DRIVING PROFITABLE GROWTH BJÖRN ROSENGREN President & CEO 1 Wärtsilä 14 November 2013 BJÖRN ROSENGREN
Fundamental changes taking place in our end markets 2 Wärtsilä 14 November 2013 BJÖRN ROSENGREN vw
We are dedicated to reaching our long-term financial targets Net sales Grow faster than global GDP Profitability 14% at the peak of the cycle, above 10% at the trough Gearing Maintain below 50% Dividend 50% of earnings per share 3 Wärtsilä 14 November 2013 BJÖRN ROSENGREN
Megatrends drive our growth Globalisation Population growth and urbanisation Emerging market growth Sustainability and climate change 4 Wärtsilä 14 November 2013 BJÖRN ROSENGREN
Growth % Electricity consumption GWh Power plant markets Electricity consumption growth vs. GDP growth Key trends 7,00 6,00 25 000 000 Continued global economic uncertainty impacts customer decision-making 5,00 4,00 3,00 2,00 1,00 20 000 000 15 000 000 10 000 000 Environmental regulations drive the increasing use of natural gas Growing demand for electricity in emerging markets 0,00-1,00 5 000 000 Need for new type of power generation in developed markets -2,00 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 0 GDP yearly growth rate Electricity production growth rate Electricity domestic consumption 5 Wärtsilä 14 November 2013 BJÖRN ROSENGREN
Power Plants strategy Maintain market leader position in flexible baseload and industrial self-generation in the growing emerging markets Grow in the large utility gas power plant markets Energy Efficiency Smart Power Generation Actively influence the regulatory environment to enable capacity investments Fuel Flexibility Operational Flexibility 6 Wärtsilä 14 November 2013 BJÖRN ROSENGREN
# of vessels Shipping markets 6000 5000 4000 Key trends Improvement in merchant activity driven by newbuild prices and fuel efficiency 3000 2000 1000 0 Current oil prices support continued activity in offshore markets Upcoming regulations create interest in gas as a fuel and environmental solutions Contracts Deliveries Source: Clarkson Research Services 7 Wärtsilä 14 November 2013 BJÖRN ROSENGREN
Ship Power growth areas Efficiency Gas and dual-fuel solutions Offshore market Environmental solutions 8 Wärtsilä 14 November 2013 BJÖRN ROSENGREN
Strengthening our position in core markets Market share 2008 2010 2012 2013 Ship Power Medium-speed Low-speed Auxiliary Power Plants Global market for gas and liquid fuelled power plants Engine manufacturers, all fuels 37% 15% 8% 3.6% 61% 42% 13% 4% 5.6% 55% 47% 18% 4% 4.2% 74% Q4/12-Q3/13 49% 10% 5% Q1-Q2 5.8% n.a. Power Plants market shares include units above 5 MW. 9 Wärtsilä 14 November 2013 BJÖRN ROSENGREN
Services brings stability in uncertain market environment Net sales development MEUR 6000 5000 4000 3000 2000 1000 0 2008 2009 2010 2011 2012 Services share of net sales 10 Wärtsilä 14 November 2013 BJÖRN ROSENGREN
Installed engine base provides opportunities for Services business MW 200000 180000 160000 140000 120000 100000 80000 60000 40000 20000 0 2007 2008 2009 2010 2011 2012 Power Plants Ship Power 11 Wärtsilä 14 November 2013 BJÖRN ROSENGREN
Services is a strategic focus area Culture and organisation Customer experience Growth and profitability through superior customer understanding Customer needs Customer focus Offering 12 Wärtsilä 14 November 2013 BJÖRN ROSENGREN v
Innovation drives our competitive position Bio seal ring 2S dual-fuel engine New thruster portfolio Wärtsilä 3C LNG terminal Gas reformer New 4S engine portfolio 13 Wärtsilä 14 November 2013 BJÖRN ROSENGREN
R&D focused on improving efficiency, reliability and environmental performance R&D EXPENSES MEUR FILED PRIORITY PATENT APPLICATIONS indexed 2007 = 100 200 300 150 250 200 100 150 50 100 50 0 2005 2006 2007 2008 2009 2010 2011 2012 0 2007 2008 2009 2010 2011 2012 14 Wärtsilä 14 November 2013 BJÖRN ROSENGREN
An organisation based on divisions with end-to-end responsibility R&D Production Sales & marketing Product delivery Customer TRANSPARENCY ACCOUNTABILITY SPEED 15 Wärtsilä 14 November 2013 BJÖRN ROSENGREN
Enhanced performance through continuous improvement 16 Wärtsilä 14 November 2013 BJÖRN ROSENGREN
Good fundamentals for long-term growth Long-term opportunities Improved activity in vessel ordering Tightening environmental regulations Growing electricity need in emerging markets Climate change and focus on renewable energy Increasing interest in gas as a fuel Short-term challenges Uncertainty in the global economy Overcapacity in the shipping markets Power plant customers delayed decision-making Marine customers continued focus on reducing operating expenses 17 Wärtsilä 14 November 2013 BJÖRN ROSENGREN