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© Wärtsilä PUBLIC
WÄRTSILÄ CORPORATIONJP MORGAN CAZENOVEEUROPEAN CAPITAL GOODS CEO CONFERENCE
Jaakko EskolaPresident & CEO
16 June 2017 Jaakko Eskola1
© Wärtsilä PUBLIC 16 June 2017 Jaakko Eskola2
Wärtsilä’s net sales by business Q1/2017
ENERGY SOLUTIONS, 24%
MARINE SOLUTIONS, 28%
SERVICES, 49%
© Wärtsilä PUBLIC
8.7% 8.5%
0%
2%
4%
6%
8%
10%
12%
14%
0
200
400
600
800
1000
1200
Q1/2016 Q1/2017
10,9 % 11,2 %11,9 % 12,2 % 12,1 %
0%
2%
4%
6%
8%
10%
12%
14%
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
5 500
2012 2013 2014 2015 2016
Net sales Comparable operating result, % of net sales
16 June 2017 Jaakko Eskola3
Net sales and profitability
MEUR
Figures for 2012-2013 include both discontinued and continuing operations.
First quarter development
© Wärtsilä PUBLIC 16 June 2017 Jaakko Eskola4
© Wärtsilä PUBLIC 16 June 2017 Jaakko Eskola5
SERVICES
We are where our customers need us to be11,000 service professionals in 70 countries, 160 locations…
Marine installed base by operating countryPower installed base by operating countryService locations
© Wärtsilä PUBLIC
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
2 200
2 400
2013 2014 2015 2016 2017
16 June 2017 Jaakko Eskola6
Services’ net sales development
SERVICES
MEUR
First quarter developmentEUR 490 million (500)
Q1 Q2-Q4
Merchant24% (26)
Power plants37% (35)
Cruise & ferry16% (14)
Navy9% (9)
Special vessels7% (7)
Offshore7% (9)
© Wärtsilä PUBLIC 16 June 2017 Jaakko Eskola7
SERVICES
Strategic focus areas
Growth throughvalue-adding lifecycle services & projects
Growth through optimising customer performance
Growth in existing business by improving customer loyalty
CUSTOMER FIRST GO DIGITAL NEW CUSTOMERACCESS
ASSET & LIFECYCLE MANAGEMENT
Growth beyondthe traditional Wärtsiläinstalled base
© Wärtsilä PUBLIC 16 June 2017 Jaakko Eskola8
• 12-year agreement • Ensuring safety and reliability of Carnival’s fleet • Reducing operational costs• Wärtsilä provides all engine maintenance and
monitoring for fleet of 79 vessels• Continuous planning together with Carnival• Performance-based revenue model• Wärtsilä’s biggest service contract in history
• Digitising fleet operations
Wärtsilä and Carnival Corporation announce strategic partnership
© Wärtsilä PUBLIC 16 June 2017 Jaakko Eskola9
ENERGY SOLUTIONS
Market trends & drivers
• Growth in sustainable energy, reducing carbon emissions
• Rapid growth of intermittent renewable generation and escalating demand fluctuation
• Economic growth, electrification and improving standard of living
• Ageing installed capacity driving investments innew technologies
• Natural gas replacing other fossil fuels
• Storage systems needed in order to support renewable intermittent energies
© Wärtsilä PUBLIC 16 June 2017 Jaakko Eskola10
Strong ordering activity in Energy Solutions
ENERGY SOLUTIONS
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2013 2014 2015 2016 2017
MEUR
Utilities
Industrials
First quarter developmentTotal EUR 405 million (312)
First quarter order intakeby fuel in MW
Gas76%
Oil24%
Q1
Independentpower producers73%
19%
8%
Q2-Q4
© Wärtsilä PUBLICENGINE POWER PLANTSSOLAR PV AND ENGINE-SOLAR
HYBRID POWER PLANTS
LNG INFRASTRUCTURE
ENERGY STORAGE INTEGRATION
CAPTURING GROWTHTHROUGH GLOBAL
ENERGY SYSTEMS INTEGRATION
ENERGY SOLUTIONS
© Wärtsilä PUBLIC 16 June 2017 Jaakko Eskola12
• A US-based leader in intelligent energy storage technology and solutions
• Specialised in energy storage optimization and integration software
• Through the acquisition Wärtsilä expands its footprint in the energy storage market with solutions that combine and optimise different forms of power generation, energy storage and demand side management
The acquisition of Greensmith will enable Wärtsilä to become a global systems integrator
© Wärtsilä PUBLIC 16 June 2017 Jaakko Eskola13
MARINE SOLUTIONS THE MOST COMPLETE MARINE OFFERING ON EARTH
© Wärtsilä PUBLIC 16 June 2017 Jaakko Eskola14
MARINE SOLUTIONS
Market trends & drivers
• Urbanisation, globalisation and population growth support seaborne trade development
• Technological developments and new breakthroughs create a need for new business models
• Increasing consumption and growing middle class population support demand for cruise sector
• Gas remains an important fuel
© Wärtsilä PUBLIC
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
5,0
0
50
100
150
200
250
01.0
903
.09
05.0
907
.09
09.0
911
.09
01.1
003
.10
05.1
007
.10
09.1
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.10
01.1
103
.11
05.1
107
.11
09.1
111
.11
01.1
203
.12
05.1
207
.12
09.1
211
.11
01.1
303
.13
05.1
307
.13
09.1
311
.13
01.1
403
.14
05.1
407
.14
09.1
411
.14
01.1
503
.15
05.1
507
.15
09.1
511
.15
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.16
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.16
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.16
01.1
703
.17
05.1
7
Mill
ion
CG
T
Num
ber o
f ves
sels
Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT
16 June 2017 Jaakko Eskola15
Marine market environment continues to be soft
MARINE SOLUTIONS
Source: Clarkson Research Services, figures exclude late contracting* CGT= gross tonnage compensated with workload
*
*
© Wärtsilä PUBLIC 16 June 2017 Jaakko Eskola16
Marine Solutions’ order intake satisfactory
MARINE SOLUTIONS
0
300
600
900
1 200
1 500
1 800
2013 2014 2015 2016 2017
First quarter developmentTotal EUR 322 million (379)
Offshore3%
Traditionalmerchant
19%Others
4%
Gas carriers33%
Navy 8%
MEUR
Q1
Cruise23%
Special vessels6%
Q2-Q4
Ferry4%
© Wärtsilä PUBLIC Jaakko Eskola17
Opportunities through our broad product portfolio and connectivity
MARINE SOLUTIONS
WÄRTSILÄ KNOWS GAS PORTFOLIO PROVIDES ROBUST SUPPORT FOR DIGITALISATION
MARINE HYBRID SOLUTIONS
Wärtsilä’s battery/hybrid systems include energy management control, power electronics and battery integrations
Data generation across the portfolio enabling big data analytics and a full-blown automation, navigation and control system offering
Wärtsilä is involved in the whole gas value chain
16 June 2017
© Wärtsilä PUBLIC 16 June 2017 Jaakko Eskola18
The overall demand for Wärtsilä’sservices and solutions in 2017 is expected to be relatively unchanged from the previous year. Demand by business area is anticipated to develop as follows:
• Solid in Services with growth opportunities
• Good in Energy Solutions (upgraded from solid)
• Soft in Marine Solutions
Prospects for 2017Setti 1
Setti 1
© Wärtsilä PUBLIC© Wärtsilä 16 June 2017 Jaakko Eskola19
OUR LONG-TERM FINANCIAL TARGETS
Grow faster than global GDPFocus on strengthening our position in strategic growth markets
Reach 14%profitabilityEnhanced performance through continuous improvement
Maintain gearing below 50%Unleveraged balance sheet supports growth through acquisitions
Dividend 50% of EPS over the cycleCommitted to providing solid shareholder returns
© Wärtsilä PUBLIC
THANK YOU
IR Contact:Natalia ValtasaariDirector, Investor & Media RelationsTel. +358 (0) 40 187 7809E-mail: [email protected]
16 June 2017 Jaakko Eskola20