Wärtsilä half year financial report January-June 2017

Marine Equipment Products and Services, Reports — By on July 20, 2017 at 5:39 AM

WÄRTSILÄ HALF YEAR FINANCIAL REPORT JANUARY-JUNE 2017

GROWTH IN ORDERS AND NET SALES IN THE FIRST HALF OF 2017

This release is a summary of Wärtsilä’s Half year financial report January-June 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/q2/frontpage/ and on the company website at www.wartsila.com.

SECOND QUARTER HIGHLIGHTS
– Order intake increased 14% to EUR 1,363 million (1,194)
– Net sales increased 8% to EUR 1,292 million (1,196)
– Book-to-bill 1.05 (1.00)
– Comparable operating result increased to EUR 126 million (122), which represents 9.7% of net sales (10.2)
– Earnings per share increased to 0.38 euro (0.19)
– Cash flow 
from operating activities decreased to EUR 2 million (202)

HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-JUNE 2017
– 
Order intake increased 13% to EUR 2,776 million (2,465)
– Net sales increased 6% to EUR 2,299 million (2,163)
– Book-to-bill 1.21 (1.14)
– Comparable operating result increased to EUR 211 million (206), which represents 9.2% of net sales (9.5)
– Earnings per share increased to 0.66 euro (0.49)
– Cash flow from operating activities decreased to EUR 3 million (189)
– Order book at the end of the period amounted to EUR 5,065 million (5,083)

WÄRTSILÄ’S PROSPECTS FOR 2017
Wärtsilä’s overall development 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, 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.
  • Solid in Marine Solutions (raised from soft), thanks to a favourable vessel contracting mix. The general marine market environment remains challenging, as 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 2,087 million (2,061). 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
“The first half of 2017 was characterised by good development in net sales, largely due to an increase in the number of power plant deliveries, as well as by solid earnings. Order intake developed well in all business areas. The power plant project pipeline has continued to materialise into orders at a healthy pace, thanks to the growing interest in flexible, gas-fired technologies. Furthermore, although the marine markets remain challenging, a favourable vessel contracting mix supported the development of Marine Solutions’ orders received, particularly in the second quarter. Activity in the service markets was broadly stable, with healthy demand for long-term agreements. I am pleased that our customers continue to see the value of entering into service partnerships with Wärtsilä, which provides a good basis for future development.

Wärtsilä’s ambition is to become an agile technology company dedicated to improving customers’ operations by being a leader in smart marine and smart energy ecosystems. The recent acquisitions of Eniram and Greensmith, as well as our cleantech innovations, demonstrate our active role in enabling sustainable societies and in helping customers to benefit from smart technologies. To support the development of our digital services and products, we are launching digital acceleration centres where promising ideas are developed and co-created into service concepts and products together with customers and partners. I am confident that the investments into our company-wide digital transformation will drive new business opportunities, ultimately strengthening our competitive positioning, and supporting our long-term target of profitable growth.

KEY FIGURES

 

MEUR

4-6/2017

4-6/2016

Change

1-6/2017

1-6/2016

Change

2016

Order intake

1 363

1 194

14%

2 776

2 465

13%

4 927

Order book at the end of the period

5 065

5 083

0%

4 696

Net sales

1 292

1 196

8%

2 299

2 163

6%

4 801

Operating result1

117

96

22%

197

179

10%

532

% of net sales

9.1

8.0

8.6

8.3

11.1

Comparable operating result

126

122

3%

211

206

2%

583

% of net sales

9.7

10.2

9.2

9.5

12.1

Comparable adjusted EBITA

134

131

3%

228

224

2%

618

% of net sales

10.4

10.9

9.9

10.3

12.9

Profit before taxes

103

58

77%

177

138

28%

479

Earnings/share, EUR

0.38

0.19

0.66

0.49

1.79

Cash flow from operating activities

2

202

3

189

613

Net interest-bearing debt at the end of the period

299

517

150

Gross capital expenditure

20

71

146

Gearing

 

 

 

0.14

0.25

 

0.07

1Items affecting comparability in the second quarter of 2017 included costs related to restructuring programmes of EUR 8 million (26). During the review period January-June 2017 restructuring costs amounted to EUR 14 million (27).


ANALYST AND PRESS CONFERENCE

An analyst and press conference will be held today, Thursday 20 July 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=1455716&s=1&k=F4FCB18C6E814C9CFA8BA5FA2F4B8FA6. To participate in the teleconference please register at the following address: http://emea.directeventreg.com/registration/45544446. 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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