Wärtsilä Presentation, Ade Audifferen, Wärtsilä Nigeria

WÄRTSILÄ CORPORATION
CORPORATE PRESENTATION 2012

1 © Wärtsilä 15 June 2012 CORPORATE PRESENTATION 2012

Our roots and heritage

Passion for engines.


Today we are much more than an engine company

Passion for optimising lifecycle value for our
customers with modern and sustainable power
solutions


Our mission, vision, and values

MISSION We provide lifecycle power solutions to enhance
the business of our customers, while creating
better technologies that benefit both the customers
and the environment.

We will be the most valued business
VISION

partner of all our customers.

ENERGY EXCELLENCE EXCITEMENT
VALUES

Capture opportunities Do things better than Foster openness,
and make things happen anyone else in our respect and trust to
industry create excitement


This is Wärtsilä

POWER
PLANTS

SHIP
POWER

SERVICES


This is what we bring to the market

ENVIRONMENTAL FUEL
EFFICIENCY
SOLUTIONS FLEXIBILITY


Our offering

CUSTOMERS
Ship Power Services
integrated solutions
solutions
Equipment Lifecycle
sales solutions
Power Plants From spare
customised parts to
solutions service
agreements


Financial highlights

MEUR 2011 2010 2009 2008

Order intake 4 516 4 005 3 291 5 573

Order book at the end of the period 4 007 3 795 4 491 6 883

Net sales 4 209 4 553 5 260 4 612

Operating result1 469 487 638 525
% of net sales1 11.1 10.7 12.1 11.4

Earnings/share, EUR 1.44 1.96 1.97 1.94

1 ) 2009-2011 figures exclude non-recurring restructuring items and selling profits.


Net sales by market area

MEUR

6000

5000

4000

3000

2000

1000

0
2008 2009 2010 2011

Asia Europe Americas Other


Solid profitability

MEUR
800 16%

700
15%

600

14%
500

400 13%

300
12%

200

11%
100

0 10%
2008 2009 2010 2011

EBIT EBIT % EBITA %
*) Operating result before nonrecurring restructuring items


Power Plants

We provide superior value to our customers with our
flexible, efficient and environmentally advanced
energy solutions, which enable a transition to a more
sustainable and modern energy infrastructure.


Power Plants offering

• We are a major supplier of flexible
baseload power plants operating
on various liquid and gaseous fuels
• We provide unique, dynamic
solutions for grid stability, reserve,
peaking, load following and
intermittent power generation
• Our multi-fuel solutions for the oil &
gas industry are used for reliable
power generation, pumping and
compression

All applications are supported with tailored lifetime operation and
maintenance services.


Power Plants market trends and drivers

• GDP growth, electrification and increasing standard of
living drive the growth of electricity demand
• Demand for sustainability and focus on climate change
• Rapid growth of intermittent renewable generation
• Increasing daily, weekly and seasonal demand
fluctuation increase the need for flexibility
• Changing roles of fuels
– New coal power plants difficult to permit in the
western countries
– Increasing role of gas, especially as a balancing fuel
– The future of nuclear is uncertain

The world needs affordable, clean, flexible and reliable power.


Smart Power Generation – unique features

Energy efficiency Operational flexibility
• Highest simple cycle electrical Energy • Unlimited, super fast,
efficiency efficiency reliable starting and
• High efficiency regardless stopping with no impact
of ambient conditions on maintenance schedule
• High plant efficiency over • Fast reserve, load
a wide load range due to following, peaking and
multiple generating sets baseload
Competitive generation cost • All ancillary services
and high dispatch • Grid support, wind
Smart enabling
Fuel flexibility Power Multi-tasking plant
prepared for future
• Continuous choice of Generation markets
the most feasible fuel
• Solutions for
– liquid and gaseous
fuels
Fuel Operational
– renewables
flexibility flexibility
– multi-fuel plants
– fuel conversions
Hedge for the future


Smart Power Generation optimises energy systems

In emerging markets, economic Affordable
growth requires increasing
investments in energy.
In developed countries, the
transition to solar and wind power
brings daily variations that need to
be balanced. Smart
Efficient and flexible Smart Power Power
Generation enables power systems System
to deliver affordable, clean and
reliable energy.
Reliable Sustainable


Ship Power

We are passionate about optimising lifecycle value by offering what our
customers need. We deliver on this promise because we provide the only
true total offering of marine products, integrated solutions and services in
the industry – worldwide.
We help our customers find the shorter route to robust growth and bigger
profits by focusing on operational efficiency, environmental excellence,
fuel flexibility and services.


Ship Power key trends and drivers

• High oil prices represent a risk for global
economic growth; however, they also stimulate
investments in exploration and production for oil
and gas
• Expansion of emerging economies continues to
support growth of demand for transportation of
raw materials and energy
• Ship owner base is shifting to Asia
• Environmental regulations drive demand for
environmental solutions and gas as a marine fuel
• Increasing focus on energy efficiency and
environmental performance

The development of environmental solutions and gas technology will
be our priority in meeting the evolving needs of our customers.

17 15 June 2012 CORPORATE PRESENTATION 2012

Ship Power’s focus on growth

OUR STRATEGIC GOAL
To be recognised as the leading solutions provider in the marine industry for:

Efficiency Gas and dual-fuel Environmental
solutions solutions
LEADER IN

• Lifecycle solutions for ship owners and operators
OFFERING
THROUGH

• Enhanced system integration for the ship building industry
• The best product sales and delivery process for the marine industry


Increasing environmental regulation and
alternatives for decreasing emissions

NOx SOx PM GHG BALLAST-
WATER
Acid rains Acid rains Impact on air quality Global warming Damage to local
Ozone depletion eco-systems

Tier II (2011) 3.5% (2012) Along with SOx Under evaluation Global ballast
Tier III in ECA ECA 0.1% (2015) reduction by IMO convention
(2016) Global 0.5% (2020)

Wärtsilä is developing a multi-solution approach to meet requirements
for different ship types and operational profiles

LNG HFO MGO
• Simultaneous reduction of GHG / SOx / NOx / PM NOx: SCR or wet methods • NOx: SCR or primary
• Market: mainly ships with regular routes and limited SOx: scrubbers methods
autonomy requirements operating in ECAs Market: mostly merchant • Market: ships operating a
• Infrastructure development is needed for larger uptake ships operating a limited time in ECAs,
• Conversion solution available significant time in ECAs small ships


The only complete marine offering

Service Ship Design
agreements
Communication
and control

Flow & Gas
Solutions Propulsion

Environmental Automation
Solutions
Power drives
Engines Seals & Power
bearings distribution


Services

Preventing the unexpected and optimising our customers operations is our
shared passion. We serve you whenever, wherever.
We provide the broadest portfolio and best services in the industry for both
shipping and power generation. We offer expertise, proximity and
responsiveness for all customers regardless of their equipment make in
the most environmentally sound way.


Services’ strategic goal

We will:
• Maximise our market share with
our present customer base
• Constantly develop our offering
proposition with value-enhancing
solutions
• Grow by providing more service
agreements with new Ship Power
and Power Plants deliveries
• Become our industry’s market
leader in environmental solutions

To be recognised by customers as their services partner:
competitive, trusted and easy to deal with.


Services key market drivers

• Growth of gas as a fuel in
power generation and in
shipping
• Stricter environmental
regulations
• Increased focus on total cost
of ownership
• Accelerating technological
development
• High demand for expertise


Improving lifecycle efficiency

Performance optimization
Our customers are currently looking for
longer-term efficiency increasing
strategies to improve business efficiency
and reducing operational expenses.

Preventing the unexpected
Reliable performance and risk
management are identified as key needs
of our customers. Preventing the
unexpected is vital to ensure cost
efficiency and smooth operations.

Environmental efficiency
Environmental legislation and the need for
energy efficiency are main drivers for our
customers to optimize their environmental
performance.


Wide range of expertise

Electrical &
Engine services Propulsion services Boiler services
automation services

Environmental
Service agreements Service projects Training services
services


70 countries, 160 locations, 5000 field service experts

Installed Wärtsilä Services global network
base
180,000 MW Widest range of offering and expertise


Wärtsilä Industrial Operations

We provide market leading products


Strategy and strengths
STRATEGY

Leading technologies Operational Flexible and agile
& products excellence operations
STRENGTH

Technology Competitive Manufacturing and Flexible and agile
leadership product portfolio engineering expertise operations
• High quality and • Broad portfolio • Best manufacturing • Global presence
reliability • Products for practises with flexible
• High performance integrated solutions • Design for manufacturing
or as stand-alone manufacturing capacity
• Environmental
focus equipment • Cost efficiency • Global supplier
• Low total cost of base
• Cooperation with
leading research ownership • Focus on core
institutes competences

Valued people in a performance culture
Enabling and developing competent and skilled people


Industrial Operations’ key activities

Technology & product development

Fundamental Technology Product Product Market
research development development management

Research and Development; Product management and Engineering
A streamlined,
broad and competitive
Product delivery product portfolio

Component
Raw material Testing and
supply
supply and Sub-assembly Assembly Customer
machining finishing

Product Centres; Delivery Centres; JVs; Licensees


Wärtsilä’s competitive product portfolio

4-stroke 2-stroke Gensets & Propellers Steerable Transverse Energy
engines engines auxpacs FPP/CPP thrusters thrusters efficiency
systems

Frequency Propulsion Automation, I/O cabinets Switchboards Gears Fuel cells
converters controls monitoring
& control

Flue gas Catalysts Pump Ballast water LNG MG Inert gas
desulphurisation (SCR, Oxicat, systems – system regasification systems
& scrubbers etc.) Flow
solutions


We have a clear leadership in dual-fuel applications

POWER MERCHANT OFFSHORE CRUISE
PLANTS AND FERRY

DF Power plants LNG Carriers PSVs/FPSOs LNG ferries
51 installations • 108 vessels • 20 vessels • 4 engines
186 engines • 429 engines • 96 engines • Complete gas train
Online since 1997 • Online since 1994 • 2,800 passengers
Conversion Highlights: • In service in 2013
• 1 chem. tanker • Harvey Gulf; the
• 2 engines conv. first 4 LNG-OSVs
• Complete gas train to be operated in
• Complete design the Gulf of Mexico

4 segments ~180 installations > 5,000,000 running hours


Wärtsilä’s manufacturing footprint
Trondheim, Norway Aalborg, Denmark
Moss, Norway Frequency converters Sveanehoij & pumps
Oil & gas systems AS Vaasa, Finland
Rubbestadneset, Norway
Propulsion, gears, R&D 4-stroke engines,
Ecotech, R&D
Stord, Norway QMD (Qingdao, China)
Electrical & automation systems 2-stroke engines
Turku, Finland
Gothenburg, Sweden R&D, Ecotech
Water treatment Suzhou, China
Assembly & sourcing
Leeds, UK Espoo, Finland
Valves R&D, Ecotech WHEC (Mokpo,
South Korea)
Poole, UK WTEC (Penza, Russia) 4-stroke engines
Water systems 4-stroke engines
WCEC
Drunen, the Netherlands Geestacht, Germany (Nantong, China)
R&D, Propulsion Fresh water generation 4-stroke engines
Wärtsilä CME (Zhenjiang, China)
Santander, Spain Propulsion
Propulsion

Bermeo, Spain WQDC (Lingang, China)
R&D Khopoli, India Wuxi, China
Gensets, Propulsion 4-stroke engines
Auxiliary modules,
Winterthur, Switzerland Ecotech modules
2-stroke engines, R&D

Trieste, Italy Singapore, Engineroom pumps
4-stroke engines, Pumproom, pumps
Propulsion, R&D

Fully owned sites
Sites with R&D 18 licensee sites
Joint Venture sites


Profitable growth by focusing on three areas

Smart Power Gas as a fuel Environmental
Generation solutions

The transition to sustainable Economic and environmental Environmental regulation and
and modern energy systems reasons increase the growth increased focus on optimised
drives the demand for smart potential for gas solutions in lifecycle efficiency create
power generation. both end markets. demand in the marine
industry.


Passion for optimising lifecycle value
with modern and sustainable power
solutions.


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