WÄRTSILÄ CORPORATION HANDELSBANKEN NORDIC LARGE CAP SEMINAR 16 SEPTEMBER 2015 Björn Rosengren, President & CEO 1
This is Wärtsilä Energy Solutions, 23% Marine Solutions, 30% Services, 47% 2
Net sales and profitability MEUR 6000 14% 5000 11.1% 10.9% 11.2% 11.9% 12% Review period development MEUR 4000 3000 10% 8% 6% 2500 2000 1500 10.9% 10.7% 14% 12% 10% 8% 2000 4% 1000 6% 1000 2% 500 4% 2% 0 2011 2012 2013 2014 0% 0 1-6/2014 1-6/2015 0% Net sales EBIT % Figures shown before nonrecurring restructuring items. Figures for 2011-2013 and H1/2014 include both discontinued and continuing operations. 3
We aim for faster than market growth Megatrends drive demand for our solutions Strong presence in growth markets Opportunities in strategic focus areas Strengthening market position through acquisitions 4
Actions for reaching our long-term profitability target 11.9% 14.0% Streamlining Increasing accountability Pricing Productivity Ensuring competitiveness Group efficiency program implemented during 2014 Setup of business line driven organisation Securing value based and market driven pricing Optimising lead times and focusing on continuous process improvement Investing into technological leadership 5
58 GW of installed power plant capacity in 175 countries Utilities IPP s Industry Others Europe Asia Africa & Middle East Americas * December 2014 6
Energy Solutions market trends & drivers Economic growth, electrification and increased standard of living Demand for sustainability and reducing carbon emissions Rapid growth of intermittent renewable generation and escalating demand fluctuation Increasing role of natural gas Ageing installed capacity The world needs clean, affordable and reliable power generation 7
Energy Solutions order intake MEUR 1800 Review period development Total EUR 475 million (409) 1600 10% Utilities 1400 41% 49% IPP s* 1200 Industrials 1000 x% 800 600 Review period order intake by fuel in MW 400 200 Oil 56% Gas 44% 0 2011 2012 2013 2014 2015 Q1-Q2 Q3-Q4 *IPP = Independent Power Producer 8
Energy Solutions strategic goals Maintain leading position in flexible baseload power plants Grow strongly in large utility gas power plants Grow in LNG infrastructure projects Grow in industrial applications 9
The most complete marine offering on earth 10
Marine Solutions market trends & drivers Marine trade and transportation growth Demand for environmental solutions and gas as a marine fuel Energy efficiency, operating performance and security Investments in exploration and production of offshore oil & gas impacted by oil price development A dynamic global market, but with distinctive segment-specific and local needs 11
Vessel contracting activity Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT * 250 5 200 4 # of vessels 150 100 3 2 * Million CGT 50 1 0 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 05.14 07.14 09.14 11.14 01.15 03.15 05.15 06.15 0 Source: Clarkson Research Services, figures exclude late contracting * CGT= gross tonnage compensated with workload 12
Marine Solutions order intake MEUR 1800 Review period development Total EUR 728 million (823) 1500 1200 900 600 Gas carriers 34% Offshore 15% Special vessels 10% 300 0 2011 2012 2013 2014 2015 Traditional merchant 16% Others 4% Navy 3% Cruise & Ferry 18% Q1-Q2 Q3-Q4 13
Acquisition of MSI strengthens our position in automation and electrical systems Automation Radar DPsystems Navigation and communication AV system Electric propulsion Sonar Safety systems Transformers Power and drives Switchboards 14
A brand new medium-speed Wärtsilä 31 engine launched in June The Wärtsilä 31 engine is the industry s most advanced, powerful, fuel efficient, fuel flexible, and environmentally sound engine The engine achieved a Guinness World Records title for the most efficient 4-stroke diesel engine Remarkable increases in fuel efficiency and fuel flexibility are matched by significant reductions in maintenance costs The engine comes in three alternative versions; diesel, dual-fuel and spark-ignited gas 15
Growth opportunities in marine markets Gas and dual-fuel solutions Broader scope of supply Efficiency Environmental solutions 16
Wärtsilä Services global network 11,000 service professionals in 70 countries, 160 locations Marine installed base by operating country Power installed base by operating country Service locations 17
Services market trends & drivers Development of installed base and installation utilisation Growing importance of gas as a fuel Need for real-time data Downtime avoidance Focus on efficiency New and stricter regulations 18
Services net sales MEUR 2000 Review period development Total EUR 1,034 million (903) 1800 1600 1400 1200 1000 800 Spare parts 51% Field service 24% 600 400 200 0 2011 2012 2013 2014 2015 Projects 7% Contracts 17% Q1-Q2 Q3-Q4 19
Development of service agreements MW 14000 30% 12000 25% 10000 20% 8000 15% 6000 4000 10% 2000 5% 0 2009 2010 2011 2012 2013 2014 30.6.2015 0% MW under agreement Energy Solutions % of Energy Solutions installed base MW under agreement Marine Solutions % of Marine Solutions installed base 20
Services strategic focus areas CUSTOMER FIRST We will nourish our partnership with our existing customer base GO-DIGITAL We will digitalise our customer engagement ASSET & LIFECYCLE MANAGEMENT We will continue to develop and commercialise our portfolio of value-adding services 21
Prospects for 2015 Wärtsilä expects its net sales for 2015 to grow by 5-10% and its operational profitability (EBIT% before non-recurring items) to be between 12.0-12.5%. The guidance includes the impact of the L-3 Marine Systems International acquisition. 22
We are dedicated to reaching our long-term financial targets Grow faster than global GDP Reach 14% profitability Maintain gearing below 50% Dividend of at least 50% of EPS over the cycle 23
WARTSILA.COM IR Contact: Natalia Valtasaari Director, Investor Relations Tel. +358 (0) 40 187 7809 E-mail: natalia.valtasaari@wartsila.com 24