WÄRTSILÄ CORPORATION HALF YEAR REPORT JANUARY – …

© Wärtsilä

WÄRTSILÄ CORPORATIONHALF YEAR REPORTJANUARY – JUNE 202120 JULY 2021HÅKAN AGNEVALL, PRESIDENT & CEOARJEN BERENDS, CFO

20 July 2021 HALF YEAR REPORT JANUARY-JUNE 20211

© Wärtsilä

STRONG CASH FLOW, BUTBUSINESS STILL HAMPERED BYCOVID-19

2 20 July 2021 HALF YEAR REPORT JANUARY-JUNE 2021

• Order intake increased by 14%, growth in all businesses

• Good progress in services:̶ Order intake increased by 24%̶ Net sales increased by 16%

• Profitability improved despite lower net sales

• Strong cash flow from operating activities

• COVID-19 continued to have a significant impact onWärtsilä’s business

© Wärtsilä

GOOD DEVELOPMENT IN KEY FIGURES


MEUR 4–6/2021 4–6/2020 CHANGE 1–6/2021 1–6/2020 CHANGE

Order intake 1,154 1,011 14% 2,398 2,259 6%

of which services 604 486 24% 1,308 1,120 17%

Order book 5,238 5,401 -3%

of which current year deliveries 2,225 2,165 3%

Net sales 1,131 1,220 -7% 2,078 2,390 -13%

of which services 591 510 16% 1,141 1,103 3%

Book-to-bill 1.02 0.83 1.15 0.95

Operating result 58 49 18% 94 101 -7%

% of net sales 5.1 4.0 4.5 4.2

Comparable operating result 71 55 30% 112 111 1%

% of net sales 6.3 4.5 5.4 4.7

© Wärtsilä

113

5571

11.1%

6.8%6.4%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

0

50

100

150

200

250

Q21

9

Q31

9

Q41

9

Q12

0

Q22

0

Q32

0

Q42

0

Q12

1

Q22

1

Comparable operating result

1,217 1,2201,131

0

1,000

2,000

3,000

4,000

5,000

6,000

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Q21

9

Q31

9

Q41

9

Q12

0

Q22

0

Q32

0

Q42

0

Q12

1

Q22

1

Net sales


SECOND QUARTERHIGHLIGHTS

Net sales EUR 1,131million

• -7% due to lowerequipment deliveries

• Service net salesincreased by 16% onthe back of a weakcomparison period

Comparable operatingresult EUR 71 million

• +30% despite lowernet sales

• More favourablesales mix betweenequipment andservices

MEUR, 12m rolling %, 12m rollingMEUR MEUR

Net sales Comparable operating result

Net sales, 12m rolling MEUR 4,293 Comparable operating result, 12m rolling MEUR 276

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• The number of vessels ordered in the reviewperiod increased to 829 (312 in thecorresponding period in 2020, excluding latereporting of contracts).

• Activity in the cargo sector has continuouslyimproved from the lows seen in 2020, whereasvessel contracting in the cruise and ferrymarkets remains low.

• The fuelling transition is increasingly gainingtraction. There were 170 orders for alternativefuel capable units in the first half of the year.

Total vessel contracting

MARINE MARKET RECOVERING


Number of vessels

UNEVEN PROGRESS ACROSS SEGMENTS – VESSEL CONTRACTING IN CRUISE AND FERRY MARKETS LOW

Specialised vessels

Source: Clarksons Research, contracting as per 7 July 2021 (+100 gt, excluding late reporting of contracts)Specialised vessels include LNG carriers, LPG carriers, cruise & ferry, offshore, and special vessels.

200400600800

1,0001,200

12 months rolling (excluding late contracting)

0100200300400500

12 months rolling (excluding late contracting)

Number of vessels

© Wärtsilä

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Q218-Q119 Q418-Q319 Q219-Q120 Q419-Q320 Q220-Q121

• The COVID-19 pandemic and the resultingweakening of the investment environmentcontinued to negatively impact the energymarket.

• Recovery will most likely take time in a largepart of our core markets.

• Activity in the energy storage markets hascontinued at a good level.

• Wärtsilä’s market share decreased to 8%.

Market for gas and liquid fuel power plants <500 MW

RECOVERY EXPECTED TO TAKE TIME IN THE ENERGY MARKET


The total market, including also power plants with prime movers above 500 MW, declined by 13% to 40.5 GW during the twelve-month period ending in March 2021 (46.4 at the end of December). The market data includes all Wärtsilä power plants and othermanufacturers’ gas and liquid fuelled gas turbine based power plants with prime movers below 500 MW, as well as the estimatedoutput of steam turbines for combined cycles. The data is gathered from the McCoy Power Report. The main gas turbinecompetitors are GE, Siemens, Mitsubishi, and Ansaldo. Other combustion engines are not included.

MW, 12m rolling

GOOD ACTIVITY IN THE ENERGY STORAGE MARKET

© Wärtsilä7 20 July 2021 HALF YEAR REPORT JANUARY-JUNE 2021

ORDER INTAKEINCREASED BY 14%

• Order intakeincreased acrossbusinesses

• Equipment orderintake increasedby 4%

• Service orderintake increasedby 24%, reflectingimprovedeconomic activityin general

754

526 549

0

500

1,000

1,500

2,000

2,500

3,000

3,500

0

100

200

300

400

500

600

700

800

900

1,000

Q21

9

Q31

9

Q41

9

Q12

0

Q22

0

Q32

0

Q42

0

Q12

1

Q22

1

Equipment order intake

MEUR MEUR

623

486

604

0

500

1,000

1,500

2,000

2,500

3,000

3,500

0

100

200

300

400

500

600

700

800

900

1,000

Q21

9

Q31

9

Q41

9

Q12

0

Q22

0

Q32

0

Q42

0

Q12

1

Q22

1

Service order intake

MEUR, 12m rolling MEUR, 12m rolling

Equipment Services

Equipment order intake, 12m rolling MEUR 2,043 Service order intake, 12m rolling MEUR 2,455

© Wärtsilä

0

500

1,000

1,500

2,000

2,500

3,000

Delivery current year Delivery next year Delivery after next year

30.6.2019* 30.6.2020 30.6.2021

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

30.6.2019* 31.12.2019 30.6.2020 31.12.2020 30.6.2021

Marine Power Marine Systems Voyage Energy Portfolio Business

Order book by business Order book delivery schedule

SLIGHT DECREASE IN ORDER BOOK DUE TO DIVESTMENTS


BOOK-TO-BILL IMPROVING

MEUR

* As published in the Interim report January-March 2020, order book figures for 2019 have been restated due to stricter requirements for booking new orders.

MEUR

Book-to-bill, 12m rolling 1.05


NET SALESDECREASED BY 7%

• Equipment netsales decreased by24%, mainly due tofewer scrubberdeliveries anddelays in energyequipmentdeliveries

• Service net salesincreased by 16%

604

710

540

0

500

1,000

1,500

2,000

2,500

3,000

0

100

200

300

400

500

600

700

800

900

1,000

Q21

9

Q31

9

Q41

9

Q12

0

Q22

0

Q32

0

Q42

0

Q12

1

Q22

1

Equipment net sales

613

510591

0

500

1,000

1,500

2,000

2,500

3,000

0

100

200

300

400

500

600

700

800

900

1,000

Q21

9

Q31

9

Q41

9

Q12

0

Q22

0

Q32

0

Q42

0

Q12

1

Q22

1

Service net sales

MEUR, 12m rolling MEUR, 12m rollingMEUR MEUR

Equipment Services

Equipment net sales, 12m rolling MEUR 1,999 Service net sales, 12m rolling MEUR 2,293

© Wärtsilä10

Testing hydrogen and ammonia• An engine and plant concept for pure hydrogen ready by 2025• An engine concept with pure ammonia ready in 2023

Autonomous, zero-emission barge with Port ofRotterdam• Collaborating to demonstrate a commercially viable autonomous

intra-port inter-terminal container shuttle

Power-to-Gas• Pre-engineering and developing a Power-to-Gas plant that would

produce carbon-neutral, synthetic methane for Vantaa Energy


TECHNOLOGY AND PARTNERSHIP HIGHLIGHTSENABLING INDUSTRY DECARBONISATION

© Wärtsilä© Wärtsilä 20 July 2021 HALF YEAR REPORT JANUARY-JUNE 202111

© Wärtsilä

+11%

SERVICE ORDERS INCREASED BY 30%

632

391463

0

500

1,000

1,500

2,000

2,500

0100200300400500600700

Q219 Q419 Q220 Q420 Q221

+18%

62

24

44

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

0

10

20

30

40

50

60

70

80

90

100

110

120

Q219 Q419 Q220 Q420 Q221

24

44

Q220 Q221

MARINE POWER: INCREASE IN ALL KEY FIGURES


Order intake Comparable operating result Comparable operating resultMEUR

12m rollingMEUR 1,759 MEUR 12m rolling 9.1%MEUR

447 420 466

0

500

1,000

1,500

2,000

2,500

0100200300400500600700

Q219 Q419 Q220 Q420 Q221

Net salesMEUR

+ Sales volumes+ Equipment/service mix+ Cost efficiency

actions

- Factory load- Cost inflation

12m rollingMEUR 1,763

© Wärtsilä13

0

50

100

150

200

250

300

350

400Second renewal of optimised maintenanceagreement with Rederi Ab Eckerö

• This latest 5-year agreement covers the mainand auxiliary engines in six vessels.

• The agreement will ensure the enginesoperate safely and with optimal fuel efficiency,while minimising downtime and unplannedmaintenance.


MARINE POWER SERVICE AGREEMENTS

MEUR, 12m rolling

NET SALES FROM INSTALLATIONS UNDER AGREEMENT STABILISED AFTER A COVID-19 RELATED DECLINE


© Wärtsilä

237 238

150

02004006008001,0001,200

050

100150200250300

Q219 Q419 Q220 Q420 Q221

SERVICE ORDER INTAKE INCREASED BY 34%

198

119

183

02004006008001,0001,200

050

100150200250300

Q219 Q419 Q220 Q420 Q221

+54%

2327

13

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0

10

20

30

40

50

60

Q219 Q419 Q220 Q420 Q221

27

13

Q220 Q221

+ Equipment/service mix

- Declining scrubbervolumes

- Cost inflation

MARINE SYSTEMS: STRONG ORDER INTAKE


Order intake Comparable operating result Comparable operating resultMEUR MEURMEUR

-37%Net salesMEUR

12m rollingMEUR 643 12m rolling 9.3%

12m rollingMEUR 627


© Wärtsilä

7356

68

0

100

200

300

400

020406080

100120

Q219 Q419 Q220 Q420 Q221

SERVICE ORDER INTAKE INCREASED BY 61%

7256 60

0

100

200

300

400

020406080

100120

Q219 Q419 Q220 Q420 Q221

+9%

-9-12 -11

-30.0%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

-50

-40

-30

-20

-10

0

Q219 Q419 Q220 Q420 Q221

-12 -11

Q220 Q221

VOYAGE: HIGHER NET SALES



+21%Net salesMEUR

+ Sales volumes

- Cost inflation

12m rollingMEUR 245 12m rolling -16.4%

12m rollingMEUR 250

© Wärtsilä18

Wärtsilä and Tanger Med enabled the firstreal-life digital port call

• The containership ‘Kobe Express’ dockedsafely and on time at Tanger Med port inMorocco using the Wärtsilä Navi-Port system

• Navi-Port is a digital platform that facilitatesthe exchange of real-time data between shipsand their destination ports to allow accuratearrival times, thereby saving fuel and costlywaiting time at anchor


VESSELS CONNECTED TO OUR CLOUD SOLUTIONSINCREASED BY 78%

Connected,cumulative

Order book

Number of connected vessels

Q2/21Q2/19 Q4/19 Q1/20Q3/19 Q2/20 Q3/20 Q4/20 Q1/21

+78%


© Wärtsilä

400457 416

0

500

1,000

1,500

2,000

0100200300400500600700

Q219 Q419 Q220 Q420 Q221

-9%

SERVICE ORDERS INCREASED BY 22%

435 390 433

0

500

1,000

1,500

2,000

0100200300400500600700

Q219 Q419 Q220 Q420 Q221

+11%

38

1924

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

-20

-10

0

10

20

30

40

50

60

70

80

90

100

110

120

Q219 Q419 Q220 Q420 Q221

1924

Q220 Q221

ENERGY: ORDER INTAKE AND PROFITABILITY IMPROVED



Net salesMEUR

+ Equipment/service mix

- Sales volumes- Factory load- Cost inflation

12m rollingMEUR 1,715 12m rolling 6.5%

12m rollingMEUR 1,515


Flexible thermal balancing powergaining traction• Wärtsilä received an order to supply equipment for a

156 MW multi-fuel balancing power plant to OmahaPublic Power District in Nebraska, the UnitedStates. Wärtsilä’s technology will be used to balancerenewable power generation in the grid and ensuresystem stability.

• Execution of a 380 MW project for Metaenergia inItaly began in June. Wärtsilä will supply six powerplants operating on natural gas to provide flexiblesystem balancing, as Italy strives to incorporatemore renewable energy.

© Wärtsilä22

0%

5%

10%

15%

20%

25%

30%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2016 2017 2018 2019 2020 30.6.2021

MW under agreement* % of Energy installed base

A long-term optimised maintenanceagreement signed for power plants in threelocations in Nigeria

• The plants covered by the five-year agreementproduce a combined total output of approx.132 MW.

• The aim of the agreement is to ensure theplants’ continued high levels of availability,reliability and efficiency.


ENERGY SERVICE AGREEMENTS

MW

* Includes agreements covering both installed assets and assets to be installed in the future

INSTALLED BASE COVERED BY LONG-TERM SERVICE AGREEMENTS HAS BEEN STABLE DURING 2021

© Wärtsilä

© Wärtsilä

MEUR 4–6/2021 4-6/2020 1–6/2021 1–6/2020

Cash flow from operating activities 245 252 312 293

Working capital 73 492

Net interest-bearing debt 253 643

Gearing 0.12 0.31

Solvency, % 37.8 35.0

Basic earnings/share, EUR 0.06 0.04 0.10 0.09

24 HALF YEAR REPORT JANUARY-JUNE 202120 July 2021

OTHER KEY FINANCIALS – NET DEBT DECREASED

© Wärtsilä

-37

252 245

0

100

200

300

400

500

600

700

800

-100

-50

0

50

100

150

200

250

300

350

Q219 Q319 Q419 Q120 Q220 Q320 Q420 Q121 Q221

Cash flow from operating activitiesCash flow from operating activities, 12m rolling MEUR 700

Cash flow from operating activities Second quarter development

STRONG CASH FLOW FROM OPERATING ACTIVITIES


MEUR MEUR, 12m rolling MEUR

RECORD HIGH CASH FLOW IN THE FIRST HALF OF THE YEAR

© Wärtsilä

Wärtsilä expects the demand environment inthe third quarter to be better than that of thecorresponding period in the previous year.However, the prevailing market conditionsmake the outlook uncertain.

© Wärtsilä

SAVE THE DATE:

WÄRTSILÄ CAPITAL MARKETS DAY18 NOVEMBER 2021


© Wärtsilä

© Wärtsilä

52%48%

ServicesEquipment

40%

16%5%

38%

1%

Marine PowerMarine SystemsVoyageEnergyPortfolio Business

ORDER INTAKE

29

Order intakeby business

Order intakeby business type

(5)

(5)

(39)

(12)

(52)(48)

(39)

HALF YEAR REPORT JANUARY-JUNE 202120 July 2021

SECOND QUARTER DEVELOPMENT

© Wärtsilä

52%48%

ServicesEquipment

41%

13%6%

37%

3%

Marine PowerMarine SystemsVoyageEnergyPortfolio Business

NET SALES

30

Net salesby business

Net salesby business type

(4)

(5)

(37)

(20)

(58)(42)

(34)


SECOND QUARTER DEVELOPMENT

© Wärtsilä

26%

14%

7%8%

45%

Spare parts

Field service

Service agreements

Service projects

Equipment

18%

6%

16%

7%

53%

Order intake Net sales

SECOND QUARTER DEVELOPMENT BY BUSINESS TYPE


(48)

(4)

(18)

(28)

(2)

(57)

(20)

(5)

(18)

(0)

MarineBusinesses

EUR 706 million(566)

EnergyEUR 433 million

(390)

26%

14%

7%8%

45%

Spare partsField serviceService agreementsService projectsEquipment

18%

5%

19%

5%

53%

(56)

(4)

(13)

(23)

(4)

(60)

(14)

(5)

(17)

(4)

MarineBusinesses

EUR 684 million(715)

EnergyEUR 416 million

(457)

© Wärtsilä32

Marine Businesses Gas carriers Cruise & ferry Offshore NavySpecialvessels Merchant Other

Marine Power

Equipment 7% (6) 38% (32) 6% (7) 15% (11) 22% (24) 11% (19) 0% (0)

Services 20% (16) 19% (13) 14% (16) 7% (12) 14% (15) 25% (25) 1% (3)

Marine Systems

Equipment 71% (42) 8% (3) 0% (3) 3% (5) 1% (1) 16% (45) 0% (1)

Services 3% (5) 8% (9) 6% (6) 30% (35) 7% (7) 42% (38) 4% (0)

Voyage

Equipment 1% (1) 32% (32) 7% (6) 4% (3) 17% (18) 18% (20) 21% (21)

Services 4% (3) 22% (35) 6% (8) 2% (3) 7% (5) 56% (45) 3% (1)


JANUARY–JUNE ORDER INTAKE BY CUSTOMER SEGMENT

Energy UtilitiesIndependent Power

Producers Industrials Other

Equipment 31% (30) 57% (59) 12% (11) 0% (0)

Services 33% (33) 26% (24) 30% (30) 11% (14)

© Wärtsilä

ORDERS RECEIVED FOR ENERGY EQUIPMENT GLOBALLY

IPP’s(IndependentPower Producers)

Utilities

Industrials

ORDER INTAKE 1-6/2021:MEUR 461 (486)

Others

33

Americas332 (380)

Africa andMiddle East

40 (29)

Europe46 (11)

Asia42 (65)


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WÄRTSILÄ CORPORATION HALF YEAR REPORT JANUARY – …