WÄRTSILÄ CORPORATION RESULT PRESENTATION 216 27 January 217 Jaakko Eskola, President & CEO 1 Wärtsilä PUBLIC 27 January 217 Result presentation 216
Highlights 216 Order intake stable at EUR 4,927 million Net sales EUR 4,81 million, -5% Book-to-bill 1.3 (.98) Comparable operating result EUR 583 million, 12.1% of net sales (EUR 612 million or 12.2%) Earnings per share EUR 1.79 (2.25) Cash flow from operating activities EUR 613 million (255) Order book at the end of the period EUR 4,696 million, -4% Dividend proposal EUR 1.3 per share, to be paid in two equal instalments 2
Improved sentiment in the energy markets supported order intake MEUR 5 5 5 Fourth quarter development 4 5 MEUR 4 3 5 3 2 5 1 6 1 4 1 2 1 1,43 1,324-6% -1% Services 2 1 5 8 6-45% Marine Solutions 1 5 4 2 37% Energy Solutions 212 213 214 215 216 Q4/215 Q4/216 Q1-Q3 Q4 3
Net sales developed in line with guidance MEUR 5 5 5 4 5 MEUR Fourth quarter development 4 3 5 3 2 5 1 8 1 6 1 4 1 2 1,59-2% 3% 1,559 Services 2 1 5 1 5 1 8 6 4 2-15% 11% Marine Solutions Energy Solutions 212 213 214 215 216 Q4/215 Q4/216 Q1-Q3 Q4 4
Net sales by business 216 Services 46% (43) Marine Solutions 35% (34) Energy Solutions 2% (22) 5
Book-to-bill MEUR 5 5 1,4 5 4 5 4 1.5 1.5 1.6.98 1.3 1,2 1, 3 5 3,8 2 5,6 2 1 5,4 1 5,2 212 213 214 215 216 Order intake Net sales Book-to-bill, 6 Wärtsilä PUBLIC 27 January 217 Result presentation 216
Order book distribution MEUR 3 5 3 2 5 2 1 5 1 5 Delivery next year 31.12.215 31.12.216 Delivery after next year 7
Operating result supported by good fourth quarter MEUR 7 14% 6 1.9% 11.2% 11.9% 12.2% 12.1% 12% 5 1% 4 8% 3 6% 2 4% 1 2% 212 213 214 215 216 % Comparable operating result % of net sales Items affecting comparability include restructuring costs of EUR 48 million (19) and acquisition related & other costs of EUR 3 million (6) for the review period January-December 216. Figures for 212-213 include both discontinued and continuing operations. 8
ENERGY SOLUTIONS 9
Q4/213 Q1/214 Q2/214 Q3/214 Q4/214 Q1/215 Q2/215 Q3/215 Q4/215 Q1/216 Q2/216 Q3/216 Q4/216 ENERGY SOLUTIONS Quotation activity per fuel type MW 6 5 4 3 Liquid fuel Gas Multi-fuel 2 1 Calculated on a 12 months rolling basis 1
ENERGY SOLUTIONS Strong ordering activity in Energy Solutions MEUR 1 8 Review period development Total EUR 1,448 million (1,9) 1 6 1 4 19% 27% Utilities Independent power producers 1 2 53% Industrials 1 8 6 Review period order intake by fuel in MW 4 2 Oil 55% Gas 45% 212 213 214 215 216 Q1-Q3 Q4 11
ENERGY SOLUTIONS Order intake globally Europe* 1,93 (1,42) 56 118 Asia 96 (299) Americas 921 (638) 919 234 94 632 64 Utilities 282 575 Africa and Middle East 54 (457) 55 IPP s (Independent Power Producers) 257 228 Industrials Order intake 216: 3,513 MW (2,436) *Turkish owners contributed to the high level of activity in Europe. 12
Wärtsilä to deliver a 1 MW combined heat and power (CHP) plant to Germany As part of its climate action plan, Germany has committed to increasing the share of electricity produced by CHP power plants to 25% of the total electricity production by 225. Unlike traditional CHP power plants, Wärtsilä gas engines enable quick power output adjustments to respond to the fluctuations in power demand as signalled by the electricity price. 13
ENERGY SOLUTIONS Market for gas and liquid fuel power plants, <5 MW 1-9/215 1-9/216 Wärtsilä 9.9% MHI 19.8% Ansaldo Other GT s 5.5%.8% Ansaldo 7.2% GE 38.8% MHI 12.% Other GT s 5.6% GE 35.2% Wärtsilä 14.7% Siemens 25.2% Siemens 25.3% <5 MW market volume: 17.4 GW (17.), +2% Total market volume: 49.2 GW (43.9), +12% 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. 14
MARINE SOLUTIONS 15
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 5.11 7.11 9.11 11.11 1.12 3.12 5.12 7.12 9.12 11.11 1.13 3.13 5.13 7.13 9.13 11.13 1.14 3.14 5.14 7.14 9.14 11.14 1.15 3.15 5.15 7.15 9.15 11.15 1.16 3.16 5.16 7.16 9.16 11.16 12.16 Number of vessels Million CGT MARINE SOLUTIONS Exceptionally low newbuild vessel orders in 216 Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT * 25 5, 4,5 2 4, 15 1 5 3,5 3, 2,5 2, 1,5 1,,5, * Source: Clarkson Research Services, figures exclude late contracting * CGT= gross tonnage compensated with workload 16 Wärtsilä PUBLIC 27 January 217 Result presentation 216
MARINE SOLUTIONS Cruise & ferry supported Marine Solutions order intake MEUR 1 8 1 5 1 2 Review period development Total EUR 1,285 million (1,599) Gas carriers 13% Offshore 3% Special vessels 9% 9 6 Traditional merchant 2% Cruise & ferry 38% 3 212 213 214 215 216 Q1-Q3 Q4 Others 7% Navy 1% 17
MARINE SOLUTIONS Marine Solutions order book 31 December 216 RoRo 3% Tankers 4% Containers 5% Cargo 1% Bulk carriers 1% Other merchant 2% Offshore 12% Gas carriers 21% Cruise & Ferry 27% Other vessel 1% Non-vessel 3% Special vessels 7% Navy 13% 18
Upcoming environmental regulations support the demand for Wärtsilä s solutions UK based Wightlink ordered a comprehensive range of modern equipment and systems to ensure a high level of environmental efficiency for their new ferry. This will be the first ferry to utilise Wärtsilä hybrid battery technology. Construcciones Navales del Norte SL ordered an LNG power and propulsion installation for its new RoRo passenger ferry. This eco-efficient smartship will be the first gas-powered RoRo passenger ferry operating in the Mediterranean Sea. Kuva pitää vaihtaa, bonny kalvon kuva voisi sopia tähän 19
MARINE SOLUTIONS Strong position in marine engine market Medium-speed main engines Others 1% (11) Auxiliary engines Wärtsilä 18% (16) Caterpillar 15% (15) Wärtsilä 51% (5) Others 82% (84) MAN D&T 24% (24) Total market volume last 12 months: 2,392 MW (2,358) Total market volume last 12 months: 2,29 MW (3,617) 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. 2
SERVICES 21
SERVICES Stable development in Services net sales MEUR 2 4 2 2 2 1 8 1 6 1 4 1 2 1 8 6 4 2 MEUR 7 6 5 4 3 2 1 Fourth quarter development 619 636 3% 212 213 214 215 216 Q4/215 Q4/216 Q1-Q3 Q4 22 Wärtsilä PUBLIC 27 January 217 Result presentation 216
SERVICES Net sales distribution 216 By product area By segment Spare parts 49% (51) Field service 23% (23) Agreements 15% (16) Offshore 9% (13) Navy 8% (7) Special Vessels 7% (8) Energy Solutions 39% (37) Projects 13% (1) Merchant 24% (24) Cruise & Ferry 13% (11) Total EUR 2,19 million (2,184) 23
SERVICES Installed base totalling 18, MW MW 2 18 16 14 12 1 8 6 4 2 212 213 214 215 216 Energy Solutions Marine Solutions, 4-stroke Marine Solutions, 2-stroke 24
MW SERVICES Installed base covered by service agreements 16 3% 14 25% 12 1 2% 8 15% 6 4 1% 2 5% 29 21 211 212 213 214 215 216 % MW under agreement Energy Solutions % of Energy Solutions installed base MW under agreement Marine Solutions % of Marine Solutions installed base 25 Wärtsilä PUBLIC 27 January 217 Result presentation 216
Wärtsilä and Carnival Corporation announce strategic partnership 12-year agreement Ensuring safety and reliability of Carnival s fleet Reducing operational costs Wärtsilä provides all engine maintenance and monitoring for fleet of 79 vessels Continuous planning together with Carnival Performance-based revenue model Wärtsilä s biggest service contract in history Digitising fleet operations 26
FINANCIALS 27
FINANCIALS Operating cash flow development MEUR 7 6 5 4 3 2 1 212 213 214 215 216 28
FINANCIALS Working capital development MEUR 1 6 25% 1 4 1 2 2% 1 15% 8 6 4 2 465 9.8% 313 6.8% 251 5.2% 543 1.8% 49 1.2% 1% 5% 212 213 214 215 216 % Working capital Total inventories Advances received Working capital / Net sales 29 Wärtsilä PUBLIC 27 January 217 Result presentation 216
FINANCIALS Gearing,5,4,3,2,1, 212 213 214 215 216 3 Wärtsilä PUBLIC 27 January 217 Result presentation 216
FINANCIALS EPS and dividend per share EUR 2,5 2, 1.79 1,5 1.3 1,,5, 212 213 214 215 216* EPS Dividend * Dividend 216 - Proposal of the Board 31 Wärtsilä PUBLIC 27 January 217 Result presentation 216
Setti 1 Setti 1 Prospects for 217 The overall demand for Wärtsilä s services and solutions 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 Solid in Energy Solutions Soft in Marine Solutions 32
THANK YOU Further information: Natalia Valtasaari Director, Investor & Media Relations Tel. +358 () 1 79 5637 E-mail: natalia.valtasaari@wartsila.com 33