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Operating result and profitability

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The fourth quarter operating result was EUR 206 million (222), which represents 13.4% of net sales (15.4). The comparable operating result was EUR 226 million (241), or 14.7% of net sales (16.7). Items affecting comparability included costs related to restructuring programs of EUR 20 million (18). In addition, items affecting comparability in the comparison period included EUR 1 million of acquisition related costs. The comparable adjusted EBITA was EUR 237 million (250), or 15.4% of net sales (17.4). Purchase price allocation amortisation amounted to EUR 11 million (10).

The operating result for the review period January-December 2018 was EUR 543 million (538), which represents 10.5% of net sales (11.0). The group sales mix favoured equipment deliveries, which, together with increased costs related to research, development and digitalisation, burdened profitability. The comparable operating result was EUR 577 million (576), or 11.2% of net sales (11.7). Items affecting comparability amounted to EUR 35 million (37), of which EUR 29 million (36) was related to restructuring programmes and EUR 6 million (2) to acquisitions and other costs. The comparable adjusted EBITA was EUR 621 million (612), or 12.0% of net sales (12.5). Purchase price allocation amortisation amounted to EUR 43 million (36).

Profit figures for the review period include a provision amounting to approximately EUR 70 million to cover cost overruns and project delays in two nuclear power plant back-up genset projects. The need for additional provisions was identified during a detailed review of the company’s nuclear power plant projects, following Wärtsilä’s decision to cease providing new equipment to this segment. The negative impact to the result was partially offset by a capital gain of EUR 27 million from the divestment of the pumps business and the release of an EUR 21 million provision related to ongoing long-term incentive schemes. Wärtsilä’s three-year long-term incentive schemes are tied to the development of the company's share price, and they apply to approximately 100 company executives.

Financial items for the review period January-December 2018 amounted to EUR -40 million (-47). Net interest totalled EUR -7 million (-8). Profit before taxes amounted to EUR 502 million (491). Taxes amounted to EUR 116 million (117), implying an effective tax rate of 23.1% (23.7). The profit for the financial period amounted to EUR 386 million (375). Earnings per share were 0.65 euro (0.63) and the equity per share was 4.09 euro (3.97). The return on investments (ROI) was 18.1% (18.5), while return on equity (ROE) was 16.1% (16.0).

Measures of profit and items affecting comparability
MEUR 10-12/2018 Restated
10-12/2017
1-12/2018 Restated
1-12/2017
Comparable adjusted EBITA 237 250 621 612
Purchase price allocation amortisation -11 -10 -43 -36
Comparable operating result 226 241 577 576
Items affecting comparability -20 -19 -35 -37
Operating result 206 222 543 538

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