Wärtsilä reports Q1 2019 net sales growth, good development in profitability
The Group has released a summary of Wärtsilä Interim Report January-March 2019.
Highlights of the review period January-March 2019:
Order intake decreased 6% to EUR 1,416 million (1,507)
Order book at the end of the period increased 15% to EUR 6,330 million (5,490)
Net sales increased 8% to EUR 1,151 million (1,066)
Book-to-bill 1.23 (1.41)
Comparable operating result increased to EUR 102 million (88), which represents 8.9% of net sales (8.3)
Earnings per share were stable at 0.10 euro (0.10)
Cash flow from operating activities increased to EUR 35 million (-42)
The demand for Wärtsilä’s services and solutions in the coming twelve months is expected to be in line with the comparative period of the previous year. Demand by business area is anticipated to be as follows:
Solid in Wärtsilä Marine Business. Wärtsilä's demand outlook for both services and equipment is supported by an extensive product mix and broad segment coverage, which limits the impact of a slower than anticipated marine market recovery.
Solid in Wärtsilä Energy Business. The global shift towards renewable energy sources and increasing electricity demand in the emerging markets support the need for distributed and flexible power capacity. However, geopolitical risks and global uncertainty continue to affect customers’ appetite for investments. The services demand outlook is supported by growth opportunities in selected regions and segments and by good order book development.
Wärtsilä’s current order book for 2019 deliveries is EUR 3,287 million (2,951). Deliveries are expected to be concentrated towards the latter part of the year.
Jaakko Eskola, President and CEO
“The beginning of 2019 was marked by growth in net sales, thanks to higher services volumes in both business areas and an increase in marine equipment deliveries. Profitability improved as a result of a more favourable sales mix within our services activities. Looking ahead, we expect net sales and profitability development to be weighted towards the end of the year, due to delivery phasing and the anticipated realisation of savings related to the realignment program announced in January.
In the marine industry, the pace of market recovery remains slow. Nevertheless, orders received by Wärtsilä Marine Business increased, primarily because of improved demand in the gas carrier segment where we received several orders for gas handling systems and related technology. Despite this positive development, reduced activity in the energy markets resulted in a decline in Group order intake. Geopolitical risks and global uncertainty continue to affect our energy customers’ appetite for investments. Furthermore, utilities in the developed world are updating their investment plans as they strive to achieve ambitious targets for increasing renewable penetration. While this is causing temporary delays in decision-making, we remain well positioned to benefit from the shift to low-carbon energy sources.
Our new organisational structure formed around two lifecycle businesses became operational at the beginning of the year. I am pleased to note that we have already started to see the initial benefits of this reorganisation in the form of improved cooperation internally with regards to developing and executing our full lifecycle offering. This further strengthens my conviction that the change will not only strengthen our partnerships with customers, but also support the progression towards our long-term target of profitable growth.”
Wärtsilä in brief
Wärtsilä is a global leader in smart technologies and complete lifecycle solutions for the marine and energy markets. By emphasising sustainable innovation, total efficiency and data analytics, Wärtsilä maximises the environmental and economic performance of the vessels and power plants of its customers. In 2018, Wärtsilä’s net sales totalled EUR 5.2 billion with approximately 19,000 employees. The company has operations in over 200 locations in more than 80 countries around the world. Wärtsilä is listed on Nasdaq Helsinki.