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Wärtsilä Corporation Interim Report

Wärtsilä Corporation Interim Report

January – March 2018

“The beginning of 2018 was characterised by a favourable operating environment in the equipment businesses.”

Jaakko Eskola, President & CEO

Q1 Interim Report PDF

Order intake and net sales developed well in the equipment businesses

“The beginning of 2018 was characterised by a favourable operating environment in the equipment businesses. Ordering activity was healthy in Energy Solutions, thanks to the growing need for flexible, smart solutions in developed countries, and energy infrastructure investments in the emerging markets. For Marine Solutions, improved demand in the merchant segment and sustained activity in the cruise and ferry markets contributed to growth in orders received. While the economic outlook continues to support a gradual recovery in the marine industry, the impact of increased geopolitical uncertainty on customer decision-making is a concern. Services' net sales development was slower than expected during the first quarter, as customers in the merchant and offshore segments continued to limit spending to essential repairs and maintenance. As a result, the group sales mix favoured equipment deliveries, which burdened profitability.

Strengthening our digital offering, for instance through the projects developed in our acceleration centres, is central to securing our competitive position in industries being transformed by increasing connectivity and new business models. The acquisition of Transas, a leader in marine navigation solutions, training and simulation services, as well as ship traffic control is also important in this context. It builds on our investments in software engineering capabilities and artificial intelligence and will play a key role in the development of smart solutions and a digital platform. With this acquisition, we take a considerable step forward towards our Smart Marine vision, which, alongside our Smart Energy vision, strongly positions Wärtsilä to enable a sustainable, low emission economy.”


Jaakko Eskola

President & CEO

Wärtsilä’s prospects for 2017

The demand for Wärtsilä’s services and solutions in 2018 is expected to improve somewhat from the previous year. Demand by business area is anticipated to be as follows:
  • Good in Services thanks to growth opportunities in selected regions and segments.
  • Good in Energy Solutions. The global shift towards renewable energy sources and increasing electricity demand in the emerging markets are supporting the need for distributed and flexible power capacity, including gas-fired generation, energy storage, and smart integration technology.
  • Solid in Marine Solutions. Despite improving sentiment, the marine market environment remains challenging due to overcapacity and lack of financing.
Wärtsilä’s current order book for 2018 deliveries is EUR 2,951 million (2,744), which mainly comprises equipment deliveries. Services’ business is largely transactional, with only around 30% of annual net sales coming from the order book.

Highlights of the review period January–March 2018

  • Order intake increased 7% to EUR 1,507 million (1,413)
  • Net sales increased 6% to EUR 1,066 million (1,005)
  • Book-to-bill 1.41 (1.41)
  • Comparable operating result increased to EUR 88 million (82), which represents 8.3% of net sales (8.1)
  • Earnings per share increased to 0.10 euro (0.09)
  • Cash flow from operating activities decreased to EUR -42 million (2)
  • Order book at the end of the period increased 7% to EUR 5,490 million (5,114)

As of 1 January 2018, Wärtsilä has adopted the IFRS 15 Revenue from Contracts with Customers standard by using the full retrospective method. This interim report is published according to the new standard and comparison periods for 2017, including the opening balance sheet, have been restated accordingly. Wärtsilä has also restated the 2017 figures for Marine Solutions and Services, due to an internal transfer of certain service activities. This transfer has no impact on Group totals.

The share issue without payment approved by Wärtsilä’s Annual General Meeting on 8 March 2018 increased the total number of Wärtsilä shares to 591,723,390. The share related figures in the comparison periods have been adjusted to reflect the increased number of shares.

Key figures
MEUR 1-3/2018 Restated
Change Restated
Order intake 1 507 1 413 7% 5 644
Order book at the end of the period 5 490 5 114 7% 5 100
Net sales 1 066 1 005 6% 4 911
Operating result1 85 76 12% 538
% of net sales 8.0 7.5 11.0
Comparable operating result 88 82 8% 576
% of net sales 8.3 8.1 11.7
Comparable adjusted EBITA 98 90 9% 612
% of net sales 9.2 9.0 12.5
Profit before taxes 76 70 491
Earnings/share, EUR 0.10 0.09 0.63
Cash flow from operating activities -42 2 430
Net interest-bearing debt at the end of the period 438 260 234
Gross capital expenditure 37 9 255
Gearing 0.21 0.13 0.10
1Items affecting comparability in the first quarter of 2018 included costs related to restructuring programmes of EUR 3 million (6).


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