WÄRTSILÄ CORPORATION JP MORGAN EUROPEAN CAPITAL GOODS CEO CONFERENCE 13 JUNE 2014 Björn Rosengren, President & CEO 1
Net sales by business 1-3/2014 Ship Power 38% Services 43% Power Plants 19% 2
Net sales and profitability MEUR 6000 14% 5000 12.1% 10.7% 11.1% 10.9% 11.2% 12% Review period development 4000 3000 2000 1000 10% 8% 6% 4% 2% 1200 1000 800 600 400 200 8.0% 8.9% 14% 12% 10% 8% 6% 4% 2% 0 2009 2010 2011 2012 2013 0% 0 1-3/2013 1-3/2014 0% Net sales EBIT % Figures shown before nonrecurring restructuring items 3
Order intake MEUR 6000 5000 4000 3000 2000 Review period development MEUR 1600 1400 1200 1000 800 600 1000 400 200 0 2009 2010 2011 2012 2013 0 1-3/2013 1-3/2014 Power Plants Ship Power Services 4
Order book distribution MEUR 3500 3000 2500 2000 1500 1000 500 0 Delivery current year 31.03.2013 31.03.2014 Delivery next year or later 5
Vessel contracting continues active 250 Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT * 5 200 4 # of vessels 150 100 3 * 2 Million CGT 50 1 0 0 Source: Clarkson Research Services * CGT= gross tonnage compensated with workload 6
Growth in Ship Power order intake MEUR 2000 1800 4% 2% 1600 1400 1200 1000 33% 800 600 62% 400 200 0 2009 2010 2011 2012 2013 1-3/2014 Merchant Offshore Other Special vessels 7
The most complete marine offering 8 v
Ship Power focus areas Efficiency Gas and dual-fuel solutions Offshore market Environmental solutions 9
Clear leadership in gas applications Power Plants Merchant Offshore Cruise & Ferry Navy Others Dual-fuel power plants 83 installations 375 engines Output 4.7 GW Online since 1997 Gas power plants 550 installations 1,700 engines Output 10.5 GW LNGC 145 vessels 585 engines Multigas Carrier 5 vessels 20 engines Conversion 1 chemical tanker 2 engines Ro-Ro 2 vessels 8 engines OSV s 31 vessels 96 engines Production 2 platforms 9 FPSO s 1 FSO 40 engines LNG cruise ferry 1 vessel 4 engines Complete gas train LNG ferries 5 ferries 20 engines Complete gas train Coastal patrol DF propulsion DF main and auxiliary engines Tug 2 vessels 2 engines each Mechanical drive Guide ship 1 vessel/engine IWW 2 vessels 3 engines 6 segments ~ 2,500 engines > 10,000,000 running hours 10
Power generation markets challenging Electricity consumption growth vs. GDP growth 7,00 25 000 000 Growth % 6,00 5,00 4,00 3,00 2,00 1,00 20 000 000 15 000 000 10 000 000 Electricity consumption GWh 0,00 5 000 000-1,00-2,00 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 0 GDP yearly growth rate Electricity production growth rate Electricity domestic consumption 11
Power Plants order intake by customer segment MEUR 2000 Review period development Total EUR 165 million (406) 1800 1600 1400 51% 25% 24% Utilities Industrials IPP s* 1200 1000 800 600 Review period order intake by fuel in MW 400 200 Oil 41% Gas 59% 0 2009 2010 2011 2012 2013 1-3/2014 *IPP = Independent Power Producer 12
Power Plants installed base Europe: Output: 12.5 GW Asia: Output: 19.8 GW Americas: Output: 11.7 GW Total: 56.2 GW Countries: 169 Plants: 4,700 Africa & Middle East: Output: 12.5 GW Utilities IPPs Industrials Others * December 2013 13
Power Plants strategic focus Maintain leading position HFO & dual-fuel power plants Grow in the large utility gas power plants by capturing market share from gas turbines Grow in biofuel power plants by enabling a wide fuel range Energy Efficiency Smart Power Generation Grow in special applications - nuclear emergency power, combined heat & power, oil & gas and LNG infrastructure Fuel Flexibility Operational Flexibility 14
Developing medium-scale LNG infrastructure 15 v
The global vessel fleet operates in all corners of the world Source: Vesselsvalue Ltd. 16
Wärtsilä Services global network Installed base 182,000 MW 70 countries, 160 locations, 11,000 service professionals Widest range of offering and expertise 17
Marine customers remain focused on cost savings Breakdown of shipyard revenues from a typical dry docking USD thousand per vessel (on average) 500 450 400 350 300 250 200 150 100 50 0 2007 2008 2009 2010 2011 2012 2013 Painting and sand blasting Steelwork Mechanical and E&A Overhead and margin 18
Stable development in Services MEUR 2000 1800 1600 24% 1400 1200 1000 800 600 53% 17% 400 200 6% 0 2009 2010 2011 2012 2013 1-3/2014 Spare parts Contracts Field service Projects 19
Development of installed engine base MW 200000 180000 160000 140000 120000 100000 80000 60000 40000 20000 0 2008 2009 2010 2011 2012 2013 Power Plants Ship Power 20
Wärtsilä s service agreements around the world North Europe 2,900 MW Americas 5,140 MW South Europe & Africa 4,930 MW Middle East & Asia 5,390 MW Marine Power 21
Differentiated service offering through modularisation Culture and organisation Customer experience Growth and profitability through superior customer understanding Customer needs Customer focus Offering 22 v
An organisation based on divisions with end-to-end responsibility R&D Production Sales & marketing Product delivery Customer TRANSPARENCY ACCOUNTABILITY SPEED 23
Prospects for 2014 Wärtsilä expects its net sales for 2014 to grow by 0-10% and its operational profitability (EBIT% before non-recurring items) to be around 11%. 24 v
Positioned for growth even in challenging markets Smart Power Generation Gas as a fuel Environmental solutions 25
WARTSILA.COM IR Contact: Natalia Valtasaari Director, Investor Relations Tel. +358 (0) 40 187 7809 E-mail: natalia.valtasaari@wartsila.com 26