Wärtsilä Corporation Interim Report Q3 2015

"I am confident in Wärtsilä’s long-term opportunities for growth and improved profitability, and believe that Jaakko Eskola, with his strong and well proven track record, is well suited to lead the company towards continued success.

I would like to take this opportunity to thank our shareholders and the entire Wärtsilä organisation for the inspiring past four years."

Björn Rosengren,
President and CEO

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Net sales and profitability developing according to plan

“Net sales increased by 9% to EUR 1,222 million in the third quarter, supported by growth in aftermarket activities and by the contribution from L-3 Marine Systems International. Good development within Services contributed to profitability, which reached 13.1%. We are well on track to reach our guidance for sales and profitability development this year.

Competition in the power generation markets is increasing, and the current macroeconomic uncertainty continues to cause delays in customer decision-making. Nevertheless, the project pipeline is solid and we continue to see opportunities for improved activity in the upcoming quarter. The Marine Solutions markets remain challenging. Low vessel contracting volumes, together with weak sentiment in the offshore segment, is impacting our order intake. I am pleased to note that our Services business is compensating well for the lower demand in our equipment markets. Improved maintenance demand from marine customers and stability within power plant service indicates a positive outlook for the rest of this year.

Wärtsilä’s mission is to shape the marine and energy markets with advanced technologies while focusing on lifecycle performance - our ambition level is high. We are well positioned to benefit from the ongoing fundamental changes in our end markets, and from the increasing demand for higher efficiency with fewer emissions. Furthermore, we have during the past few years initiated various measures to develop the efficiency and flexibility of our own operations. I am confident in Wärtsilä’s long-term opportunities for growth and improved profitability, and believe that Jaakko Eskola, with his strong and proven track record, is well suited to lead the company towards continued success. I would like to take this opportunity to thank our shareholders and the entire Wärtsilä organisation for the inspiring past four years.”

björn-autograph.png

Björn Rosengren, President and CEO

Wärtsilä's prospects for 2015 unchanged

Wärtsilä expects its net sales for 2015 to grow by 5-10% and its operational profitability (EBIT% before non-recurring items) to be 12.0-12.5%. This guidance includes the impact of the L-3 Marine Systems International (MSI) acquisition. MSI is expected to contribute approximately EUR 250 million to net sales and EUR 9 million to the operating result during 2015. Excluding purchase price allocation amortisation, MSI’s operating result is estimated to reach EUR 16 million.

Third quarter highlights

  • Order intake decreased 17% to EUR 1,086 million (1,309)

  • Net sales increased 9% to EUR 1,222 million (1,117)

  • Book-to-bill 0.89 (1.17)

  • EBITA EUR 170 million, or 13.9% of net sales (EUR 149 million or 13.3%)

  • Operating result before non-recurring items EUR 160 million, or 13.1% of net sales (EUR 142 million or 12.7%)

  • Earnings per share 0.49 euro (0.43)

  • Cash flow from operating activities EUR -5 million (68)

  • Mr Jaakko Eskola appointed President and CEO of Wärtsilä Corporation as of 1 November 2015

Highlights of the review period January-September 2015

  • Order intake was stable at EUR 3,529 million (3,562)

  • Net sales increased 6% to EUR 3,439 million (3,230)

  • Book-to-bill 1.03 (1.10)

  • EBITA EUR 420 million, or 12.2% of net sales (EUR 392 million or 12.1%)

  • Operating result before non-recurring items EUR 397 million, or 11.5% of net sales (EUR 373 million or 11.5%)

  • Earnings per share 1.46 euro (1.16)

  • Cash flow from operating activities EUR 78 million (240)

  • Order book at the end of the period increased 9% to EUR 5,112 million (4,674)

 Key figures

MEUR 7-9/2015 7-9/2014 Change 1-9/2015 1-9/2014 Change 2014
Order intake 1 086 1 309 -17% 3 529 3 562 -1% 5 084
Order book at the end of the period 5 112 4 674 9% 4 530
Net sales 1 222 1 117 9% 3 439 3 230 6% 4 779
Operating result (EBITA)1 170 149 14% 420 392 7% 594
% of net sales 13.9 13.3 12.2 12.1 12.4
Operating result (EBIT)2 160 142 13% 397 373 7% 569
% of net sales 13.1 12.7 11.5 11.5 11.9
Profit before taxes 132 129 354 338 494
Earnings/share, EUR 0.49 0.43 1.46 1.16 1.76
Cash flow from operating activities -5 68 78 240 452
Net interest-bearing debt at the end of the period 513 277 94
Gross capital expenditure 314 69 94
Gearing 0.26 0.14 0.05
1 EBITA is shown excluding non-recurring items related to restructuring measures of EUR 11 million (17) and purchase price allocation amortisation of EUR 23 million (19) during the review period January-September 2015. During the third quarter, non-recurring items related to restructuring measures amounted to EUR 11 million (1) and purchase price allocation amortisation to EUR 9 million (6).
2 EBIT is shown excluding non-recurring items.
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