INTERIM REPORT JANUARY-JUNE 213 BJÖRN ROSENGREN, PRESIDENT & CEO 18 JULY 213 Wärtsilä
Highlights Q2/213 NEW PIC Order intake EUR 1,71 million, -11% Net sales EUR 1,152 million, +5% Book-to-bill.93 EBITA EUR 119 million, 1.3% of net sales Operating result (EBIT) EUR 111 million, 9.6% of net sales EPS EUR.39 (.38) Cash flow from operating activities EUR 38 million EBITA is shown excluding non-recurring items and intangible asset amortisation related to acquisitions EBIT is shown excluding non-recurring items Certain comparison figures in this presentation have been restated due to changes in pension accounting
Order intake development MEUR 55 5 45 4 Second quarter development 35 MEUR 14 3 25 2 15 1 12 1 8 6 4 1 198-11% 1% -15% 1 71 Services Ship Power Power Plants 5 2-23% 29 21 211 212 1-6/213 Q2/212 Q2/213 3 Wärtsilä
Net sales developed according Net sales in to line expectations with our expectations MEUR 55 5 45-13% 4-7.6% 12% Second quarter development 35 MEUR 14 3 25 2 15 1 12 1 8 6 4 1 99 5% 4% 6% 1 152 Services Ship Power Power Plants 5 2 4% 29 21 211 212 1-6/213 Q2/212 Q2/213 4 Wärtsilä
Net sales by business 1-6/213 Net sales by business 1-3/212 Ship Power 28% (25) Services 44% (45) Power Plants 28% (3) 5 Wärtsilä
Book-to-bill ratio remains above one MEUR 6 1,4 55 5 1.7 1.5 1.19 1,2 45 4 35.88 1,,8 3.63 25 2 15 1 5 29 21 211 212 1-6/213,6,4,2, Order intake Net sales Book-to-bill 6 Wärtsilä
Solid order book supports guidance Order book distribution MEUR 4 3 2 1 3.6.212 3.6.213 Delivery current year Delivery next year or later 7 Wärtsilä
Profitability MEUR 25 16% 2 15 12.8% 12.1% 11.% 1.7% 11.5% 11.7% 11.1% 1.9% 1.3% 9.6% 14% 12% 1% 8% EBIT% target: 1-14% 1 6% 5 4% 2% 29 21 211 212 213 Q1 Q2 Q3 Q4 % 8 Wärtsilä EBITA% (operating result before non-recurring items and intangible asset amortisation related to acquisitions) EBIT% (operating result before non-recurring items)
Power plant market activity stable
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 Q2 Q3 Q4 Q1 Q2 MW Power Plants quoted MW per fuel type 16 14 12 1 8 6 4 2 Others Natural gas Heavy fuel oil 25 26 27 28 29 21 211 212 213 Share of natural gas is consistently increasing. 1 Wärtsilä
Power Plants quarterly order intake MEUR 6 5 4 3 2 1 26 27 28 29 21 211 212 213 Q1 Q2 Q3 Q4 11 Wärtsilä
Power Plants order intake by customer segment MEUR 2 Review period development Total EUR 623 million (591) 18 16 43% 1% Utilities Industrials 14 47% IPP s 12 x% 1 8 6 Review period order intake by fuel in MW 4 2 Oil 18% Gas 82% 29 21 211 212 1-6/213 12 Wärtsilä
Major gas engine power plant order from Russia The 11 MW natural gas fuelled power plant unit in Tikhvin, Leningrad region, will be the first of its kind in Russia Wärtsilä will supply the technology and engineering, supported by installation and commissioning assistance The solution will provide a reliable and efficient electricity supply for large industrial consumers, while meeting the highly variable load requirements with extreme flexibility and fast response 13 Wärtsilä
Power Plants - global order intake Europe 22 (19) 54 Asia 21 (771) 5 Americas 324 (425) 25 141 16 47 1 Africa and Middle East 359 (186) Utilities 268 18 27 IPP s Industrials 314 Order intake 1-6/213: 1,113 MW (1,41) 14 Wärtsilä
Market for gas and liquid based power plants 212 Total market 75.4 GW 4.2% 3.8% 3.6% GE 4.8% 2.6% 34.2% Siemens MHI Alstom Wärtsilä Ansaldo 28.8% Other GTs Includes all Wärtsilä power plants and other manufacturers gas and liquid fuelled power plants with prime movers above 5MW, 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. 15 Wärtsilä
Ship Power market activity showing signs of improvement
1.9 2.9 3.9 4.9 5.9 6.9 7.9 8.9 9.9 1.9 11.9 12.9 1.1 2.1 3.1 4.1 5.1 6.1 7.1 8.1 9.1 1.1 11.1 12.1 1.11 2.11 3.11 4.11 5.11 6.11 7.11 8.11 9.11 1.11 11.11 12.11 1.12 2.12 3.12 4.12 5.12 6.12 7.12 8.12 9.12 1.12 11.12 12.12 1.13 2.13 3.13 4.13 5.13 6.13 # of vessels Million CGT Vessel order development Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT * 14 4 12 1 3 8 * * 2 6 4 1 2 Source: Clarkson Research Services * CGT= gross tonnage compensated with workload 17 Wärtsilä
Ship Power order intake by segment MEUR 16 Review period development Total EUR 822 million (723) 12 Merchant 33% Offshore 43% 8 4 Other 4% 29 21 211 212 1-6/213 Special vessels 8% Cruise & ferry 7% Navy 4% 18 Wärtsilä
Harvey Gulf to use Wärtsilä s integrated solution Order to supply an integrated solution for a new multipurpose support vessel Scope of supply includes the engines, a turnkey installation of the Wärtsilä Control & Communication Centre (3C) and the complete electrical and automation system Included in the comprehensive solution is a five year service agreement covering up to 9 vessels, which includes all Harvey Gulf vessels recently fitted with Wärtsilä equipment Wärtsilä s integrated solution enables optimisation of the operational, environmental and economic performance of the vessel 19 Wärtsilä
Joint venture ordering activity MEUR 6 55 5 45 4 35 3 25 2 15 Order intake in Wärtsilä Hyundai Engine Company Ltd in South Korea, and Wärtsilä Qiyao Diesel Company Ltd in China totalled EUR 113 million (148) during the review period January-June 213 Wärtsilä s share of ownership in these companies is 5%, and the results are reported as a share of result of associates and joint ventures 1 5 Q2/213 Q1/213 Q4/212 Q3/212 Q2/212 Q1/212 Q4/211 Q3/211 Q2/211 Q1/211 Q4/21 Q3/21 Q2/21 Q1/21 Joint venture order intake Ship Power order intake 2 Wärtsilä
Ship Power Market Market position of Wärtsilä s marine engines Medium-speed main engines Low-speed main engines Mitsubishi 1%(2) Auxiliary engines Wärtsilä 4%(4) Others 25%(29) Wärtsilä 47%(48) Wärtsilä 14%(15) MAN D&T 18%(19) Caterpillar 1%(4) MAN D&T 85%(83) Others 96%(96) Total market volume last 12 months: 4,85 MW (4,691) Total market volume last 12 months: 13,214 MW (9,569) Total market volume last 12 months: 3,8 MW (3,728) 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. 21 Wärtsilä
Stable development in service markets
Services net sales development MEUR 2 18 16 14 12 % % 5% Second quarter development MEUR 6 4% 449 465 5 1 4 8 6 3 4 2 2 1 29 21 211 212 1-6/213 Q2/212 Q2/213 23 Wärtsilä
Services net sales by quarter MEUR 6 5 4 3 2 1 26 27 28 29 21 211 212 213 Q1 Q2 Q3 Q4 24 Wärtsilä
Services net sales distribution 1-6/213 Spare parts 53%(53) Field service 23%(24) Projects 8%(9) Contracts 16%(14) Total EUR 899 million (942) 25 Wärtsilä
Good demand for service agreements in Africa 3-year O&M agreement signed with Central Termica de Ressano Garcia for the company s gas engine power plant in Mozambique The power plant will help meet the country s growing demand for electricity 1-year O&M agreement signed with Ndola Energy Company Ltd for the NECL power plant in Zambia The power plant will significantly contribute towards Zambia achieving a more diversified energy mix Wärtsilä s O&M and other service agreements cover more than 17 GW of generating capacity in both marine and land-based installations globally, of which 29 such agreements are in Africa 26 Wärtsilä
Development of Power Plants service agreements MW 45 9% 4 8% 35 7% 3 53% 57% 58% 57% 6% 25 48% 5% 2 4% 15 3% 1 2% 5 1% 29 21 211 212 Q2/213 12m rolling % O&M and maintenance agreements Power Plants deliveries % of delivered MWs 27 Wärtsilä
Percent Anchored Nr of Active Vessels Fleet utilisation Fleet utilisation Anchored Vessels & Fleet Development* 35% 22 3% 215 25% 21 2% 25 15% 2 Jul.13 Apr.13 Jan.13 Oct.12 Jul.12 Apr.12 Jan.12 Oct.11 Jul.11 Apr.11 Jan.11 Anchored Active Fleet Fleet Average Speed, knots** 1,5 1, 9,5 9, 8,5 8, Jul.13 Apr.13 Jan.13 Oct.12 Jul.12 Apr.12 Jan.12 Oct.11 Jul.11 Apr.11 Jan.11 *Source Bloomberg (AISLive). More than 25, vessels (>299 GT) covered. ** Source Bloomberg 28 Wärtsilä
Cash flow from operating activities MEUR 7 6 5 4 3 2 1 29 21 211 212 1-6/213 29 Wärtsilä
Net working capital development Good development in advances received MEUR 2 25% 18 16 2% 14 12 15% 1 8 9.2% 9.8% 1.9% * 1% 6 4 2 267 5.8% 486 118 3.7% 235 6.8% 465 58 5% 28 29 21 211 212 3.6.213 % Net working capital Total inventories Advances received Net working capital / Net sales * Working capital / 12 months rolling net sales 3 Wärtsilä
Committed loans 3 June 213 Financial freedom is maintained MEUR 18 16 14 12 529 1 8 254 15 Total EUR 889 million drawn 6 87 4 2 549 Drawn longterm loans Current portion of long-term loans Drawn shortterm loans Undrawn long term loans Undrawn revolving credits At the end of the reporting period, drawn revolving credits amounted to euro. Drawn short-term loans include EUR 239 million Finnish Commercial Papers. The total amount of Finnish Commercial Paper Programs was EUR 7 million (uncommitted). 31 Wärtsilä
Continuous focus on R&D WÄRTSILÄ S R&D EXPENSES MEUR 2 15 1 5 % of net sales 4,5% 4,% 3,5% 3,% 2,5% 2,% 1,5% 1,% 1-year loan totalling EUR 15 million granted by the European Investment Bank in June The loan will fund R&D and innovation activities in several European countries Wärtsilä s R&D activities focus on improving the efficiency, reliability and environmental performance of our engine technology,5% 28 29 21 211 212,%
Financial position Solvency 5% 45% 4% 35% 3% 25% 2% 15% Gearing,5,4,3,2,1 1% 5% %, 29 21 211 212 3.6.213 -,1 29 21 211 212 3.6.213 33 Wärtsilä
Market outlook NEW PIC Power Plants: The overall market for natural gas and liquid fuel based power generation in 213 is expected to be similar to that of 212. Ship Power: The outlook for the shipping and ship building market in 213 is cautious, although market conditions are expected to be better than in 212. The contracting mix is expected to be largely in line with that seen in 212, favouring contracting in the offshore and specialised vessel segments. Services: The overall service market outlook remains stable. 34 Wärtsilä
Prospects for 213 unchanged Wärtsilä expects its net sales for 213 to grow by -1% and its operational profitability (EBIT% before non-recurring items) to be around 11%.
IR Contact: Natalia Valtasaari Director, Investor Relations Tel. +358 () 4 187 789 E-mail: natalia.valtasaari@wartsila.com