BJÖRN ROSENGREN, PRESIDENT & CEO 18 JULY 2012
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BJÖRN ROSENGREN, PRESIDENT & CEO 18 JULY 2012 INTERIM REPORT JANUARY-JUNE 2012
Transcript of BJÖRN ROSENGREN, PRESIDENT & CEO 18 JULY 2012
BJÖRN ROSENGREN, PRESIDENT & CEO18 JULY 2012
INTERIM REPORT JANUARY-JUNE 2012
© Wärtsilä
Highlights Q2/2012
• Order intake EUR 1,198 million, +2%• Net sales EUR 1,099 million, +6%• Book-to-bill 1.09 (1.13)• EBIT EUR 113 million,
10.3% of net sales• EBITA EUR 123 million,
11.2% of net sales• EPS EUR 0.38 (0.35)
EBIT is shown excluding non-recurring items. EBITA is shown excluding non-recurring items and intangible asset amortisation related to acquisitions.
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© Wärtsilä
0
200
400
600
800
1000
1200
1400
Q2/2011 Q2/2012
Steady development in order intake
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
2008 2009 2010 2011 1-6/2012
2%
-33%
46%
5%
1 170 1 198
MEUR
Power Plants
Ship Power
Services
Second quarter development
MEUR
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0
200
400
600
800
1000
1200
1400
Q2/2011 Q2/2012
Growth in net sales
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
2008 2009 2010 2011 1-6/2012
-7.6%
-13%14%
6%
-1%
-2%
34%
1 036
MEUR
Second quarter development
MEUR
1 099
4
Power Plants
Ship Power
Services
© Wärtsilä
Net sales by business 1-6/2012
Ship Power25% (24)
Power Plants30% (34)
Services45% (42)
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Book-to-bill ratio remains above one
1.21
0.63
0.88
1.07 1.10
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
2008 2009 2010 2011 1-6/2012
Order intake Net sales Book-to-bill
MEUR
6
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0
1000
2000
3000
4000
5000
6000
7000
2008 2009 2010 2011 30.6.2011 30.6.2012
Growth in order book
19%
25%
20%
7%3 779
MEUR
Power Plants Ship Power Services
4 515
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Order book distribution
0
1000
2000
3000
4000
Delivery current year Delivery next year or later
30.6.2011 30.6.2012
MEUR
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Profitability
11.4%12.1%
10.7% 11.1%
10.3%
11.9%12.8%
11.0%11.5% 11.2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
50
100
150
200
250
2008 2009 2010 2011 2012
EBIT% target:10-14%
MEUR
Q2Q1 Q3 Q4
EBIT% before non-recurring itemsEBITA% before non-recurring items and intangible asset amortisation related to acquisitions
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Power plant markets active, some delays in larger investments
© Wärtsilä
High level of quoted MWs
0
2000
4000
6000
8000
10000
12000
14000
16000
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
2004 2005 2006 2007 2008 2009 2010 2011 2012
MW
Quoted MW per Fuel Type
Others
Natural gas
Heavy fuel oil
Share of natural gas is consistently increasing
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0
100
200
300
400
500
600
2005 2006 2007 2008 2009 2010 2011 2012
Quarterly order intake
MEUR
Q2Q1 Q3 Q4
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Order intake by application
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2008 2009 2010 2011 1-6/2012
MEUR Review period developmentTotal EUR 591 million (672)
Industrial self-generation
Flexible baseload
Oil 39% Gas
61%
Review period order intake by fuel in MW
67%
16%9%
13
9%
Oil & gas
Grid stability & peaking
© Wärtsilä
Major power plant order from Azerbaijan
• Contract awarded to supply a 384 MW gas power plant to Azerbaijan to be operated for baseloadproduction by Azerenerji JSC, the state-owned utility
• Scope of supply includes 21 Wärtsilä 50SG engines running on natural gas, related auxiliaries and process equipment
• The high efficiency of the Wärtsilä 50SG engines and our ability to deliver on a fast-track basis were major reasons for us being awarded this contract
• Wärtsilä has delivered over 860 MW of installed capacity to Azerbaijan
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Global order intake
Order intake 1-6/2012: 1,401 MW (1,487)
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229110
58
Americas 425 (199)
Europe 19 (550) Asia 771 (298)
Africa and Middle East 186 (440)
19 59
602
110
59
127
Flexible baseloadIndustrial self-generation Grid stability & peakingOil & gas
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© Wärtsilä
Market for gas and liquid based power plants
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.
GE
Siemens
MHI
Wärtsilä
Alstom
Russian
16
3.3%
2011
29.3%
34.6%
4.3%
8.8%
14.4%
Total market 100.8 GW
3.3%
2.0%
Other combustion engines*
Other gas turbines
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Good development within specialisedvessel segments
© Wärtsilä
Vessel order development
Source: Clarkson Research Services* CGT= gross tonnage compensated with workload
18
0
1
2
3
4
0
20
40
60
80
100
120
14001
.09
02.0
903
.09
04.0
905
.09
06.0
907
.09
08.0
909
.09
10.0
911
.09
12.0
901
.10
02.1
003
.10
04.1
005
.10
06.1
007
.10
08.1
009
.10
10.1
011
.10
12.1
001
.11
02.1
103
.11
04.1
105
.11
06.1
107
.11
08.1
109
.11
10.1
111
.11
12.1
101
.12
02.1
203
.12
04.1
205
.12
06.1
2
Mill
ion
CG
T*
# of
ves
sels
Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT*
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Order intake increased by 51%
0
400
800
1200
1600
2000
2008 2009 2010 2011 1-6/2012
MEUR
Review period developmentTotal EUR 723 million (479)
Offshore43%
Merchant32%
Special vessels
7%
Other2%
Cruise & ferry
4%
Navy12%
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Increasing activity in scrubber markets
• Exhaust gas scrubbers enable efficient and economical reduction of SOx emissions in ships
• Wärtsilä’s scrubber portfolio is the widest in the market and consists of:– Open-loop scrubbers, well established– Closed-loop scrubbers, in operation and
new projects under delivery– Hybrid scrubbers, orders received
• New scrubber orders:– World’s largest hybrid scrubber from the global
rolling cargo operator Wilh. Wilhelmsen ASA– Order received for four hybrid scrubber systems
to be installed on two newbuilt vessels and an option for another similar order
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© Wärtsilä
Joint venture ordering activity
• Order intake in the South Korean joint venture producing dual-fuel engines and the Chinese joint venture producing auxiliary engines totalled EUR 148 million (33) during the review period January-June 2012
• Wärtsilä’s share of ownership in these companies is 50%, profits are reported as a share of result in associates and joint ventures
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50
100
150
200
250
300
350
400
450
500
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600MEUR
Ship Power order intake
Joint venture order intake(Wärtsilä Hyundai Engine Company Ltd and Wärtsilä Qiyao Diesel Company Ltd)
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Ship Power order book 30 June 2012
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Cruise & Ferry5%
Offshore40%
Special vessels13%
Navy 8%
Bulkers6%
Cargo6%
Tankers13%
Containers2%
LNG10%
Merchant38%
Others2%
RoRo1%
© Wärtsilä
Market position of Wärtsilä’s marine engines
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.
Wärtsilä49%(49)
Others25%(26)
MAN Diesel19%(15)
Caterpillar(MAK)7%(10)
MAN Diesel75%(74)
Wärtsilä22%(24)
Mitsubishi3%(2)
Low-speed main engines
Total market volume last 12 months:11,984 MW (13,520)
Total market volume last 12 months:5,156 MW (5,495)
Medium-speed main enginesWärtsilä5%(5)
Auxiliary engines
Total market volume last 12 months:3,501 MW (3,793)
Others95%(95)
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Stable development in the service markets
© Wärtsilä
Net sales development
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2008 2009 2010 2011 1-6/20120
100
200
300
400
500
600
Q2/2011 Q2/2012
MEUR
Second quarter development
MEUR
452
-1%
449
0% 0% 0%
25
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Net sales by quarter
0
100
200
300
400
500
600
2005 2006 2007 2008 2009 2010 2011 2012
Q1 Q2 Q3 Q4
MEUR
26
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Net sales distribution 1-6/2012
Spare parts 53%(54)
Field service 24%(23)
Contracts 14%(15)
Projects9%(8)
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Total EUR 942 million (890)
© Wärtsilä
Interest in service agreements continues
• Several service agreements signed during the second quarter:– A 3-year O&M agreement with Sasol New Energy
Holdings covering the 180 MW gas engine power plant project in Sasolburg, South Africa
– A long-term O&M agreement for the 120 MW Hera power plant in Dili, in the Democratic Republic of Timor-Leste
– A long-term service agreement covering seven Princess Cruise Lines vessels and 270 MW of installed capacity
• Wärtsilä has over 16 GW of generating capacity under O&M and other service agreements globally, covering more than 500 marine and land-based installations
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Development of Power Plants service agreements
31%
53%57% 58%
115%
0%
20%
40%
60%
80%
100%
120%
140%
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2008 2009 2010 2011 1-6/2012
O&M and maintenance agreements Power Plants deliveries % of delivered MWs
MW
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9,0
9,5
10,0
10,5
Jan.11Feb.11M
ar.11Apr.11M
ay.11Jun.11Jul.11A
ug.11S
ep.11O
ct.11N
ov.11D
ec.11Jan.12Feb.12M
ar.12A
pr.12M
ay.12Jun.12Jul.12
2%
8%
14%
20%
26%
Jan.11Feb.11M
ar.11Apr.11M
ay.11Jun.11Jul.11A
ug.11S
ep.11O
ct.11N
ov.11D
ec.11Jan.12Feb.12M
ar.12A
pr.12M
ay.12Jun.12Jul.12
Anchored Idle
Services – Fleet utilisation
* Source Bloomberg (AISLive). More than 25 000 vessels (>299 GT) covered.** Idle (no movement for 19 days for containerships, others 35 days). Source Lloyd’s MIU. Around 15 000 vessels (>299 GT) covered.*** Source Bloomberg
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Anchored* & Idle Vessels**, percent of fleet
Fleet Average Speed***, knots
© Wärtsilä
Cash flow from operating activities
-200
-100
0
100
200
300
400
500
600
700
800
2008 2009 2010 2011 1-6/2012
MEUR
31
© Wärtsilä
Net working capital development
267
482
170285
5455.8%
9.2%
.3,7%
6.8%
13.0%*
0%
5%
10%
15%
20%
25%
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2008 2009 2010 2011 30.6.2012
Net Working Capital Total Inventories Advances Received Net Working Capital / Net sales
MEUR
* Working Capital / Annualised Net Sales
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• Increase in net working capital a result of:– Decrease in mainly project
related accruals – Increase in inventories, due to:
• Large deliveries scheduled for the remainder of the year
• Certain customers experiencing delays in arranging payment security
• Hamworthy opening balance for inventories approx. EUR 90 million
© Wärtsilä
Committed loans 30 June 2012
At the end of the reporting period, drawn revolving credits amounted to 0 euro. Drawn short-term loans include EUR 246 million Finnish Commercial Papers. The total amount of Finnish Commercial Paper Programs was EUR 700 million (uncommitted).
594
86
262
534
0
200
400
600
800
1000
1200
1400
1600
Drawn long-term loans
Drawn short-term loans
Current portion of long-term loans
Total EUR 942 million drawn
Undrawn revolving credits
MEUR
33
© Wärtsilä
Financial position
Solvency Gearing
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2008 2009 2010 2011 30.6.2012 -0,10
0,00
0,10
0,20
0,30
0,40
0,50
0,60
0,70
2008 2009 2010 2011 30.6.2012
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© Wärtsilä
Organising for entrepreneurial drive
• Change of organisational set up within Ship Power and Wärtsilä Industrial Operations to strengthen competitiveness and to serve customers more effectively
• Aim to further increase the flexibility of operations and ensure faster decision making
• Ship Power will be organised by products consisting of 4-stroke, 2-stroke, Propulsion, Flow & Gas, Environmental, and Solutions
• WIO will be renamed PowerTech and it will consist of Product Center 4-stroke and Central Operations
• No job reductions planned based on the changes in the organisational structure
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© 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.
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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%.
IR Contact:Pauliina TenniläDirector, Investor Relations Tel. +358 (0) 40 570 5530E-mail: [email protected]
