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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.

  • Slow decision-making burdened equipment orders, services activity remained healthy
  • Operating result affected by cost overruns in certain equipment business projects
Key figures
MEUR 7-9/2019 7-9/2018 Change 1-9/2019 1-9/2018 Change 2018
Order intake 274 363 -25% 1 207 1 519 -21% 2 362
of which services 234 215 9% 683 598 14% 851
Order book, end of period 2 399 2 382 1% 2 515
Net sales 342 650 -47% 1 176 1 658 -29% 2 359
of which services 201 199 1% 607 572 6% 842
Book-to-bill 0.80 0.56 1.03 0.92 1.00
Operating result -10 73 -114% 61 159 -62% 194
% of net sales -3.0 11.2 5.2 9.6 8.2
Comparable operating result -9 73 -113% 69 162 -57% 197
% of net sales -2.7 11.2 5.9 9.8 8.4
Personnel, end of period 5 488 5 692 -4% 5 712
Order intake Wärtsilä Energy
MW 7-9/2019 7-9/2018 Change 1-9/2019 1-9/2018 Change 2018
Gas 50 212 -76% 857 1 127 -24% 1 941
Oil 4 21 -79% 118 699 -83% 877
Renewables - - 0% 30 42 -29% 87
Order intake, total 54 232 -77% 1 005 1 868 -46% 2 905

Operating environment

Activity in the equipment business was weak in the third quarter of 2019. Decision-making was slow globally, as utilities update their investment plans to achieve ambitious decarbonisation targets and macroeconomic uncertainty continues to cause customers to postpone investments. The low number of new power plant projects is resulting in a tough competitive environment. The demand for services in the energy markets was healthy, and customers continued to show interest towards long-term service agreements.

Wärtsilä’s market share in the up to 500 MW market segment decreased slightly to 14% (15), while global orders for natural gas and liquid power plants decreased by 14% to 15.1 GW during the twelve-month period ending in June 2019 (17.6 at the end of March). 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 third quarter order intake totalled EUR 274 million (363), a decrease of 25% compared to the corresponding period last year. Book-to-bill was 0.80 (0.56). Services order intake increased by 9% to EUR 234 million (215), while equipment order intake decreased by 73% to EUR 39 million (148). Services orders include a 5-year extension to a guaranteed asset performance agreement for a 27.65 MW combined heat and power plant in Hungary.

Third quarter net sales decreased by 47% to EUR 342 million (650) compared to the corresponding period last year. Services net sales increased by 1% to EUR 201 million (199), while equipment net sales decreased by 69% to EUR 141 million (451). The comparable operating result for the quarter was EUR -9 million (73), or -2.7% of net sales (11.2).

Order intake for January-September totalled EUR 1,207 million (1,519), a decrease of 21% compared to the corresponding period last year. Book-to-bill was 1.03 (0.92). Services order intake increased by 14% to EUR 683 million (598), while equipment order intake decreased by 43% to EUR 524 million (921). The order book at the end of September was stable at EUR 2,399 million (2,382).

January-September net sales decreased by 29% to EUR 1,176 million (1,658) compared to the corresponding period last year. Services net sales increased by 6% to EUR 607 million (572), while equipment net sales decreased by 48% to EUR 569 million (1,086). The comparable operating result during the same period was EUR 69 million (162), which represents 5.9% of net sales (9.8). The comparable operating result includes a charge of EUR 67 million related to cost overruns in certain projects in the equipment business, of which EUR 48 million was booked during the third quarter.

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