Wärtsilä Corporation Interim Report January-September 2003 Ole Johansson President & CEO 29 October 2003
Highlights of the reporting period Order intake of Power Divisions increased. Clear improvement in operating profit. Consultations on personnel reductions started in France. Streamlining of operations continues. presentaatio 2
Wärtsilä Group MEUR Q3/2003 Q3/2002 Net sales 608.7 510.3 EBITA 1 32.8 22.7 EBIT 26,1 16,1 Profit before taxes 19.3 10.5 EPS, EUR 0.27 0.05 MEUR 1-9/2003 1-9/2002 2002 Net sales 1,635.4 1,792.6 2,519.0 EBITA 1 67.3 70.0 100.6 Operational EBIT 47.2 53.9 77.8 EBIT 47.2 165.0 188.9 Profit before taxes 34.9 157.9 170.4 EPS, EUR 0.40 1.63 2.05 1 EBITA is the operating profit before amortization of goodwill on consolidation. 3
Cashflow MEUR 1-9/2003 1-9/2002 2002 Cashflow from operating activities 62.6-21.1 55.4 Cashflow from investing activities -13.0-253.2-286.5 Cashflow from financing activities -126.3 235.0 232.3 Liquid funds at the end of period 109.1 145.3 185.8 4
Solvency and gearing 50 Solvency 1,2 Gearing 45 40 1 35 0,8 30 25 0,6 20 15 10 0,4 0,2 5 0 98 99 00 01 02 1-9/03 0-0,2 98 99 00 01 02 1-9/03 Solvency 1 Solvency 2 5 Gearing 1 Gearing 2 In solvency ratio 2 and gearing 2 shareholders equity includes the convertible subordinated debentures EUR 27.9 million (27.9).
Power Divisions MEUR Q3/2003 Q3/2002 Change Net sales 568.4 469.3 21.1% EBIT 26.9 18.0 49.6% % of net sales 4.7% 3.8% Order intake 555.8 498.7 11.4% MEUR 1-9/2003 1-9/2002 Change 2002 Net sales 1,484.9 1,645.8-9.8% 2,319.9 EBIT 49.2 50.2-2.1% 74.6 % of net sales 3.3% 3.0% 3.2% Order intake 1,658.1 1,353.8 22.5% 1,882.8 Order book, end of period 1,405.1 1,371.6 2.4% 1,206.6 presentaatio 6
Power Divisions key figures MEUR Net sales 568.4 469.3 +6.4% Order intake 555.8 498.7-1.1% 1,206.6 Order book 1,371.6 1,405.1-2.3% +46.0% +39.7% +70.1% +31.3% -14.1% Q3/02 Q3/03-16.3% Q3/02 Q3/03 31.12.02 30.9.02 30.9.03 Marine Power Plants Service presentaatio 7
Power Divisions profitability Operating profit and EBIT-% by quarter 2000-2003 MEUR 60 40 20 % 8 6 4 2 0-20 -40 1-3/00 4-6/00 7-9/00 10-12/00 1-3/01 4-6/01 7-9/01 10-12/01 1-3/02 4-6/02 7-9/02 10-12/02 1-3/03 4-6/03 7-9/03 0-2 -4-6 -60-8 -10-80 Operating profit Operating result incl. restructuring provisions EBIT-% -12 8
Delivered engine megawatts from Wärtsilä factories MW 5 000 4 000 3 000 2 000 1 000 0 1998 1999 2000 2001 2002 1-9/2003 Power Plants Note! Does not include Biopower or licensing. 9 Marine
Marine MEUR Q3/2003 Q3/2002 Change 2002 1 Net sales 194.4 148.0 31.3% 772.9 Order intake 127.5 152.2-16.3% 522.8 Order book, end of period 640.5 745.4-14.1% 662.6 1 Includes income from licensing. Power Divisions net sales Q3/2003 EUR 568.4 million Marine 34% 10
Vessel orders 12 Tankers Bulk carriers Containers Others 3 months moving average 10 8 6 4 2 0 12-99 03-00 06-00 09-00 12-00 03-01 06-01 09-01 12-01 03-02 06-02 09-02 12-02 03-03 06-03 09-03 Volume [ million dwt ] Source: Based on data from Clarkson Research Studies Note: Cargo vessels > 5,000 dwt 11
Vessel orderbook Tankers Bulk carriers Containers Others 150 125 100 75 50 25 0 12-96 06-97 12-97 06-98 12-98 06-99 12-99 06-00 12-00 06-01 12-01 06-02 12-02 06-03 Volume [ million dwt ] Source: Based on data from Clarkson Research Studies Note: Cargo vessels > 5,000 dwt 12
Shipyard order book Korea Japan China Others 150 125 100 75 50 25 0 12-96 06-97 12-97 06-98 12-98 06-99 12-99 06-00 12-00 06-01 12-01 06-02 12-02 06-03 Volume [ million dwt ] Source: Based on data from Clarkson Research Studies Note: Cargo vessels > 5,000 dwt, Other vessels > 2000 grt 13
Net sales of Marine Division by vessel type MEUR 800 600 400 200 0 1998PF 1999 2000 2001 2002 1-9/2003 tankers container ships Wärtsilä Propulsion bulk carriers others Note! 1998 incl. Grandi Motori Trieste 14
Power Plants MEUR Q3/2003 Q3/2002 Change 2002 Net sales 153.7 110.0 39.7% 666.0 Order intake 203.7 119.7 70.1% 427.9 Order intake (MW): heavy fuel oil 484 68 607.9% 539 gas 75 151-50.2% 293 Biopower, MW th 0 10 107 Order book, end of period 462.9 317.0 46.0% 255.2 Power Divisions net sales Q3/2003 EUR 568.4 million. Power Plants 27% 15
Power plant order intake 1-9/2003: 1,175 MW (693) Americas 320 (266) Europe 187 (220) 94 93 (57) (163) Asia 262 (130) 227 35 (108) (22) 311 (222) 9 (44) Africa and other regions 407 (77) Gas Oil 385 21 (61) (16) 16
Service Q3/2003 Q3/2002 Change 2002 Net sales, MEUR 218.7 205.5 6.4% 843.4 Personnel, end of period 5,938 5,501 8.0% 5,644 Long-term service agreements, MW 9,780 9,383 4.2% 9,756 O&M (operation and maintenance) agreements), MW 2,215 1,922 15.2% 2,056 Power Divisions net sales Q3/2003 EUR 568.4 million Service 38% 17
Long-term service and O&M contracts O&M contracts rapid growth continues Long-term service and O&M contracts cover 12,000 MW Active engine base 130,000 MW MW 2500 MW 10000 2250 9500 2000 1750 1500 9000 8500 8000 Long-term service agreements O&M contracts 1250 7500 1000 2000 2001 2002 1-9/2003 18 7000
Imatra Steel Key figures, MEUR Q3/2003 Q3/2002 Change 2002 Net sales 40.6 41.2-1.5% 200.4 Operating profit -0.8-1.9 3.2 % of net sales -2.1% -4.6% 1.6% Imatra Steel s net sales by market segment 2002 Trucks 52% Engineering industries 34% Cars 14% Comparable net sales increased 5.1%. Maintenance stoppages, increased raw material and energy costs affected the result. 19 A WÄRTSILÄ COMPANY
Outlook for the rest of the year 2003 Power Divisions Net sales and operational profitability excluding restructuring costs, at last year s level. Streamlining measures continue - EUR 75-150 million restructuring provision will be entered in fourth-quarter accounts. Sale of the Polar holding generates EUR 15 million capital gain, which will be entered in fourth-quarter accounts. Imatra Steel Market outlook remains unchanged. Net sales increases and operational result improves. 20