Wärtsilä Corporation reported its Q3 2016 results. Order intake increased 5% to EUR 1.139 billion while net sales declined 12% to EUR 1.079 billion. The operating result was EUR 123 million, an 11.4% margin. Order intake was strong in energy solutions due to growth in emerging markets and a large power plant order in Texas. However, net sales declined across all businesses due to lower delivery volumes. For 2016, Wärtsilä expects net sales to decline 5% and the operating margin to be around 12%.

1. © Wärtsilä PUBLIC
WÄRTSILÄ CORPORATION
INTERIM REPORT JANUARY-SEPTEMBER 2016
25 October 2016
Jaakko Eskola, President & CEO
25 October 2016 Q3 result presentation1

2. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation2
Highlights Q3/2016
• Order intake EUR 1,139 million, +5%
• Net sales EUR 1,079 million, -12%
• Book-to-bill 1.06 (0.89)
• Comparable operating result EUR 123 million,
11.4% of net sales (EUR 160 million or 13.1%)
• Earnings per share EUR 0.43 (0.49)
• Cash flow from operating activities EUR 189 million (-5)
• Order book at the end of the period EUR 5,024 million, -2%

3. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation3
Positive development in order intake
0
200
400
600
800
1 000
1 200
1 400
1 600
Q3/2015 Q3/2016
Third quarter development
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
MEUR
MEUR
Q1-Q3 Q4
5%
97%
1,086 1,139
-29%
2%
Energy
Solutions
Marine
Solutions
Services

4. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation4
Net sales affected by delivery schedules
0
200
400
600
800
1 000
1 200
1 400
Q3/2015 Q3/2016
1,222
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
-12%
-4%
-13%
-27%
Third quarter development
Energy
Solutions
Marine
Solutions
Services
MEUR
Q1-Q3 Q4
MEUR
1,079

5. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation5
Net sales by business 1-9/2016
Marine Solutions
36% (33)
Energy Solutions
16% (22)
Services
48% (45)

6. © Wärtsilä PUBLIC
1.05 1.05 1.06 0.98
1.11
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
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 1-9/2016
25 October 2016 Q3 result presentation6
Book-to-bill ratio
MEUR
Order intake Net sales Book-to-bill

7. © Wärtsilä PUBLIC 20 July 2016 Q2 Result presentation7
Order book distribution
0
500
1 000
1 500
2 000
2 500
3 000
30.9.2015 30.9.2016
Delivery current year Delivery next year
MEUR
Delivery later than next year

8. © Wärtsilä PUBLIC
0%
2%
4%
6%
8%
10%
12%
14%
0
50
100
150
200
250
300
350
400
450
1-9/2015 1-9/2016
25 October 2016 Q3 result presentation8
Operating result impacted by lower delivery volumes
10.9%
11.2%
11.9% 12.2%
0%
2%
4%
6%
8%
10%
12%
14%
0
100
200
300
400
500
600
700
2012 2013 2014 2015
MEUR
Items affecting comparability include restructuring costs of EUR 29 million (11) for the review period January-September 2016, of which EUR 17 million were non-cash write-downs.
Figures for 2012-2013 include both discontinued and continuing operations.
Comparable operating result % of net sales
Review period development
MEUR
11.5%
10.2%

9. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation9
ENERGY SOLUTIONS

10. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation10
Strong ordering activity in Energy Solutions
ENERGY SOLUTIONS
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2012 2013 2014 2015 2016
MEUR
Utilities
Industrials
Review period development
Total EUR 947 million (642)
Review period order intake
by fuel in MW
Gas
41%
Oil
59%
Q1-Q3 Q4
Independent
power producers
20%
58%
21%

11. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation11
ENERGY SOLUTIONS
412278
228
919
Order intake 1-9/2016: 2,555 MW (1,687)
298
IPP’s
(Independent
Power Producers)
Utilities
Industrials
Order intake globally
*Turkish owners contributed to the high level of activity in Europe.
36
18
215
87
9
55
Africa and Middle East 498 (230)
Asia 395 (174)
Americas 726 (246)
Europe* 936 (1,037)

12. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation12
• The plant will provide balancing power to
the community, which is moving towards a
green, low emissions power system
• The value of the engineering and
equipment (EEQ) order is approx.
EUR 100 million
• Quick start and stop capability, high
efficiency, and fast delivery were key in the
contract award
Wärtsilä to supply a 225 MW Smart
Power Generation power plant
to the City of Denton, Texas, USA

13. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation13
Market for gas and liquid fuel power plants, <500 MW
ENERGY SOLUTIONS
1-6/2015 1-6/2016
Market data includes all Wärtsilä power plants and other manufacturers’ gas and liquid fuelled gas turbine based power plants with prime movers above 5 MW,
as well as estimated output of steam turbines for combined cycles. The data is gathered from the McCoy Power Report.
Other combustion engines not included. In engine technology Wärtsilä has a leading position.
<500 MW market volume: 11.8 GW (12.6), -6%
Total market volume: 37.2 GW (27.9), +32%
GE
35.0%
Siemens
27.9%
Wärtsilä
9.7%
MHI
19.5%
Other GT’s
0.4%
GE
36.8%
Siemens
27.8%
Wärtsilä
16.0%
MHI
17.7%
Other GT’s
1.9%
Ansaldo
7.4%

14. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation14
MARINE SOLUTIONS

15. © 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
01.09
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
07.12
09.12
11.11
01.13
03.13
05.13
07.13
09.13
11.13
01.14
03.14
05.14
07.14
09.14
11.14
01.15
03.15
05.15
07.15
09.15
11.15
01.16
03.16
05.16
07.16
09.16
MillionCGT
Numberofvessels
Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT
25 October 2016 Q3 result presentation15
Contracting volumes reflect weak marine market environment
MARINE SOLUTIONS
Source: Clarkson Research Services, figures exclude late contracting
* CGT= gross tonnage compensated with workload
*
*

16. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation16
Cruise & ferry supported Marine Solutions’ order intake
MARINE SOLUTIONS
0
300
600
900
1 200
1 500
1 800
2012 2013 2014 2015 2016
Review period development
Total EUR 1,028 million (1,134)
Offshore
4%
Traditional
merchant
19%
Others
5%
Gas carriers
13%
Navy
8%
MEUR
Q1-Q3 Q4
Cruise &
ferry
41%
Special vessels
10%

17. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation17
• The conversion is planned to be carried
out on a modern LNG vessel
• Conversion enables Höegh LNG to
quickly capture new business
opportunities
• Wärtsilä’s system features
regasification technology using water
glycol, providing a more compact
solution than the traditional propane
based system
Wärtsilä to supply regasification
system for Höegh LNG’s FSRU
conversion project
Kuva
pitää
vaihtaa,
bonny
kalvon
kuva voisi
sopia
tähän

18. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation18
Strong position in marine engine market
MARINE SOLUTIONS
Medium-speed main engines Auxiliary engines
Wärtsilä’s market shares are calculated on a 12 months rolling basis, numbers in brackets are from the end of the previous quarter.
The calculation is based on Wärtsilä’s own data portal.
Wärtsilä
50% (58)
Others
11% (14)
MAN D&T
24% (22)
Caterpillar
15% (6)
Total market volume last 12 months:
2,358 MW (2,090)
Wärtsilä
16% (13)
Total market volume last 12 months:
3,617 MW (4,498)
Others
84% (87)

19. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation19
SERVICES

20. © Wärtsilä PUBLIC
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
2 200
2 400
2012 2013 2014 2015 2016
25 October 2016 Q3 result presentation20
Services’ year-to-date net sales stable
SERVICES
0
100
200
300
400
500
600
700
Q3/2015 Q3/2016
MEUR
MEUR
531
-4%
512
Third quarter development
Q1-Q3 Q4

21. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation21
Net sales distribution 1-9/2016
SERVICES
Spare parts
50% (51)
Field service
23% (24)
Projects
11% (8)
Agreements
15% (17)
Total EUR 1,554 million (1,565)

22. © Wärtsilä PUBLIC
0%
5%
10%
15%
20%
25%
30%
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
2009 2010 2011 2012 2013 2014 2015 1-9/2016
MW
25 October 2016 Q3 result presentation22
Installed base covered by service agreements
SERVICES
MW under agreement – Energy Solutions MW under agreement – Marine Solutions
% of Marine Solutions’ installed base% of Energy Solutions’ installed base

23. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation23
• SkyLight combines data about the ship’s
movements with noon report and
meteorological data, to model the vessel’s
speed and fuel performance
• Vessel performance records are stored in
the cloud-based software, enabling more
prompt reporting, planning and cost
optimisation
SkyLight – a next generation fleet
performance monitoring service

24. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation24
FINANCIALS

25. © Wärtsilä PUBLIC
0
50
100
150
200
250
300
350
400
1-9/2015 1-9/2016
25 October 2016 Q3 result presentation25
Cash flow development
FINANCIALS
0
100
200
300
400
500
600
700
2012 2013 2014 2015
MEUR
Review period development
MEUR

26. © Wärtsilä PUBLIC
522 540
10.5%* 11.2%*
0%
5%
10%
15%
20%
25%
0
200
400
600
800
1 000
1 200
1 400
1 600
30.9.2015 30.9.2016
25 October 2016 Q3 result presentation26
Working capital development
FINANCIALS
465
313
251
543
9.8%
6.8%
5.2%
10.8%
0%
5%
10%
15%
20%
25%
0
200
400
600
800
1 000
1 200
1 400
1 600
2012 2013 2014 2015
MEUR
Working capital Total inventories Advances received Working capital / net sales
Review period development
MEUR
* Working capital / 12 months rolling net sales

27. © Wärtsilä PUBLIC
0,00
0,10
0,20
0,30
0,40
0,50
30.9.2015 30.9.2016
25 October 2016 Q3 result presentation27
Gearing
FINANCIALS
0,00
0,10
0,20
0,30
0,40
0,50
2012 2013 2014 2015
Review period development

28. © Wärtsilä PUBLIC
Market outlook
25 October 2016 Q3 result presentation28
Energy Solutions
Growth in electricity demand and the
availability of international funding for
infrastructure projects will continue to
support power plant investments in
the emerging markets. In the
industrialised countries, the slow
economic growth continues to limit
demand for new power plants, except
in North America. The megatrend
towards renewable energy sources is
evident.
Marine Solutions
The outlook for the shipping and
shipbuilding markets remains
challenging. Overcapacity and weak
earnings continue to limit the demand
for new vessels in the merchant
segment, while low oil prices are
impacting investments in offshore
exploration and development and
gas carrier market remains under
pressure. The outlook for the cruise
and ferry segment remains positive.
Services
The service market outlook remains
solid with growth opportunities in
selected regions and segments.
Customers in both the marine and
power plant markets continue to show
interest in long-term service
agreements.

29. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation29
Wärtsilä expects its net sales to decline
by around 5% and its profitability
(comparable operating result as a
percent of net sales) to be around 12%.
Prospects for 2016 revised

30. © Wärtsilä PUBLIC 25 October 2016 Q3 result presentation30
THANK YOU
Further information:
Natalia Valtasaari
Director, Investor & Media Relations
Tel. +358 (0) 10 709 5637
E-mail: natalia.valtasaari@wartsila.com