CEO review

“Supported by a strong fourth quarter and a focus on cost control, our full year operational profitability reached 11.2%. ”

BJÖRN ROSENGREN President & CEO

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Resilient profitability and strong cash flow in challenging markets


"Wärtsilä’s performance in 2013 was impacted by the continued uncertainty in the global economy. Due to unfavorable exchange rates and some delayed deliveries, the net sales development was slightly weaker than expected. However, profitability remained resilient despite the lower level of sales. Supported by a strong fourth quarter and a focus on cost control, our full year operational profitability reached 11.2%. Cash flow from operating activities developed well, increasing to EUR 578 million during the year. There was significant improvement in the marine markets during 2013, and ordering was active in all major vessel segments. In the power plant markets delays in customer decision-making continued. This impacted our Group order intake levels, which decreased by 1% compared to the previous year. The service markets remained stable. Long-term agreements continue to be a strategic focus area for the Services business, and I am pleased that several such contracts were signed during the year.

Our market outlook for 2014 remains cautious, although a slight improvement may be seen in certain areas. Based on our current order book and project pipeline we expect some growth in net sales during 2014 and profitability to remain at a similar level to that of 2013."

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BJÖRN ROSENGREN President & CEO

Prospects for 2014

Wärtsilä expects its net sales for 2014 to grow by 0-10% and its operational profitability (EBIT% before non-recurring items) to be around 11%.

Fourth quarter highlights
  • Order intake remained stable at EUR 1,351 million (1,357)
  • Net sales decreased 8% to EUR 1,411 million (1,533)
  • Book-to bill 0.96 (0.89)
  • Operating result before non-recurring items EUR 201 million, or 14.2% of net sales (EUR 188 million or 12.3%)
  • EBITA EUR 208 million, or 14.8% of net sales (EUR 198 million or 12.9%)
  • Earnings per share EUR 0.74 (0.62)
  • Cash flow from operating activities EUR 317 million (187)

 

Events after the reporting period
  • A Group-wide efficiency programme was announced on 29 January 2014
1-12/2013 review period highlights
  • Order intake decreased 1% to EUR 4,872 million (4,940)
  • Net sales decreased 1% to EUR 4,654 million (4,725)
  • Book-to bill 1.05 (1.05)
  • Order book at the end of the period decreased by 1% to EUR 4,426 million (4,492)
  • Operating result before non-recurring items EUR 520 million, or 11.2% of net sales (EUR 517 million or 10.9%)
  • EBITA EUR 552 million, or 11.9% of net sales (EUR 552 million or 11.7%)
  • Earnings per share EUR 1.98 (1.72)
  • Cash flow from operating activities EUR 578 million (153)
  • Dividend proposal 1.05 euro per share
Key figures
Restated3 Restated3
MEUR 10-12/2013 10-12/2012 Change 1-12/2013 1-12/2012 Change
Order intake 1 351 1 357 0% 4 872 4 940 -1%
Order book at the end of the period 4 426 4 492 -1%
Net sales 1 411 1 533 -8% 4 654 4 725 -1%
Operating result (EBITA)1 208 198 5% 552 552 0%
% of net sales 14.8 12.9 11.9 11.7
Operating result (EBIT)2 201 188 7% 520 517 1%
% of net sales 14.2 12.3 11.2 10.9
Profit before taxes 181 162 507 453
Earnings/share, EUR 0.74 0.62 1.98 1.72
Cash flow from operating activities 317 187 578 153
Net interest-bearing debt at the end of the period 276 567
Gross capital expenditure 134 513
Gearing 0.15 0.32

1 EBITA is shown excluding non-recurring items of EUR 20 million (34) and intangible asset amortisation related to acquisitions of EUR 32 million (35) during the review period January-December 2013. During the fourth quarter, non-recurring items amounted to EUR 9 million (17) and intangible asset amortisation related to acquisitions to EUR 8 million (10).
2 EBIT is shown excluding non-recurring items.
3 Figures have been restated due to changes in pension accounting (IAS 19 Employee benefits).

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