Wärtsilä Q1 2014 presentation
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Transcript of Wärtsilä Q1 2014 presentation
© Wärtsilä
WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY-MARCH 2014
24 APRIL 2014
Björn Rosengren, President & CEO
• Order intake EUR 1,142 million, -16%
• Net sales EUR 1,012 million, +15%
• Book-to-bill 1.13
• EBIT EUR 90 million, 8.9% of net sales
(EUR 70 million or 8.0%)
• EPS EUR 0.31 (0.37)
• Cash flow from operating activities
EUR 111 million (84)
• Efficiency program proceeding
according to plan
EBIT is shown excluding non-recurring items.
Highlights Q1/2014
NEW
PIC
© Wärtsilä
0
200
400
600
800
1000
1200
1400
Q1/2013 Q1/2014
-16%
-59%
5%
1%
1,352
MEUR
First quarter development
MEUR
3
Order intake affected by challenging power plant markets
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
2010 2011 2012 2013 1-3/2014
1,142
Q1 Q2-Q4
Power Plants
Ship Power
Services
© Wärtsilä
0
200
400
600
800
1000
1200
Q1/2013 Q1/2014
Net sales in line with our expectations
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
2010 2011 2012 2013 1-3/2014
-7.6% 12%
15%
0%
54%
-6%
882
MEUR
First quarter development
MEUR
1,012
4
Net sales increased by 15%
Power Plants
Ship Power
Services
Q1 Q2-Q4
-1%
© Wärtsilä
Net sales by business 1-3/2012
Ship Power
38% (28)
Power Plants
19% (23)
Services
43% (49)
5
Net sales by business 1-3/2014
© Wärtsilä
0.88
1.07 1.05 1.05
1.13
0,0
0,2
0,4
0,6
0,8
1,0
1,2
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
2010 2011 2012 2013 1-3/2014
Order intake Net sales Book-to-bill
MEUR
6
Book-to-bill ratio remains above one
© Wärtsilä
Order book distribution
MEUR
7
Order book distribution
0
500
1000
1500
2000
2500
3000
3500
31.03.2013 31.03.2014
Delivery current year Delivery next year or later
© Wärtsilä
8.0%
8.9%
0%
2%
4%
6%
8%
10%
0
20
40
60
80
100
Q1/2013 Q1/2014
10.7% 11.1% 10.9%
11.2%
0%
2%
4%
6%
8%
10%
12%
14%
0
100
200
300
400
500
600
2010 2011 2012 2013
MEUR
First quarter development
MEUR
8
Profitability in line with expectations
EBIT% before non-recurring items
EBIT before non-recurring items
© Wärtsilä 9
Continued uncertainty
in the power
generation markets
Power Plants quotation activity remains on a good level
10 © Wärtsilä
The share of natural gas is consistently increasing.
0
2000
4000
6000
8000
10000
12000
14000
16000Q
1
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
Q3
Q4
Q1
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
MW
Quoted MW per Fuel Type
Others
Natural gas
Heavy fuel oil
© Wärtsilä
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2010 2011 2012 2013 1-3/2014
MEUR Review period development
Total EUR 165 million (406)
IPP’s*
Utilities
Industrials
Oil
41% Gas
59%
Review period order intake by fuel in MW
x%
11
Power Plants order intake by customer segment
25%
24%
51%
Q1 Q2-Q4
*IPP = Independent Power Producer
© Wärtsilä
Order intake 1-3/2014: 396 MW (760)
Power Plants global order intake Africa and Middle East the most active region
Europe
91 (72)
Africa and
Middle East
202 (314)
Asia
37 (50)
Americas
67 (324)
12
© Wärtsilä
Siemens
GE
MHI
Wärtsilä
Alstom
13
19.8%
2013
48.2%
22.1%
2.9%
Total market 73.2 GW (75.4)
3.3% 2.6%
Other GTs
Ansaldo
13
Market for gas and liquid based power plants
Includes all Wärtsilä power plants and other manufacturers’ gas and liquid fuelled 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.
1.1%
© Wärtsilä 14
Marine market
activity on a
healthy level
© Wärtsilä 15
Good activity in vessel contracting
Source: Clarkson Research Services
* CGT= gross tonnage compensated with workload
*
*
0
1
2
3
4
5
0
50
100
150
200
250
01
.09
03
.09
05
.09
07
.09
09
.09
11
.09
01
.10
03
.10
05
.10
07
.10
09
.10
11
.10
01
.11
03
.11
05
.11
07
.11
09
.11
11
.11
01
.12
03
.12
05
.12
07
.12
09
.12
11
.12
01
.13
03
.13
05
.13
07
.13
09
.13
11
.13
01
.14
03
.14
Mil
lio
n C
GT
# o
f ve
ss
els
Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT
© Wärtsilä
0
300
600
900
1200
1500
1800
2010 2011 2012 2013 1-3/2014
MEUR
Review period development Total EUR 467 million (443)
Offshore
33%
Merchant
62%
Special
vessels
4%
16
Ship Power order intake by segment
Others
2%
Q1 Q2-Q4
© Wärtsilä
• Order received for Wärtsilä’s 2-stroke, dual-fuel
engine and gas valve unit
• The vessel will be built in China for the Chinese
ship owner and operator Zhejiang Huaxiang
Shipping Co. Ltd.
• Benefits of low-pressure, dual-fuel technology for
two stroke engines include:
– Reduced capital expenditure and gains in
operating expenditure
– Compliance with IMO Tier III emission
regulations without exhaust gas cleaning
systems when operating in gas mode
17
Wärtsilä’s 2-stroke, dual-fuel engine chosen to power a
new LNG carrier
NEW
PIC
© Wärtsilä
• Joint venture order intake totalled
EUR 25 million (25) during
January-March 2014
• Wärtsilä’s share of ownership in
these companies is 50%, and the
results are reported as a share of
result of associates and joint
ventures
MEUR
Ship Power order intake
Joint venture order intake, includes figures from Wärtsilä Hyundai Engine Company Ltd.
and Wärtsilä Qiyao Diesel Company Ltd.
18
Joint venture ordering activity
0
50
100
150
200
250
300
350
400
450
500
550
600
Q1/2
010
Q2/2
010
Q3/2
010
Q4/2
010
Q1/2
011
Q2/2
011
Q3/2
011
Q4/2
011
Q1/2
012
Q2/2
012
Q3/2
012
Q4/2
012
Q1/2
013
Q2/2
013
Q3/2
013
Q4/2
013
Q1/2
014
© Wärtsilä
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.
Wärtsilä
51%(52)
Others
20%(19)
MAN D&T
23%(25)
Caterpillar
6%(4)
MAN D&T
90%(88)
Wärtsilä
9%(10)
Mitsubishi
1%(2)
Low-speed main engines
Total market volume last 12 months:
31,017 MW (22,935)
Total market volume last 12 months:
3,787 MW (4,137)
Medium-speed main engines
Wärtsilä
3%(4)
Auxiliary engines
Total market volume last 12 months:
6,895 MW (5,966)
Others
97%(96)
19
Ship Power market Market position of Wärtsilä’s marine engines
© Wärtsilä 20
Steady demand
in marine and
power plant
service markets
© Wärtsilä
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2010 2011 2012 2013 1-3/2014
-3%
0
100
200
300
400
500
600
Q1/2013 Q1/2014
MEUR
First quarter development
MEUR
434
0%
435
0%
21
Services net sales development stable
5%
Q1 Q2-Q4
© Wärtsilä
Spare parts
53%(50)
Field service
24%(27)
Contracts
17%(16)
Projects
6%(6)
22
Total EUR 435 million (434)
Services net sales distribution 1-3/2014
© Wärtsilä
• Order for the technical design and installation of
a new fixed pitch propeller for an FPSO
conversion project
• The vessel is operated by Woodside Energy Ltd,
an independent Australian oil and gas company
• Fast-track project execution a key customer
requirement
• The major benefit of the new propeller is
increased vessel speed
23
Australian FPSO optimises propeller design
NEW
PIC
© Wärtsilä
O&M and maintenance agreements Power Plants deliveries % of delivered MWs
MW
24
Development of Power Plants service agreements
57% 58% 57%
51% 49%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0
500
1000
1500
2000
2500
3000
3500
4000
2010 2011 2012 2013 Q1/2014 12m rolling
© Wärtsilä
Fleet utilisation
* Source Bloomberg. Sample of more than 25 000 vessels (>299 GT) covered by IHS AIS Live.
** Source Bloomberg
25
Fleet utilisation
Fleet Average Speed, knots**
Anchored Vessels & Fleet Development*
20500
21000
21500
22000
22500
15%
20%
25%
30%
35%
09.1
1
12.1
1
03.1
2
06.1
2
09.1
2
12.1
2
03.1
3
06.1
3
09.1
3
12.1
3
03.1
4
Nr
of
Active V
essels
Perc
ent A
nchore
d
Anchored Active Fleet
8,0
8,5
9,0
9,5
10,0
10,5
09.1
1
12.1
1
03.1
2
06.1
2
09.1
2
12.1
2
03.1
3
06.1
3
09.1
3
12.1
3
03.1
4
© Wärtsilä 26
Strong financial
position
© Wärtsilä 27
MEUR
Favourable development in operating cash flow
0
25
50
75
100
125
150
Q1/2013 Q1/2014
First quarter development
MEUR
0
100
200
300
400
500
600
700
2010 2011 2012 2013
© Wärtsilä
Working capital Total inventories Advances received Working capital / Net sales
MEUR
28
Focus on working capital development
118
235
465
313 292 2.6%
5.6%
9.8%
6.7%
6.1%
0%
5%
10%
15%
20%
25%
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2010 2011 2012 2013 31.3.2014
© Wärtsilä
Solvency Gearing
29
Financial position
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2010 2011 2012 2013 31.3.2014 -0,10
0,00
0,10
0,20
0,30
0,40
0,50
2010 2011 2012 2013 31.3.2014
© Wärtsilä
• Power Plants: Although customers are still
delaying their decision-making, the forecasted
GDP growth in 2014 is expected to result in a
slightly improved overall market for liquid and gas
fuelled power generation. Ordering activity
remains focused on the emerging markets.
• Ship Power: The main drivers supporting activity
in the shipping and offshore sectors are in place.
Overall contracting is expected to be in line with
that seen in 2013, keeping in mind the prevailing
overcapacity and the market’s limited capacity to
absorb new tonnage.
• Services: The overall service market outlook
remains stable.
30
Market outlook
NEW
PIC
© Wärtsilä 31
Wärtsilä expects its net sales
for 2014 to grow by 0-10% and
its operational profitability
(EBIT% before non-recurring
items) to be around 11%.
Prospects for 2014 unchanged
IR Contact:
Natalia Valtasaari
Director, Investor Relations
Tel. +358 (0) 40 187 7809
E-mail: [email protected]