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Wärtsilä’s Half Year Financial Report January–June 2021

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Wärtsilä’s Half Year Financial Report January–June 2021

Wärtsilä Corporation Half Year Financial Report January–June 2021 20 July 2021 at 8:30 a.m. local time

Wärtsilä’s Half Year Financial Report January–June 2021

STRONG CASH FLOW, BUT BUSINESS STILL HAMPERED BY COVID-19

This release is a summary of Wärtsilä’s Half Year Report January–June 2021. The complete report is attached to this release as a pdf file*. It is also available on the company website at www.wartsila.com.


HIGHLIGHTS OF APRIL–JUNE 2021

  • Order intake increased by 14% to EUR 1,154 million (1,011)
  • Service order intake increased by 24% to EUR 604 million (486)
  • Net sales decreased by 7% to EUR 1,131 million (1,220)
  • Book-to-bill amounted to 1.02 (0.83)
  • Comparable operating result increased by 30% to EUR 71 million (55), which represents 6.3% of net sales (4.5)
  • Operating result increased by 18% to EUR 58 million (49), which represents 5.1% of net sales (4.0)
  • Basic earnings per share increased to 0.06 euro (0.04)
  • Cash flow from operating activities decreased to EUR 245 million (252)

HIGHLIGHTS OF JANUARY–JUNE 2021

  • Order intake increased by 6% to EUR 2,398 million (2,259)
  • Service order intake increased by 17% to EUR 1,308 million (1,120)
  • Order book at the end of the period decreased by 3% to EUR 5,238 million (5,401)
  • Net sales decreased by 13% to EUR 2,078 million (2,390)
  • Book-to-bill amounted to 1.15 (0.95)
  • Comparable operating result increased by 1% to EUR 112 million (111), which represents 5.4% of net sales (4.7)
  • Operating result decreased by 7% to EUR 94 million (101), which represents 4.5% of net sales (4.2)
  • Basic earnings per share increased to 0.10 euro (0.09)
  • Cash flow from operating activities increased to EUR 312 million (293)

WÄRTSILÄ’S PROSPECTS

Wärtsilä expects the demand environment in the third quarter to be better than that of the corresponding period in the previous year. However, the prevailing market conditions make the outlook uncertain.


HÅKAN AGNEVALL, PRESIDENT AND CEO

“During the second quarter of 2021, we saw signs of stabilisation and recovery in our markets, despite the prevailing uncertainty.

In our key energy markets, the market situation stabilised, but many investments in new power plant capacity still continued to be postponed. Meanwhile, activity in the energy storage market continued at a good level. Furthermore, the recent order for a 156 MW multi-fuel power plant in Nebraska and the commencement of execution of the 380 MW project for Metaenergia in Italy show how flexible thermal balancing power enables the increased share of wind and solar energy in power systems in different parts of the world. Demand for services was also at a good level, and customers continued to show interest in long-term agreements, thereby bringing stability to the business during low market volumes.

In the marine markets, vessel ordering activity improved, although activity in our key vessel segments remained relatively low. In particular, the important cruise industry is still heavily affected by COVID-19 related restrictions. The demand for services has developed positively across vessel segments, supported by improved vessel activity and earnings. We saw good demand for long-term agreements, as customers wish to secure the performance of their fleet.

Despite the relatively challenging overall market environment, our order intake grew across businesses, with a total increase of 14%. It was also encouraging to see that our service order intake grew by 24% and that the order intake growth was broad and driven by several customer segments.

While net sales decreased, we succeeded in improving our profitability, and our comparable operating profit increased by 30%. Marine Power and Energy clearly improved their results, while Marine Systems suffered from low net sales driven by postponed scrubber retrofits. Customers’ interest towards smarter, digitalised, greener, and safer solutions supported the growth in Voyage’s order intake and net sales. The number of vessels connected to our cloud solutions increased by 78%. Our cash flow from operating activities was very strong. Wärtsilä’s asset-light business model, strong cash generation ability, and high service volumes deliver overall operational stability.

Wärtsilä’s success is based on a wide portfolio, global service support, and the innovation capabilities needed to promote the decarbonisation transformation of both the marine and energy industries. During the second quarter, we continued our systematic investments in R&D and participated in several international and local research alliances. Wärtsilä is pioneering the adoption of carbon-free fuels. Extensive tests are ongoing with ammonia, hydrogen and methanol as potential future fuels for Wärtsilä’s fuel-flexible combustion engines. Clean fuels, combined with Wärtsilä’s strengths in outcome-based service agreements, provide our customers with major opportunities to improve environmental footprint while boosting profitability.

We expect the demand environment in the third quarter to be better than that of the corresponding period in the previous year. In the longer term, we see exciting opportunities driven by the decarbonisation transformation of both the marine and energy industries. With our focus on a holistic system approach, technology leadership, and fuel flexible solutions, we are committed to supporting our customers to succeed in this transformation.”

KEY FIGURES

MEUR4–6/
2021
4–6/
2020
Change1–6/
2021
1–6/
2020
Change2020
Order intake1,1541,01114%2,3982,2596%4,359
of which services60448624%1,3081,12017%2,267
Order book, end of period5,2385,401-3%5,057
Net sales1,1311,220-7%2,0782,390-13%4,604
of which services59151016%1,1411,1033%2,255
Book-to-bill1.020.831.150.950.95
Operating result584918%94101-7%234
% of net sales5.14.04.54.25.1
Comparable operating result715530%1121111%275
% of net sales6.34.55.44.76.0
Comparable adjusted EBITA*796325%1281280%308
% of net sales7.05.26.15.46.7
Profit before taxes533647%887911%191
Basic earnings/share, EUR0.060.040.100.090.23
Cash flow from operating activities245252312293681
Net interest-bearing debt, end of period253643394
Gross capital expenditure6354117
Gearing0.120.310.18
Solvency, %37.835.038.1
Personnel, end of period17,38618,334-5%17,792
*Comparable adjusted EBITA excludes items affecting comparability and purchase price allocation amortisation.

Wärtsilä presents certain alternative performance measures in accordance with the guidance issued by the European Securities and Markets Authority (ESMA). The definitions of these alternative performance measures are presented in the Calculations of financial ratios section.

ANALYST AND PRESS CONFERENCE

A virtual analyst and press conference will be held as a webinar today, Tuesday 20 July 2021, at 10:00 a.m. Finnish time (8:00 a.m. UK time).

If you only wish to view the stream, please register at: http://www.mediaserver.fi/live/wartsila.

If you plan to view the stream and ask questions in the Q&A session, please register at: https://attendee.gotowebinar.com/register/7687349210800509967.

Please register using only one of the links above, not both. Once you have registered, you will receive a confirmation email that includes specific joining instructions.

***

Please note that there will be no separate audio (phone) line for the event. The Q&A session will use the audio in the GoToWebinar tool itself. In case you are joining via mobile, you may need to install the free GoToWebinar app from the app store.

To enter into the questions and answers queue, please use the raise your hand function in the webinar platform and unmute your microphone when the moderator announces your name. Please remember to lower your hand once your question has been answered.

For more information on joining and setting up your audio for Q&A, you may visit the official GoToWebinar attendee joining guide at: https://support.goto.com/webinar/how-to-join-attendees. Instructions on Q&A related functionalities can be found at: https://support.logmeininc.com/gotowebinar/help/raise-your-hand.

A recording of the webcast will be available on the company website as soon as possible after the event.

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