Wartsila Oyj Abp · OMXHEX:WRT1V
Wartsila Oyj Abp — Wärtsilä — Investor Day (2008)
22 slides from Wartsila Oyj Abp's investor day presentation, 2008
Slide 1: Cracking the Financials
CRACKING THE FINANCIALS RAIMO LIND, EXECUTIVE VICE PRESIDENT & CFO 1 © Wärtsilä Wärtsilä Capital Markets Day
Slide 2: Themes for discussion
Themes for discussion Growth over the cycle Growth Profitability target over the cycle & Order book distribution Profitability Order book risks Investment CAPEX analysis Cash flow and Working Capital development financial position Work in progress and Advances received Wärtsilä’s financial position
Slide 3: Growth over the cycle
Growth over the cycle Sales New Acquisitions Growth % (incl. acquisitions) Sales EUR millions Sales growth 6000 60% 5000 50% 4000 CAGR = 40% 8,6%* 3000 30% 27% 18% 2000 21% 20% 13% 1000 10% 7% 3% 3% 0 0% -3% -5% -7% -1000 -10% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008E 2009E * Incl
Slide 4: Orderbook distribution
Orderbook distribution Orderbook 4000 EUR million 3500 3000 ~60% 2500 2000 49% 1500 40% 1000 35% 27% 500 0 Current Year Next Year Next Year +1 and beyond 2000 2001 2002 2003 2004 2005 2006 2007 2008 Note: Based on order book end of Q3 4 © Wärtsilä Wärtsilä Capital Markets Day
Slide 5: Strong Services business brings stability in fluctuating markets
Strong Services business brings stability in fluctuating markets Net sales by business 1-9/2008 Net sales by business 2000 * 26% 31% 36% 43% 31% 33% Ship Power Power Plants Services Total net sales 1-9/2008: EUR 3,082 million Total net sales 2000: EUR 2,288 million Services: EUR 1,335 million Servic
Slide 6: Wärtsilä's profitability target 8-10% +/- 2% over the cycle
Wärtsilä’s profitability target 8-10% +/- 2% over the cycle SALES Operating profit 7 000 14% Elements of a more robust EUR millions EBIT % business model: 6 000 12% • Business mix more stable – Offering in all businesses 5 000 10% broadened, latest addition Ship Design 4 000 8% – Services’ share of
Slide 7: Resource risk of orderbook
Resource risk of orderbook DEMOLITION SCRAP 500 450 400 • Cancellations 350 300 • Delays 250 200 – Due to finance 150 100 – Yard schedules 50 0 – Wärtsilä schedules 0 1 2 3 4 5 6 7 8 .0 .0 .0 .0 .0 .0 .0 .0 .0 ct ct ct ct ct ct ct ct ct O O O O O O O O O – Subsupplier schedules Exchange rate Euro /
Slide 8: Themes for discussion
Themes for discussion Growth over the cycle Growth Profitability target over the cycle & Order book distribution Profitability Order book risks Investment CAPEX analysis Cash flow and Working Capital development financial position Work in progress and Advances received Wärtsilä’s financial position
Slide 9: Investment CAPEX analysis
Investment CAPEX analysis Acquisitions Other shares Investments in growth / process development Investments in maintenance Investments % of sales (no acq. & shares) Depreciation Depreciation w/o acquisition intangibles Investments and depreciations EUR millions Investments % of sales 450 9% 400 8% 3
Slide 10: Corporate transactions – last 12 months
Corporate transactions – last 12 months Sales* Name Transaction Locations Business MEUR Head-count Maritime Service A/S Acquisition Ålesund Engine and ship service 3,2 28 International Acquisition Aalborg, Boiler services 6,3 39 Combustion Dubai Engineering A/S Claus D.Christophel Acquisition Hambur
Slide 11: Working capital is exceptionally low
Working capital is exceptionally low 2000 25% EUR millions 1800 1600 20% 1400 1200 15% 1000 9,5% 800 8,4% 10% 7,0% 600 5,5% 400 5% 212 2,7% 206 176 2,1% 200 155 103 101 0 0% 2003 2004 2005 2006 2007 30.9.2008 Working Capital Total Inventories Advances Received Working Capital / Net Sales All figures
Slide 12: Breakdown of cash flow
Breakdown of cash flow MEUR 1-9/2008 2007 2006 EBITDA 395 462 333 Other operating cash flow -3 -12 -6 Change in working capital -62 135 52 Cash flow from operating activities before financial items and taxes 331 585 379 Net financial items and taxes -75 -154 -77 Cash flow from operating activities 2
Slide 13: Wärtsilä Credits (end of period)
Wärtsilä Credits (end of period) 1000 900 800 700 600 500 400 300 200 100 0 2007 11/08 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2017+ Situation 12/2007 Undrawn Committed loans Un-utilised RCF Utilised RCF Short Term loans Long Term loans 13 © Wärtsilä Wärtsilä Capital Markets Day
Slide 14: Cash reserves 31.10.2008
Cash reserves 31.10.2008 1000 MEUR 900 Uncommitted 800 700 600 500 Committed, 400 total 565mEUR 300 200 100 0 100 mio 130 mio 235 mio Pension Other Long Sale & Private CP Cash Undrawn Unutilised Loans term loans Leaseback placement Committed RCF Loans 14 © Wärtsilä Wärtsilä Capital Markets Day
Slide 15: Themes for discussion
Themes for discussion Growth over the cycle Growth Profitability target over the cycle & Order book distribution Profitability Order book risks Investment CAPEX analysis Cash flow and Working Capital development financial position Work in progress and Advances received Wärtsilä’s financial position
Slide 16: Management system / IFRS 8
Management system / IFRS 8 General • Chief Operating Decision Maker (CODM) – CODM of Wärtsilä is the President & CEO, supported by the Board of Management and when necessary the Board of Directors – CODM appraises the economic performance and the development of the group as one entity, not based on
Slide 17: Management system / IFRS 8
Management system / IFRS 8 One segment or several segments? • Wärtsilä serves two markets, the • Technology of all engines is the Marine and Power plant market with same, also the R&D is joint an integrated structure • Product manufacturing is done by • Life cycle of customer support is the same pla
Slide 18: Wärtsilä's segment reporting
Management system / IFRS 8 Wärtsilä’s segment reporting • IFRS 8 – core principle ”An entity shall disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it op
Slide 19: New Corporate Governance rules
New Corporate Governance rules • New Corporate Governance (CG) rules approved in October 2008 (replaces the guidelines given in December 2003) • CG in force 1st January 2009, early adaption possible • Changes which require the decision of General Meeting shall be made in the 2009 Annual General Meet
Slide 20: New Corporate Governance rules
New Corporate Governance rules Corporate Governance rules October, 2008 • 52 guidelines in total of which – 48 consistent with guidelines – 3 differing Guideline 1: Potential misalignment in Articles of Association – publication days of the notice of the meeting Guideline 21: Lacking the participati
Slide 21: Guideline 51
Guideline 51 Disclosure on the issuer’s corporate governance system • The issuer shall disclose in its annual report the following information on its system of corporate governance. 1. Reference to such regulations on the system of corporate governance that the issuer shall conform to, or to such re
Slide 22: WARTSILA.COM
WARTSILA.COM © WARTSILA