Wärtsilä Corporation Annual report 2014

Highlights 2014

Wärtsilä’s performance in 2014 was in line with the targets set for the year. Supported by a strong fourth quarter, net sales increased by 4%. Profitability reached 11.9%, which is at the upper end of the guided 11.5-12.0% range. Order intake grew by 5%, with good development in Ship Power and Services orders.

Power generation markets were challenging throughout 2014, with macroeconomic uncertainty and slow global growth projections impacting customer decision-making. Activity improved after the summer, supported by the demand for new power plants in the emerging markets and the dollar strengthening against euro. Power Plants’ order intake development was stable compared to the previous year, as the growth seen during the second half compensated for a difficult first six months. Although overall vessel contracting slowed in 2014, the ordering of gas carriers was robust and there was continued demand for specialised tonnage. Consequently Ship Power’s orders outperformed the markets, increasing by 6%. Service markets developed well. Marine customers’ service demand improved in the second half, and the demand for power plant related services was healthy throughout the year. Supported by an all-time high fourth quarter, Services’ full year net sales increased by 5%.

During the year, Wärtsilä continued to develop its business by expanding its product offering, strengthening its manufacturing capabilities in key emerging markets, and pursuing growth opportunities through acquisitions. In July, Wärtsilä and China State Shipbuilding Corporation (CSSC) agreed to establish a joint venture to take over Wärtsilä's two-stroke engine business. Subsequently, Wärtsilä began reporting the two-stroke business as discontinued operations. The reorganisation of the two-stroke business will have a positive effect of Wärtsilä's continuing operations. The joint venture, Winterthur Gas and Diesel Ltd, was finalised in January 2015. In December, Wärtsilä announced the acquisition of L-3 Marine Systems International, a global supplier of automation, navigation and electrical systems to the marine, naval and offshore markets. Through this acquisition Wärtsilä's position in the electrical and automation business will be unique in terms of sector competence and product offering.

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Net sales
Restated*
MEUR 2014 2013 Change %
Power Plants 1 138 1 459 -22%
Ship Power 1 702 1 309 30%
Services 1 939 1 842 5%
Other -2
Group 4 779 4 607 4%
*Figures include continuing operations.

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