result presentation q1 2015
TRANSCRIPT
© Wärtsilä
WÄRTSILÄ CORPORATIONINTERIM REPORT JANUARY-MARCH 2015
23 APRIL 2015Björn Rosengren,President & CEO
• Order intake EUR 1,285 million, +15%• Net sales EUR 988 million, -1%• Book-to-bill 1.30 (1.12)• EBIT EUR 100 million, 10.1% of net sales
(EUR 98 million or 9.8%) • EPS EUR 0.43 (0.31)• Cash flow from operating activities
EUR 37 million (111)• Order book at the end of the period
EUR 4,931 million, +12%
EBIT is shown excluding non-recurring items. As a result of the 2-stroke operations being classified as discontinued operations in 2014, first quarter comparison figures related to the statement of income have been restated.
Highlights Q1/2015
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0
200
400
600
800
1000
1200
1400
1600
Q1/2014 Q1/2015
15%
74%
30%
-24%
1,115
MEUR
First quarter development
MEUR
3
Order intake growth supported by Power Plants and Services
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
2011 2012 2013 2014 2015
1,285
Q1 Q2-Q4
Power Plants
Ship Power
Services
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0
200
400
600
800
1000
1200
Q1/2014 Q1/2015
Net sales in line with our expectations
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
2011 2012 2013 2014 2015
-1%
11%
-14%
-5%
997
MEUR
First quarter development
MEUR
988
4
Net sales development stable
Power Plants
Ship Power
Services
Q1 Q2-Q4
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Net sales by business 1-3/2012
Ship Power32% (37)
Power Plants18% (19)
Services49% (44)
5
Net sales by business 1-3/2015
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1.071.05 1.05 1.06
1.30
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
2011 2012 2013 2014 1-3/2015
Order intake Net sales Book-to-bill
MEUR
6
Book-to-bill ratio remains above one
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Order book distribution
MEUR
7
Order book distribution
0
500
1000
1500
2000
2500
3000
31.3.2014 31.3.2015
Delivery current year Delivery next year or later
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MEUR
8
Improvement in profitability
EBIT%EBIT
11.1% 10.9% 11.2%11.9%
0%
2%
4%
6%
8%
10%
12%
14%
0
100
200
300
400
500
600
2011 2012 2013 2014
EBIT is show before non-recurring items. Figures for 2010-2013 and Q1/2014 include both discontinued and continuing operations.
First quarter development
MEUR
8.9%10.1%
0%
2%
4%
6%
8%
10%
12%
0
20
40
60
80
100
120
Q1/2014 Q1/2015
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Sentiment in power generation markets improving
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0
2000
4000
6000
8000
10000
12000
14000
16000
18000
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
2010 2011 2012 2013 2014 2015
Quoted MW per Fuel Type
Others
Natural gas
Heavy fuel oil
10
Power Plants’ quotation activity on a high level
MW
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0
200
400
600
800
1000
1200
1400
1600
1800
2011 2012 2013 2014 2015
MEUR Review period developmentTotal EUR 287 million (165)
IPP’s*
Utilities
Industrials
Oil 64%
Gas36%
Review period order intake by fuel in MW
x%
11
Growth in Power Plants order intake
30%
8%
61%
Q1 Q2-Q4
*IPP = Independent Power Producer
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184
20
40
Order intake 1-3/2015: 702 MW (396)
Americas 75 (67)
Asia 20 (37)
Africa and Middle East 175 (202)
UtilitiesIPP’sIndustrials
12
Power Plants orders globally
410
135
Europe 433 (90)
75
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• Contract to supply a 56 MW peaking and wind support power plant to Coffeyville Municipal Light and Power in Kansas, USA
• Scope of supply three gas-fired Wärtsilä 50SG engines
• Benefits of Smart Power Generation power plants include fast starts, flexibility and reliability
• Wärtsilä has over 2,500 MW of installed capacity in the United States
13
Growing interest towards gas fuelled power plants in USA
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13.2% 50.4%
20.1%
1.3%
Market <500 MW23.4 GW (32)
10.7%
3.8%
14
Market data includes all Wärtsilä power plants and other manufacturers’ gas and liquid fuelled 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.
0.4%
Total market47.8 GW (73)
GE Siemens MHI WärtsiläAlstom Ansaldo Other GTs
20.8%
41.9%
8.1%
5.2%
19.0%
4.7% 0.3%
Market for gas and liquid fuel based power plants 2014
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Slow activity in the marine markets
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Subdued vessel contracting
Source: Clarkson Research Services, figures exclude late contracting* CGT= gross tonnage compensated with workload
*
*
0
1
2
3
4
5
0
50
100
150
200
250
01.0
903
.09
05.0
907
.09
09.0
911
.09
01.1
003
.10
05.1
007
.10
09.1
011
.10
01.1
103
.11
05.1
107
.11
09.1
111
.11
01.1
203
.12
05.1
207
.12
09.1
211
.12
01.1
303
.13
05.1
307
.13
09.1
311
.13
01.1
403
.14
05.1
407
.14
09.1
411
.14
01.1
503
.15
Mill
ion
CG
T
# of
ves
sels
Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT
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0
300
600
900
1200
1500
1800
2011 2012 2013 2014 2015
MEUR
Review period developmentTotal EUR 336 million (440)
Offshore11%
Traditional merchant
18%
Special vessels11%
17
Ship Power order intake supported by gas carriers
Others 5%
Q1 Q2-Q4
Gas carriers41%
Cruise & Ferry11%
Navy 3%
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• Joint venture order intake totalledEUR 138 million (25) during January-March 2015
• During the first quarter, Wärtsilä Hyundai Engine Company Ltd. received an order to supply 30 dual-fuel engines for icebreaking LNG carriers for the Yamal LNG project in Russia
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
650
700
Q1/2010
Q2/2010
Q3/2010
Q4/2010
Q1/2011
Q2/2011
Q3/2011
Q4/2011
Q1/2012
Q2/2012
Q3/2012
Q4/2012
Q1/2013
Q2/2013
Q3/2013
Q4/2013
Q1/2014
Q2/2014
Q3/2014
Q4/2014
Q1/2015
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
© Wärtsilä
• Tallink Grupp’s new fast ropax ferry will feature Wärtsilä dual-fuel engines running primarily on LNG
• Contract scope: three 12-cylinder Wärtsilä 50DF and two 6-cylinder Wärtsilä 50DF main engines, two Wärtsilä fixed pitch propellers and propeller shaft lines
• Operating primarily on LNG enables compliance with the sulphur emissions legislation that came into force in January
• Wärtsilä’s highly efficient and reliable main engine propulsion and leading position in gas fuelled solutions was key in the contract award
19
Environmentally sustainable dual-fuel engines to a new Baltic Sea ferry
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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.
Wärtsilä56% (52)
Others 16% (5)
MAN D&T15% (25)
Caterpillar13% (17)
Total market volume last 12 months:5,711 MW (4,484)
Medium-speed main engines
Wärtsilä4% (3)
Auxiliary engines
Total market volume last 12 months:4,988 MW (6,682)
Others96% (98)
20
Strong position in marine engine market
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Increased maintenance activity boosted Services’ order intake and sales
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0
200
400
600
800
1000
1200
1400
1600
1800
2000
2011 2012 2013 2014 2015
-3%
0
100
200
300
400
500
600
Q1/2014 Q1/2015
MEUR
First quarter development
MEUR
435
11%485
22
Services’ net sales increased by 11%
5%
Q1 Q2-Q4
5%
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Spare parts 53%(53)
Field service 24%(24)
Contracts 17%(17)
Projects6%(6)
23
Total EUR 485 million (435)
Services net sales distribution 1-3/2015
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• Contract signed with Shanghai Electric Power to convert the Maltese Delimara Power Station to operate on natural gas
• Project scope includes converting four of the power plant’s eight engines into Wärtsilä 50SG and four into Wärtsilä 50DF engines
• Operating the plant on natural gas with the latest Wärtsilä factory specification will enable reduced emissions and operating costs, as well as increased efficiency and output
24
Wärtsilä to boost efficiency and reduce emissions of Maltese power plant
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0%
5%
10%
15%
20%
25%
30%
0
2000
4000
6000
8000
10000
12000
14000
2009 2010 2011 2012 2013 2014 Q1 2015
25
MW
Development of service agreements
MW under agreement – Power Plants MW under agreement – Ship Power
% of Ship Power installed base% of Power Plants installed base
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Fleet utilisation
* Source: Bloomberg. Sample of more than 25 000 vessels (>299 GT) covered by IHS AIS Live.** Source: Bloomberg
26
Fleet utilisation
Fleet Average Speed, knots**
Anchored Vessels & Fleet Development*
20500
21000
21500
22000
22500
23000
15%
20%
25%
30%
35%
10.12
01.13
04.13
07.13
10.13
01.14
04.14
07.14
10.14
01.15
04.15
Nr o
f A
ctiv
e V
esse
ls
Per
cent
Anc
hore
d
Anchored Active Fleet
8,0
8,5
9,0
9,5
10,0
10,5
10.12
01.13
04.13
07.13
10.13
01.14
04.14
07.14
10.14
01.15
04.15
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Solid financial standing
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Cash flow from operating activities
0
100
200
300
400
500
600
700
2011 2012 2013 2014
MEUR
0
20
40
60
80
100
120
1-3/2014 1-3/2015
Review period development
MEUR
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235
465
313251
5.6%
9.8%
6.8%5.2%
0%
5%
10%
15%
20%
25%
0
200
400
600
800
1000
1200
1400
1600
2011 2012 2013 2014
Working capital Total inventories Advances received Working capital / Net sales
MEUR
29
Working capital
MEUR
Review period development
* Working capital / 12 months rolling net sales
292 2966.1%* 6.2%*
0%
5%
10%
15%
20%
25%
0
200
400
600
800
1000
1200
1400
1600
31.3.2014 31.3.2015
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Gearing remains low
0,00
0,10
0,20
0,30
0,40
0,50
2011 2012 2013 2014 0,00
0,10
0,20
0,30
0,40
0,50
31.3.2014 31.3.2015
Review period development
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• Power Plants: Based on the market situation during 2014 and the GDP forecasts for 2015, the market for liquid and gas fuelled power generation is expected to remain challenging.
• Ship Power: The outlook for the shipping and shipbuilding market environment remains cautious due to weaker market conditions in the dry bulk and offshore segments.
• Services: The overall service market outlook is cautiously positive with growth opportunities in selected regions and segments.
31
Market outlook
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Wärtsilä expects its net sales for 2015 to grow by 0-10% and its operational profitability (EBIT% before non-recurring items) to be between 12.0-12.5%.
Prospects for 2015 unchanged
IR Contact:Natalia ValtasaariDirector, Investor Relations Tel. +358 (0) 40 187 7809E-mail: [email protected]