WÄRTSILÄ interim report January-March 2017

Marine Equipment Products and Services — By on April 26, 2017 at 7:22 AM

Wärtsilä Corporation INTERIM REPORT 26 April 2017 at 8.30 a.m. local time

WÄRTSILÄ INTERIM REPORT JANUARY-MARCH 2017

POSITIVE DEVELOPMENT IN ORDER INTAKE

This release is a summary of Wärtsilä’s Interim Report January-March 2017. The complete report is attached to this release as a pdf-file. It is also available at http://www.wartsilareports.com/en-US/2017/q1/frontpage/ and on the company website atwww.wartsila.com.

HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-MARCH 2017
Order intake increased 11% to EUR 1,413 million (1,271)
– Net sales increased 4% to EUR 1,007 million (967)
– Book-to-bill 1.40 (1.31)
– Comparable operating result increased to EUR 86 million (84), which represents 8.5% of net sales (8.7)
– Earnings per share declined to 0.28 euro (0.30)
– Cash flow from operating activities increased to EUR 2 million (-13)
– Order book at the end of the period was stable at EUR 5,096 million (5,103)

WÄRTSILÄ’S PROSPECTS FOR 2017
The overall demand for Wärtsilä’s services and solutions in 2017 is expected to be relatively unchanged from the previous year. Demand by business area is anticipated to be as follows:

  • Solid in Services with growth opportunities in selected regions and segments.
  • Good in Energy Solutions (previously solid), thanks to increasing electricity demand in the emerging markets and the global shift towards renewable energy sources, which will support the need for distributed, flexible, gas-fired power generation.
  • Soft in Marine Solutions. Although the outlook for the cruise and ferry segment is positive, the merchant, gas carrier, and offshore segments continue to suffer from overcapacity, slow trade growth, and the financial constraints of customers.

Wärtsilä’s current order book for 2017 deliveries is EUR 2,744 million (2,681), which mainly comprises Marine Solutions’ and Energy Solutions’ deliveries. Wärtsilä will continue to focus on improving efficiency, which is expected to partially offset lower volumes in the marine markets. The pricing environment in Energy Solutions’ markets has stabilised, but the order book is still impacted by the competitive pressure seen in previous years. The good performance in Services is expected to continue.

JAAKKO ESKOLA, PRESIDENT AND CEO
“Wärtsilä’s order intake development was clearly the highlight of the first quarter. Services’ order intake was boosted by growing interest in long-term service agreements, while customers in the energy markets continued to invest in new power generation, both in the emerging markets and industrialised countries. Orders received in the Marine Solutions business were also at a reasonable level, thanks to continued activity in the cruise and FSRU markets. Although vessel contracting has remained low, signs of improving sentiment indicate a gradual recovery in demand towards the latter part of the year.

The higher level of power plant deliveries supported both net sales development and our underlying performance in the first quarter. Looking ahead, we expect service activity to improve thanks to customers’ maintenance schedules and the increased demand for long-term agreements in both of our end markets. This, together with the stabilised pricing environment in Energy Solutions, provides a good basis for the second half of 2017.

KEY FIGURES

MEUR

1-3/2017

1-3/2016

Change

2016

Order intake

1 413

1 271

11%

4 927

Order book at the end of the period

5 096

5 103

0%

4 696

Net sales

1 007

967

4%

4 801

Operating result1

80

83

-4%

532

% of net sales

7.9

8.6

11.1

Comparable operating result

86

84

2%

583

% of net sales

8.5

8.7

12.1

Comparable adjusted EBITA

94

93

1%

618

% of net sales

9.4

9.6

12.9

Profit before taxes

74

80

479

Earnings/share, EUR

0.28

0.30

1.79

Cash flow from operating activities

2

-13

613

Net interest-bearing debt at the end of the period

260

639

150

Gross capital expenditure

9

11

146

Gearing

0.13

0.32

 

0.07

1Items affecting comparability in the first quarter of 2017 included costs related to restructuring programmes of EUR 6 million (1).

ANALYST AND PRESS CONFERENCE
An analyst and press conference will be held today, Wednesday 26 April 2017, 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 at the following address:
http://wcc.webeventservices.com/r.htm?e=1400874&s=1&k=8313E441822FC1CF85A246AAF2D74652. To participate in the teleconference please register at the following address:http://emea.directeventreg.com/registration/2005373. 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 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.

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