Wärtsilä Corporation Interim Report q3 2014

CEO REVIEW

The third quarter was characterised by the strong development in order intake. I am confident that the positive trend will continue during the upcoming quarter.

-Björn Rosengren, President and CEO

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Good development in order intake and profitability

“The third quarter was characterised by the strong development in order intake. In the power generation markets customers are gradually beginning to commit to investments. The improved activity levels especially for smaller orders, combined with the 139 MW order we received from Mexico and the 112 MW order from North Dakota, resulted in a 47% increase in Power Plants’ order intake. In the marine markets the recent activity in LNG and LPG carriers has supported the ordering of gas handling systems. The 24% increase in Ship Power’s order intake was further enhanced by good activity in the cruise markets. I am confident that the positive trend in order development will continue during the upcoming quarter.

Third quarter net sales and profitability developed in line with our expectations. I am especially pleased that Services’ net sales grew by 9%, which shows that our focus on growth is paying off. Profitability reached 12.7% partly thanks to the ongoing efficiency program, which resulted in savings of EUR 10 million in the third quarter. Profitability has developed well thus far in 2014, reaching 11.5% for the period January-September, and consequently we raise our full year profitability guidance to 11.5-12.0%.”

björn-autograph.png

Björn Rosengren, President and CEO

WÄRTSILÄ'S PROSPECTS FOR 2014 REVISED

Wärtsilä estimates its profitability for 2014 (EBIT% before non-recurring items) to be 11.5-12.0%. Previously profitability was expected to be around 11.5%. Wärtsilä reiterates its expectation that net sales will grow by around 5%.


THIRD QUARTER HIGHLIGHTS

  • Order intake increased 21% to EUR 1,309 million (1,086)

  • Net sales decreased 7% to EUR 1,117 million (1,199)

  • Book-to-bill 1.17 (0.91)

  • Operating result before non-recurring items EUR 142 million, or 12.7% of net sales (EUR 148 million or 12.3%)

  • Earnings per share EUR 0.43 (0.48)

  • Cash flow from operating activities EUR 68 million (139)

HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-SEPTEMBER 2014

  • Order intake increased 2% to EUR 3,562 million (3,487)

  • Net sales increased 1% to EUR 3,230 million (3,203)

  • Book-to-bill 1.10 (1.09)

  • Operating result before non-recurring items EUR 373 million, or 11.5% of net sales (EUR 346 million or 10.8%)

  • Earnings per share EUR 1.16 (1.24)

  • Cash flow from operating activities EUR 240 million (261)

  • Order book at the end of the period increased 5% to EUR 4,674 million (4,455)


 KEY FIGURES

MEUR 7-9/2014 Restated
7-9/2013
Change 1-9/2014 Restated
1-9/2013
Change Restated
2013
Order intake 1 309 1 086 21% 3 562 3 487 2% 4 821
Order book at the end of the period 4 674 4 455 5% 4 311
Net sales 1 117 1 199 -7% 3 230 3 203 1% 4 607
Operating result (EBIT)1 142 148 -4% 373 346 8% 557
% of net sales 12.7 12.3 11.5 10.8 12.1
Profit before taxes 2 129 136 338 353 544
Earnings/share, EUR 2 0.43 0.48 1.16 1.24 1.98
Cash flow from operating activities 68 139 240 261 578
Net interest-bearing debt at the end of the period 277 534 276
Gross capital expenditure 75 84 134
Gearing 0.14 0.31 0.15
1 EBIT is shown excluding non-recurring items. Wärtsilä recognised non-recurring items related to restructuring measures amounting to EUR 1 million (8) in the third quarter and EUR 17 million (10) during the review period January-September 2014. Non-recurring items amounted to EUR 20 million in 2013, of which EUR 11 million related to restructuring measures.
2 Earnings/share and profit before taxes for January-September 2013 and the full year 2013 include the sale of Wärtsilä’s shares in Sato Oyj.