SEB FINNISH BLUE CHIP SEMINAR RAIMO LIND, EVP & CFO 28 AUGUST 2012 Wärtsilä
This is Wärtsilä POWER PLANTS SHIP POWER SERVICES 2 Wärtsilä
Growth in net sales MEUR 5500 5000 4500 14% -13% 4000-7.6% Second quarter development 3500 MEUR 3000 2500 2000 1500 1000 1400 1200 1000 800 600 400 1 036 6% -1% 34% 1 099 Services Ship Power Power Plants 500 200-2% 0 2008 2009 2010 2011 1-6/2012 0 Q2/2011 Q2/2012 3 Wärtsilä
Net sales by business 1-6/2012 Ship Power 25% (24) Services 45% (42) Power Plants 30% (34) 4 Wärtsilä
Profitability MEUR 250 16% 200 150 11.9% 11.4% 12.8% 12.1% 11.0% 10.7% 11.5% 11.1% 11.2% 10.3% 14% 12% 10% 8% EBIT% target: 10-14% 100 6% 50 4% 2% 0 2008 2009 2010 2011 2012 Q1 Q2 Q3 Q4 EBIT% before non-recurring items EBITA% before non-recurring items and intangible asset amortisation related to acquisitions 0% 5 Wärtsilä
Target markets and solutions Flexible baseload power generation Grid stability and peaking Industrial self-generation Solutions for oil and gas industry Oil, dual-fuel and gas fired power plants Liquid biofuel power plants Flexible grid stability power plants Combined heat & power plants (CHP) Pumping and compression applications 6 Wärtsilä
Order intake by application MEUR 2000 1800 1600 1400 1200 Review period development Total EUR 591 million (672) 9% 9% 67% 16% Industrial self-generation Flexible baseload Oil & gas Grid stability & peaking 1000 800 600 Review period order intake by fuel in MW 400 200 0 2008 2009 2010 2011 1-6/2012 Oil 39% Gas 61% 7 Wärtsilä
Global order intake Europe 19 (550) Asia 771 (298) 19 110 59 Americas 425 (199) 58 29 602 110 229 Africa and Middle East 186 (440) Flexible baseload Industrial self-generation Grid stability & peaking Oil & gas 127 59 Order intake 1-6/2012: 1,401 MW (1,487) 8 Wärtsilä
Market for gas and liquid based power plants 2011 Total market 100.8 GW 3.3% 4.3% 2.0% 8.8% 3.3% GE Siemens MHI 34.6% Alstom 14.4% Wärtsilä 29.3% Russian Other gas turbines Other combustion engines* 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. 9 Wärtsilä
Market trends and drivers GDP growth, electrification and increasing standard of living drive the growth of electricity demand Demand for sustainability and focus on climate change Rapid growth of intermittent renewable generation Increasing daily, weekly and seasonal demand fluctuation increase the need for flexibility Changing roles of fuels New coal power plants difficult to permit in the western countries Increasing role of gas, especially as a balancing fuel The future of nuclear is uncertain The world needs affordable, clean, flexible and reliable power. 10 Wärtsilä
The only complete marine offering Service agreements Ship Design Communication and control Flow & Gas Solutions Propulsion Environmental Solutions Automation Engines Seals & bearings Power distribution Power drives 11 Wärtsilä
12 Vessel order development Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT* 140 4 120 100 3 80 60 2 40 1 20 0 0 01.09 02.09 03.09 04.09 05.09 06.09 07.09 08.09 09.09 10.09 11.09 12.09 01.10 02.10 03.10 04.10 05.10 06.10 07.10 08.10 09.10 10.10 11.10 12.10 01.11 02.11 03.11 04.11 05.11 06.11 07.11 08.11 09.11 10.11 11.11 12.11 01.12 02.12 03.12 04.12 05.12 06.12 # of vessels Million CGT* Source: Clarkson Research Services * CGT= gross tonnage compensated with workload Wärtsilä
Order intake increased by 51% MEUR 2000 Review period development Total EUR 723 million (479) 1600 1200 Merchant 32% Offshore 43% 800 Other 2% 400 0 2008 2009 2010 2011 1-6/2012 Special vessels 7% Cruise & ferry 4% Navy 12% 13 Wärtsilä
Key trends and drivers High oil prices represent a risk for global economic growth; however, they also stimulate investments in exploration and production for oil and gas Expansion of emerging economies continues to support growth of demand for transportation of raw materials and energy Ship owner base is shifting to Asia Environmental regulations drive demand for environmental solutions and gas as a marine fuel Increasing focus on energy efficiency and environmental performance The development of environmental solutions and gas technology will be our priority in meeting the evolving needs of our customers. 14 Wärtsilä
70 countries, 160 locations, 5000 field service experts Installed base 180,000 MW Wärtsilä Services global network Widest range of offering and expertise 15 Wärtsilä
Wide range of expertise Engine services Propulsion services Electrical & automation services Boiler services Environmental services Service agreements Service projects Training services 16 Wärtsilä
Net sales by quarter MEUR 600 500 400 300 200 100 0 2005 2006 2007 2008 2009 2010 2011 2012 Q1 Q2 Q3 Q4 17 Wärtsilä
Net sales distribution 1-6/2012 Field service 24%(23) Spare parts 53%(54) Contracts 14%(15) Projects 9%(8) Total EUR 942 million (890) 18 Wärtsilä
Development of Power Plants service agreements MW 4500 140% 4000 3500 3000 2500 115% 120% 100% 80% 2000 53% 57% 58% 60% 1500 1000 500 31% 40% 20% 0 2008 2009 2010 2011 1-6/2012 0% O&M and maintenance agreements Power Plants deliveries % of delivered MWs 19 Wärtsilä
Services Fleet utilisation Anchored* & Idle Vessels**, percent of fleet 26% 20% 14% 8% 2% Jul.12 Jun.12 May.12 Apr.12 Mar.12 Feb.12 Jan.12 Dec.11 Nov.11 Oct.11 Sep.11 Aug.11 Jul.11 Jun.11 May.11 Apr.11 Mar.11 Feb.11 Jan.11 Anchored Idle 10,5 10,0 9,5 9,0 Jul.12 Jun.12 May.12 Apr.12 Mar.12 Feb.12 Jan.12 Dec.11 Nov.11 Oct.11 Sep.11 Aug.11 Jul.11 Jun.11 May.11 Apr.11 Mar.11 Feb.11 Jan.11 * 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 20 Wärtsilä Fleet Average Speed***, knots
Current key market drivers Growth of gas as a fuel in power generation and in shipping Stricter environmental regulations Increased focus on total cost of ownership Accelerating technological development High demand for expertise 21 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. 22 Wärtsilä
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%. 23 Wärtsilä
IR Contact: Pauliina Tennilä Director, Investor Relations Tel. +358 (0) 40 570 5530 E-mail: pauliina.tennila@wartsila.com