Interim report Q3 2013
NET SALES AND PROFITABILITY DEVELOPED WELL IN A CHALLENGING MARKET ENVIRONMENT
This release is a summary of Wärtsilä’s Interim Report January-September 2013. The complete report is attached to this release as a pdf-file. It is also available at http://www.wartsilareports.com/en-US/2013/q3/frontpage/ and on the company website at www.wartsila.com.
THIRD QUARTER HIGHLIGHTS
- Order intake decreased 14% to EUR 1,097 million (1,275)
- Net sales increased 11% to EUR 1,209 million (1,087)
- Book-to-bill 0.91 (1.17)
- Operating result before non-recurring items EUR 138 million, or 11.4% of net sales (EUR 113 million or 10.4%)
- EBITA EUR 146 million, or 12.1% of net sales (EUR 122 million or 11.2%)
- Earnings per share EUR 0.48 (0.38)
- Cash flow from operating activities EUR 139 million (121)
HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-SEPTEMBER 2013
- Order intake decreased 2% to EUR 3,520 million (3,583)
- Net sales increased 2% to EUR 3,243 million (3,191)
- Book-to-bill 1.09 (1.12)
- Operating result before non-recurring items EUR 319 million, or 9.8% of net sales (EUR 328 million or 10.3%)
- EBITA EUR 343 million, or 10.6% of net sales (EUR 354 million or 11.1%)
- Earnings per share EUR 1.24 (1.09)
- Cash flow from operating activities EUR 261 million (-34)
- Order book at the end of the period decreased by 3% to EUR 4,568 million (4,724)
BJÖRN ROSENGREN, PRESIDENT AND CEO:
“Our operations developed in line with our expectations during the third quarter. Net sales grew by 11% to EUR 1,209 million and profitability was 11.4%. With better visibility on net sales development, we specify our sales growth guidance to 0-5%, while our profitability estimate remains unchanged at around 11%.
Uncertainties in the global economy and fluctuations in emerging market currencies have caused power plant customers to delay decision-making, which has impacted our overall order intake development. In the marine markets, we see good activity across all the main vessel segments. The focus on fuel efficiency and competitive newbuilding prices are supporting investments in the merchant segment, while offshore markets remain active. Services net sales development was steady, which reflects the overall stability of the service market. Wärtsilä signed several long-term service agreements during the quarter, and we see further opportunities in this area.”
WÄRTSILÄ’S PROSPECTS FOR 2013 REVISED
Wärtsilä specifies its net sales prospects for 2013. Based on the current order book, net sales for 2013 is expected to grow by 0-5%. Previously, Wärtsilä estimated that its net sales would grow by 0-10%. Wärtsilä reiterates its expectations that operational profitability (EBIT% before non-recurring items) will be around 11%.
The general macro-economic uncertainty and the slow global growth projections continue to impact power generation markets. Based on weaker global ordering statistics in the first half-year, the overall market for natural gas and liquid fuel based power generation in 2013 is expected to decline. Ordering activity remains focused on the emerging markets, which continue to invest in new power generation capacity. 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.
Our outlook for the shipping and shipbuilding market in 2013 has improved. The lively ordering of product tankers, large containerships and gas carriers is expected to continue during the rest of the year. Furthermore, the offshore sector is expected to remain active, although with a different contracting mix that favours mobile drilling units and FPSOs more. Current emission regulations and the focus on fuel efficiency create interesting opportunities in gas fuelled vessels and environmental solutions. Financing is expected to remain difficult, but some signs of easing can be seen across the industry. Overall, the contracting mix is expected to be more balanced than in 2012, with activity in all major vessel segments.
The overall service market outlook remains stable. An increase in the installed base partly balances the slower service demand for older installations and the continued focus of merchant marine customers on reducing operating expenses. The outlook for services to the offshore industry and gas fuelled vessels remains positive. Demand for services in the power plant segment continues to be good, with opportunities for long-term agreements. The outlook for the Middle East and Asia remains slightly more positive, supported by interest in power plant related services. The outlook is also good in the Americas and in Africa.
ANALYST AND PRESS CONFERENCE
An analyst and press conference will be held on Thursday 24 October 2013 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:
To participate in the teleconference please register at the following address: http://emea.directeventreg.com/registration/79611431. You will receive dial-in details by e-mail once you have registered. If problems occur, please press *0 for operator assistance. Please use *6 to mute the sounds from your phone during the teleconference and the same code to unmute.
An on-demand version of the webcast will be available on the company website later the same day.
For further information, please contact:
Executive Vice President & CFO
Tel: +358 10 709 5640
Director, Investor Relations
Tel: +358 40 187 7809
For press information, please contact:
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 2012, Wärtsilä’s net sales totalled EUR 4.7 billion with approximately 18,900 employees. The company has operations in nearly 170 locations in 70 countries around the world. Wärtsilä is listed on the NASDAQ OMX Helsinki, Finland.