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Reporting segment: Wärtsilä Energy Business

Wärtsilä Energy is leading the transition towards a 100% renewable energy future. As an energy system integrator, Wärtsilä understands, designs, builds and serves optimal power systems for future generations. Wärtsilä’s solutions provide the needed flexibility to integrate renewables and secure power system reliability. The company's offering comprises engine-based flexible power plants – including liquid gas systems – hybrid solar power plants, energy management systems and storage and integration solutions. Wärtsilä supports its customers over the lifecycle of their installations with services that enable increased efficiency and guaranteed performance.

  • Order intake decreased by 22% to EUR 494 million (630)
  • Net sales decreased by 7% to EUR 418 million (447)
  • Comparable operating result totalled EUR 42 million (31), which represents 10.0% of net sales (6.8)
Key figures
MEUR 1-3/2019 Restated
1-3/2018
Change Restated
2018
Order intake 494 630 -22% 2 362
of which services 242 216 12% 851
Order book, end of period 2 469 2 672 -8% 2 515
Net sales 418 447 -7% 2 359
of which services 203 181 12% 842
Book-to-bill 1.18 1.41 1.00
Operating result 36 30 20% 194
% of net sales 8.7 6.8 8.2
Comparable operating result 42 31 36% 197
% of net sales 10.0 6.8 8.4
Personnel 5 758 5 564 3% 5 712

Operating environment

Steady development in the energy services markets partially compensated for the lower market activity in the new equipment business during the first quarter of 2019. Renewables continue to take the market from inflexible thermal plants, and utilities globally are updating their strategies and investment plans in order to achieve ambitious decarbonisation targets. Understanding this transition is causing temporary delays in investment decisions beyond renewable technologies. As the energy transition progresses, the demand for flexible power solutions is expected to grow along with the increasing penetration of renewables. Countries in the emerging markets continue to invest in new baseload capacity to support economic growth and to alleviate power shortages, but macroeconomic uncertainty and elections in certain key countries are slowing down decision-making. Services market activity was steady globally and customers continued to show interest in long-term service agreements.

An improved equipment order intake in the last quarter of 2018, combined with a slightly declining global power plant market, supported Wärtsilä’s market share growth in the up to 500 MW market segment. Wärtsilä’s market share was 14% (13), while global orders for natural gas and liquid power plants of up to 500 MW decreased by 3% to 20.1 GW for the twelve months ending in December 2018 (20.8 at the end of September). Global orders include gas turbine and Wärtsilä orders with prime movers over 5 MW in size. The data is gathered from the McCoy Power Report.

Financial development


Wärtsilä Energy’s order intake totalled EUR 494 million (630) during the review period January-March 2019, a decrease of 22% compared to the corresponding period last year. Book-to-bill was 1.18 (1.41). Services order intake increased by 12% to EUR 242 million (216), while equipment order intake decreased by 39% to EUR 252 million (414).

Demand for both equipment and services was highest in the Americas and in Asia. Equipment orders received included a 132 MW dual-fuel power plant to the Bahamas. Services orders include a 5-year operation and maintenance agreement for a newly installed 145 MW power plant in Myanmar, and a 5-year lifecycle solution agreement for a 100 MW power plant in Bangladesh.

 

Order intake Wärtsilä Energy
MW 1-3/2019 1-3/2018 Change 2018
Gas 518 429 21% 1 941
Oil 78 399 -81% 877
Renewable 5 87
Order intake, total 595 833 -29% 2 905

The order book at the end of the period amounted to EUR 2,469 million (2,672). The decrease of 8% is primarily related to lower demand in the equipment business.

Net sales decreased by 7% to EUR 418 million (447) compared to the corresponding period last year. Services net sales increased by 12% to EUR 203 million (181), while equipment net sales decreased by 19% to EUR 215 million (267).

The comparable operating result was EUR 42 million (31), or 10.0% of net sales (6.8). Profitability improved thanks to the increase of services net sales.

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