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Why invest in Wärtsilä

Our strengths are our technological leadership, our integrated services and solutions offering, our close and long-standing customer relationships, and our unparalleled global presence.

 

Supporting our customers with lifecycle solutions

Our Services business, representing nearly 50% of Wärtsilä's total net sales, offsets the cyclicality of our end-markets, while supporting our aim for faster than market profitable growth over the long term.

The growth of our installed equipment base and increasing technological complexity supports the demand for our services, while digitalisation provides further opportunities to develop our value-adding offering and customer loyalty. We also seek growth beyond our installed base by expanding our business model to cover new market areas and multiple brands.

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A leader in advanced technology for the marine and energy markets

The demand for our services and solutions is driven by megatrends, such as global transportation needs, the growing demand for energy, and increasing environmental awareness. As a frontrunner in our field, we are well positioned to respond to the need for innovative, energy efficient, and environmentally advanced solutions. Our presence in two different end markets with a global spread, together with our wide portfolio of products and solutions, offsets cyclical developments and reduces market risk exposure. Continuously investing in research and development is vital for ensuring the competitiveness of our product portfolio, and for securing a leading position in sustainable innovation.

A capital-light business model focused on increasing efficiency

Our business model is focused on lifecycle services of high-tech equipment. Wärtsilä’s facilities comprise asset-light assembly lines, with shared production and R&D. This creates flexibility in aligning our operations to market conditions, and synergies in our innovation processes, thereby supporting stability in earnings over the cycle and enhancing our future competitiveness.

Achieving operational excellence by focusing on continuous process improvement throughout the organisation, and driving the benefits of a business line based organisation with decentralised accountability are key enablers for reaching our long-term targets.

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Investing in technological leadership and providing shareholder returns

Our financial position enables us to develop our business by expanding our offering of services and solutions through research and development activities and acquisitions. It also enables us to offer solid dividends to our shareholders.

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Q&A:

What is your outlook for Wärtsilä’s end markets going into 2017?

The demand in our service markets is expected to be solid, and we continue to see growth opportunities in selected regions and segments. Our sizeable installed base and opportunities in new market areas, as well as the interest our customers express in long-term service agreements, support our long-term ambitions for the Services business.

Demand in the energy markets is expected to be solid. Our systematic market development efforts have positively impacted our position in the energy market. Therefore, we consider ourselves well positioned to capture opportunities related to the growth in electricity demand in the emerging markets, the global shift towards renewable energy sources, and the need for distributed, flexible power production.

We expect the marine markets to remain soft. Although the outlook for the cruise and ferry segment is positive, the merchant, gas carrier, and offshore segments continue to suffer from overcapacity, slow trade growth, and customer financial constraints. Our exposure to all the main marine segments and the breadth of our offering continues to position us relatively well in a challenging market.

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Why is digitalisation important for Wärtsilä?

We have a clear appetite for development within the field of digitalisation. Not only does this provide enhanced value to our customers in the form of new, data-analytics driven solutions, it also enables us to develop our internal processes through, for instance, the increased use of robotics in our manufacturing, and mathematic modelling in our testing processes. During the year, we strengthened our digital foundation with the appointment of a Chief Digital Officer to the Board of Management, as well as with the acquisition of Eniram. We are also currently in the process of finalising a new digital organisation, with the aim of accelerating Wärtsilä’s digital transformation.

How far are you in terms of rolling out Operational Excellence?

Operational Excellence is one of the building blocks for reaching our 14% profitability target and its aim is to achieve gradual, continuous improvement. Although not fully rolled out, we have already seen certain benefits in terms of, for example, improved inventory management and optimised production flow.

Is there scope for acquisitions going forward?

At the end of 2016, our net debt was EUR 150 million and our gearing was 0.07. Our ambition is to find good investment opportunities for our owners and we have a number of potential acquisitions on our target list. We look for asset light companies with a high services content and strong technological capabilities.

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