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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, we understand, design, build and serve optimal power systems for future generations. Wärtsilä’s solutions provide the needed flexibility to integrate renewables and secure power system reliability. Our offering comprises engine-based flexible power plants – including liquid gas systems – hybrid solar power plants, energy management systems, and storage and integration solutions. We support our customers over the lifecycle of their installations with services that enable increased efficiency and guaranteed performance.

  • The challenging demand environment affected equipment order intake development
  • Profitability in the period January-June was supported by the growth in services net sales
Key figures
MEUR 4-6/2019 4-6/2018 Change 1-6/2019 1-6/2018 Change 2018
Order intake 441 526 -16% 935 1 155 -19% 2 362
of which services 209 166 25% 450 382 18% 851
Order book, end of period 2 496 2 660 -6% 2 515
Net sales 416 561 -26% 834 1 008 -17% 2 359
of which services 203 193 5% 406 373 9% 842
Book-to-bill 1.06 0.94 1.12 1.15 1.00
Operating result 35 57 -38% 71 87 -18% 194
% of net sales 8.4 10.1 8.5 8.6 8.2
Comparable operating result 37 58 -37% 79 89 -12% 197
% of net sales 8.9 10.4 9.4 8.8 8.4
Personnel, end of period 5 641 5 622 0% 5 712
Order intake Wärtsilä Energy
MW 4-6/2019 4-6/2018 Change 1-6/2019 1-6/2018 Change 2018
Gas 289 487 -41% 807 916 -12% 1 941
Oil 36 279 -87% 114 678 -83% 877
Renewable 30 42 -29% 30 42 -29% 87
Order intake, total 355 808 -56% 950 1 636 -42% 2 905

Operating environment

Growth in the energy service markets partially compensated for the lower activity in new equipment business during the first half of 2019. Renewables continue to take the market from inflexible thermal plants. Utilities globally are updating their strategies to achieve ambitious decarbonisation targets, which is causing 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. In the emerging markets, there is a continued need for new baseload capacity to support economic growth and to alleviate power shortages. However, macroeconomic uncertainty is slowing decision-making. The demand for service work in the energy markets improved, and customers continued to show interest in long-term service agreements.

Wärtsilä’s market share in the up to 500 MW market segment increased slightly to 15% (14), while global orders for natural gas and liquid power plants decreased by 12% to 17.6 GW during the twelve-month period ending in March 2019 (20.1 at the end of December). 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 second quarter order intake totalled EUR 441 million (526), a decrease of 16% compared to the corresponding period last year. Book-to-bill was 1.06 (0.94). Services order intake increased by 25% to EUR 209 million (166), while equipment order intake decreased by 35% to EUR 232 million (360).

Demand for both new equipment and services was highest in Asia and the Americas. New equipment orders received during the second quarter included a 200 MW dual-fuel power plant to Cambodia to provide grid stability and reliability and to enable increasing levels of renewable energy integration to the system. Service orders include a 7-year maintenance management and operational advisory agreement for two power plants in Bangladesh having a total capacity of 464 MW.

Second quarter net sales decreased by 26% to EUR 416 million (561) compared to the corresponding period last year. Services net sales increased by 5% to EUR 203 million (193), while equipment net sales decreased by 42% to EUR 213 million (368). The comparable operating result for the quarter amounted to EUR 37 million (58), or 8.9% of net sales (10.4).

The January-June order intake totalled EUR 935 million (1,155), a decrease of 19% compared to the corresponding period last year. Book-to-bill was 1.12 (1.15). Services order intake increased by 18% to EUR 450 million (382), while equipment order intake decreased by 37% to EUR 484 million (773). The order book at the end of June decreased by 6% to EUR 2,496 million (2,660), as a result of lower demand in the equipment business.

January-June net sales decreased by 17% to EUR 834 million (1,008) compared to the corresponding period last year. Services net sales increased by 9% to EUR 406 million (373), while longer order book delivery times resulted in equipment net sales decreasing by 33% to EUR 428 million (635). The comparable operating result during the same period was EUR 79 million (89), which represents 9.4% of net sales (8.8). Profitability improved thanks to growth in services net sales.

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