WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-SEPTEMBER 21 OLE JOHANSSON, PRESIDENT & CEO 2 OCTOBER 21 1 Wärtsilä
Q3/1 Highlights Order intake EUR 1,4 million (+38%) Net sales EUR 1,39 million (-11%) Operating result* EUR 117 million (-13%), 11.2% of net sales EPS* EUR.83 (.87) Cash flow from operating activities EUR 222 million (214) * Excluding nonrecurring items 2 Wärtsilä
Strong growth in order intake 6 55 Third quarter development 5 45 12 1 38% 1 4 4 35 8 725-1% 3 25 6 4 16% 2 2 131% 15 1 5 Q3/29 Q3/21 26 27 28 29 1-9/21 Order intake Power Plants Ship Power Services 3 Wärtsilä
Order book 8 7 6 5 4-21% 5 351 21% -37% 4 243 3 2 1-2% 26 27 28 29 3.9.29 3.9.21 Order book Power Plants Ship Power Services 4 Wärtsilä
Order book distribution 5 4 3 2 1 3.9.29 3.9.21 Delivery current year Delivery next year + 5 Wärtsilä
Net sales developed as expected 55 5 45 4 35 3 25 18% 23% 14% 14 12 1 8 6 4 Third quarter development 1 167-11% 1 39 3% -27% 2 2-11% 15 1 Q3/29 Q3/21 5 26 27 28 29 1-9/21 Net sales Power Plants Ship Power Services 6 Wärtsilä
Net sales by business 1-9/21 Ship Power 27% (33) Power Plants 31% (31) Services 42% (35) 7 Wärtsilä
Strong profitability 22 2 18 16 14 12 11.2% 1 8 6 4 2 Q1 Q2 Q3 Q4 26 27 28 29 21 Operating result before nonrecurring items 8 Wärtsilä
Ship Power market vessel order development Continued recovery in ordering activity 45 4 35 All vessels Offshore Special vessels Merchant Cruise and Ferry 3 months moving average in DWT 3 25 3 25 2 15 1 5-2 15 1 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 # of vessels Million DWT Source: Clarkson Research Services 9 Wärtsilä
Ship Power order intake Recovery continued 9 8 7 6 5 4 3 2 1 24 25 26 27 28 29 21 Q1 Q2 Q3 Q4 1 Wärtsilä
Ship Power order intake by segment Q3/21 Special vessels 18% Ship Design Cruise & Ferry 3% 2% Offshore 43% Merchant 33% Total EUR 176 million (68) 11 Wärtsilä
Ship Power market Market position of Wärtsilä s marine engines Medium-speed main engines Low-speed main engines Mitsubishi 3%(3) Auxiliary engines Wärtsilä 3%(1) Others 29%(37) Wärtsilä 32%(37) Wärtsilä 12%(15) MAN Diesel 31%(22) Caterpillar (MAK) 8%(4) MAN Diesel 85%(82) Others 97%(99) Total market volume last 12 months: 914 MW (553) Total market volume last 12 months: 6,752 MW (5,667) Total market volume last 12 months: 2,775 MW (1,795) 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. 12 Wärtsilä
Ship Power order book Sept. 3, 21 All vessel segments represented LNG 6% RoRo 4% Merchant 47% Bulkers 11% Offshore 3% Containers 6% Tankers 8% Special vessels 8% Cargo 12% Ship Design 2% Navy 6% Cruise & Ferry 7% Total EUR 2,38 million (3,23) 13 Wärtsilä
Power Plants - Market demand remains strong MW 14 12 1 8 6 4 2 Quoted MW per Fuel Type Others Natural gas Heavy fuel oil 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 24 25 26 27 28 29 21 Share of natural gas is consistently increasing 14 Wärtsilä
Power Plants order intake by application 2 18 16 14 12 1 8 6 4 2 5 4 3 2 1 Third quarter development 131% 393 17 487% 1285% 184% -6% Q3/29 Q3/21 Order intake by fuel Q3/21 26 27 28 29 1-9/21 Oil 54% Gas 46% Order intake Industrial selfgeneration Flexible baseload Grid stability & peaking Oil & Gas 15 Wärtsilä
Power Plants quarterly order intake 6 5 4 3 2 1 24 25 26 27 28 29 21 Q1 Q2 Q3 Q4 16 Wärtsilä
Power Plants order intake Asia strongest region Order intake 1-9/21: 2,342 MW (1,382) 239 Europe 34 (4) 78 Asia 1,81 (9) Americas 74 (28) 72 55 317 227 45 9 1 Africa and Middle East 253 (612) 686 164 47 Flexible baseload Industrial self-generation Oil & gas Grid stability & peaking 17 Wärtsilä 42
Services Net sales stable 2 18 16 14 18% % 5 4 Third quarter development 424 435 3% 12 22% 3 1 2 8 1 6 4 Q3/29 Q3/21 2 26 27 28 29 1-9/21 18 Wärtsilä
Services Net sales per quarter 6 5 4 3 2 1 21 22 23 24 25 26 27 28 29 21 Q1 Q2 Q3 Q4 19 Wärtsilä
Services Net sales distribution 1-9/21 Spare parts 54% Field service 24% Contracts 13% Projects 9% 2 Wärtsilä
Services Level of laid-up vessels normalised % of Fleet 2% 18% 16% 14% 12% 1% 8% 6% 4% 2% Aug.1 Jun.1 Apr.1 Feb.1 Dec.9 Oct.9 Aug.9 Jun.9 Apr.9 Feb.9 Anchored * Idle ** 21 Wärtsilä * Anchored (reported navigation status at anchor). Source Bloomberg (AISLive). More than 25 vessels (>299 GT) covered. ** Idle (no movement for 19 days for containerships, others 35 days). Source Lloyd s MIU. Around 15 vessels (>299 GT) covered.
All time high cash flow 7-9/1 7-9/9 1-9/1 1-9/9 29 Cash flow from operating activities 222 214 491 142 349 Cash flow from investing activities 21-23 -3-113 -163 Cash flow from financing activities 11-45 -159 36-14 Cash and cash equivalents at end of period 578 262 578 262 244 22 Wärtsilä
Net working capital development 2 25% 18 16 14 2% 16 14 12 3 Sept. 21 12 15% 1 1 8 6 4 2 9.5% 7.% 8.4% 5.5% 26 155 212 176 12 2.7% 5.8% 267 9.2% 482 1% 5% 8 6 4 2 5.6%* 229 * Annualised Working Capital / Net Sales 23 24 25 26 27 28 29 % Working Capital Total Inventories Advances Received Working Capital / Net Sales All figures relate to the Power Businesses 23 Wärtsilä
Committed loans Sept. 3, 21 14 12 1 565 8 6 88 1 Total EUR 688 million drawn 4 2 599 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). 24 Wärtsilä
Financial position Solvency % 5 45 4 35 3 25 2 15 1 Gearing,7,6,5,4,3,2,1 5 26 27 28 29 3.9.21, -,1 26 27 28 29 3.9.21 25 Wärtsilä
Restructuring measures Restructuring measures May 29: Ship Power adjustment program January 21: Adaption of manufacturing capacity initiated October 21: Processes initiated for reduction of 4 jobs in global staff functions Impacts of all restructuring measures Personnel to be reduced by approx. 1,8 employees Total cost savings approx. EUR 11-12 million, of which EUR 3 million to materialise in 21 and the rest gradually in 211. Total non-recurring costs EUR 14 million, of which 4 million recognised in 29. In January-September 21 Wärtsilä recorded EUR 59 million nonrecurring items related to restructuring measures. 26 Wärtsilä
Market outlook Ship Power: Ordering volumes will remain at lower levels than during peak years. Competition and price pressure will remain intense. Wärtsilä Ship Power s order intake in 21 expected to clearly improve over 29. Power Plants: The power generation market recovery is expected to continue in 21. Wärtsilä Power Plants order intake in 21 expected to clearly improve over 29. Services: Services development is expected to remain steady. Scrapping of older tonnage and its replacement with new tonnage may impact Services. Power plant installations continue to be run at high operating levels. Increased interest in maintenance partnerships seen. 27 Wärtsilä
Prospects for 21 improved Net sales expected to decline by approximately 15 percent. Operational profitability (EBIT% before nonrecurring items) expected to be better than earlier estimated and to exceed 1%. 28 Wärtsilä
Presentation name / Author IR Contact: Joséphine Mickwitz Director, Investor Relations Tel. +358 ()1 795216 E-mail: josephine.mickwitz@wartsila.com