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Annual Report 2013

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WÄRTSILÄ CORPORATION INTERIM REPORTJANUARY-JUNE 2016

Stable volume development in a challenging market

“The development of the first half of 2016 was satisfactory, given the prevailing challenges in our operating environment. Net sales remained broadly in line with the previous year, while the lower level of power plant deliveries and tight competition in the energy markets burdened our operating result. Going forward, we expect equipment deliveries to be concentrated towards the end of the year. Order intake development was solid, largely thanks to the somewhat improved sentiment in the power generation industry, which supported growth in Energy Solutions’ ordering activity. Marine Solutions’ orders have also held up fairly well considering the low level of vessel contracting, benefitting from announced fleet renewal activity in the cruise and ferry markets. Services' net sales have grown at a slower pace; however, we expect improved activity levels to support a pick-up in volumes in the coming quarters. Based on the current trends in our end markets and the increased uncertainty in the global economy, our outlook for demand development remains cautious.

Pursuing growth through innovative solutions is one of the key cornerstones of Wärtsilä’s strategy, which is why I am pleased to highlight the acquisition of Eniram, a company specialised in energy management and data analytics solutions. Eniram complements our existing digital offering and enhances our expertise in data analytics, modelling, and performance optimisation. It is an important investment for our digital future. During the second quarter, we also announced the acquisition of American Hydro. This investment is aimed at strengthening our presence and competences in the industrial and hydro power service markets.”

Wärtsilä's prospects for 2016 unchanged

Wärtsilä expects its net sales for 2016 to grow by 0-5% and its profitability (comparable operating result as a percent of net sales) to be 12.5-13.0%. 

Second quarter highlights

    • Order intake increased 3% to EUR 1,194 million (1,159)
    • Net sales decreased 3% to EUR 1,196 million (1,230)
    • Book-to-bill 1.00 (0.94)
    • Comparable operating result EUR 122 million, or 10.2% of net sales (EUR 137 million or 11.1%)
    • Earnings per share 0.19 euro (0.54)
    • Cash flow from operating activities EUR 202 million (47)

 

Highlights of the review period January-June 2016

    • Order intake increased 1% to EUR 2,465 million (2,443)
    • Net sales decreased 2% to EUR 2,163 million (2,218)
    • Book-to-bill 1.14 (1.10)
    • Comparable operating result EUR 206 million, or 9.5% of net sales (EUR 237 million or 10.7%)
    • Earnings per share 0.49 euro (0.97)
    • Cash flow from operating activities EUR 189 million (84
    • Order book at the end of the period decreased 5% to EUR 5,083 million (5,325)

Key figures

MEUR 4-6/2016 4-6/2015 Change 1-6/2016 1-6/2015 Change 2015
Order intake 1 194 1 159 3% 2 465 2 443 1% 4 932
Order book at the end of the period 5 083 5 325 -5% 4 882
Net sales 1 196 1 230 -3% 2 163 2 218 -2% 5 029
Operating result1 96 137 -30% 179 237 -24% 587
% of net sales 8.0 11.1 8.3 10.7 11.7
Comparable operating result 122 137 -11% 206 237 -13% 612
% of net sales 10.2 11.1 9.5 10.7 12.2
Comparable adjusted EBITA 131 144 -9% 224 250 -11% 643
% of net sales 10.9 11.7 10.3 11.3 12.8
Profit before taxes2 58 140 -59% 138 222 -38% 553
Earnings/share, EUR2 0.19 0.54 0.49 0.97 2.25
Cash flow from operating activities 202 47 189 84 255
Net interest-bearing debt at the end of the period 517 495 372
Gross capital expenditure 71 297 346
Gearing 0.25 0.25 0.17
1Items affecting comparability included restructuring costs of EUR 26 million in the second quarter of 2016, of which EUR 17 million were non-cash write-downs. During the review period January-June 2016 restructuring costs amounted to EUR 27 million.
2Write-downs of approx. EUR 42 million related to the divestment of the Winterthur Gas & Diesel joint venture, realised exchange rate losses from Brazilian projects, and other receivables were recognised in the results for the second quarter of 2016.

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