jp morgan european capital goods ceo conference

© Wärtsilä PUBLIC

WÄRTSILÄ CORPORATIONJP MORGAN CAZENOVEEUROPEAN CAPITAL GOODS CEO CONFERENCE

Jaakko EskolaPresident & CEO

16 June 2017 Jaakko Eskola1

© Wärtsilä PUBLIC 16 June 2017 Jaakko Eskola2

Wärtsilä’s net sales by business Q1/2017

ENERGY SOLUTIONS, 24%

MARINE SOLUTIONS, 28%

SERVICES, 49%


8.7% 8.5%

0%

2%

4%

6%

8%

10%

12%

14%

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1200

Q1/2016 Q1/2017

10,9 % 11,2 %11,9 % 12,2 % 12,1 %

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14%

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500

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1 500

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2012 2013 2014 2015 2016

Net sales Comparable operating result, % of net sales


Net sales and profitability

MEUR

Figures for 2012-2013 include both discontinued and continuing operations.

First quarter development


SERVICES

We are where our customers need us to be11,000 service professionals in 70 countries, 160 locations…

Marine installed base by operating countryPower installed base by operating countryService locations


0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

2 200

2 400

2013 2014 2015 2016 2017


Services’ net sales development

SERVICES

MEUR

First quarter developmentEUR 490 million (500)

Q1 Q2-Q4

Merchant24% (26)

Power plants37% (35)

Cruise & ferry16% (14)

Navy9% (9)

Special vessels7% (7)

Offshore7% (9)


SERVICES

Strategic focus areas

Growth throughvalue-adding lifecycle services & projects

Growth through optimising customer performance

Growth in existing business by improving customer loyalty

CUSTOMER FIRST GO DIGITAL NEW CUSTOMERACCESS

ASSET & LIFECYCLE MANAGEMENT

Growth beyondthe traditional Wärtsiläinstalled base


• 12-year agreement • Ensuring safety and reliability of Carnival’s fleet • Reducing operational costs• Wärtsilä provides all engine maintenance and

monitoring for fleet of 79 vessels• Continuous planning together with Carnival• Performance-based revenue model• Wärtsilä’s biggest service contract in history

• Digitising fleet operations

Wärtsilä and Carnival Corporation announce strategic partnership


ENERGY SOLUTIONS

Market trends & drivers

• Growth in sustainable energy, reducing carbon emissions

• Rapid growth of intermittent renewable generation and escalating demand fluctuation

• Economic growth, electrification and improving standard of living

• Ageing installed capacity driving investments innew technologies

• Natural gas replacing other fossil fuels

• Storage systems needed in order to support renewable intermittent energies


Strong ordering activity in Energy Solutions

ENERGY SOLUTIONS

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2013 2014 2015 2016 2017

MEUR

Utilities

Industrials

First quarter developmentTotal EUR 405 million (312)

First quarter order intakeby fuel in MW

Gas76%

Oil24%

Q1

Independentpower producers73%

19%

8%

Q2-Q4

© Wärtsilä PUBLICENGINE POWER PLANTSSOLAR PV AND ENGINE-SOLAR

HYBRID POWER PLANTS

LNG INFRASTRUCTURE

ENERGY STORAGE INTEGRATION

CAPTURING GROWTHTHROUGH GLOBAL

ENERGY SYSTEMS INTEGRATION

ENERGY SOLUTIONS


• A US-based leader in intelligent energy storage technology and solutions

• Specialised in energy storage optimization and integration software

• Through the acquisition Wärtsilä expands its footprint in the energy storage market with solutions that combine and optimise different forms of power generation, energy storage and demand side management

The acquisition of Greensmith will enable Wärtsilä to become a global systems integrator


MARINE SOLUTIONS THE MOST COMPLETE MARINE OFFERING ON EARTH


MARINE SOLUTIONS

Market trends & drivers

• Urbanisation, globalisation and population growth support seaborne trade development

• Technological developments and new breakthroughs create a need for new business models

• Increasing consumption and growing middle class population support demand for cruise sector

• Gas remains an important fuel


0,0

0,5

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01.0

903

.09

05.0

907

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09.0

911

.09

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003

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05.1

007

.10

09.1

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.10

01.1

103

.11

05.1

107

.11

09.1

111

.11

01.1

203

.12

05.1

207

.12

09.1

211

.11

01.1

303

.13

05.1

307

.13

09.1

311

.13

01.1

403

.14

05.1

407

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09.1

411

.14

01.1

503

.15

05.1

507

.15

09.1

511

.15

01.1

603

.16

05.1

607

.16

09.1

611

.16

01.1

703

.17

05.1

7

Mill

ion

CG

T

Num

ber o

f ves

sels

Merchant Offshore Cruise and Ferry Special vessels 3 months moving average in CGT


Marine market environment continues to be soft

MARINE SOLUTIONS

Source: Clarkson Research Services, figures exclude late contracting* CGT= gross tonnage compensated with workload

*

*


Marine Solutions’ order intake satisfactory

MARINE SOLUTIONS

0

300

600

900

1 200

1 500

1 800

2013 2014 2015 2016 2017

First quarter developmentTotal EUR 322 million (379)

Offshore3%

Traditionalmerchant

19%Others

4%

Gas carriers33%

Navy 8%

MEUR

Q1

Cruise23%

Special vessels6%

Q2-Q4

Ferry4%

© Wärtsilä PUBLIC Jaakko Eskola17

Opportunities through our broad product portfolio and connectivity

MARINE SOLUTIONS

WÄRTSILÄ KNOWS GAS PORTFOLIO PROVIDES ROBUST SUPPORT FOR DIGITALISATION

MARINE HYBRID SOLUTIONS

Wärtsilä’s battery/hybrid systems include energy management control, power electronics and battery integrations

Data generation across the portfolio enabling big data analytics and a full-blown automation, navigation and control system offering

Wärtsilä is involved in the whole gas value chain

16 June 2017


The overall demand for Wärtsilä’sservices and solutions in 2017 is expected to be relatively unchanged from the previous year. Demand by business area is anticipated to develop as follows:

• Solid in Services with growth opportunities

• Good in Energy Solutions (upgraded from solid)

• Soft in Marine Solutions

Prospects for 2017Setti 1

Setti 1

© Wärtsilä PUBLIC© Wärtsilä 16 June 2017 Jaakko Eskola19

OUR LONG-TERM FINANCIAL TARGETS

Grow faster than global GDPFocus on strengthening our position in strategic growth markets

Reach 14%profitabilityEnhanced performance through continuous improvement

Maintain gearing below 50%Unleveraged balance sheet supports growth through acquisitions

Dividend 50% of EPS over the cycleCommitted to providing solid shareholder returns


THANK YOU

IR Contact:Natalia ValtasaariDirector, Investor & Media RelationsTel. +358 (0) 40 187 7809E-mail: [email protected]


jp morgan european capital goods ceo conference

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