Wärtsilä Corporation INTERIM REPORT 18 July 2012 at 8.30 a.m. local time
STEADY DEVELOPMENT IN THE SECOND QUARTER
SECOND QUARTER HIGHLIGHTS
- Order intake increased 2% to EUR 1,198 million (1,170)
- Net sales increased 6% to EUR 1,099 million (1,036)
- Operating result EUR 113 million or 10.3% of net sales (EUR 117 million and
11.3%)
- Earnings per share amounted to EUR 0.38 (0.35)
- Book-to-bill 1.09 (1.13)
HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-JUNE 2012
- Order intake increased 7% to EUR 2,308 million (2,149)
- Net sales decreased 1% to EUR 2,104 million (2,119)
- Operating result EUR 215 million, or 10.2% of net sales (EUR 230 million and
10.9%)
- At the end of the period the order book totalled EUR 4,515 million (3,779),
+19%
- Earnings per share amounted to 0.72 euro (0.73)
- Cash flow from operating activities EUR -154 million (84)
BJÖRN ROSENGREN, PRESIDENT AND CEO:
"The second quarter marked steady progress for Wärtsilä. Our net sales grew by
6% and our profitability was 10.3%. We continue to work towards reaching our
growth and profitability targets this year. I am pleased with the good
development within Ship Power's specialised vessel segments, which compensated
for Power Plants' slightly weaker second quarter order intake. Ship Power also
received interesting pump, gas and environmental system orders. Services
development remained rather steady, despite the tough market conditions in the
merchant vessel markets.
To further strengthen our competitiveness and to serve our customers more
effectively, we have decided to change the organisational set up within Ship
Power and Wärtsilä Industrial Operations (WIO). The main change will be that the
product development related to 2-stroke, and the manufacturing and product
development related to Propulsion and Electrical & Automation will be
transferred from WIO to Ship Power. WIO will be renamed PowerTech and it will
continue to serve both market areas of Ship Power and Power Plants. There are no
job reductions planned based on this change."
KEY FIGURES
MEUR 4-6/2012 4-6/2011 Change 1-6/2012 1-6/2011 Change 2011
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Order intake 1 198 1 170 2% 2 308 2 149 7% 4 516
Order book at the end
of the period 4 515 3 779 19% 4 007
Net sales 1 099 1 036 6% 2 104 2 119 -1% 4 209
Operating result
(EBITA)(1) 123 120 3% 232 237 -2% 485
% of net sales 11.2% 11.6% 11.0% 11.2% 11.5%
Operating result
(EBIT)(2) 113 117 -3% 215 230 -7% 469
% of net sales 10.3% 11.3% 10.2% 10.9% 11.1%
Profit before taxes 98 108 192 215 429
Earnings/share, EUR 0.38 0.35 0.72 0.73 1.44
Cash flow from
operating activities -154 84 232
Net interest-bearing
debt
at the end of the
period 790 64 58
Gross capital
expenditure 501 44 187
Gearing 0.49 0.04 0.04
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(1 )EBITA is shown excluding non-recurring items of EUR 13 million (12) and
intangible asset amortisation related to acquisitions of EUR 17 million (7)
during the review period January-June 2012. During the second quarter, non-
recurring items amounted to EUR 6 million (9) and intangible asset amortisation
related to acquisitions to EUR 10 million (3).
(2 )EBIT is shown excluding non-recurring items.
MARKET OUTLOOK
The power generation market is expected to remain active in 2012. The growing
emerging markets will continue to invest in new power generation capacity, which
will drive demand - especially in the flexible baseload segment. In the OECD
countries, there is still pent-up power sector demand, mainly driven by CO2
neutral generation and the ramp down of older, mainly coal-based, generation.
The outlook for overall vessel contracting activity during 2012 is slightly
negative, with full year contracting expected to be somewhat lower than
contracting during 2011. The decrease is largely driven by the low contracting
levels in traditional merchant segments. Robust contracting activity, in line
with activity levels seen during 2011 and so far in 2012, is expected for the
offshore, gas carrier, and other specialised vessel markets. Interesting
opportunities are seen in the following areas: efficiency improvement, gas as a
fuel, and environmental solutions. These are now central issues in many
newbuilding discussions and are expected to grow in importance going forward.
Despite the slightly improved market situation in the review period, some
uncertainties remain in the service market. The merchant marine segments are
still expected to be under pressure, as overcapacity in the market continues to
impact the potential for services in this area. Development in the active
installed base is also expected to be moderate, with continued scrapping,
layups, slow steaming, and low utilisation of vessels in the merchant segments.
The power plant service market is expected to develop steadily.
WÄRTSILÄ'S PROSPECTS FOR 2012 REITERATED
Wärtsilä expects its net sales for 2012 to grow by 5-10% and its operational
profitability (EBIT% before non-recurring items) to be 10-11%.
DISCLOSURE PROCEDURE
Wärtsilä Corporation follows the disclosure procedure enabled by Standard 5.2b
published by the Finnish Financial Supervision Authority. This stock exchange
release is a summary of Wärtsilä Corporation's Interim Report January-June
2012. The complete report is attached to this release in pdf format and is also
available on Wärtsilä's website at www.wartsila.com/investors.
ANALYST AND PRESS CONFERENCE AT 10.00 A.M. LOCAL TIME
An analyst and press conference will be held on Wednesday 18 July 2012 at 10.00
a.m. Finnish time (8.00 a.m. UK time), at the Wärtsilä headquarters in Helsinki,
Finland. The combined web- and teleconference will be held in English and can be
viewed on the internet at the following address:
http://storm.zoomvisionmamato.com/player/wartsila/objects/gwc27jyf/.
To participate in the teleconference please register at the following address:
http://www.yourconferencecentre.com/r.aspx?p=1&a=DZmpnCKQhoFbgF.
You will receive dial-in details by e-mail once you have registered. If you want
to ask questions during the teleconference, press the *-button followed by the
1-button on your phone to register for a question and the # -key to withdraw a
question. The event name is: Q2 Results 2012. Please be ready to state your
details and the name of the conference to the operator. If problems occur,
please press the *-button followed by the 0-button.
An on-demand version of the webcast will be available on the company website
later the same day.
For further information, please contact:
Raimo Lind
Executive Vice President & CFO
Tel: +358 10 709 5640
raimo.lind@wartsila.com
Pauliina Tennilä
Director, Investor Relations
Tel: +358 40 570 5530
pauliina.tennila@wartsila.com
For press information, please contact:
Atte Palomäki
Group Vice President, Communications & Branding
Tel: +358 40 547 6390
atte.palomaki@wartsila.com
Wärtsilä in brief
Wärtsilä is a global leader in complete lifecycle power solutions for the marine
and energy markets. By emphasising technological innovation and total
efficiency, Wärtsilä maximises the environmental and economic performance of the
vessels and power plants of its customers. In 2011, Wärtsilä's net sales
totalled EUR 4.2 billion with approximately 18,000 employees. The company has
operations in nearly 170 locations in 70 countries around the world. Wärtsilä is
listed on the NASDAQ OMX Helsinki, Finland.
[HUG#1627499]
