1. Ingeniería

WÄRTSILÄ CORPORATION
RESULT PRESENTATION 2014
29 JANUARY 2015
Björn Rosengren,
President & CEO
© Wärtsilä
Highlights 2014 – good performance in challenging markets
•
•
•
•
•
•
•
•
Order intake EUR 5,084 million, +5%
Net sales EUR 4,779 million, +4%
Book-to-bill 1.06 (1.05)
EBIT EUR 569 million, 11.9% of net sales
(EUR 557 million or 12.1%)
EPS EUR 1.76 (1.98)
DPS proposal EUR 1.15
Acquisition of L-3 Marine Systems International
announced in December 2014
Joint venture for 2-stroke engine business
finalised in January 2015
EBIT is shown excluding non-recurring items.
As of the third quarter of 2014, the two-stroke business is reported as discontinued
operations. Income statement related comparison figures for 2013 have been restated.
2 © Wärtsilä
Order intake growth supported by Ship Power & Services
MEUR
5500
5000
4500
4000
MEUR Fourth quarter development
3500
1600
1400
3000
1,522
1,334
14%
1200
2500
23%
1000
Services
2000
800
-2%
1500
Ship Power
600
1000
Power Plants
400
500
23%
200
0
0
2010
2011
Q1-Q3
Q4
3 © Wärtsilä
2012
2013
2014
Q4/2013
Q4/2014
sales in line with our expectations
Net sales in line with Net
expectations
MEUR
5000
4500
4000
MEUR Fourth quarter development
3500
1,549
1600
3000
1400
1,403
10%
2500
1200
2000
1000
11%
Services
800
1500
30%
Ship Power
600
1000
Power Plants
400
500
-8%
200
0
0
2010
Q1-Q3
4 © Wärtsilä
2011
Q4
2012
2013
2014
Q4/2013
Q4/2014
Net sales by business 2014 Net sales by business 1-3/2012
Ship Power
36% (28)
Services
41% (40)
Power Plants
24% (32)
5 © Wärtsilä
Book-to-bill ratio remains above one
MEUR
1,2
5500
1.07
5000
1.05
1.05
1.06
1,0
4500
0.88
4000
0,8
3500
3000
0,6
2500
2000
0,4
1500
1000
0,2
500
0
0,0
2010
Order intake
6 © Wärtsilä
2011
Net sales
2012
Book-to-bill
2013
2014
Order book distribution
Order book distribution
MEUR
3500
3000
2500
2000
1500
1000
500
0
31.12.2013
Delivery next year
7 © Wärtsilä
31.12.2014
Delivery after next year
Profitability at upper end of guidance range
MEUR
14%
600
11.9%
500
10.7%
11.1%
10.9%
11.2%
12%
10%
400
8%
300
6%
200
4%
100
2%
0
0%
2010
2011
EBIT before non-recurring items
2012
2013
2014
EBIT% before non-recurring items
2014 EBIT and EBIT% include continuing operations. Figures for 2010-2013 include both discontinued and continuing operations.
8 © Wärtsilä
Power plant market
activity improved in the
second half
9
© Wärtsilä
Power Plants quotations strong in 2014
Quoted MW per Fuel Type
18000
16000
14000
MW
12000
Others
10000
8000
Natural gas
6000
Heavy fuel oil
4000
2000
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
Q2
Q3
Q4
Q1
Q2
Q3
Q4
0
2005
2006
2007
2008
2009
2010
2011
70% of quotations for gas based installations
10 © Wärtsilä
2012
2013
2014
Power Plants order intake stable despite challenges
MEUR
Review period development
Total EUR 1,293 million (1,292)
1800
1600
Utilities
1400
33%
35%
Industrials
IPP’s*
1200
x%
32%
1000
800
Review period order intake by fuel in MW
600
400
Oil
39%
200
0
2010
Q1-Q3
2011
2012
Q4
*IPP = Independent Power Producer
11 © Wärtsilä
2013
2014
Gas
61%
Power Plants orders well distributed globally
Europe 769 (320)
Asia 394 (1,083)
308
423
124
217
Americas 686 (418)
53
38
72
274
Africa and Middle East 639 (581)
130
171
340
Utilities
IPP’s
Industrials
339
Order intake 2014: 2,489 MW (2,401)
12 © Wärtsilä
Orders for 11 industrial power plants from Russia
• Order placed by EUROCEMENT group
• Scope of supply: 36 natural gas-fired Wärtsilä
34SG engines with a combined capacity of
314 MW
• The plants will produce electricity for cement
factories and work in parallel with the grid
• Wärtsilä’s total installed power generation
capacity in Russia is approximately 1,000 MW
13 © Wärtsilä
Market for gas and liquid fuel based power plants 1-9/2014
Total market
37.7 GW (38)
Market <500MW
16.5 GW (25)
1.8%
3.6% 1.8%
1.6%
0.8%
5.0%
10.5%
9.0%
9.8%
48.0%
12.7%
14.5%
26.3%
GE
55.2%
Siemens
Alstom
MHI
Wärtsilä
Ansaldo
Other GTs
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.
14 © Wärtsilä
Ship Power order
intake supported by
activity in gas carriers
and cruise vessels
15
© Wärtsilä
Slowdown in vessel contracting
Cruise and Ferry
Special vessels
3 months moving average in CGT *
250
5
200
4
150
3
100
2
50
1
0
0
Source: Clarkson Research Services, figures exclude late contracting
* CGT= gross tonnage compensated with workload
16 © Wärtsilä
*
Million CGT
Offshore
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
# of vessels
Merchant
6% growth in Ship Power order intake
MEUR
1800
Review period development
Total EUR 1,746 million (1,644)
1500
1200
Gas carriers
34%
Offshore
28%
900
Navy
4%
600
Traditional
merchant
10%
300
0
17 © Wärtsilä
2010
2011
Q1-Q3
Q4
2012
2013
2014
Others
2%
Cruise &
Ferry
16%
Special
vessels
6%
Joint venture ordering activity
MEUR
700
• Joint venture order intake totalled
EUR 306 million (222) during
January-December 2014
• In November Wärtsilä Hyundai
Engine Company Ltd. received a
major order to supply 54 dual-fuel
engines for arctic LNG carriers for
the Yamal project in Russia
650
600
550
500
450
400
350
300
250
200
150
100
50
0
Q4/2014
Q3/2014
Q2/2014
Q1/2014
Q4/2013
Q3/2013
Q2/2013
Q1/2013
Q4/2012
Q3/2012
Q2/2012
Q1/2012
Q4/2011
Q3/2011
Q2/2011
Q1/2011
Q4/2010
Q3/2010
Q2/2010
Q1/2010
Joint venture order intake, includes figures from Wärtsilä Hyundai
Engine Company Ltd. and Wärtsilä Qiyao Diesel Company Ltd.
Ship Power order intake
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
18 © Wärtsilä
Orders for integrated solutions increasing
• Order received for 6 integrated solutions to
Anchor Handling Tug Supply vessels, being
built for Maersk Supply Service A/S
• Scope of supply: complete power generation
solution, electrical distribution and drives,
vessel automation and propulsion
• The fully integrated systems will provide
optimal power, efficiency, versatility and
redundancy, with the lowest operating
expenditures and a minimal environmental
impact
19 © Wärtsilä
Ship Power order book 31 December 2014
Cargo
Other merchant
RoRo 1%
2%
4%
Tankers
4%
Offshore
35%
Gas carriers
24%
Non-vessel
4%
Special
vessels
4%
20 © Wärtsilä
Navy
8%
Cruise & Ferry
12%
Strong position in marine engine market
Medium-speed main engines
Others
5%(21)
Auxiliary engines
Wärtsilä
3%(2)
Caterpillar
17%(11)
Wärtsilä
52%(51)
MAN D&T
25%(17)
Total market volume last 12 months:
4,484 MW (4,554)
Others
97%(98)
Total market volume last 12 months:
6,682 MW (7,628)
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.
21 © Wärtsilä
Wärtsilä strengthens its position in automation and
electrical systems
• L-3 MSI is a global supplier of automation,
navigation and electrical systems to the
marine, naval and offshore markets
• Transaction value EUR 285 million (enterprise
value), subject to customary adjustments
• Financing for the deal will be from existing cash
resources and credit facilities
• The acquisition is subject to clearance from the
regulatory authorities, and is expected to be
closed during the second quarter of 2015
• The acquisition is expected to be EPS accretive
as of 2015
22 © Wärtsilä
Growth in service
demand
23
© Wärtsilä
All-time high fourth quarter supported Services sales
growth
MEUR
2000
Fourth quarter development
1800
0%
-3%
5%
MEUR
5%
1600
600
1400
500
11%
564
507
1200
400
1000
300
800
600
200
400
100
200
0
0
2010
Q1-Q3
24 © Wärtsilä
2011
Q4
2012
2013
2014
Q4/2013 Q4/2014
Services net sales distribution 2014
Field service
25%(26)
Spare parts
51%(49)
Contracts
16%(16)
Projects
9%(8)
Total EUR 1,939 million (1,842)
25 © Wärtsilä
Services distribution per business 2014
Installed base
Total 181,000 MW
Net sales
Total EUR 1,939 million
Ship
Power
Power
Plants
Ship Power
2-stroke
Power
Plants
Ship Power
4-stroke
26 © Wärtsilä
Growing interest in marine service agreements
• Service contracts bring flexibility to
operations through optimised
maintenance planning
• Several agreements signed during 2014
in various vessel segments, including:
– 10-year maintenance and technical support
agreement with Royal Caribbean Cruises
Ltd covering 36 vessels
– 3-year service agreement with Dutch
dredging and marine contractor Van Oord
– 5-year technical maintenance agreement
with three Greek LNG carrier owners for a
total of 15 vessels
– 6-year maintenance agreement for 15 of
Wagenborg’s dry cargo carriers
27 © Wärtsilä
Development of service agreements
MW
14000
30%
12000
25%
10000
20%
8000
15%
6000
10%
4000
5%
2000
0%
0
2009
28 © Wärtsilä
2010
2011
2012
2013
MW under agreement – Power Plants
MW under agreement – Ship Power
% of Power Plants installed base
% of Ship Power installed base
2014
Fleet utilisation
Fleet utilisation
35%
23000
30%
22500
22000
25%
21500
20%
21000
15%
20500
01.15
10.14
07.14
04.14
01.14
10.13
07.13
04.13
01.13
10.12
07.12
Anchored
Active Fleet
Fleet Average Speed, knots**
10,5
10,0
9,5
9,0
8,5
8,0
01.15
10.14
07.14
04.14
29 © Wärtsilä
01.14
10.13
07.13
04.13
01.13
10.12
07.12
* Source Bloomberg. Sample of more than 25 000 vessels (>299 GT) covered by IHS AIS Live.
** Source Bloomberg
Nr of Active Vessels
Percent Anchored
Anchored Vessels & Fleet Development*
Solid financial
standing
30
© Wärtsilä
Cash flow from operating activities
MEUR
700
600
500
400
300
200
100
0
2010
31 © Wärtsilä
2011
2012
2013
2014
Working capital developed well
MEUR
1600
25%
1400
20%
1200
1000
15%
800
9.8%
10%
600
6.8%
465
5.6%
400
200
5.2%
313
2.6%
5%
251
235
118
0%
0
2010
Working capital
32 © Wärtsilä
2011
Total inventories
2012
Advances received
2013
2014
Working capital / Net sales
Gearing remains low
0,50
0,40
0,30
0,20
0,10
0,00
-0,10
33 © Wärtsilä
2010
2011
2012
2013
2014
EPS and dividend per share
EUR
2,50
2,00
1.76
1,50
1.15
1,00
0,50
0,00
2010
EPS
*Dividend
34 © Wärtsilä
Dividend
2014 - Proposal of the Board
2011
Extra dividend
2012
2013
2014*
Market outlook
35 © Wärtsilä
•
Power Plants: The overall market for liquid and gas fuelled
power generation is expected to continue to be challenging.
Ordering activity remains focused on emerging markets and
countries benefiting from a stronger US dollar.
•
Ship Power: The outlook for shipping and shipbuilding is
cautious, due to the current uncertainties in the market. Low oil
prices are expected to limit the demand for offshore vessels.
The outlook for gas carriers continues to be positive. The
importance of fuel efficiency and environmental regulations are
clearly visible, driving interest in environmental solutions and
gas as a marine fuel for the broader marine markets.
•
Services: The overall service market outlook remains stable.
The service outlook for offshore and gas fuelled vessels remains
favourable. Demand for services in the power plant segment
continues to be good. Marine and power plant customers show
healthy interest in long-term service agreements.
Prospects for 2015
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%.
36
© Wärtsilä
IR Contact:
Natalia Valtasaari
Director, Investor Relations
Tel. +358 (0) 40 187 7809
E-mail: [email protected]