Björn Rosengren President & CEO of Wärtsilä delivers his year 2012 financial results message to shareholders.
Extracts from the message follow:
"During 2012, we closed our largest ever acquisition with the purchase of Hamworthy. This acquisition supports our growth strategy in the marine gas, offshore and environmental solutions markets, and Hamworthy has performed well while being integrated to our Ship Power business.
In 2012, the Power Plants business received two of its largest orders ever; a 384 MW power plant to be built in Azerbaijan followed by a 573 MW order from Jordan. I am also very pleased that Services' net sales returned to growth and reached an all time high level.
Supported by the positive development in all three businesses, as well as by the acquisition of Hamworthy, our net sales grew by 12%. At the same time we kept our profitability solid at 10.9%.
In Ship Power markets, the traditional merchant segment continued to struggle with overcapacity and, as a result the number of global vessel orders was 35% down from the previous year. Despite the weak overall markets, Wärtsilä Ship Power performed strongly and its order intake grew by 45%.
Our position is good in the growing offshore markets, not least in Brazil where we secured several important orders. There was continued strong interest in marine gas solutions, and the orders received demonstrate our leading position in the dual-fuel markets.
In line with the Ship Power strategy, Wärtsilä received several significant orders for the delivery of total solutions, including ship design, propulsion machinery, automation and other equipment.
Strategically notable orders were also received for environmental solutions, such as the first orders for ballast water management systems and several orders for exhaust gas cleaning systems for SOx removal.
Overcapacity and low freight rates in the marine industry have impacted our Services customer base, and utilisation of the global fleet has been at historically low levels. After three stable years, growing by 5% in this tough environment was a great achievement.
During 2012, Wärtsilä invested more than ever in technological development, spending EUR 188 million on R&D activities. These activities were focused on developing technologies and products that meet the tightened environmental legislation and on products and solutions which can secure profitable operations for our customers. We are well positioned to reduce emissions and the use of natural resources, thanks to our various technologies, specialised services, and our continuous R&D efforts. Power production on land and at sea is a big responsibility, and thus efficiency, reliability and sustainable business practices are vital to us. We remain committed to supporting the UN Global Compact and its principles with respect to human rights, labour, the environment and anti-corruption.
Today, 35% of ships are built in China. In order to secure a strong presence in the important Chinese shipbuilding market, Wärtsilä signed an agreement with Yuchai Marine Power Co. Ltd. to establish a joint venture for manufacturing medium-speed marine engines. Furthermore, the existing Chinese joint venture factory manufacturing auxiliary engines is planning to expand its production capacity. Our strategic goal is to be the leader in complete lifecycle power solutions for the global marine markets and selected energy markets worldwide."