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Net sales and operating result

Wärtsilä’s fourth quarter net sales increased by 10% to EUR 1,684 million (1,532) compared to the corresponding period last year, largely due to improved marine equipment deliveries. Wärtsilä Marine accounted for 61% of net sales and Wärtsilä Energy for 39%. Services related net sales was stable at EUR 740 million (731). Adjusting for the effects of currency translation, services related net sales remained stable.

The fourth quarter operating result amounted to EUR 164 million (206), which represents 9.7% of net sales (13.4). The comparable operating result was EUR 202 million (226), which represents 12.0% of net sales (14.7). Items affecting comparability amounted to EUR 39 million (20). These consisted primarily of restructuring costs and additional costs related to the closure of the Wärtsilä Hyundai Engine Company (WHEC) joint venture in South Korea. The comparable operating result for Wärtsilä Marine amounted to EUR 119 million (190) or 11.7% of net sales (22.9), while the comparable operating result for Wärtsilä Energy amounted to EUR 83 million (35) or 12.5% of net sales (5.0). The comparable adjusted EBITA was EUR 213 million (237), or 12.6% of net sales (15.4). Purchase price allocation amortisation amounted to EUR 10 million (11). The fourth quarter result figures include charges of EUR 68 million related to cost overruns in certain large and complex project deliveries in the Marine and Energy businesses, of which EUR 34 million was recognised in Wärtsilä Marine and EUR 34 million in Wärtsilä Energy.

Wärtsilä’s January-December net sales were stable compared to the corresponding period last year, amounting to EUR 5,170 million (5,174). Increased marine equipment deliveries and growth in service volumes served to offset the decline in energy equipment deliveries. Wärtsilä Marine accounted for 64% of net sales and Wärtsilä Energy for 36%. Services related net sales increased by 3% to EUR 2,502 million (2,419). Adjusting for the effects of currency translation, services related net sales increased by 2%. Of Wärtsilä’s net sales, approximately 67% was EUR denominated, 20% USD denominated, with the remainder being split between several currencies.

The January-December operating result amounted to EUR 362 million (543), which represents 7.0% of net sales (10.5). The comparable operating result was EUR 457 million (577), or 8.8% of net sales (11.2). Items affecting comparability included costs of EUR 95 million (35). These consisted primarily of restructuring costs and additional costs related to the closure of the WHEC joint venture. The comparable operating result for Wärtsilä Marine amounted to EUR 305 million (380), or 9.1% of net sales (13.5), while the comparable operating result for Wärtsilä Energy amounted to EUR 152 million (197), or 8.3% of net sales (8.4). The comparable adjusted EBITA was EUR 498 million (621), or 9.6% of net sales (12.0). Purchase price allocation amortisation amounted to EUR 41 million (43). The full year result figures include charges of EUR 152 million related to cost overruns in certain large and complex project deliveries in the Marine and Energy businesses. Of the total amount, EUR 51 million was recognised in Wärtsilä Marine and EUR 101 million in Wärtsilä Energy.

Financial items amounted to EUR -47 million (-40) during the period January-December. Net interest totalled EUR -12 million (-7). Profit before taxes amounted to EUR 315 million (502). Taxes amounted to EUR 97 million (116), implying an effective tax rate of 30.7% (23.1). The effective tax rate was burdened by tax charges related to previous financial periods. Profit for the financial period amounted to EUR 218 million (386). Earnings per share were 0.37 euro (0.65), while the equity per share was 4.05 euro (4.09). Return on investment (ROI) was 11.5% (18.1), while return on equity (ROE) was 9.0% (16.1).

Net sales and operating result by reporting segment
MEUR 10-12/2019 10-12/2018 Change 1-12/2019 1-12/2018 Change
Net sales 1 684 1 532 10% 5 170 5 174 -0%
Marine 1 020 831 23% 3 330 2 815 18%
Energy 664 701 -5% 1 840 2 359 -22%
Operating result 164 206 -20% 362 543 -33%
Marine 99 171 -42% 237 349 -32%
Energy 64 35 86% 125 194 -35%
Operating result, % of net sales 9.7 13.4 7.0 10.5
Marine 9.7 20.6 7.1 12.4
Energy 9.7 4.9 6.8 8.2
Comparable operating result 202 226 -10% 457 577 -21%
Marine 119 190 -37% 305 380 -20%
Energy 83 35 135% 152 197 -23%
Comparable operating result,
% of net sales
12.0 14.7 8.8 11.2
Marine 11.7 22.9 9.1 13.5
Energy 12.5 5.0 8.3 8.4

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