Wärtsilä Corporation Company Announcement 20.11.2007 at 8 am EET
The management of Wärtsilä will today announce the growth estimate for 2008 and will specify the long term profitability target. Wärtsilä´s net sales are estimated to increase by about 25 percent in 2008. This estimate is based on a very strong order book, out of which approx. EUR 2.8 billion will be delivered in 2008, and the continued strong development of the Services business. In 2008 the profitability will improve. To support this growth, Wärtsilä is planning to invest approx. EUR 200 million during 2008 in capacity expansion, process improvements and maintenance.
Wärtsilä also specifies its long term profitability target (EBIT%) that has previously been 8% over the cycle. The specified target is 8 – 10 percent, plus/minus 2 percent, of net sales over the cycle.
The 2007 estimates unchanged
The short-term market forecast and profitability estimate published in the Q3 interim report are unchanged: Demand in the ship power and energy markets looks likely to remain active for Wärtsilä for the next two quarters. Based on the strong order book, Wärtsilä’s net sales are expected to grow this year by around 15%. Full year profitability will exceed 9%.
Currently contracting of ships is continuing on a high level and on short-term there are no signs of change in the activity. In some vessel types, for example in offshore supply vessels, contracting has decreased during the last few months when new ships have entered into service.
On long-term it is estimated that contracting of large merchant ships will decrease from current high levels. The contracting of smaller vessels will also slightly decrease, but will remain relatively stable. In the offshore sector investments in new exploration and utilization of current fields are expected to continue.
Demand in the Power Plants business is expected to remain strong. All relevant customer segments and geographical areas remain active. Wärtsilä’s power generation equipment brings added value in terms of fuel flexibility and efficiency, in a market where energy security and the responsible use of fuels are at the forefront of the energy debate.
Due to the long order book Wärtsilä has time to react to potential fluctuations in the market and this is supported by the flexible manufacturing model.
For further information please contact Mr Raimo Lind, Executive Vice President & CFO, phone +358 10 709 5640 or Ms Eeva Kainulainen, VP, Corporate Communications & IR, phone +358 10 709 5235.
The presentation material of the Capital Markets Day can be found on www.wartsila.com.