Operating result and profitability
The fourth quarter operating result (EBIT) before non-recurring items was EUR 196 million (211), or 12.7% of net sales (15.0). Compared to 2013, fourth quarter profitability was on a lower level due to an unfavourable business mix and a more stable quarterly development throughout the year. Including non-recurring items, the operating result was EUR 166 million (202) or 10.7% of net sales (14.4). Non-recurring items amounted to EUR 30 million (9) during the fourth quarter, of which EUR 25 million related to the efficiency programme announced in January and EUR 5 million to acquisitions and other costs.
For the review period January-December 2014, the operating result (EBIT) before non-recurring items was EUR 569 million (557). This represents 11.9% of net sales (12.1), which is at the upper end of the guided 11.5-12.0% range. Including non-recurring items, the operating result was EUR 522 million (537) or 10.9% of net sales (11.7). Non-recurring items amounted to EUR 47 million (20), of which EUR 42 million related to the efficiency programme and EUR 5 million to acquisitions and other costs. Intangible asset amortisation related to acquisitions amounted to EUR 26 million (32) during the review period.
Financial items amounted to EUR -28 million (-19). The weakening of the euro resulted in unrealised exchange rate losses. Net interest totalled EUR -9 million (-14). Profit before taxes amounted to EUR 494 million (544). Profit before taxes for 2013 includes the sale of Wärtsilä’s Sato Oyj shares. Taxes in the reporting period amounted to EUR 106 million (119), implying an effective tax rate of 21%. The profit for the financial period amounted to EUR 351 million (393), which includes a loss from discontinued operations of EUR 37 million (31). Earnings per share were EUR 1.76 (1.98) and equity per share was EUR 9.94 (9.35). Return on investment (ROI) was 18.7% (21.2). Return on equity (ROE) was 18.0% (21.4). ROI and ROE for continuing operations were 20.3% (22.6) and 20.0% (23.1) respectively.