Wärtsilä Corporation, Half year financial report January-June 2023, 21 July 2023
at 8:30 (EEST)
Wärtsilä's Half year financial report January-June 2023
This release is a summary of Wärtsilä's Half year financial report January-June
2023. The complete report is attached to this release as a pdf file. It is also
available on the company website at www.wartsila.com.
IMPROVED PROFITABILITY AND CONTINUED GROWTH IN SERVICES
HIGHLIGHTS FROM APRIL-JUNE 2023
· Order intake increased by 17% to EUR 1,687 million (1,440), of which organic
growth was 21%
· Service order intake increased by 13% to EUR 913 million (811)
· Net sales increased by 3% to EUR 1,454 million (1,407), of which organic
growth was 7%
· Book-to-bill amounted to 1.16 (1.02)
· Comparable operating result increased by 26% to EUR 108 million (85), which
represents 7.4% of net sales (6.1).
· Operating result decreased by 12% to EUR 66 million (75), which represents
4.5% of net sales (5.3).
· Basic earnings per share decreased to 0.05 euro (0.09)
· Cash flow from operating activities increased to EUR 75 million (-90)
HIGHLIGHTS FROM JANUARY-JUNE 2023
· Order intake increased by 22% to EUR 3,427 million (2,820), of which organic
growth was 25%
· Service order intake increased by 17% to EUR 1,802 million (1,543)
· Order book at the end of the period increased by 5% to EUR 6,249 million
(5,936)
· Net sales increased by 11% to EUR 2,919 million (2,639), of which organic
growth was 13%
· Book-to-bill amounted to 1.17 (1.07)
· Comparable operating result increased by 30% to EUR 196 million (151), which
represents 6.7% of net sales (5.7)
· Operating result increased by EUR 230 million to EUR 158 million (-72),
which represents 5.4% of net sales (-2.7)
· Basic earnings per share increased to 0.14 euro (-0.16)
· Cash flow from operating activities increased to EUR 219 million (-213)
WÄRTSILÄ'S PROSPECTS
Marine
Wärtsilä expects the demand environment for the next 12 months (Q3/2023-Q2/2024)
to be similar to that of the comparison period.
Energy
Wärtsilä expects the demand environment for the next 12 months (Q3/2023-Q2/2024)
to be similar to that of the comparison period.
HÅKAN AGNEVALL, PRESIDENT & CEO: TRANSFORMING WÄRTSILÄ TO A MORE PROFITABLE AND
STABLE COMPANY
“The market sentiment remained fairly positive during the second quarter of
2023, and we succeeded to improve our performance. The continued growth in
service and positive development in the energy storage business supported our
profitability improvement.
In the energy market, higher interest rates, volatile gas prices and longer
permitting times continued to hamper new projects, especially in the power
plants business. In Energy storage, the decrease of battery raw material prices
during the first half of the year has resulted in orders being postponed as
certain customers wait for even lower price levels. Interest in balancing
technologies remains high as supportive energy and climate policies around the
world continue to evolve towards decarbonisation targets. The Energy service
business continued to develop well. For example, we signed a two-year renewal of
an Operations & Maintenance agreement with the Brazilian independent energy
producer, Gera Amazonas. We also signed our largest ever energy storage deal to
-date with an Australian customer, Origin Energy.
In the marine market, the increasing cost of new ships and limited capacity at
shipyards continued to limit the investment appetite in some segments. However,
the market sentiment remained positive in Wärtsilä's key segments due to
continued investments in new Liquefied Natural Gas (LNG) terminals, improving
sentiment in the passenger travel segment, and the continued growth in demand
for offshore assets. Shipping companies face increasing pressure to decarbonise
their operations, but more incentives are required to accelerate the pace of
investments. Recent IMO MEPC meeting sharpened 2030 targets by introducing
additional targets to reduce overall GHG emissions by 20% and revised the long
-term goal to be net zero by or around 2050. The clear rise in the ambition
supports Wärtsilä's strategy and accelerates our decarbonisation opportunities.
Q2 order intake increased by 17%, supported by good development both in
equipment and services. Net sales increased by 3% with solid growth in services
and decline in equipment. The comparable operating result increased by 26% with
the comparable operating margin amounting to 7.4%, with strong contribution from
services and energy storage. We managed to improve our profitability despite
taking a 19 MEUR provision in a single turnkey project in the Gas Solutions
business unit belonging to Marine Systems. Cash flow from our operating
activities also improved.
Wärtsilä is committed to decarbonise shipping operations, and we have continued
to invest in our engine portfolio to be capable of utilising carbon neutral and
zero carbon fuels. Swedish ferry operator Stena Line contracted us to convert
some of its vessels to operate with methanol fuel. This includes the fuel supply
system and engine modifications, as well as integrating the new installations
with the ships' existing systems. Converting ferries for methanol fuel will
enable them to be compliant with various existing and upcoming regulations,
including the Carbon Intensity Indicator (CII), FuelEU Maritime, and IMO 2050
GHG reduction target. In the energy storage industry where safety is a major
priority, Wärtsilä's technology is designed to meet and exceed stringent safety
and quality standards. During the quarter, our GridSolv Quantum energy storage
technology attained a new NFPA 69 fire safety standard. In June, Wärtsilä was
recognised by TIME Magazine as one of the 100 most influential companies in the
world for the continuous pursuit and focus on innovation and for shaping the
decarbonisation of the energy and marine sectors.
As announced during the first quarter, we completed the transfer of parts of the
Voyage business activities (previously part of Marine Power) and Marine
Electrical Systems business unit (previously part of Marine Systems) to the
Portfolio Business. By doing this, we will accelerate the performance
improvement of these units and unlock their value through divestments or other
strategic alternatives.
In June, two new members joined our Board of Management. Anders Lindberg was
appointed as President of the Energy business, and Saara Tahvanainen as
Executive Vice President, Marketing and Communications. I am very happy to
welcome Anders and Saara to the Wärtsilä team and look forward to developing our
business together with them.
We expect the demand environment for the next 12 months to be similar to that of
the comparison period, in both Marine (including Marine Power and Marine
Systems) and Energy businesses. We are step by step moving towards our
profitability target. Services continues to grow profitably and we are
delivering the part of our order backlog that has been significantly impacted by
cost inflation. Energy storage is improving its profitability and the
decarbonisation transformation continues to gain momentum in marine and energy.
As a technology leader in decarbonisation, Wärtsilä is very well positioned for
the future and will benefit from the transformation that lies ahead.”
KEY FIGURES
MEUR 4-6/20 4-6/20 Change 1-6/2023 1-6/2022 Change 2022
23 22
Order intake 1,687 1,440 17% 3,427 2,820 22% 6,074
of which services 913 811 13% 1,802 1,543 17% 3,066
of which equipment 774 629 23% 1,625 1,277 27% 3,008
Order book, end of 6,249 5,936 5% 5,906
period
Net sales 1,454 1,407 3% 2,919 2,639 11% 5,842
of which services 807 696 16% 1,543 1,327 16% 2,775
of which equipment 647 712 -9% 1,376 1,312 5% 3,067
Book-to-bill 1.16 1.02 1.17 1.07 1.04
Comparable adjusted 113 91 24% 206 163 26% 349
EBITA*
% of net sales 7.8 6.4 7.1 6.2 6.0
Comparable operating 108 85 26% 196 151 30% 325
result
% of net sales 7.4 6.1 6.7 5.7 5.6
Operating result 66 75 -12% 158 -72 320% -26
% of net sales 4.5 5.3 5.4 -2.7 -0.4
Result before taxes 53 72 -26% 137 -74 284% -32
Basic 0.05 0.09 0.14 -0.16 -0.11
earnings/share, EUR
Cash flow from 75 -90 219 -213 -62
operating activities
Net interest-bearing 462 432 481
debt, end of period
Gearing 0.23 0.21 0.23
Solvency, % 33.5 35.8 35.3
*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 on the same
day, Friday 21 July 2023, at 10.00 a.m. Finnish time (8.00 a.m. UK time).
If you only wish to view the stream, please register at:
https://www.mediaserver.fi/live/wartsila
If you plan to view the stream and ask questions in the Q&A session, please
register at: https://register.gotowebinar.com/register/2317125529521558613
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.
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A recording of the webcast will be available on the company website as soon as
possible after the event.
For further information, please contact:
Arjen Berends
Executive Vice President & CFO
Tel. +358 10 709 5444
arjen.berends@wartsila.com
Hanna-Maria Heikkinen
Vice President, Investor Relations
Tel. +358 10 709 1461
hanna-maria.heikkinen@wartsila.com
For press information, please contact:
Saara Tahvanainen
Executive Vice President, Communications and Marketing
Tel. +358 40 589 0223
saara.tahvanainen@wartsila.com
Wärtsilä in brief
Wärtsilä is a global leader in innovative technologies and lifecycle solutions
for the marine and energy markets. We emphasise innovation in sustainable
technology and services to help our customers continuously improve their
environmental and economic performance. Our dedicated and passionate team of
17,500 professionals in more than 240 locations in 79 countries shape the
decarbonisation transformation of our industries across the globe. In 2022,
Wärtsilä's net sales totalled EUR 5.8 billion. Wärtsilä is listed on Nasdaq
Helsinki. www.wartsila.com