WÄRTSILÄ’S HALF YEAR FINANCIAL REPORT JANUARY-JUNE 2019
This release is a summary of Wärtsilä’s Half Year Report January-June 2019. The complete report is attached to this release as a pdf file. It is also available at http://www.wartsilareports.com/en-US/2019/q2/frontpage/ and on the company website at www.wartsila.com.
HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-JUNE 2019
The demand for Wärtsilä’s services and solutions in the coming 12 months is expected to be somewhat below that of the previous 12 months (previously in-line). Demand by business area is anticipated to be as follows:
Wärtsilä’s current order book for 2019 deliveries is EUR 2,613 million (2,336). Deliveries are expected to be concentrated to the last quarter of the year.
JAAKKO ESKOLA, PRESIDENT AND CEO
“While the first half of 2019 was generally marked by stable development in our net sales and profitability, our performance in the second quarter was burdened by fewer power plant deliveries, as well as an unfavourable project and equipment mix.
Order intake for the first six months was below that of the previous year, largely resulting from the continued macroeconomic and geopolitical uncertainty that has prolonged customer decision-making in the energy markets. Orders received in the Marine Business remained stable during the same period, as newbuild contracting has favoured the more specialised vessel segments. Nevertheless, uncertainty regarding fuel price development has slowed scrubber orders, which, in combination with concerns related to lower overall vessel contracting volumes, has prompted us to lower our marine demand outlook for the coming twelve months. The outlook for the energy markets has also been lowered, as we expect market conditions to remain challenging in the near-term. In contrast to the softer demand trends in the equipment markets, I am pleased to note that the growth in services related sales has continued in both businesses throughout the second quarter.
The phasing of the order book indicates that volume related challenges will continue in the coming months, followed by unusually strong deliveries in the fourth quarter. Successful delivery execution, the implementation of ongoing realignment actions, and finalising certain power plant contracts will be central to our financial performance this year.
Looking beyond 2019, we are well placed to benefit from the demand for energy efficiency and the shift to low-carbon energy sources in both of our end-markets. We remain focused on improving operational efficiency and delivering increased lifecycle value to further strengthen our competitive position.”
|Order intake||1 377||1 553||-11%||2 793||3 060||-9%||6 307|
|of which services||622||592||5%||1 275||1 258||1%||2 598|
|Order book, end of period||6 470||5 904||10%||6 166|
|Net sales||1 217||1 246||-2%||2 368||2 312||2%||5 174|
|of which services||612||582||5%||1 184||1 117||6%||2 419|
|% of net sales||7.9||8.9||7.9||8.5||10.5|
|Comparable operating result*||113||123||-8%||215||211||2%||577|
|% of net sales||9.3||9.8||9.1||9.1||11.2|
|Comparable adjusted EBITA**||123||134||-8%||236||232||2%||621|
|% of net sales||10.1||10.7||10.0||10.0||12.0|
|Profit before taxes||83||102||-18%||162||178||-9%||502|
|Cash flow from operating activities||-37||41||-2||-1||470|
|Net interest-bearing debt, end of period***||746||642||333|
|Gross capital expenditure||54||232||306|
|Personnel, end of period||19 239||19 231||0%||19 294|
*Items affecting comparability in the second quarter of 2019 included costs related primarily to restructuring programmes of EUR 17 million (12). During January-June, items affecting comparability amounted to EUR 28 million (15).
**Comparable adjusted EBITA excludes items affecting comparability and purchase price allocation amortisation.
***The increase in net interest-bearing debt is largely related to the inclusion of lease liabilities on the balance sheet, as a result of the new IFRS 16 standard.
As of the first quarter of 2019, Wärtsilä’s financial reporting has been amended to reflect its new organisational structure. The two business areas, Wärtsilä Marine Business and Wärtsilä Energy Business, constitute the reportable segments. Financial reporting for 2018 has been adjusted to reflect this change. Wärtsilä will additionally report the services related order intake and net sales for the two segments. In Wärtsilä Marine Business, order intake and net sales for retrofit scrubber projects have been transferred from services to new equipment. The comparison figures have been adjusted accordingly.
Wärtsilä presents certain alternative performance measures in accordance with the guidance issued by the European Securities and Markets Authority (ESMA). The definition of these alternative performance measures is presented in the calculations of financial ratios at the end of this report.
ANALYST AND PRESS CONFERENCE
An analyst and press conference will be held today, Thursday 18 July 2019, at 10:00 a.m. Finnish time (8:00 a.m. UK time), at Wärtsilä Helsinki Campus, located at Hiililaiturinkuja 2, Helsinki, Finland. The combined web- and teleconference will be held in English and can be viewed by registering on: http://www.mediaserver.fi/live/wartsila.
To participate in the teleconference, please register at the following address: http://emea.directeventreg.com/registration/3683345. You will receive dial-in details by e-mail once you have registered. If problems occur, please press *0 for operator assistance. Please press *6 to mute your phone during the teleconference and to unmute.
A recording of the webcast will be available on the company website later during the day.
For further information, please contact:
Executive Vice President & CFO
Tel: +358 10 709 5444
Vice President, Investor Relations
Tel: +358 10 709 5637
For press information, please contact:
Executive Vice President, Communications, Branding & Marketing
Tel: +358 10 709 5599
Wärtsilä in brief
Wärtsilä is a global leader in smart technologies and complete lifecycle solutions for the marine and energy markets. By emphasising sustainable innovation, total efficiency and data analytics, Wärtsilä maximises the environmental and economic performance of the vessels and power plants of its customers. In 2018, Wärtsilä’s net sales totalled EUR 5.2 billion with approximately 19,000 employees. The company has operations in over 200 locations in more than 80 countries around the world. Wärtsilä is listed on Nasdaq Helsinki.