WÄRTSILÄ CORPORATION
INTERIM REPORT JANUARY-SEPTEMBER 2016
25 October 2016
Jaakko Eskola, President & CEO
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25 October 2016
Q3 result presentation
Highlights Q3/2016
• Order intake EUR 1,139 million, +5%
• Net sales EUR 1,079 million, -12%
• Book-to-bill 1.06 (0.89)
• Comparable operating result EUR 123 million,
11.4% of net sales (EUR 160 million or 13.1%)
• Earnings per share EUR 0.43 (0.49)
• Cash flow from operating activities EUR 189 million (-5)
• Order book at the end of the period EUR 5,024 million, -2%
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Q3 result presentation
Positive development in order intake
MEUR
5 500
5 000
Third quarter development
4 500
MEUR
4 000
1 600
3 500
1 400
3 000
1 200
2 500
1 000
2 000
800
1 500
600
1 000
400
500
200
0
Q1-Q3
© Wärtsilä
5%
1,139
Services
2%
Marine
Solutions
-29%
Energy
Solutions
97%
0
2012
3
1,086
PUBLIC
2013
2014
2015
Q4
25 October 2016
Q3 result presentation
2016
Q3/2015
Q3/2016
Net sales affected by delivery schedules
MEUR
5 500
5 000
Third quarter development
4 500
MEUR
4 000
1 400
1,222
3 500
1 200
-12%
3 000
1 000
1,079
Services
-4%
2 500
800
Marine
Solutions
2 000
600
1 500
400
1 000
0
0
2012
Q1-Q3
© Wärtsilä
Energy
Solutions
-27%
200
500
4
-13%
PUBLIC
2013
2014
2015
Q4
25 October 2016
Q3 result presentation
2016
Q3/2015
Q3/2016
Net sales by business 1-9/2016
Services
48% (45)
Marine Solutions
36% (33)
Energy Solutions
16% (22)
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25 October 2016
Q3 result presentation
Book-to-bill ratio
MEUR
5 500
1,4
5 000
4 500
1.05
1.06
1.05
1.11
1,2
0.98
4 000
1,0
3 500
0,8
3 000
2 500
0,6
2 000
0,4
1 500
1 000
0,2
500
0
0,0
2012
Order intake
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2013
Net sales
25 October 2016
2014
Book-to-bill
Q3 result presentation
2015
1-9/2016
Order book distribution
MEUR
3 000
2 500
2 000
1 500
1 000
500
0
30.9.2015
Delivery current year
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30.9.2016
Delivery next year
20 July 2016
Delivery later than next year
Q2 Result presentation
Operating result impacted by lower delivery volumes
MEUR
700
14%
11.9%
600
10.9%
12.2%
Review period development
12%
11.2%
MEUR
500
10%
450
14%
400
400
8%
350
12%
11.5%
300
300
6%
200
4%
10%
10.2%
250
8%
200
6%
150
4%
100
2%
100
2%
50
0
0%
2012
2013
2014
Comparable operating result
2015
0
0%
1-9/2015
1-9/2016
% of net sales
Items affecting comparability include restructuring costs of EUR 29 million (11) for the review period January-September 2016, of which EUR 17 million were non-cash write-downs.
Figures for 2012-2013 include both discontinued and continuing operations.
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ENERGY SOLUTIONS
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Q3 result presentation
ENERGY SOLUTIONS
Strong ordering activity in Energy Solutions
Review period development
MEUR
Total EUR 947 million (642)
1 800
21%
1 600
1 400
Utilities
20%
Independent
power producers
58%
Industrials
1 200
1 000
800
Review period order intake
by fuel in MW
600
400
Oil
59%
200
0
2012
Q1-Q3
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2013
2014
2015
Q4
25 October 2016
Q3 result presentation
2016
Gas
41%
ENERGY SOLUTIONS
Order intake globally
Europe* 936 (1,037)
18
Asia 395 (174)
919
87
Americas 726 (246)
9
36
278
412
Africa and Middle East 498 (230)
Utilities
55
IPP’s
(Independent
Power Producers)
215
Industrials
Order intake 1-9/2016: 2,555 MW (1,687)
*Turkish owners contributed to the high level of activity in Europe.
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228
298
Wärtsilä to supply a 225 MW Smart
Power Generation power plant
to the City of Denton, Texas, USA
• The plant will provide balancing power to
the community, which is moving towards a
green, low emissions power system
• The value of the engineering and
equipment (EEQ) order is approx.
EUR 100 million
• Quick start and stop capability, high
efficiency, and fast delivery were key in the
contract award
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Q3 result presentation
ENERGY SOLUTIONS
Market for gas and liquid fuel power plants, <500 MW
1-6/2015
Ansaldo
7.4%
1-6/2016
Other GT’s
0.4%
Wärtsilä
16.0%
Wärtsilä
9.7%
MHI
19.5%
GE
35.0%
Siemens
27.9%
Other GT’s
1.9%
MHI
17.7%
GE
36.8%
Siemens
27.8%
<500 MW market volume: 11.8 GW (12.6), -6%
Total market volume: 37.2 GW (27.9), +32%
Market data includes all Wärtsilä power plants and other manufacturers’ gas and liquid fuelled gas turbine based 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.
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MARINE SOLUTIONS
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Q3 result presentation
MARINE SOLUTIONS
Contracting volumes reflect weak marine market environment
Merchant
Offshore
Cruise and Ferry
3 months moving average in CGT *
Special vessels
250
5,0
4,5
200
4,0
150
3,0
2,5
100
2,0
1,5
50
1,0
0,5
Source: Clarkson Research Services, figures exclude late contracting
* CGT= gross tonnage compensated with workload
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Q3 result presentation
09.16
07.16
05.16
03.16
01.16
11.15
09.15
07.15
05.15
03.15
01.15
11.14
09.14
07.14
05.14
03.14
01.14
11.13
09.13
07.13
05.13
03.13
01.13
11.11
09.12
07.12
05.12
03.12
01.12
11.11
09.11
07.11
05.11
03.11
01.11
11.10
09.10
07.10
05.10
03.10
01.10
11.09
09.09
07.09
05.09
03.09
0,0
01.09
0
*
Million CGT
Number of vessels
3,5
MARINE SOLUTIONS
Cruise & ferry supported Marine Solutions’ order intake
MEUR
1 800
Review period development
Total EUR 1,028 million (1,134)
1 500
Gas carriers
13%
1 200
Offshore
4%
Special vessels
10%
900
Cruise &
ferry
41%
Traditional
merchant
19%
600
300
Others
5%
0
2012
Q1-Q3
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2013
2014
2015
Q4
25 October 2016
Q3 result presentation
2016
Navy
8%
Wärtsilä to supply regasification
system for Höegh LNG’s FSRU
conversion project
• The conversion is planned to be carried
out on a modern LNG vessel
• Conversion enables Höegh LNG to
quickly capture new business
opportunities
• Wärtsilä’s system features
regasification technology using water
glycol, providing a more compact
solution than the traditional propane
based system
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Q3 result presentation
Kuva
pitää
vaihtaa,
bonny
kalvon
kuva voisi
sopia
tähän
MARINE SOLUTIONS
Strong position in marine engine market
Medium-speed main engines
Auxiliary engines
Others
11% (14)
Wärtsilä
16% (13)
Caterpillar
15% (6)
Wärtsilä
50% (58)
Others
84% (87)
MAN D&T
24% (22)
Total market volume last 12 months:
2,358 MW (2,090)
Total market volume last 12 months:
3,617 MW (4,498)
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.
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Q3 result presentation
SERVICES
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25 October 2016
Q3 result presentation
SERVICES
Services’ year-to-date net sales stable
MEUR
2 400
2 200
Third quarter development
2 000
MEUR
1 800
700
1 600
600
1 400
1 200
531
-4%
500
1 000
512
400
800
300
600
200
400
100
200
0
2012
Q1-Q3
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2013
2014
2015
Q4
25 October 2016
Q3 result presentation
2016
0
Q3/2015
Q3/2016
SERVICES
Net sales distribution 1-9/2016
Field service
23% (24)
Spare parts
50% (51)
Agreements
15% (17)
Projects
11% (8)
Total EUR 1,554 million (1,565)
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Q3 result presentation
SERVICES
Installed base covered by service agreements
16 000
30%
14 000
25%
12 000
20%
MW
10 000
8 000
15%
6 000
10%
4 000
5%
2 000
0
0%
2009
2010
2011
2012
MW under agreement – Energy Solutions
% of Energy Solutions’ installed base
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25 October 2016
Q3 result presentation
2013
2014
2015
MW under agreement – Marine Solutions
% of Marine Solutions’ installed base
1-9/2016
SkyLight – a next generation fleet
performance monitoring service
• SkyLight combines data about the ship’s
movements with noon report and
meteorological data, to model the vessel’s
speed and fuel performance
• Vessel performance records are stored in
the cloud-based software, enabling more
prompt reporting, planning and cost
optimisation
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FINANCIALS
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Q3 result presentation
FINANCIALS
Cash flow development
MEUR
700
Review period development
600
MEUR
400
500
350
400
300
250
300
200
200
150
100
100
50
0
0
2012
25
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2013
2014
25 October 2016
Q3 result presentation
2015
1-9/2015
1-9/2016
FINANCIALS
Working capital development
MEUR
1 600
25%
Review period development
1 400
20%
1 200
MEUR
1 600
25%
1 400
1 000
15%
20%
1 200
800
10.8%
9.8%
543
600
1 000
800
6.8%
465
5.2%
400
313
15%
10%
600
5%
251
11.2%*
10.5%*
522
540
10%
400
5%
200
200
0
0%
2012
2013
Working capital
2014
Total inventories
2015
Advances received
* Working capital / 12 months rolling net sales
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Q3 result presentation
0
0%
30.9.2015
Working capital / net sales
30.9.2016
FINANCIALS
Gearing
0,50
Review period development
0,40
0,50
0,30
0,40
0,30
0,20
0,20
0,10
0,10
0,00
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2012
PUBLIC
2013
2014
25 October 2016
Q3 result presentation
2015
0,00
30.9.2015
30.9.2016
Market outlook
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Energy Solutions
Marine Solutions
Services
Growth in electricity demand and the
availability of international funding for
infrastructure projects will continue to
support power plant investments in
the emerging markets. In the
industrialised countries, the slow
economic growth continues to limit
demand for new power plants, except
in North America. The megatrend
towards renewable energy sources is
evident.
The outlook for the shipping and
shipbuilding markets remains
challenging. Overcapacity and weak
earnings continue to limit the demand
for new vessels in the merchant
segment, while low oil prices are
impacting investments in offshore
exploration and development and
gas carrier market remains under
pressure. The outlook for the cruise
and ferry segment remains positive.
The service market outlook remains
solid with growth opportunities in
selected regions and segments.
Customers in both the marine and
power plant markets continue to show
interest in long-term service
agreements.
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Q3 result presentation
Prospects for 2016 revised
Wärtsilä expects its net sales to decline
by around 5% and its profitability
(comparable operating result as a
percent of net sales) to be around 12%.
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THANK YOU
Further information:
Natalia Valtasaari
Director, Investor & Media Relations
Tel. +358 (0) 10 709 5637
E-mail: [email protected]
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