Wartsila Oyj Abp · OMXHEX:WRT1V
Wartsila Oyj Abp — Wärtsilä — FY2014 Earnings Presentation
37 slides from Wartsila Oyj Abp's earnings presentation, Jan 29, 2015
Slide 1: Wärtsilä Corporation Result Presentation 2014
WÄRTSILÄ CORPORATION RESULT PRESENTATION 2014 29 JANUARY 2015 Björn Rosengren, President & CEO © Wärtsilä
Slide 2: Highlights 2014 – good performance in challenging markets
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 Marin
Slide 3: Order intake growth supported by Ship Power & Services
Order intake growth supported by Ship Power & Services MEUR 5500 5000 4500 4000 MEUR Fourth quarter development 1,522 3500 1600 1,334 1400 3000 14% 1200 2500 23% 1000 2000 Services 800 1500 -2% Ship Power 600 1000 Power Plants 400 500 23% 200 0 0 2010 2011 2012 2013 2014 Q4/2013 Q4/2014 Q1-Q3 Q4 3 ©
Slide 4: Net sales in line with our expectations
Net sales in line with Net sales in line with our expectations expectations MEUR 5000 4500 4000 MEUR Fourth quarter development 3500 1,549 1600 3000 1,403 1400 2500 10% 1200 11% 2000 1000 Services 800 1500 30% Ship Power 600 1000 Power Plants 400 500 -8% 200 0 0 2010 2011 2012 2013 2014 Q4/2013 Q4/2
Slide 5: Net sales by business 2014
Net sales by business 2014 Net sales by business 1-3/2012 Ship Power Services 36% (28) 41% (40) Power Plants 24% (32) 5 © Wärtsilä
Slide 6: Book-to-bill ratio remains above one
Book-to-bill ratio remains above one MEUR 5500 1,2 1.07 1.06 5000 1.05 1.05 4500 1,0 0.88 4000 0,8 3500 3000 0,6 2500 2000 0,4 1500 1000 0,2 500 0 0,0 2010 2011 2012 2013 2014 Order intake Net sales Book-to-bill 6 © Wärtsilä
Slide 7: Order book distribution
Order book distribution Order book distribution MEUR 3500 3000 2500 2000 1500 1000 500 0 31.12.2013 31.12.2014 Delivery next year Delivery after next year 7 © Wärtsilä
Slide 8: Profitability at upper end of guidance range
Profitability at upper end of guidance range MEUR 600 14% 11.9% 12% 500 11.2% 11.1% 10.9% 10.7% 10% 400 8% 300 6% 200 4% 100 2% 0 0% 2010 2011 2012 2013 2014 EBIT before non-recurring items EBIT% before non-recurring items 2014 EBIT and EBIT% include continuing operations. Figures for 2010-2013 incl
Slide 9: Power plant market activity improved in the second half
Power plant market activity improved in the second half 9 © Wärtsilä
Slide 10: Power Plants quotations strong in 2014
Power Plants quotations strong in 2014 Quoted MW per Fuel Type 18000 16000 14000 12000 10000 Others MW 8000 Natural gas 6000 4000 Heavy fuel oil 2000 0 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 2005 2006 2007 2008 2009 201
Slide 11: Power Plants order intake stable despite challenges
Power Plants order intake stable despite challenges MEUR Review period development 1800 Total EUR 1,293 million (1,292) 1600 Utilities 1400 35% 33% Industrials 1200 IPP’s* x% 32% 1000 800 Review period order intake by fuel in MW 600 400 200 Oil Gas 39% 61% 0 2010 2011 2012 2013 2014 Q1-Q3 Q4 *IPP =
Slide 12: Power Plants orders well distributed globally
Power Plants orders well distributed globally Europe 769 (320) Asia 394 (1,083) 423 308 124 217 Americas 686 (418) 38 53 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
Slide 13: Orders for industrial power plants from Russia
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 insta
Slide 14: Market for gas and liquid fuel based power plants 1-9/2014
Market for gas and liquid fuel based power plants 1-9/2014 Total market Market <500MW 37.7 GW (38) 16.5 GW (25) 1.6% 1.8% 5.0% 0.8% 3.6% 1.8% 9.0% 10.5% 9.8% 48.0% 12.7% 55.2% 26.3% 14.5% GE Siemens Alstom MHI Wärtsilä Ansaldo Other GTs Market data includes all Wärtsilä power plants and other manufa
Slide 15: Ship Power order intake supported by activity in gas carriers and cruise vessels
Ship Power order intake supported by activity in gas carriers and cruise vessels 15 © Wärtsilä
Slide 16: Slowdown in vessel contracting
Slowdown in vessel contracting Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT * 250 5 200 4 * # of vessels 150 3 Million CGT 100 2 50 1 0 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
Slide 17: 6% growth in Ship Power order intake
6% growth in Ship Power order intake MEUR 1800 Review period development Total EUR 1,746 million (1,644) 1500 1200 Gas carriers Offshore 34% 28% 900 Navy 600 4% Special Traditional vessels 300 merchant 6% 10% Others Cruise & 2% Ferry 16% 0 2010 2011 2012 2013 2014 Q1-Q3 Q4 17 © Wärtsilä
Slide 18: Joint venture ordering activity
Joint venture ordering activity MEUR 700 650 • Joint venture order intake totalled 600 EUR 306 million (222) during 550 January-December 2014 500 450 • In November Wärtsilä Hyundai 400 Engine Company Ltd. received a 350 major order to supply 54 dual-fuel 300 engines for arctic LNG carriers for 250 2
Slide 19: Orders for integrated solutions increasing
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 fu
Slide 20: Ship Power order book 31 December 2014
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 Cruise & Ferry vessels Navy 12% 4% 8% 20 © Wärtsilä
Slide 21: Strong position in marine engine market
Strong position in marine engine market Medium-speed main engines Auxiliary engines Others Wärtsilä 5%(21) 3%(2) Caterpillar 17%(11) Wärtsilä 52%(51) MAN D&T 25%(17) Others 97%(98) Total market volume last 12 months: Total market volume last 12 months: 4,484 MW (4,554) 6,682 MW (7,628) Wärtsilä’s ma
Slide 22: Wärtsilä strengthens its position in automation and electrical systems
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 th
Slide 23: Growth in service demand
Growth in service demand 23 © Wärtsilä
Slide 24: All-time high fourth quarter supported Services sales growth
All-time high fourth quarter supported Services sales growth MEUR 2000 Fourth quarter development 1800 0% 5% -3% 5% MEUR 1600 600 11% 1400 564 500 1200 507 400 1000 800 300 600 200 400 100 200 0 0 2010 2011 2012 2013 2014 Q4/2013 Q4/2014 Q1-Q3 Q4 24 © Wärtsilä
Slide 25: Services net sales distribution 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
Slide 26: Services distribution per business 2014
Services distribution per business 2014 Net sales Installed base Total EUR 1,939 million Total 181,000 MW Ship Power Ship Power Power Power Plants 2-stroke Plants Ship Power 4-stroke 26 © Wärtsilä
Slide 27: Growing interest in marine service agreements
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 L
Slide 28: Development of service agreements
Development of service agreements MW 14000 30% 12000 25% 10000 20% 8000 15% 6000 10% 4000 5% 2000 0 0% 2009 2010 2011 2012 2013 2014 MW under agreement – Power Plants MW under agreement – Ship Power % of Power Plants installed base % of Ship Power installed base 28 © Wärtsilä
Slide 29: Fleet utilisation
Fleet utilisation Fleet utilisation Anchored Vessels & Fleet Development* 35% 23000 Nr of Active Vessels Percent Anchored 30% 22500 22000 25% 21500 20% 21000 15% 20500 07.12 10.12 01.13 04.13 07.13 10.13 01.14 04.14 07.14 10.14 01.15 Anchored Active Fleet Fleet Average Speed, knots** 10,5 10,0 9,5 9
Slide 30: Solid financial standing
Solid financial standing 30 © Wärtsilä
Slide 31: Cash flow from operating activities
Cash flow from operating activities MEUR 700 600 500 400 300 200 100 0 2010 2011 2012 2013 2014 31 © Wärtsilä
Slide 32: Working capital developed well
Working capital developed well MEUR 1600 25% 1400 20% 1200 1000 15% 800 9.8% 10% 600 465 6.8% 400 5.6% 5.2% 313 235 251 5% 2.6% 200 118 0 0% 2010 2011 2012 2013 2014 Working capital Total inventories Advances received Working capital / Net sales 32 © Wärtsilä
Slide 33: Gearing remains low
Gearing remains low 0,50 0,40 0,30 0,20 0,10 0,00 -0,10 2010 2011 2012 2013 2014 33 © Wärtsilä
Slide 34: EPS and dividend per share
EPS and dividend per share EUR 2,50 2,00 1.76 1,50 1.15 1,00 0,50 0,00 2010 2011 2012 2013 2014* EPS Dividend Extra dividend *Dividend 2014 - Proposal of the Board 34 © Wärtsilä
Slide 35: Market outlook
Market outlook • 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 i
Slide 36: Prospects for 2015
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
Slide 37: IR Contact: Natalia Valtasaari
IR Contact: Natalia Valtasaari Director, Investor Relations Tel. +358 (0) 40 187 7809 E-mail: [email protected]