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WÄRTSILÄ CORPORATION INTERIM REPORTJANUARY-SEPTEMBER 2016

Positive development in order intake

“The third quarter of 2016 developed largely in line with our expectations. As anticipated, the concentration of deliveries towards the end of the year resulted in lower sales, which burdened our operating result. We continue to focus on increasing efficiency and flexibility within our organisation.

Although service activity has stabilised at a high level, we remain confident in the positive long-term drivers. In the equipment markets, the demand for new vessels was weak, reflecting the challenges related to overcapacity and low earnings. Nevertheless, improved sentiment in the power generation markets has contributed to the growth in overall order intake. I am pleased to note that a solid project pipeline supports continued momentum in our Energy Solutions business.

Despite the growth in order intake, lower than anticipated power plant deliveries in the current year has caused us to adjust our guidance for 2016. We now expect a small decline in sales, and estimate profitability to be around 12%.”

 

Wärtsilä's prospects for 2016

Wärtsilä revised its prospects on 12 October 2016. Wärtsilä now expects its net sales to decline by around 5% and its profitability (comparable operating result as a percent of net sales) to be around 12%. Previously Wärtsilä expected its net sales to grow by 0-5% and its profitability to be 12.5-13.0%.

Third quarter highlights

    • Order intake increased 5% to EUR 1,139 million (1,086)
    • Net sales decreased 12% to EUR 1,079 million (1,222)
    • Book-to-bill 1.06 (0.89)
    • Comparable operating result EUR 123 million, or 11.4% of net sales (EUR 160 million or 13.1%)
    • Earnings per share 0.43 euro (0.49)
    • Cash flow from operating activities EUR 189 million (-5)

 

Highlights of the review period January-September 2016

    • Order intake increased 2% to EUR 3,604 million (3,529)
    • Net sales decreased 6% to EUR 3,242 million (3,439)
    • Book-to-bill 1.11 (1.03)
    • Comparable operating result EUR 330 million, or 10.2% of net sales (EUR 397 million or 11.5%)
    • Earnings per share 0.92 euro (1.46)
    • Cash flow from operating activities EUR 378 million (78)
    • Order book at the end of the period decreased 2% to EUR 5,024 million (5,112)

Key figures

MEUR 7-9/2016 7-9/2015 Change 1-9/2016 1-9/2015 Change 2015
Order intake 1 139 1 086 5% 3 604 3 529 2% 4 932
Order book at the end of the period 5 024 5 112 -2% 4 882
Net sales 1 079 1 222 -12% 3 242 3 439 -6% 5 029
Operating result1 122 149 -18% 301 386 -22% 587
% of net sales 11.3 12.2 9.3 11.2 11.7
Comparable operating result 123 160 -23% 330 397 -17% 612
% of net sales 11.4 13.1 10.2 11.5 12.2
Comparable adjusted EBITA 132 170 -22% 356 420 -15% 643
% of net sales 12.3 13.9 11.0 12.2 12.8
Profit before taxes 115 132 -13% 253 354 -29% 553
Earnings/share, EUR 0.43 0.49 0.92 1.46 2.25
Cash flow from operating activities 189 -5 378 78 255
Net interest-bearing debt at the end of the period 384 513 372
Gross capital expenditure 126 314 346
Gearing 0.18 0.26 0.17
1Items affecting comparability included restructuring costs of EUR 2 million (11) in the third quarter of 2016. During the review period January-September 2016 restructuring costs amounted to EUR 29 million (11), of which EUR 17 million were non-cash write-downs.

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