X
MenuClose
Open navigation

CEO review

Note

Add a note?

The year 2017 developed in line with our expectations. Increased power plant deliveries supported some growth in net sales, while profitability was in line with the previous year. The highlight of the year was the order intake growth seen in all of our business areas. This provides a sound foundation from which we can develop our business in the coming years.

Services’ net sales remained solid, thanks to steady demand for power plant related service work, and healthy activity in the cruise and gas carrier markets. While this performance was satisfactory, bearing in mind the challenges we faced in the offshore and merchant segments, our ambitions are still higher. Central to achieving growth is developing stronger partnerships with our customers, and providing them with greater value in the form of new service concepts, and through utilising the opportunities provided by digitalisation. The strategic partnership with Carnival Corporation, announced in the beginning of the year, is a compelling demonstration of where we are headed. The agreement emphasises continuous joint improvement efforts, and targets the increased safety, reliability, and operational efficiency of Carnival’s cruise vessels. This will include using the latest digital solutions.

In the energy industry, many emerging countries are now prioritising increased access to clean and reliable power to support their economic and social growth. Meanwhile, in the developed markets, the demand for operational flexibility is becoming increasingly relevant. This is largely because the decline in solar and wind prices is increasing the competitiveness of renewable sources of energy. These converging trends have together created a strong demand environment for our energy solutions during the year. I am pleased that there has been an increase in orders, both for our traditional engine-based plants, and in newer business areas, such as LNG-terminals and solar PV plants.

2017 saw a recovery in vessel contracting from the record low levels of the previous year. Although overcapacity and a lack of financing continue to burden the marine industry, an increased confidence in economic growth resulted in improved sentiment, particularly among our merchant customers. This, in combination with a favourable vessel mix and our broad offering of solutions, was supportive of growth in Marine Solutions’ orders received.

During the year, we launched our company purpose – enabling sustainable societies with smart technology – to provide an even stronger sense of direction to our work, both now and in the future. Central to the purpose is our commitment to promoting a low emissions economy, and providing intelligent ways of producing and using energy. Equally important is being at the forefront in developing new technologies and new business models that create increased value for our customers.

Indicative of this is our acquisition of Greensmith, which was a strategic response to the transformation that is taking place in the energy industry as the world moves from traditional baseload generation to renewable energy. Through Greensmith, we strengthen our system integration capabilities, and expand our offering to include storage technology and advanced software. This complements our portfolio of flexible power generation solutions, and supports our Smart Energy vision by positioning us at the very core of future energy systems.

Note

Add a note?

Our Smart Marine vision on the other hand, emphasises the opportunities offered by connectivity and digitalisation to promote safety, alleviate environmental impact, and improve efficiency. Our innovations will increasingly centre around this vision. Prime examples from 2017 include the introduction of our marine hybrid solution and the development of our competences in intelligent shipping, for instance through the acquisition of Guidance Marine. By emphasising collaboration with our customers and partners, and supported by our deep industry know-how and broad offering of solutions, we will continue to develop the innovations and competences needed to lead the transformation into a new era of shipping.

Protection of the environment, and supporting the general well-being of the community and its people, are at the heart of a sustainable society. To this end, Wärtsilä is committed to supporting the UN Global Compact and its principles with respect to human rights, labour, the environment, and anti-corruption. Fostering an inclusive corporate culture by respecting diversity, providing equal opportunities, and demonstrating high ethical standards is high on our agenda. Ensuring safe working conditions is another priority, and the decline in our lost time injury frequency shows that we are moving in the right direction. However, reaching our target of zero lost-time injuries will require an even stronger effort to develop safety consciousness throughout the organisation.

Looking ahead, I am confident that an essential element for creating customer value will be our continued focus on developing smart technology and integrating new business models into our offering. Our shareholders, stakeholders and society at large will also benefit from this approach. By emphasising energy efficiency, lifecycle optimisation, and innovative solutions in our offering, we shall be able to reach our long-term target of profitable growth. In terms of 2018, we expect our demand outlook to improve somewhat. We see a good demand environment for our Services business, thanks to growth opportunities related to our portfolio of long-term agreements and the increasing technological sophistication of our installed base. The demand for our energy solutions is anticipated to be at a good level, supported by a healthy project pipeline and favourable market trends. In the marine industry we expect market conditions to improve, and this will support a solid demand outlook.

I would like to take this opportunity to thank our personnel for their continued dedication and for enabling us to achieve our common goals. To our customers, I say thank you for your trust in our solutions and services, and finally yet importantly, I thank our shareholders for their confidence in our continued future success.

Jaakko Eskola
President & CEO

Note

Add a note?

Key figures
MEUR 2017 10‑12/2017 7‑9/2017 4‑6/2017 1‑3/2017 2016 2015
Net sales 4 923 1 445 1 178 1 292 1 007 4 801 5 029
Services 2 215 654 526 546 490 2 190 2 184
Energy Solutions 1 401 425 324 412 239 943 1 126
Marine Solutions 1 307 366 328 334 279 1 667 1 720
Depreciation, amortisation and impairment -134 -42 -30 -30 -33 -138 -124
Comparable operating result1 590 244 135 126 86 583 612
Comparable operating result1, % 12.0 16.9 11.4 9.7 8.5 12.1 12.2
Profit before taxes 506 215 114 103 74 479 553
Earnings per share, EUR 1.95 0.86 0.43 0.38 0.28 1.79 2.25
Order intake 5 644 1 514 1 354 1 363 1 413 4 927 4 932
MEUR 2017 31.12.2017 30.9.2017 30.6.2017 31.3.2017 2016 2015
Balance sheet total 5 607 5 607 5 365 5 264 5 382 5 391 5 589
Interest-bearing liabilities, gross 619 619 729 637 670 629 724
Cash and cash equivalents 379 379 292 332 403 472 334
ROI, continuing operations, % 18.9 18.9 19.5 19.5 16.9 17.1 21.0
Gearing 0.10 0.10 0.20 0.14 0.13 0.07 0.17
Order book, end of period 5 064 5 064 5 075 5 065 5 096 4 696 4 882
Year-end market capitalisation 10 375 - - - - 8 418 8 314
Personnel, number at end of period 18 065 18 065 17 859 17 783 17 832 18 011 18 856
1 Figures exclude items affecting comparability.

Note

Add a note?