Wärtsilä - Interim report (Q1 and Q3)

Wärtsilä Interim Report January-September 2017

Wärtsilä Corporation INTERIM REPORT 25 October 2017 at 8.30 a.m. local time

WÄRTSILÄ INTERIM REPORT JANUARY-SEPTEMBER 2017

STRONG DEVELOPMENT IN ORDER INTAKE

This release is a summary of Wärtsilä's Interim Report January-September 2017.
The complete report is attached to this release as a pdf-file. It is also
available at http://www.wartsilareports.com/en-US/2017/q3/frontpage/ and on the
company website at www.wartsila.com.

THIRD QUARTER HIGHLIGHTS
- Order intake increased 19% to EUR 1,354 million (1,139)
- Net sales increased 9% to EUR 1,178 million (1,079)
- Book-to-bill reached 1.15 (1.06)
- Comparable operating result increased to EUR 135 million (123), which
represents 11.4% of net sales (11.4)
- Earnings per share amounted to 0.43 euro (0.43)
- Cash flow from operating activities decreased to EUR 150 million (189)

HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-SEPTEMBER 2017
- Order intake increased 15% to EUR 4,130 million (3,604)
- Net sales increased 7% to EUR 3,477 million (3,242)
- Book-to-bill reached 1.19 (1.11)
- Comparable operating result increased to EUR 346 million (330), which
represents 10.0% of net sales (10.2)
- Earnings per share increased to 1.10 euro (0.92)
- Cash flow from operating activities decreased to EUR 154 million (378)
- Order book at the end of the period amounted to EUR 5,075 million (5,024)

WÄRTSILÄ'S PROSPECTS FOR 2017
The overall development for 2017 is expected to be relatively unchanged from the
previous year. Demand by business area is anticipated to be as follows:
  * Solid in Services with growth opportunities in selected regions and
    segments.
  * Good in Energy Solutions, thanks to increasing 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.
  * Solid in Marine Solutions. Despite good order intake growth, the marine
    market environment remains challenging, as the merchant, gas carrier, and
    offshore segments continue to suffer from overcapacity and slow trade
    growth.
Wärtsilä's current order book for 2017 deliveries is EUR 1,206 million (1,346).
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
"Wärtsilä's performance in the third quarter was satisfactory. Although power
plant deliveries continued to drive overall sales development, challenges in the
offshore segment and low volumes from service projects resulted in lower than
expected sales growth in the Services business. Profitability was supported by
certain deliveries being brought forward from the fourth quarter to the third.
These timetable changes also result in a more even distribution of deliveries
between the quarters than in the previous year.
I am pleased with the continued growth in order intake. In addition to good
demand for our power generation solutions, we received an order to build our
third LNG terminal in Finland, which will be located in Hamina. The project will
provide cleaner fuel for both marine transport applications and local industry,
thereby demonstrating Wärtsilä's contribution to the development of sustainable
societies. A favourable contracting mix in the marine markets supported order
intake growth in Marine Solutions, the highlight being a contract to supply the
main engines and exhaust gas cleaning systems to Norwegian Cruise Line's four
new generation cruise ships to be built by Fincantieri. The high level of
activity in the cruise segment over the past few years has lengthened delivery
times for both yards and equipment suppliers. Finally, the continued demand for
long-term service agreements resulted in order intake growth also for Services.

After the third quarter, we announced two acquisitions in our Marine Solutions
business. Puregas Solutions will expand our overall reach in the gas value chain
by strengthening our position in the biogas liquefaction market. The acquisition
of Guidance Marine, on the other hand, represents a further step in our digital
transformation. Being a technology leader in sensor solutions relating to
dynamic positioning and other vessel control systems, such as collision
avoidance and remote control operations, Guidance Marine enhances our
frontrunner position in intelligent shipping technologies."

KEY FIGURES

 MEUR                7-9/2017 7-9/2016 Change 1-9/2017 1-9/2016 Change     2016
-------------------------------------------------------------------------------
 Order intake           1 354    1 139    19%    4 130    3 604    15%    4 927

 Order book at the
 end of the period                               5 075    5 024     1%    4 696

 Net sales              1 178    1 079     9%    3 477    3 242     7%    4 801

 Operating result(1)      130      122     7%      327      301     9%      532

 % of net sales          11.1     11.3             9.4      9.3            11.1

 Comparable                                                                 583
 operating result         135      123     9%      346      330     5%

 % of net sales          11.4     11.4            10.0     10.2            12.1

 Comparable adjusted                                                        618
 EBITA                    144      132     9%      373      356     5%

 % of net sales          12.2     12.3            10.7     11.0            12.9

 Profit before taxes      114      115    -1%      291      253    15%      479

 Earnings/share, EUR     0.43     0.43            1.10     0.92            1.79

 Cash flow from
 operating
 activities               150      189             154      378             613

 Net interest-
 bearing debt at the
 end of the period                                 432      384             150

 Gross capital
 expenditure                                       176      126             146

 Gearing                                          0.20     0.18            0.07
-------------------------------------------------------------------------------
 (1)Items affecting comparability in the third quarter of 2017 included costs
 related to restructuring programmes of EUR 4 million (2). During the review
 period January-September 2017 restructuring costs amounted to EUR 19 million
 (29).


ANALYST AND PRESS CONFERENCE
An analyst and press conference will be held today, Wednesday 25 October 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=1518386&s=1&k=CB2E36BA72432A8C2ED7E9DA70
7DA609. To participate in the teleconference please register at the following
address: http://emea.directeventreg.com/registration/93498475. 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
Executive 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:

Interim report Q3 2017.pdf