self-generation Oil & gas Grid stability & peaking 58 62 Order intake 1-3/211: 682 MW (457) 2 Wärtsilä
Power Plants market Gas turbine and engine manufacturers 28 29 21 Other CEs 2.2 Other GTs 5.1 Wärtsilä 3.3 Ansaldo 4.2 Other CEs.9 Other GTs 3.9 Ansaldo 1.3 MHI 2. Other CEs 1.9 Other GTs 3.2 Ansaldo 1.8 Alstom 1.9 Alstom 5.3 Wärtsilä 2. Wärtsilä 3.2 MHI 13.8 GE 39.5 Alstom 2.5 GE 18.7 MHI 3.9 GE 23.7 Siemens 2. Siemens 17.1 Siemens 17. Total market 92.8 GW Wärtsilä s market share 3.6% Total market 48.5 GW Wärtsilä s market share 4.1% Total market 56.6 GW Wärtsilä s market share 5.6% Market data includes all prime mover units over 5 MW and estimated output of steam turbines for combined cycles. The data is gathered from the McCoy Power Report and IESG. In oil and gas engine technology, Wärtsilä has a leading position. 21 Wärtsilä
Services net sales showed growth 2 18 % % 16 18% 14 12 1 8 6 4 2 5 4 3 2 1 Q1 on Q1 development 439 49 7% Q1/21 Q1/211 27 28 29 21 1-3/211 22 Wärtsilä
Services - Net sales by quarter 6 5 4 3 2 1 24 25 26 27 28 29 21 211 Q1 Q2 Q3 Q4 23 Wärtsilä
Services net sales distribution 1-3/211 Field service 22%(23) Spare parts 55%(55) Contracts 15%(13) Projects 8%(9) Numbers in brackets are from Q1/21. 24 Wärtsilä
Breakthrough contract for marine services Target to grow through service agreements Continued interest in maintenance agreements seen in marine and power plant markets Reduction of fixed costs Enhanced performance and reliability Maintenance support agreement signed with Royal Caribbean Cruises Ltd Five year maintenance support agreement 29 vessels, with an aggregate output of 1,4 MW Wärtsilä s single largest marine maintenance support agreement Optimised planning of overhauls and spare parts logistics Improved fuel economy and predictability of operational costs 25 Wärtsilä
Cash flow from operating activities 7 6 5 4 2 15 1 Q1 on Q1 development 181 133 3 5 2 1 Q1/21 Q1/211 27 28 29 21 1-3/211 26 Wärtsilä
Working capital development 2 25% 18 16 2% 14 31 March 211 14 12 12 15% 1 1 8 6 8 6 4 2 155 7.% 8.4% 212 176 5.5% 2.7% 12 5.8% 267 482 9.2% 17 3.7% 1% 5% 4 2 3.3%* 142 * Annualised Working Capital / Net Sales 24 25 26 27 28 29 21 % Working Capital Total Inventories Advances Received Working Capital / Net Sales 24 figures relate to the Power Businesses 27 Wärtsilä
Committed loans 31 March 211 14 12 1 55 8 6 63 2 Total EUR 618 million drawn 4 553 2 Drawn longterm loans Current portion of long-term loans Drawn shortterm loans Undrawn revolving credits At the end of the reporting period, drawn revolving credits amounted to euros. In addition, there are Finnish Commercial Paper Programs of EUR 7 million (uncommitted). 28 Wärtsilä
Financial position Solvency % 5 45 4 35 3 25 2 15 1 Gearing,7,6,5,4,3,2,1 5, 27 28 29 21 1-3/211 -,1 27 28 29 21 1-3/211 29 Wärtsilä
Restructuring programmes Personnel reductions of approx. 1,8 targeted, 1,5 employees reduced to date. Expected annual savings approx. EUR 13 million, of which EUR 6 million recognised by end of 21 and remainder will gradually materialise during 211. Nonrecurring restructuring costs approx. EUR 15 million, of which EUR 115 million recognised by end of 21 and EUR 2 million recognised in Q1/211. 3 Wärtsilä
Market outlook Ship Power: Price pressure in markets will continue. Order intake in 211 expected to be moderately better than in 21. Power Plants: Recovery in the power generation market is expected to continue in 211. Order intake estimated to remain at a good level in 211. Services: A sustainable recovery in the marine service market is expected in 211. Stable demand from Power Plants customers. 31 Wärtsilä
Prospects for 211 reiterated Wärtsilä expects its net sales for 211 to grow 3-5% and operational profitability (EBIT% before nonrecurring items) to be around 11% 32 Wärtsilä
Presentation name / Author IR Contact: Pauliina Tennilä Director, Investor Relations Tel. +358 () 4 57 553 E-mail: pauliina.tennila@wartsila.com