Wärtsilä’s Interim Financial Report January–March 2021

Wärtsilä Corporation,
  • Stock exchange release
22 April 2021 at 8:30 AM E. Europe Standard Time

Wärtsilä’s Interim Financial Report January–March 2021 

ORDER INTAKE STABLE, BUT COVID-19 CONTINUES TO BURDEN NET SALES AND PROFITABILITY 

This release is a summary of Wärtsilä’s Interim Report January–March 2021. The complete report is attached to this release as a pdf file. It is also available on the company website at www.wartsila.com

HIGHLIGHTS OF JANUARY–MARCH 2021 

  • Order intake was stable at EUR 1,244 million (1,247) 
  • Order book at the end of the period decreased by 6% to EUR 5,399 million (5,745) 
  • Net sales decreased by 19% to EUR 946 million (1,170) 
  • Book-to-bill amounted to 1.32 (1.07) 
  • Comparable operating result decreased by 28% to EUR 41 million (56), which represents 4.3% of net sales (4.8). This includes approximately EUR 20 million net provisions arising from a detailed project risk review in Wärtsilä Energy. 
  • Operating result decreased by 30% to EUR 36 million (52), which represents 3.8% of net sales (4.5) 
  • Earnings per share decreased to 0.04 euro (0.05) 
  • Cash flow from operating activities increased to EUR 67 million (42) 

WÄRTSILÄ'S PROSPECTS 

Wärtsilä expects the near-term demand environment to be somewhat better than that of the corresponding period in the previous year. However, visibility remains limited, and the prevailing market conditions make the outlook uncertain. 

HÅKAN AGNEVALL, PRESIDENT AND CEO 

“During the first quarter of 2021, the prolonged COVID-19 pandemic continued to pose challenges to our business operations, our people, and our financial performance. The cruise industry remained depressed, customers held up investments in new power plant capacity, deliveries were delayed, and profitability remained low due to cost inflation and fixed cost under absorption. However, there were signs of stabilisation and recovery. Vessel ordering activity in general improved, and the demand for services and energy storage solutions was at a good level. As a result, our order intake remained stable compared to the first quarter of 2020, despite the pandemic having a larger impact during the first quarter of 2021. Vaccination programmes are ongoing in many countries, although at varying speeds. This makes us cautiously optimistic about further recovery in the marine markets, while recovery in many of our core energy markets is expected to take longer. Furthermore, our firm focus on working capital resulted in yet another quarter of positive cash flow development. It is of utmost importance to maintain cost control and preserve cash in order to maintain a strong position in the low-demand markets. We will continue to carefully consider our capacity needs and adjust if and where needed. 

We have several exciting R&D and strategic projects ongoing, both in-house and together with our partners. These are aimed at accelerating the decarbonisation of the energy and marine industries. During the quarter, we announced that we are installing a pilot plant in Norway to test our carbon capture and storage technologies, and we launched further cost-optimised grid balancing technology capable of ramping up to full load in two minutes. In addition, we are co-operating with several stakeholders in Finland with the aim of utilising emission-free hydrogen in power production, industry, and traffic applications. We also established a strategic partnership with Ocean Technologies Group to enhance safety and efficiency in the maritime sector by combining on-demand digital training, virtual and simulation events via cloud-based solutions, and in-person learning experiences. 

In the era of rapid development of new technologies, our starting point will be how we best can make our customers more successful. We will focus on open innovation, services, and cooperation with an end-to-end perspective. Embracing new ideas and sharing best practices will be key, with the ambition to learn something new every day. The technological changes taking place in both of our end-markets during this decade will be more extensive than anything seen during the past 30 years and will result in significant opportunities for Wärtsilä. I believe that with our customer-oriented and innovation-driven culture, leading technologies, highly skilled people, and extensive service network, we are well positioned to harvest on those opportunities. 

Visibility into demand development remains low, as the market environment continues to be challenging and unpredictable. We expect the near-term demand environment to be somewhat better than that seen a year ago. Despite our cautious market outlook, we believe that the increasing demand for efficiency and alternative fuels, the digital transformation, and changing energy needs will work in our favour over the long term. In order to maintain our technological leadership, we will continue to invest in developing our fuel flexible solutions and digital offering.” 

KEY FIGURES 

MEUR  1–3/2021  1–3/2020  Change  2020 
Order intake  1,244  1,247  0%  4,359 
of which services  704  635  11%  2,267 
Order book, end of period  5,399  5,745  -6%  5,057 
Net sales  946  1,170  -19%  4,604 
of which services  550  593  -7%  2,255 
Book-to-bill  1.32  1.07  0.95 
Operating result  36  52  -30%  234 
% of net sales  3.8  4.5  5.1 
Comparable operating result  41  56  -28%  275 
% of net sales  4.3  4.8  6.0 
Comparable adjusted EBITA*  49  65  -25%  308 
% of net sales  5.1  5.6  6.7 
Profit before taxes  35  43  -19%  191 
Earnings/share, EUR  0.04  0.05  0.23 
Cash flow from operating activities  67  42  681 
Net interest-bearing debt, end of period  419  849  394 
Gross capital expenditure  29  27  117 
Gearing  0.20  0.42  0.18 
Solvency, %  37.0  35.3  38.1 
Personnel, end of period  17,742  18,642  -5%  17,792 

*Comparable adjusted EBITA excludes items affecting comparability and purchase price allocation amortisation. 

Wärtsilä’s financial information for the first quarter of 2020 has been adjusted to reflect the group’s new reporting structure. As of the second quarter of 2020, Marine Power, Marine Systems, Voyage, and Energy constitute the reportable segments of the group, while Portfolio Business continues to be reported as other business activities. This restatement has no impact on the group’s total financial figures.  

Wärtsilä presents certain alternative performance measures in accordance with the guidance issued by the European Securities and Markets Authority (ESMA). The definitions of these alternative performance measures are presented in the Calculations of financial ratios section. 

ANALYST AND PRESS CONFERENCE 

A virtual analyst and press conference will be held as a webinar today, Thursday 22 April 2021, at 10:00 a.m. Finnish time (8:00 a.m. UK time).  

If you only wish to view the stream, please register at: http://www.mediaserver.fi/live/wartsila
 
If you plan to view the stream and ask questions in the Q&A session, please register at: https://attendee.gotowebinar.com/register/6183517468884024075
 
Please register using only one of the links above, not both. Once you have registered, you will receive a confirmation email that includes specific joining instructions. 

*** 
 
Please note that there will be no separate audio (phone) line for the event. The Q&A session will use the audio in the GoToWebinar tool itself. In case you are joining via mobile, you may need to install the free GoToWebinar app from the app store. 
 
To enter into the questions and answers queue, please use the raise your hand function in the webinar platform and unmute your microphone when the moderator announces your name. Please remember to lower your hand once your question has been answered. 
 
For more information on joining and setting up your audio for Q&A, you may visit the official GoToWebinar attendee joining guide at: https://support.goto.com/webinar/how-to-join-attendees. Instructions on Q&A related functionalities can be found at: https://support.logmeininc.com/gotowebinar/help/raise-your-hand

 
A recording of the webcast will be available on the company website as soon as possible after the event. 

For further information, please contact: 

Arjen Berends 
Executive Vice President & CFO  
Tel. +358 10 709 5444 
arjen.berends@wartsila.com 

Emilia Rantala 
Manager, Investor Relations 
Tel. +358 10 709 1114 
emilia.rantala@wartsila.com 

For press information, please contact: 

Atte Palomäki 
Executive Vice President, Communications, Branding & Marketing 
Tel: +358 10 709 5599 
atte.palomaki@wartsila.com

 

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 2020, Wärtsilä's net sales totalled EUR 4.6 billion with approximately 18,000 employees. The company has operations in over 200 locations in more than 70 countries around the world. Wärtsilä is listed on Nasdaq Helsinki. 
www.wartsila.com

Interim report Q1 2021

© 2021 Wärtsilä