Wärtsilä Interim Report January-March 2012

Wärtsilä Corporation, Stock exchange release 20 April 2012 at 11:30 UTC+2

Interim report Q1 2012


- Order intake increased 13% to EUR 1,109 million (979)
- Book-to-bill 1.10 (0.90)
- At the end of the period the order book totalled EUR 4,409 million (3,669), +20%
- Net sales decreased 7% to EUR 1,005 million (1,083)
- Operating result EUR 102 million, or 10.1% of net sales (EUR 113 million and 10.4%)
- Earnings per share 0.33 euro (0.38)
- Cash flow from operating activities EUR 28 million (133)
- The acquisition of Hamworthy became effective on 31 January 2012

“The year has started rather well with order intake increasing by 13%. Our profitability was 10.1% and we are well on track to reach our targets for this year. Our net sales development was in line with our overall expectation of rather low Power Plants and Ship Power deliveries during the first quarter. Services’ net sales grew by 12% with the increase coming from both parts and field services. During the first quarter, we signed a service agreement with US-based Prestige Cruise Holdings, as well as an operations & management agreement with Energética Suape II SA in Brazil for the largest power plant ever delivered by Wärtsilä. These contracts signify our commitment to deliver lifecycle value to our customers.

The offshore market was active, and we received a repeat order from Harvey Gulf International to supply integrated solutions for two gas fuelled offshore support vessels that will operate in the Gulf of Mexico. Power Plants’ major orders included a dual-fuel power plant from Matanuska Electric Association in Alaska, USA and Indonesia’s first gas engine peaking plant ordered by PT Perusahaan Listrik Negara.

Integration of the recently acquired company Hamworthy is proceeding according to plan and the company is performing better than expected. Our target is to double Hamworthy’s net sales within the next five years.”


1-3/2012 1-3/2011 Change2011
Order intake1 10997913%4 516
Order book at the end of period 4 4093 66920%4 007
Net sales 1 0051 083-7%4 209
Operating result (EBITA)  1109117-7%485
% of net sales  10.910.8 11.5
Operating result (EBIT) 2102113-10%469
% of net sales  10.110.4 11.1
Profit before taxes93107 429
Earnings/share, EUR0.330.38 1.44
Cash flow from operating activities28133 232
Net interest-bearing debt
at the end of the period
615-17 58
Gross capital expenditure48119 187
Gearing0.400.00 0.04

1 EBITA is shown excluding non-recurring items of EUR 7 million (2) and intangible asset amortisation of EUR 8 million (4) related to acquisitions.
2 EBIT is shown excluding non-recurring items.

The power generation market is expected to remain at a good level in 2012. The growing emerging markets will continue to invest in new power generation capacity, which will drive demand - especially in the flexible baseload segment. In the OECD countries, there is still pent-up power sector demand, mainly driven by CO2 neutral generation and the ramp down of older, mainly coal-based, generation.

The overall outlook for vessel contracting activity during 2012 remains largely unchanged, with full year contracting expected to be at a similar level or slightly lower than in 2011. Contracting is expected to remain slow for bulk carriers, container vessels and tankers. In these sectors efficient designs are expected to be a common theme in contracting negotiations, due to economic pressures to reduce fuel consumption. Contracting in the LNG carrier segment is expected to remain robust during the year, with levels in line with activity seen during the first quarter of 2012. The offshore segment continues to present good future contracting opportunities, especially for drilling ships and support vessels. The interest for gas fuelled vessels has increased also in segments that have not previously been powered by gas. The environmental agenda is also expected to remain a central issue, thus driving interest in solutions for environmental compliance.

Despite the slightly improved market situation in the first quarter, some uncertainties remain in the service market. The merchant marine segments are still expected to be under pressure, as overcapacity in the market continues to impact the potential for services in this area. Development in the active installed base is also expected to be moderate, with continued scrapping, layups, slow steaming, and the low utilisation of vessels in the merchant segments. The power plant service market is expected to develop steadily.

Wärtsilä expects its net sales for 2012 to grow by 5-10% and its operational profitability (EBIT% before non-recurring items) to be 10-11%.

Wärtsilä Corporation now follows the disclosure procedure enabled by Standard 5.2b published by the Finnish Financial Supervision Authority. This stock exchange release is a summary of Wärtsilä Corporation’s Interim Report January-March 2012. The complete report is attached to this release in pdf format and is also available on Wärtsilä’s website at www.wartsila.com/investors.

An analyst and press conference will be held on Friday 20 April 2012 at 10.00 a.m. Finnish time (8.00 a.m. UK time), at the Wärtsilä headquarters in Helsinki, Finland. The combined web- and teleconference will be held in English and can be viewed on the internet at the following address: http://storm.zoomvisionmamato.com/player/wartsila/objects/wpv7dztb/.

To participate in the teleconference please register at the following address: http://www.yourconferencecentre.com/r.aspx?p=1&a=DImwrHYMdWeikT.
You will receive dial-in details by e-mail once you have registered. If you want to ask questions during the teleconference, press the *-button followed by the 1-button on your phone to register for a question and the # -key to withdraw a question. The event name is: Q1 Results 2012. Please be ready to state your details and the name of the conference to the operator. If problems occur, please press the *-button followed by the 0-button.

An on-demand version of the webcast will be available on the company website later the same day.

For further information, please contact:

Raimo Lind
Executive Vice President & CFO
Tel: +358 10 709 5640

Pauliina Tennilä
Director, Investor Relations
Tel: +358 40 570 5530

For press information, please contact:

Atte Palomäki
Group Vice President, Communications & Branding
Tel: +358 40 547 6390

Wärtsilä in brief
Wärtsilä is a global leader in complete lifecycle power solutions for the marine and energy markets. By emphasising technological innovation and total efficiency, Wärtsilä maximises the environmental and economic performance of the vessels and power plants of its customers. In 2011, Wärtsilä’s net sales totalled EUR 4.2 billion with approximately 18,000 employees. The company has operations in nearly 170 locations in 70 countries around the world. Wärtsilä is listed on the NASDAQ OMX Helsinki, Finland.