Handelsbanken Nordic Large Cap Seminar BJÖRN ROSENGREN, PRESIDENT AND CEO 10 SEPTEMBER 2012 Wärtsilä
This is Wärtsilä POWER PLANTS SHIP POWER SERVICES 2 Wärtsilä
Global net sales - top 10 countries Norway 5% USA 5% Dominican Republic 5% 4% The Netherlands Turkey 9% 3% China 9% 3% South Korea 5% Bangladesh 3% Singapore Brazil 3 Wärtsilä
Net sales emphasis on high growth areas Net sales by market area 2011 (MEUR): Forecasted GDP growth 2012 1 MEUR 2 500 845 20% 520 12% 1.594 38% 1,249 30% Europe Asia The Americas Others Forecasted GDP growth 2013 1 2 000 1 500 1 000 500 0 2007 2008 2009 2010 2011 Notes: 1 Estimates by Citigroup Global Markets (22 February 2012) Europe accounted for some 30% of Wärtsilä 2011 sales, while the rest of the world accounted for more than 70% of the sales, offering diversification from the weak European economy 4 Wärtsilä
Net sales by currency small impact on profitability Net sales by currency 2011: Sensitivity analysis 2% 18% Impact of EUR exchange rate compared to other currencies 2012: 13% 68% EUR USD NOK Other currencies +/- 10% (compared to Feb 2012) would result in -/+ 4% change in net sales Impact on profitability would be marginal 80% 70% 60% 50% 40% 30% 20% 10% 0% 2007 2008 2009 2010 2011 5 Wärtsilä
Profitability MEUR 250 16% 200 150 11.9% 11.4% 12.8% 12.1% 11.0% 10.7% 11.5% 11.1% 11.2% 10.3% 14% 12% 10% 8% EBIT% target: 10-14% 100 6% 50 4% 2% 0 2008 2009 2010 2011 2012 Q1 Q2 Q3 Q4 EBIT% before non-recurring items EBITA% before non-recurring items and intangible asset amortisation related to acquisitions 0% 6 Wärtsilä
Target markets and solutions Flexible baseload power generation Grid stability and peaking Industrial self-generation Solutions for oil and gas industry Oil, dual-fuel and gas fired power plants Liquid biofuel power plants Flexible grid stability power plants Combined heat & power plants (CHP) Pumping and compression applications 7 Wärtsilä
Order intake by application MEUR 2000 1800 1600 1400 1200 Review period development Total EUR 591 million (672) 9% 9% 67% 16% Industrial self-generation Flexible baseload Oil & gas Grid stability & peaking 1000 800 600 Review period order intake by fuel in MW 400 200 0 2008 2009 2010 2011 1-6/2012 Oil 39% Gas 61% 8 Wärtsilä
Global order intake Europe 19 (550) Asia 771 (298) 19 110 59 Americas 425 (199) 58 29 602 110 229 Africa and Middle East 186 (440) Flexible baseload Industrial self-generation Grid stability & peaking Oil & gas 127 59 Order intake 1-6/2012: 1,401 MW (1,487) 9 Wärtsilä
Market for gas and liquid based power plants 2011 Total market 100.8 GW 3.3% 4.3% 2.0% 8.8% 3.3% GE Siemens MHI 34.6% Alstom 14.4% Wärtsilä 29.3% Russian Other gas turbines Other combustion engines* 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. In engine technology, Wärtsilä has a leading position. * Other combustion engines figures based partly on Wärtsilä s own estimate. 10 Wärtsilä
Power Plant strategy going forward Maintain our leading position in HFO power plants Grow strongly in large gas power plants Grow in power plants based on renewables Grow in oil and gas and emergency power applications 11 Wärtsilä
Smart Power Generation Energy efficiency Smart Power Generation Fuel flexibility Operational flexibility 12 Wärtsilä
Shipbuilding has moved to Asia 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 13 Contracting volumes (DWT): share by region China Japan South Korea Other Asia Europe Rest of world Source: Wärtsilä s Marine Market Database Wärtsilä
14 Vessel order development Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT* 140 4 120 100 3 80 60 2 40 1 20 0 0 01.09 02.09 03.09 04.09 05.09 06.09 07.09 08.09 09.09 10.09 11.09 12.09 01.10 02.10 03.10 04.10 05.10 06.10 07.10 08.10 09.10 10.10 11.10 12.10 01.11 02.11 03.11 04.11 05.11 06.11 07.11 08.11 09.11 10.11 11.11 12.11 01.12 02.12 03.12 04.12 05.12 06.12 # of vessels Million CGT* Source: Clarkson Research Services * CGT= gross tonnage compensated with workload Wärtsilä
Order intake increased by 51% MEUR 2000 Review period development Total EUR 723 million (479) 1600 1200 Merchant 32% Offshore 43% 800 Other 2% 400 0 2008 2009 2010 2011 1-6/2012 Special vessels 7% Cruise & ferry 4% Navy 12% 15 Wärtsilä
Ship Power s focus on growth OUR STRATEGIC GOAL To be recognised as the leading solutions provider in the marine industry for: LEADER IN Efficiency Gas and dual-fuel solutions Environmental solutions THROUGH OFFERING Lifecycle solutions for ship owners and operators Enhanced system integration for the ship building industry The best product sales and delivery process for the marine industry 16 Wärtsilä
70 countries, 160 locations, 5000 field service experts Installed base 180,000 MW Wärtsilä Services global network Widest range of offering and expertise 17 Wärtsilä
Wide range of expertise Engine services Propulsion services Electrical & automation services Boiler services Environmental services Service agreements Service projects Training services 18 Wärtsilä
Net sales by quarter MEUR 600 500 400 300 200 100 0 2005 2006 2007 2008 2009 2010 2011 2012 Q1 Q2 Q3 Q4 19 Wärtsilä
Net sales distribution By product, 1-6/2012 By region, 2011 24% 22% 29% 43% 14% 21% 9% 27% Spare parts Field service Middle-East and Asia Northern Europe Contracts Projects Southern Europe and Africa Americas 20 Wärtsilä
Our strategic goal We will: Maximise our market share with our present customer base Constantly develop our offering proposition with value-enhancing solutions Grow by providing more service agreements with new Ship Power and Power Plants deliveries Become our industry s market leader in environmental solutions To be recognised by customers as their services partner: competitive, trusted and easy to deal with. 21 Wärtsilä
Market outlook Power Plants: The power generation market is expected to remain active in 2012. Ship Power: Full year vessel contracting expected to be somewhat lower than in 2011. Robust contracting activity is expected for the offshore, gas carrier, and other specialised vessel markets. Services: The merchant marine segments are still expected to be under pressure, as overcapacity in the market continues to impact the potential for services in this area. The power plant service market is expected to develop steadily. 22 Wärtsilä
Prospects for 2012 reiterated Wärtsilä expects its net sales for 2012 to grow by 5-10% and its operational profitability (EBIT% before non-recurring items) to be 10-11%. 23 Wärtsilä
IR Contact: Pauliina Tennilä Director, Investor Relations Tel. +358 (0) 40 570 5530 E-mail: pauliina.tennila@wartsila.com