Wartsila Oyj Abp · OMXHEX:WRT1V
Wartsila Oyj Abp — Wärtsilä — Investor Day (2008)
20 slides from Wartsila Oyj Abp's investor day presentation, 2008
Slide 1: Power Plants Update
POWER PLANTS UPDATE CHRISTOPH VITZTHUM, VITZTHUM GROUP VICE PRESIDENT 1 © Wärtsilä Wärtsilä Capital Markets Day
Slide 2: Agenda
Agenda 1. Demand drivers 2. Wärtsilä’s competitive advantages 3. New market focus and positioning 4. Why is it different this time? 2 © Wärtsilä Wärtsilä Capital Markets Day
Slide 3: The demand drivers
The demand drivers Growth in Electricity Generation in the World Economic developmentp 6% • Electricity demand growth and eco- nomic growth correlate almost 1:1 5% • Impacts of a possible recession – Industrial sector demand may 4% decrease 3% – Domestic consumption will continue to grow unless the
Slide 4: The demand drivers
The demand drivers • Climate change • Rising electricity prices – Emission trading and other – Power plant construction costs schemes target to reduce carbon have increased emissions – General fuel price trend is up, coal – Difficult to p permit and build p power prices have increased 50 % in p plan
Slide 5: Wärtsilä's competitive advantages
Wärtsilä’s competitive advantages Fuel flexibility Competitive capital cost • Ability to use available fuels • Standardized solutions • Ability to use low cost fuels • Modularity • Ability to convert from one fuel to • Professional delivery another Emission compliance • Backup fuel capability • Comp
Slide 6: Wärtsilä's competitive advantages
Wärtsilä’s competitive advantages Global EPC High Business Entry Barrier • Wärtsilä is the only power plant • Prime mover development, 3-5 year contractor delivering EPC in the R&D whole developing world • Modular, standardized power plant • Main enablers products p – Modular pre-fabricated power •
Slide 7: Power Plants Mission
Power Plants Mission ”We provide superior value to our customers with our distributed, flexible, efficient and environmentally advanced energy solutions, which enable a global transition to a more sustainable and modern energy infrastructure.” 7 © Wärtsilä Wärtsilä Capital Markets Day
Slide 8: Power Plants repositioning
Power Plants repositioning • We take an active role in improving p g the world through active market development • We focus on products and services, businesses and pprojects j that p provide unquestionable q environmental benefits, and make economical sense • We position ourselves as the active ENA
Slide 9: New market focus and positioning
New market focus and positioning Wärtsilä’s has 4 ”legs” with different customers and industry cycles 1. OIL power plants 2. GAS power plants 3. Renewable power plants 4. OIL & GAS industry applications 9 © Wärtsilä Wärtsilä Capital Markets Day
Slide 10: Wärtsilä's "legs"
Wärtsilä’s ”legs” 1. HFO p power plants p LFO p power plants p – 2 separate markets: – Demand steady despite high oil • Islands and remote areas: prices. Mainly stand-by Market steady due to non applications availability of other practical fuel – Reserve capacity constraints in options Europe open a
Slide 11: HFO Power Plants / 1-60 MW Engines
HFO Power Plants / 1-60 MW Engines 2008 HFO Power plant market (incl. crude) Gas Wärtsilä Recip. Competitors Gas Turbines Turbines 5% 4500 4000 Wärtsilä Market size 3500 Recip. 4050MW 49% 3000 Competitors 46% 2500 MW 2000 1500 1000 2007 500 Gas Turbines 9% 0 1996 1997 1998 1999 2000 2001 2002 2003 2
Slide 12: LFO & LBF Power Plants / 3.5-60 MW Engines
LFO & LBF Power Plants / 3.5-60 MW Engines LFO O Power o e pplant a market a e ((including c ud g bbio-oils) o o s) 2008 Gas Wärtsilä Wärtsilä Recip. Competitors Gas Turbines Turbines 20% 21% 1800 1600 Market size 1300MW 1400 1200 1000 Recip. MW Competitors 800 59% 600 400 2007 Gas 200 Turbines Wärt
Slide 13: Wärtsilä's "legs"
Wärtsilä’s ”legs” 2. GAS ppower plants p – Wind ppower g growth opens p up pa – 2 separate markets new market for dynamic • Developing world: resources – Strong gas infrastructure • Reciprocating p g engines g are the construction expands the best technology option markets to gas power plants • Wärt
Slide 14: GAS Power Plants / 3.5-60 MW Engines
GAS Power Plants / 3.5-60 MW Engines GAS Power plant market (incl. Dual) Recip. 2008 Competitors Wärtsilä Recip. Competitors Gas Turbines Wärtsilä 4% 18000 8% 16000 14000 Market size 15630MW 12000 10000 Gas MW Turbines 8000 88% 6000 4000 2007 Recip. Wärtsilä Competitors 2000 12% 4% 0 1996 1997 1998
Slide 15: Wärtsilä's "legs"
Wärtsilä’s ”legs” 3. Renewable power plants – BioPower serves the market within Europe p and other subsidized regions – R&D for small scale gasification & reciprocating engine based power plant for global markets 15 © Wärtsilä Wärtsilä Capital Markets Day
Slide 16: Wärtsilä's "legs"
Wärtsilä’s ”legs” 4. OIL & GAS industry applications – Industry y cycle y different from electricityy business – High investments on exploration and transportation infra – Wärtsilä a niche player in • Gas compression in selected markets • Field power applications in South America, Africa, Russia • S
Slide 17: All fuels, Power Plants / Engines
All fuels, Power Plants / Engines 2008 All ffuels, l P Power plant l t market k t (HFO 1 1-60MW,LFO 60MW LFO 3 3.5-60MW,GAS 5 60MW GAS 3 3.5-60MW) 5 60MW) Wärtsilä 17% Wärtsilä Recip. Competitors Gas Turbines 25000 Recip. Market size Competitors 20980MW 16% 20000 Gas Turbines 67% 15000 MW W 10000 20
Slide 18: All fuels, Power Plants / Engines
All fuels, Power Plants / Engines Market share changes, linear average 70 0% 70.0% 65 0% 65.0% % 60.1% 60.0% 51.3% 51.6% 52.0% 51.6% 50.0% 46.5% 44.6% 47.4% 47.4% 36.6% 44.5% 40.0% 40.2% 30.0% 22.9% 20.0% 16.3% 15.0% % 16.3% 16.7% 13 7% 13.7% 14 0% 14.0% 14 6% 14.6% 11.3% 11.7% 10.0% 9.8% 10.4% 7.9%
Slide 19: Why is it different this time?
Why is it different this time? Wärtsilä’s has 4 ”Legs” with different customers and industry cycles OIL & GAS OIL GAS Renewable Industry Power Plants Power Plants Power Plants Applications • Opportunistic Æ Focused Æ New focus areas • Standardized modular products enable customization • Total access
Slide 20: WARTSILA.COM
WARTSILA.COM © WARTSILA