Wärtsilä Reports Strong Order Intake Growth of 19% in Q3

© Wärtsilä PUBLIC
WÄRTSILÄ CORPORATION
INTERIM REPORT JANUARY-SEPTEMBER 2017
25 October 2017
Jaakko Eskola, President & CEO
25 October 2017 Q3 Result presentation 20171

© Wärtsilä PUBLIC 25 October 2017 Q3 Result presentation 20172
Highlights Q3/2017
• Order intake EUR 1,354 million, +19%
• Net sales EUR 1,178 million, +9%
• Book-to-bill 1.15 (1.06)
• Comparable operating result EUR 135 million (123),
11.4% of net sales (11.4)
• Earnings per share EUR 0.43 (0.43)
• Cash flow from operating activities EUR 150 million (189)
• Order book at the end of the period EUR 5,075 million (5,024)

0
200
400
600
800
1 000
1 200
1 400
1 600
Q3/2016 Q3/2017
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
2013 2014 2015 2016 2017
MEUR
MEUR
Q1-Q3 Q4
19%
26%
1,139
1,354
35%
5%
Energy
Solutions
Marine
Solutions
Services
Strong development in order intake

0
200
400
600
800
1 000
1 200
1 400
1 600
Q3/2016 Q3/2017
1,079
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
5 500
2013 2014 2015 2016 2017
9%
3%
-16%
83%
Energy
Solutions
Marine
Solutions
Services
MEUR
MEUR
1,178
Q1-Q3 Q4
Net sales supported by power plant deliveries

Net sales by business 1-9/2017
Marine Solutions
27% (36)
Energy Solutions
28% (16)
Services
45% (48)

1.05 1.06
0.98
1.03
1.19
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
2013 2014 2015 2016 1-9/2017
Book-to-bill
MEUR
Order intake Net sales Book-to-bill

Order book distribution
0
500
1 000
1 500
2 000
2 500
3 000
3 500
30.9.2016 30.9.2017
Delivery current year Delivery next year
MEUR
Delivery later than next year

11.2%
11.9%
12.2% 12.1%
0%
2%
4%
6%
8%
10%
12%
14%
0
100
200
300
400
500
600
700
2013 2014 2015 2016
MEUR
Items affecting comparability included costs related to restructuring programmes of EUR 4 million (2) in the third quarter of 2017 and EUR 19 million (29) during the review period
January-September. Figures for 2013 include both discontinued and continuing operations.
Comparable operating result % of net sales
10.2% 10.0%
0%
2%
4%
6%
8%
10%
12%
14%
0
50
100
150
200
250
300
350
400
1-9/2016 1-9/2017
Review period development
MEUR
Operating result supported by changes in timing of deliveries

SERVICES

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
Services’ sales affected by challenges in offshore
and low volumes from service projects
SERVICES
MEUR
0
100
200
300
400
500
600
700
Q3/2016 Q3/2017
MEUR
512 3%
526
Q1-Q3 Q4

Net sales distribution 1-9/2017
SERVICES
Total EUR 1,561 million (1,554)
By product area By segment
Spare parts
50% (50)
Field service
22% (23)
Projects
10% (11)
Agreements
17% (15)
Merchant
23% (24)
Power plants
39% (38)
Cruise & ferry
15% (13)
Navy
8% (8)
Special vessels
7% (8)
Offshore
8% (9)

0%
5%
10%
15%
20%
25%
30%
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
20 000
2009 2010 2011 2012 2013 2014 2015 2016 1-9/2017
MW
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

• A service agreement covering eight
LNG carriers expands the cooperation
between Wärtsilä and GasLog
• Wärtsilä’s digital services allows for
remote troubleshooting and tuning of
engines as well as software updates
• Applying real-time installation
data enables striving for optimum
lifecycle utilisation
Ensuring certainty of operations
and predictability of GasLog’s
LNG carriers

ENERGY SOLUTIONS

0
10 000
20 000
30 000
40 000
50 000
60 000
Q4/2014
Q1/2015
Q2/2015
Q3/2015
Q4/2015
Q1/2016
Q2/2016
Q3/2016
Q4/2016
Q1/2017
Q2/2017
Q3/2017
Quotation activity by fuel type
ENERGY SOLUTIONS
Liquid fuel
Multi-fuel
Gas
Calculated on a 12 months rolling basis
MW

Energy Solutions’ order intake developing well
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
Total EUR 1,184 million (947)
Review period order intake
by fuel in MW
Gas
49%
Oil
51%
Independent
power producers
Q1-Q3 Q4
49%36%
15%

ENERGY SOLUTIONS
329
134
110
Order intake 1-9/2017: 2,856 MW (2,555)
1,309
IPP’s
(Independent
Power Producers)
Utilities
Industrials
Order intake globally
75
95
8
714
Africa and Middle East 279 (385)
Asia 2,031 (395)
Americas 348 (726)
Europe 198 (1,049)
13
18
50

• Wärtsilä will supply its third LNG
receiving terminal to be located in
Hamina, Finland
• The port of Hamina will be the first LNG
receiving terminal in Finland connected
to Finnish gas grid, offering security
of supply to gas customers
• The LNG terminal is scheduled to be
operational in August 2020
Contributing to the development of
sustainable societies

Market for gas and liquid fuel power plants, <500 MW
ENERGY SOLUTIONS
Market shares are calculated on a 12 months rolling basis, numbers in brackets are from the end of the previous period.
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 last 12 months: 24.8 GW (28.4)
Total market volume last 12 months: 54.6 GW (58.0)
GE
30% (31)
Siemens
19% (24)
Wärtsilä
14% (12)
MHI
14% (15)
Other GT’s
4% (4)
Ansaldo
19% (15)

MARINE SOLUTIONS

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
11.16
01.17
03.17
05.17
07.17
MillionCGT
Numberofvessels
Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT
Improving market conditions supported vessel contracting
MARINE SOLUTIONS
Source: Clarkson Research Services, figures exclude late contracting
* CGT= gross tonnage compensated with workload
*
*
09.17

Marine Solutions’ order intake supported by favourable contracting mix
MARINE SOLUTIONS
0
300
600
900
1 200
1 500
1 800
2013 2014 2015 2016 2017
Total EUR 1,112 million (1,028)
Offshore
3%
Traditional
merchant
17%
Others
4%
Gas carriers
26%
Navy
8%
MEUR
Cruise
31%
Special vessels
8%
Ferry
3%
Q1-Q3 Q4

Market position of Wärtsilä’s marine engines
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 period.
The calculation is based on Wärtsilä’s own data portal.
Wärtsilä
43% (40)
Others
20% (17)
MAN D&T
27% (30)
Caterpillar
10% (13)
Total market volume last 12 months:
2,982 MW (3,065)
Wärtsilä
13% (8)
Total market volume last 12 months:
1,932 MW (1,680)
Others
87% (92)

• Efficient and reliable remote control and
monitoring capabilities are central to
the enablement of intelligent shipping
• Wärtsilä recently successfully tested
the remote control of ship operations
using standard bandwidth onboard
satellite communication
• Wärtsilä’s capabilities in intelligent
vessel navigation will be enhanced by
the acquisition of Guidance Marine
Developing technologies that enable
a Smart Marine future
Kuva
pitää
vaihtaa,
bonny
kalvon
kuva voisi
sopia
tähän

FINANCIALS

Cash flow from operating activities affected by increased receivables
FINANCIALS
0
100
200
300
400
500
600
700
2013 2014 2015 2016
MEUR
0
50
100
150
200
250
300
350
400
1-9/2016 1-9/2017
MEUR

313
251
543
4906.8%
5.2%
10.8%
10.2%
0%
5%
10%
15%
20%
25%
0
200
400
600
800
1 000
1 200
1 400
1 600
2013 2014 2015 2016
Working capital
FINANCIALS
MEUR
Working capital Total inventories Advances received Working capital / Net sales
540
658
11.2%*
13.1%*
0%
5%
10%
15%
20%
25%
0
200
400
600
800
1 000
1 200
1 400
1 600
30.9.2016 30.9.2017
*Working capital / 12 months rolling net sales
MEUR

0,00
0,10
0,20
0,30
0,40
0,50
2013 2014 2015 2016
Gearing
FINANCIALS
0,00
0,10
0,20
0,30
0,40
0,50
30.9.2016 30.9.2017

The overall development 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
• Solid in Marine Solutions
Prospects for 2017 unchanged
Setti 1
Setti 1

THANK YOU
Further information:
Natalia Valtasaari
Director, Investor & Media Relations
Tel. +358 (0) 10 709 5637
E-mail: natalia.valtasaari@wartsila.com

Wärtsilä Reports Strong Order Intake Growth of 19% in Q3

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