Wärtsilä - Financial Statement Release

Wärtsilä's Financial Statements Bulletin January-December 2014

Wärtsilä Corporation FINANCIAL STATEMENTS BULLETIN 29 January 2015 at 8.30 local
time

WÄRTSILÄ'S FINANCIAL STATEMENTS BULLETIN JANUARY-DECEMBER 2014

GOOD PERFORMANCE DESPITE CHALLENGING MARKET CONDITIONS

This release is a summary of Wärtsilä's financial statements bulletin 2014. The
complete report is attached to this release as a pdf-file. It is also available
at http://www.wartsilareports.com/en-US/2014/q4/frontpage/ and on the company
website at www.wartsila.com.

FOURTH QUARTER HIGHLIGHTS
- Order intake increased 14% to EUR 1,522 million (1,334)
- Net sales increased 10% to EUR 1,549 million (1,403)
- Book-to-bill 0.98 (0.95)
- Operating result before non-recurring items EUR 196 million, or 12.7% of net
sales (EUR 211 million
or 15.0%)
- Earnings per share EUR 0.60 (0.74)
- Cash flow from operating activities EUR 212 million (317)

HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-DECEMBER 2014
- Order intake increased 5% to EUR 5,084 million (4,821)
- Net sales increased 4% to EUR 4,779 million (4,607)
- Book-to-bill 1.06 (1.05)
- Operating result before non-recurring items EUR 569 million, or 11.9% of net
sales (EUR 557 million
or 12.1%)
- Earnings per share EUR 1.76 (1.98)
- Cash flow from operating activities EUR 452 million (578)
- Order book at the end of the period increased 5% to EUR 4,530 million (4,311)
- Dividend proposal 1.15 euro per share

BJÖRN ROSENGREN, PRESIDENT AND CEO"Wärtsilä performed well in 2014, a year characterised by challenging market
conditions. Net sales and profitability developed in line with our expectations.
Net sales grew by 4% to EUR 4,779 million (4,607), largely due to a strong
fourth quarter. Profitability reached 11.9% (12.1), with the development in
Services and Ship Power performance and the restructuring measures introduced in
January compensating for the effect of lower Power Plants' sales.

Although overall vessel contracting slowed during 2014, the robust ordering of
gas carriers and the continued demand for specialised tonnage resulted in good
ordering activity for Ship Power. In the power generation markets, activity
among our customers increased significantly during the second half.
Consequently, Power Plants' order intake picked up after a difficult first six
months. I am especially pleased that we have achieved our ambition to grow the
Services business. Supported by an all-time high fourth quarter, Services' full
year net sales increased by 5%.

In December we announced the acquisition of L-3 Marine Systems International, a
global supplier of automation, navigation and electrical systems to the marine,
naval and offshore markets. Through this acquisition our position in the
electrical and automation business will be unique in terms of sector competence.

How the current market uncertainties will impact customers' investment decisions
is not yet clear, and therefore our market outlook remains cautious. We are,
however, confident that our strategic focus areas position us well, and continue
to see opportunities to grow sales and improve profitability in the coming
year."

WÄRTSILÄ'S PROSPECTS FOR 2015
Wärtsilä expects its net sales for 2015 to grow by 0-10% and its operational
profitability (EBIT% before nonrecurring items) to be between 12.0-12.5%. The
guidance excludes the impact of the L-3 Marine Systems International
acquisition.

KEY FIGURES
                                  Restated                   Restated
 MEUR                10-12/2014 10-12/2013 Change 1-12/2014 1-12/2013    Change
-------------------------------------------------------------------------------
 Order intake             1 522      1 334    14%     5 084     4 821        5%

 Order book at the
 end of the period                                    4 530     4 311        5%

 Net sales                1 549      1 403    10%     4 779     4 607        4%

 Operating result
 (EBIT)(1)                  196        211    -7%       569       557        2%

 % of net sales            12.7       15.0             11.9      12.1

 Profit before taxes
 (2)                        157        191              494       544

 Earnings/share, EUR
 (2)                       0.60       0.74             1.76      1.98

 Cash flow from
 operating
 activities                 212        317              452       578

 Net interest-
 bearing debt at the
 end of the period                                       94       276

 Gross capital
 expenditure                                            101       134

 Gearing                                               0.05      0.15
-------------------------------------------------------------------------------
 (1) EBIT is shown excluding non-recurring items. Wärtsilä recognised non-
 recurring items amounting to EUR 30 million (9) in the fourth quarter, of
 which EUR 25 million related to the efficiency programme announced in January
 and EUR 5 million to acquisitions and other costs. During the review period
 January-December 2014, non-recurring items amounted to EUR 47 million (20), of
 which EUR 42 million (11) related to the efficiency programme and EUR 5
 million to acquisitions and other costs.

 (2) Earnings/share and profit before taxes for January-December 2013 include
 the sale of Wärtsilä's shares in Sato Oyj.



MARKET OUTLOOK
Power generation markets closely follow global macroeconomic development. Based
on the difficult market situation seen during 2014 and the GDP forecasts for
2015, the overall market for liquid and gas fuelled power generation is expected
to continue to be challenging. Ordering activity remains focused on emerging
markets and countries benefiting from a stronger US dollar. The low oil prices
may impact investments in new power generation capacity in oil and gas
production based economies. In the OECD countries, there is still pent-up power
sector demand, mainly driven by CO2 neutral generation and the ramp down of
older, largely coal-based generation.

Our outlook for shipping and shipbuilding is cautious, due to the current
uncertainties in the market. Overcapacity continues to affect demand for
traditional merchant vessels. Vessels are being scrapped at a younger age, which
along with a more balanced fleet growth, supports a gradual recovery in the
freight market. Low oil prices are expected to impact investments in exploration
and development, thus limiting the demand for offshore vessels. In other vessel
markets, lower bunkering costs may have a positive impact on the operating
expenses for ship owners. The outlook for gas carriers continues to be positive,
although the strong ordering volumes seen in 2014 are expected to normalise. The
importance of fuel efficiency and environmental regulations are clearly visible,
driving interest in environmental solutions and gas as a marine fuel for the
broader marine markets.

The overall service market outlook remains stable, with interesting developments
in selected regions. An increase in the installed base of medium-speed engines
and propulsion equipment offsets the slower service demand for older
installations and the continued emphasis of merchant marine customers on
reducing operating expenses. The service outlook for offshore and gas fuelled
vessels remains favourable. Demand for services in the power plant segment
continues to be good. Marine and power plant customers show healthy interest in
long-term service agreements. From a regional perspective, the outlook for the
Middle East and Africa is positive, and is supported by demand for power plant
related services.

BOARD OF DIRECTORS' DIVIDEND PROPOSAL
The Board of Directors proposes that a dividend of 1.15 euro per share be paidfor the financial year 2014. The parent company's distributable funds total
1,002,766,535.62 euro, which includes 183,367,874.92 euro in net profit for the
year. There are 197,241,130 shares with dividend rights. The dividend will be
paid to shareholders who are registered in the list of shareholders maintained
by Euroclear Finland Ltd on the record date, which is 9 March 2015. The dividend
payment date proposed by the Board is 16 March 2015.

The Annual Report 2014, including the financial review and the review by the
Board of Directors, will be available on the company website www.wartsila.com
and at www.wartsilareports.com during week 7.

ANALYST AND PRESS CONFERENCE
An analyst and press conference will be held on Thursday 29 January 2015, at
10.00 a.m. Finnish time (8.00 a.m. UK time), at the Wärtsilä headquarters in
Helsinki, Finland. The combined web- and teleconference will be held in English
and can be viewed at the following address:
http://wcc.webeventservices.com/r.htm?e=923566&s=1&k=E46DD3E8717EB84AE735DBFEFAC
DF40A.

To participate in the teleconference please register at the following address:
http://emea.directeventreg.com/registration/64499881. You will receive dial-in
details by e-mail once you have registered. If problems occur, please press *0
for operator assistance. Please press *6 to mute your phone during the
teleconference and the same code to unmute.

An on-demand version of the webcast will be available on the company website
later the same day.

For further information, please contact:

Marco Wirén
Executive Vice President & CFO
Tel: +358 10 709 5640
marco.wiren@wartsila.com

Natalia Valtasaari
Director, Investor Relations
Tel: +358 40 187 7809
natalia.valtasaari@wartsila.com

For press information, please contact:

Atte Palomäki
Group Vice President, Communications & Branding
Tel: +358 10 709 5599
atte.palomaki@wartsila.com

Wärtsilä in brief:
Wärtsilä is a global leader in complete lifecycle power solutions for the marine
and energy markets. By emphasising technological innovation and total
efficiency, Wärtsilä maximizes the environmental and economic performance of the
vessels and power plants of its customers. In 2014, Wärtsilä's net sales
totalled EUR 4.8 billion with approximately 17,700 employees. The company has
operations in more than 200 locations in nearly 70 countries around the world.
Wärtsilä is listed on the NASDAQ OMX Helsinki, Finland.
www.wartsila.com



[HUG#1890136]

Attachments:

Financial Statements Bulletin 2014.pdf