Wärtsilä Interim Report
Stable Development in the fist half of 2013
Second Quarter Highlights:
• Order intake decreased 11% to EUR 1,071 million (1,198)
• Net sales increased 5% to EUR 1,152 million (1,099)
• Book-to-bill 0.93 (1.09)
• Operating result EUR 111 million, or 9.6% of net sales (EUR 113 million or 10.3%)
• EBITA EUR 119 million, or 10.3% of net sales (EUR 123 million or 11.2%)
• Earnings per share EUR 0.39 (0.38)
• Cash flow from operating activities EUR 38 million (-183)
Highlights of the Review Period January-June 2013:
• Order intake increased 5% to EUR 2,424 million (2,308)
• Net sales decreased 3% to EUR 2,034 million (2,104)
• Book-to-bill 1.19 (1.10)
• Operating result EUR 181 million, or 8.9% of net sales (EUR 215 million or 10.2%)
• EBITA EUR 198 million, or 9.7% of net sales (EUR 232 million or 11.0%)
• Earnings per share EUR 0.76 (0.72)
• Cash flow from operating activities EUR 122 million (-154)
• Order book at the end of the period increased by 5% to EUR 4,763 million (4,515)
Bjorn Rosengren, President and CEO said:
"The second quarter development was reasonable considering the current economic situation, with net sales increasing by 5% and profitability at 9.6%. We continue to work towards reaching this year's growth and profitability targets. Marine markets are showing some signs of improvement, with the offshore and specialised vessel segments continuing to be active. Furthermore, competitive new building prices and the increased fuel efficiency of modern vessels are attracting investments in the merchant segment. Overall order intake levels were lower than in the previous year, especially in Power Plants where we are experiencing delays in customer decision-making. We have seen some recovery in the service markets, which was reflected in the Services' net sales increase of 4%. Supported by our solid order book and the stable Services business, our prospects for 2013 remain unchanged."
The general macroeconomic uncertainty and the slow global growth projections are expected to continue to impact the global power generation markets. It is expected that the overall market for natural gas and liquid fuel based power generation in 2013 will be similar to that of 2012. In 2013, ordering activity is expected to remain 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 is cautious, although market conditions are expected to be better than in 2012. Despite the continued activity in orders, financing and overcapacity related issues are still visible in the traditional merchant markets. The orders placed in these markets focus more on fuel-efficient design and technology. Current emission regulations create interesting opportunities in environmental solutions. The contracting mix is expected to be largely in line with that seen in 2012, favouring contracting in offshore and specialised vessel segments. The outlook for gas demand remains healthy and the attractiveness of LNG as a fuel is supported by its low carbon intensity, global trade, and pricing.
The overall service market outlook remains stable. A continued increase in the medium-speed engine and propulsion installed base helps to balance the market environment in regions such as Europe, where the market is expected to remain challenging - especially on the marine side. The outlook for offshore services remains positive. Interesting opportunities can be seen in long term service agreements for gas powered vessels. Demand for services in the power segment continues to be good. The outlook for the Middle East and Asia remains slightly more positive, supported by interest in power plant related service projects. The outlook is also good in the Americas, where there is a mix of marine and power plant customers.
Wärtsilä's Prospects for 2013 Unchanged:
Wärtsilä expects its net sales for 2013 to grow by 0-10% and its operational profitability (EBIT% before non-recurring items) to be around 11%.