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Reporting segment: Wärtsilä Energy Business

Wärtsilä Energy leads the transition towards a 100% renewable energy future. We help our customers unlock the value of the energy transition by optimising their energy systems and future-proofing their assets. Our offering comprises flexible power plants, energy management and storage systems, as well as lifecycle services that enable increased efficiency and guaranteed performance.

  • Slow decision-making burdened equipment orders throughout the year
  • An all-time high order intake in long-term agreements demonstrates the importance of installation reliability
  • The operating result was affected by cost overruns in certain equipment project deliveries
Key figures
MEUR 10-12/2019 10-12/2018 Change 1-12/2019 1-12/2018 Change
Order intake 604 843 -28% 1 810 2 362 -23%
of which services 279 254 10% 961 851 13%
Order book, end of period 2 079 2 515 -17%
Net sales 664 701 -5% 1 840 2 359 -22%
of which services 256 270 -5% 863 842 2%
Book-to-bill 0.91 1.20 0.98 1.00
Operating result 64 35 86% 125 194 -35%
% of net sales 9.7 4.9 6.8 8.2
Comparable operating result 83 35 135% 152 197 -23%
% of net sales 12.5 5.0 8.3 8.4
Personnel, end of period 5 335 5 712 -7%
Order intake Wärtsilä Energy
MW 10-12/2019 10-12/2018 Change 1-12/2019 1-12/2018 Change
Gas 520 813 -36% 1 413 1 941 -27%
Oil 42 178 -76% 124 877 -86%
Other* 229 6 3722% 443 93 377%
Order intake, total 791 998 -21% 1 980 2 911 -32%
* Includes energy storage solutions, biofuel power plants, and solar installations

Operating environment

Activity in the liquid and gas fuelled power plant markets was well below that of the previous year. Energy policies are being developed to drive ambitious decarbonisation targets, and utilities continue to update their investment strategies accordingly. This, combined with macroeconomic uncertainty, has slowed decision-making globally. The low number of new power plant projects resulted in a tough competitive environment. In contrast to the challenges in the equipment business, the demand for services was solid, as customers continued to see the benefit of enhancing installation reliability with long-term service agreements.

Wärtsilä’s market share in the up to 500 MW market segment increased to 17% (14), while global orders for natural gas and liquid power plants decreased by 44% to 11.6 GW during the twelve-month period ending in September 2019 (15.1 GW at the end of June). Global orders include gas turbines 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 fourth quarter order intake totalled EUR 604 million (843), a decrease of 28% compared to the corresponding period last year. Book-to-bill was 0.91 (1.20). Services order intake increased by 10% to EUR 279 million (254), while equipment order intake decreased by 45% to EUR 325 million (589). Equipment orders received included the first Modular Block Solution of 40 MW in Mali. Wärtsilä also received several orders for energy storage and optimisation solutions during the quarter, including a 100 MW/100 MWh total capacity energy storage project in South East Asia. Services orders included a gas conversion project in the Dominican Republic, as well as an automation upgrade project with a five-year extension to an existing maintenance agreement in Hungary. Wärtsilä also signed its largest ever long-term operation and maintenance agreement with Energia del Pacifico for a power plant under construction in El Salvador, for which order intake will be recognised once the plant is in operation.

Fourth quarter net sales decreased by 5% to EUR 664 million (701) compared to the corresponding period last year. Services net sales declined by 5% to EUR 256 million (270), and equipment net sales decreased by 5% to EUR 408 million (431). The comparable operating result for the quarter was EUR 83 million (35), or 12.5% of net sales (5.0). A charge of EUR 34 million related to cost overruns in certain projects in the equipment business was booked during the fourth quarter.

Order intake for January-December totalled EUR 1,810 million (2,362), a decrease of 23% compared to the corresponding period last year. Book-to-bill was 0.98 (1.00). Services order intake increased by 13% to EUR 961 million (851), largely thanks to the all-time high order intake in long-term service agreements, which grew by 50% compared to the previous year. Equipment order intake decreased by 44% to EUR 849 million (1,511). The order book at the end of December declined by 17% to EUR 2,079 million (2,515). Demand for new equipment and services was highest in Asia and the Americas. New equipment orders received during the year included a 132 MW dual-fuel power plant to improve system reliability in the Bahamas, as well as a 200 MW dual-fuel power plant to be delivered to Cambodia to provide grid stability and to enable increasing levels of renewable energy integration into the system. Signed service agreements included Bangladesh’s largest ever service agreement to maintain Summit’s 464 MW power plants and a 5-year operation and maintenance agreement for a newly installed 145 MW power plant in Myanmar.

January-December net sales decreased by 22% to EUR 1,840 million (2,359) compared to the corresponding period last year. Services net sales increased by 2% to EUR 863 million (842), while equipment net sales decreased by 36% to EUR 977 million (1,517). The comparable operating result during the same period was EUR 152 million (197), which represents 8.3% of net sales (8.4). The comparable operating result for 2019 includes charges of EUR 101 million related to cost overruns in certain projects in the equipment business, while the comparison figure includes a charge of approximately EUR 70 million covering cost overruns and project delays in two nuclear power plant back-up genset projects.

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