Wärtsilä - Financial Statement Release

WÄRTSILÄ'S FINANCIAL STATEMENTS BULLETIN JANUARY-DECEMBER 2016

Wärtsilä Corporation FINANCIAL STATEMENTS BULLETIN 27 January 2017 at 8.30 a.m.
local time

WÄRTSILÄ'S FINANCIAL STATEMENTS BULLETIN JANUARY-DECEMBER 2016

SATISFACTORY PERFORMANCE SUPPORTED BY GOOD FOURTH QUARTER

This release is a summary of Wärtsilä's financial statements bulletin 2016. The
complete report is attached to this release as a pdf-file. It is also available
at http://www.wartsilareports.com/en-US/2016/q4/frontpage/ and on the company
website at www.wartsila.com.

FOURTH QUARTER HIGHLIGHTS
- Order intake declined 6% to EUR 1,324 million (1,403)
- Net sales declined 2% to EUR 1,559 million (1,590)
- Book-to-bill 0.85 (0.88)
- Comparable operating result improved to EUR 253 million, or 16.3% of net sales
(EUR 215 million or 13.5%)
- Earnings per share increased to 0.87 euro (0.79)
- Cash flow from operating activities increased to EUR 235 million (176)

HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-DECEMBER 2016
- Order intake was stable at EUR 4,927 million (4,932)
- Net sales declined 5% to EUR 4,801 million (5,029)
- Book-to-bill 1.03 (0.98)
- Comparable operating result declined to EUR 583 million, or 12.1% of net sales
(EUR 612 million or 12.2%)
- Earnings per share declined to 1.79 euro (2.25)
- Cash flow from operating activities increased to EUR 613 million (255)
- Order book at the end of the period decreased 4% to EUR 4,696 million (4,882)
- The dividend is proposed to increase by 8% to 1.30 (1.20) euro per share. In
line with growing practice, the dividend will be paid in two equal instalments
in March and September.

WÄRTSILÄ'S PROSPECTS FOR 2017
As of 2017, Wärtsilä has changed its guidance policy to be consistent with
general industry practice. Wärtsilä has discontinued providing numerical
financial guidance on net sales and operating result developments. Instead,
Wärtsilä's prospects statement is based on expectations regarding demand
development in its markets. Wärtsilä will continue to provide certain financial
information, including the order book for current year deliveries, as well as
information on key matters that may affect profitability.

The overall demand for Wärtsilä's services and solutions in 2017 is expected to
be relatively unchanged from the previous year. Demand by business area is
anticipated to develop as follows:

  * Solid in Services with growth opportunities in selected regions and
    segments.
  * Solid in Energy Solutions, thanks to growth in electricity demand in the
    emerging markets and the global shift towards renewable energy sources,
    which will support the need for distributed, flexible, gas fired power
    generation.
  * Soft in Marine Solutions. Although the outlook for the cruise and ferry
    segment is positive, the merchant, gas carrier, and offshore segments
    continue to suffer from overcapacity, slow trade growth and customers'
    financial constraints.

Wärtsilä's current order book for 2017 deliveries is EUR 3,143 million (3,097),
which mainly comprises Marine Solutions and Energy Solutions' deliveries.
Wärtsilä will continue to focus on improving efficiency, which is expected to
partially offset lower volumes in the marine markets. The pricing environment in
Energy Solutions' markets has stabilised, but the order book is still impacted
by the competitive pressure seen in previous years. The good performance in
Services is expected to continue.


JAAKKO ESKOLA, PRESIDENT AND CEO
"Thanks to solid delivery execution, growth in Services' revenues, and an
improved project mix in the fourth quarter, we were able to meet our revised net
sales and profitability targets for the year 2016. I am pleased with our cash
flow development, which improved primarily due to our focus on working capital
management.

The weak growth in seaborne trade, low oil and gas prices, as well as customers'
financial constraints burdened the marine industry throughout the year, which
resulted in exceptionally low contracting activity. Considering these headwinds,
Wärtsilä's order intake developed well. This was largely due to the improved
sentiment in the energy markets, where growth in electricity demand and energy
policy changes supported the demand for Wärtsilä's power generation solutions in
both the emerging markets and the industrialised world. The development of our
Services business was solid, despite challenges related primarily to the
offshore service market.

Wärtsilä is in the midst of a major digital transformation. I am excited about
this journey, which will enhance our customer offering as well as our own
operations. During the year, we strengthened our digital foundation with the
appointment of a Chief Digital Officer to the Board of Management, as well as
with the acquisition of Eniram. Going forward we expect to shape our markets
with efficient use of data.

Looking into 2017, we expect our business environment to remain largely
unchanged. We continue to be well positioned to benefit from the trends of
increasing demand for efficiency and changing energy needs, and will continue to
work towards reaching our long-term target for profitable growth."

KEY FIGURES
 MEUR                10-12/2016 10-12/2015 Change 1-12/2016 1-12/2015    Change
-------------------------------------------------------------------------------
 Order intake             1 324      1 403    -6%     4 927     4 932        0%

 Order book at the
 end of the period                                    4 696     4 882       -4%

 Net sales                1 559      1 590    -2%     4 801     5 029       -5%

 Operating result(1)        231        202    15%       532       587       -9%

 % of net sales            14.8       12.7             11.1      11.7

 Comparable                 253        215    18%       583
 operating result                                                 612       -5%

 % of net sales            16.3       13.5             12.1      12.2

 Comparable adjusted        262        224    17%       618
 EBITA                                                            643       -4%

 % of net sales            16.8       14.1             12.9      12.8

 Profit before taxes        226        199    14%       479       553      -13%

 Earnings/share, EUR       0.87       0.79             1.79      2.25

 Cash flow from             235        176
 operating
 activities                                             613       255

 Net interest-
 bearing debt at the
 end of the period                                      150       372

 Gross capital
 expenditure                                            146       346

 Gearing                                               0.07      0.17
-------------------------------------------------------------------------------
 (1)Items affecting comparability in the fourth quarter of 2016 included costs
 related to restructuring programmes of EUR 22 million (11). In the comparison
 period, items affecting comparability also included EUR 3 million of
 acquisition related and other costs. During the review period January-December
 2016 restructuring costs amounted to EUR 48 million (19), and other costs to
 EUR 3 million (6).



BOARD OF DIRECTORS' DIVIDEND PROPOSAL
The Board of Directors proposes that a dividend of 1.30 euro per share be paid
for the financial year 2016. The parent company's distributable funds total
1,097,420,182.01 euro, which includes 281,705,697.79 euro in net profit for the
year. There are 197,241,130 shares with dividend rights. The dividend will be
paid in two instalments. The first instalment of 0.65 euro per share will be
paid to shareholders who are registered in the list of shareholders maintained
by Euroclear Finland Ltd on the record date 6 March 2017. The dividend payment
date proposed by the Board for this instalment is 13 March 2017. The second
instalment of 0.65 euro per share will be paid in September 2017. The second
instalment will be paid to shareholders who are registered in the list of
shareholders maintained by Euroclear Finland Ltd on the dividend record date,
which, together with the payment date, shall be decided by the Board of
Directors in its meeting scheduled for 12 September 2017 in accordance with the
rules of the Finnish book-entry system. The dividend record date for the second
instalment as per the current rules of the Finnish book-entry system would be
14 September 2017 and the dividend payment date 21 September 2017, unless the
renewal of the securities processing infrastructure by Euroclear Finland Ltd
brings the dividend payment date a few days earlier.
The Annual Report 2016, 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 6.

ANALYST AND PRESS CONFERENCE
An analyst and press conference will be held today, Friday 27 January 2017, 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=1341102&s=1&k=8AF7CAE8285EF67AE49534CEB8
63F8AC.

To participate in the teleconference please register at the following address:
http://emea.directeventreg.com/registration/46314279 You will receive dial-in
details by e-mail once you have registered. If problems occur, please press *0
for operator assistance. Please use *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 & Media Relations
Tel: +358 10 709 5637
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 advanced technologies and complete lifecycle
solutions for the marine and energy markets. By emphasising sustainable
innovation and total efficiency, Wärtsilä maximises the environmental and
economic performance of the vessels and power plants of its customers.
In 2016, Wärtsilä's net sales totalled EUR 4.8 billion with approximately
18,000 employees. The company has operations in over 200 locations in more than
70 countries around the world. Wärtsilä is listed on Nasdaq Helsinki.
www.wartsila.com



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Attachments:

FinancialStatementsBulletin2016.pdf