WÿRTSILÿ CORPORATION INTERIM REPORT JANUARY - JUNE 2009>
WÿRTSILÿ CORPORATION INTERIM REPORT JANUARY - JUNE 2009
(Thomson Reuters ONE) - Wärtsilä Corporation INTERIM REPORT 22 July 2009 at 8.30 local timeSTRONG SECOND QUARTER - MARKET CHALLENGES CONTINUESECOND QUARTER HIGHLIGHTS- Net sales grew 22% to EUR 1,333 million (1,092)- Operating result before nonrecurring restructuring items grew toEUR 155 million (124), 11.7% of net sales (11.4). Including therestructuring items, operating result totalled EUR 149 million, 11.2% of net sales.- Earnings per share amounted to 1.01 (0.96)- Order intake fell 45% to EUR 785 million (1,432)HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-JUNE 2009- Net sales EUR 2,574 million (1,942), growth 33%- Operating result before nonrecurring restructuring items grew toEUR 286 million (206), 11.1% of net sales (10.6). Including therestructuring items, operating result totalled EUR 280 million, 10.9%of net sales.- Earnings per share amounted to 1.90 (1.45)- Cash flow from operating activities EUR -72 million (207)- Order intake EUR 1,743 million (3,368 million), a decrease of 48%- Order book total EUR 5,829 million (7,479), a decrease of 22%- Materialised order cancellations totalled EUR 154 millionOLE JOHANSSON, PRESIDENT AND CEO:"The first half of 2009 was strong for Wärtsilä. Net sales grew by33% to EUR 2,574 million and operating result by 39% to EUR 286million, EBIT margin being 11.1%. At the same time, the globaleconomic downturn was reflected in the order intake, which fell 48%.As expected the Ship Power markets continued to be challenging, andfurther cancellations and postponements were seen in the market. ForWärtsilä cancellations of EUR 154 million materialised during thefirst half of 2009 and Wärtsilä sees a potential cancellation risk ofapproximately EUR 800 million. Wärtsilä Ship Power has takenappropriate measures to minimize the effects of the down cycle byadjusting its operations to current demand. In the Power Plantsmarket activity remained good in all areas and Services continued itsstable development. Despite the risk of cancellations and theuncertainty in the market, Wärtsilä's prospects for 2009 remainunchanged."WÿRTSILÿ'S PROSPECTS FOR 2009 REITERATEDDespite the risk of cancellations and the nonrecurring restructuringitems booked in the second quarter, the substantial order book at theend of the year should support a 10-20 percent growth in net salesfor 2009, which would maintain the profitability at last year's goodlevel.ANALYST AND PRESS CONFERENCEAn analyst and press conference will be held today, Wednesday 22 July2009, at 10.45 a.m. Finnish time (8.45 a.m. UK time), at the Wärtsiläheadquarters in Helsinki, Finland. The combined web- andteleconference can be viewed on the internet at the followingaddress:http://wip.goodmood.tv:80/wip/directlink.do?newbrowser=1&pid=2917866.To participate in the teleconference please call: +44 (0)207 1620 177and enter the Conference ID: 838853. If you want to ask questionsduring the teleconference, press the number 1 on your phone toregister for a question and the # -key to withdraw a question. Theevent title for the call is: Results Q2 2009. Please be ready tostate your details and the name of the conference to the operator. Ifproblems occur, please press the *-button followed by the 0-button.We would recommend that you register in advance for the conference inadvance at the following address:https://eventreg2.conferencing.com/webportal3/reg.html?Acc=783899&Conf=199233.An on-demand version of the webcast will be available on the companywebsite later the same day.Wärtsilä in briefWärtsilä is a global leader in complete lifecycle power solutions forthe marine and energy markets. By emphasising technologicalinnovation and total efficiency, Wärtsilä maximises the environmentaland economic performance of the vessels and power plants of itscustomers. In 2008, Wärtsilä's net sales totalled EUR 4.6 billionwith 19,000 employees. The company has operations in 160 locations in70 countries around the world. Wärtsilä is listed on the NASDAQ OMXHelsinki, Finland.INTERIM REPORT JANUARY-JUNE 2009The figures in this interim report are unaudited.SECOND QUARTER 4-6/2009 IN BRIEFMEUR 4-6/2009 4-6/2008 ChangeOrder intake 785 1 432 -45%Net sales 1 333 1 092 22%Operating result (EBIT) before nonrecurringrestructuring items 155 124 25%% of net sales 11.7% 11.4%Operating result 149% of net sales 11.2%Profit before taxes 141 131 7%Earnings/share, EUR 1.01 0.96REVIEW PERIOD JANUARY - JUNE 2009 IN BRIEFMEUR 1-6/2009 1-6/2008 Change 2008Order intake 1 743 3 368 -48% 5 573Order book 30 June 5 829 *) 7 479 -22% 6 883Net sales 2 574 1 942 33% 4 612Operating result (EBIT) beforenonrecurring restructuring items 286 206 39% 525% of net sales 11.1% 10.6% 11.4%Operating result 280% of net sales 10.9%Profit before taxes 263 206 28% 516Earnings/share, EUR 1.90 1.45 3.88Cash flow from operating activities -72 207 278Interest-bearing net debtat the end of the period 759 254 455Gross capital expenditure 72 87 366*) Cancellations amounting to EUR 154 million have been eliminatedfrom the order book during the period January-June 2009.MARKET DEVELOPMENTSHIP POWERThe market activity in new building remained very low and only ahandful of ship orders were placed during the second quarter. Therecent decrease in new building prices did not attract owners toplace new orders as the economical fundaments and an oversupply inbigger ship segments still prevail. The orders that materialisedduring the second quarter were mainly placed for specialised tonnageat specialised yards.With the exception of increased oil prices, there were no materialchanges in the general business environment during the secondquarter. Increased oil prices are expected to have a positive impacton offshore investments as soon as the pressure on the financialmarket eases.More cancellations and rescheduling of existing newbuilding ordersoccurred during the period and markets are expected to continue toseek balance by cancelling and reorganising orders. The reduction ofexisting fleet capacity through temporary lay-ups, scrapping and slowsteaming continues.Ship Power market sharesWärtsilä's share of the medium speed main engine market increasedfrom 35% (at the end of the previous quarter) to 40%. The marketshare in low speed engines decreased to 11% (13). In the auxiliaryengine market Wärtsilä's share remained at 6% (6). The decrease intotal contracting volume has led to market shares becoming morevolatile and increasingly sensitive to large individual orders. Thisis creating greater variances between reporting periods.POWER PLANTSThe market environment for Power Plants was mostly unchanged from theprevious quarter. Inquiries for new power plants remained at a highlevel and market activity was good with customers showing continuedinterest in new flexible capacity. The impact of the financial crisiswas evident through a slower conclusion of projects, mainly due todifficulties in securing financing. In North America an increasedamount of inquiries were seen. The industrial self-generationcustomer segment is so far the most negatively affected market, withmany projects being postponed due to the uncertainty in the market,or for instance through a lack of demand for minerals.SERVICESIn the marine industry, the imbalance between vessel capacity andvessel demand continues to drive capacity adaption through slowingdown vessel speed and vessel lay-ups. During the review periodWärtsilä launched new service packages in response to demand for allphases of ship lay-ups and de-activation. The Services business inthe power plant segment remained active, and Wärtsilä receivedseveral service contracts for power plants during the review period.Wärtsilä's installed engine base in the Ship Power and Power Plantmarkets totals over 160,000 MW and consists of thousands ofinstallations distributed throughout the world. Both end marketsconsist of several customer segments for Services, and Wärtsilä'sportfolio is the broadest in the market. These factors limit theimpacts of fluctuations in any individual market or customer segment.ORDER INTAKEThe order intake for the second quarter totalled EUR 785 million(1,432) a decrease of 45%. The order intake for Ship Power totalledEUR 67 million (467), 86% below the corresponding period last year.During the second quarter Ship Power registered 31% of orders in theMerchant segment and 24% in the Offshore segment. Orders from theNavy segment represented 19% and orders from the Cruise&Ferry segment12%. The Special vessels segment and Ship design each accounted for7% of Ship Power's total order intake. Compared to the first quarter2009 order intake fell by 47% (EUR 127 million during the firstquarter of 2009). For the review period January-June 2009 ShipPower's order intake was EUR 194 million (1,224), a decrease of 84%from the corresponding period last year.The second quarter order intake for the Power Plants businesstotalled EUR 257 million (556), which was 54% lower than in thecorresponding period last year. The largest orders for oil-firedpower plants were received from Chad, Malta and Yemen. The largestorders for gas-fired power plant were received from Turkey. Timing oforder intake has become even more challenging due to the financialcrisis. Compared to the first quarter, order intake fell 20% (EUR 321million in the first quarter of 2009).The order intake for the reviewperiod January-June 2009 was EUR 577 million (1,122), which is 49%lower than in 2008.Order intake for the Services business totalled EUR 458 million (402)in the second quarter, a growth of 14% compared to the correspondingperiod 2008. During the second quarter Wärtsilä Services signed animportant Operations & Management contract in the Philippines.Compared to the first quarter, order intake fell 10% (EUR 507 millionin the first quarter of 2009). Services' order intake for the reviewperiod January-June totalled EUR 965 million (1,013), a reduction of5% over the corresponding period in 2008.For the review period January-June 2009 Wärtsilä's total order intakeamounted to EUR 1,743 million (3,368), which represents a reductionof 48% compared to the corresponding period 2008.ORDER BOOKAt the end of the review period Wärtsilä's total order book stood atEUR 5,829 million (7,479), a decrease of 22%. The Ship Power orderbook stood at EUR 3,602 million (4,841), -26%. Wärtsilä continuouslyevaluates the firmness of the order book. During the review periodJanuary-June 2009, cancellations of EUR 154 million materialised andwere deducted from the order book. The cancellations were mainlywithin the Merchant segment but cancellations also materialised inthe Offshore and Special vessel segments. Wärtsilä sees a potentialcancellation risk of approximately EUR 800 million. The estimate atthe end of the previous quarter was EUR 1,000 million. At the end ofthe review period, the Power Plants order book amounted to EUR 1,705million (2,107), which is 19% lower than at the corresponding datelast year. The Services order book totalled EUR 522 million (530) atthe end of the review period, a decrease of 2%.Second quarter order intake by businessMEUR 4-6/2009 4-6/2008 ChangeShip Power 67 467 -86%Power Plants 257 556 -54%Services 458 402 14%Order intake, total 785 1 432 -45%Order intake Power PlantsMW 4-6/2009 4-6/2008 ChangeOil 426 617 -31%Gas 51 333 -85%Renewable fuels 0 47 -100%Order intake for the review period bybusinessMEUR 1-6/2009 1-6/2008 Change 1-12/2008Ship Power 194 1 224 -84% 1 826Power Plants 577 1 122 -49% 1 883Services 965 1 013 -5% 1 858Order intake, total 1 743 3 368 -48% 5 573Order intake Power PlantsMW 1-6/2009 1-6/2008 Change 1-12/2008Oil 770 1 059 -27% 2 029Gas 294 876 -66% 1 240Renewable fuels 0 84 -100% 80Order book by businessMEUR 30 June 2009 30 June 2008 Change 2008Ship Power 3 602 4 841 -26% 4 486Power Plants 1 705 2 107 -19% 1 949Services 522 530 -2% 445Order book, total 5 829*) 7 479 -22% 6 883*) Cancellations amounting to EUR 154 million have been eliminatedfrom the order book during the review period January-June 2009.NET SALESDuring the second quarter, Wärtsilä's net sales increased by 22% toEUR 1,333 million (1,092) compared to the corresponding period lastyear. Net sales for Ship Power totalled EUR 479 million (365), agrowth of 31% compared to the corresponding period last year. PowerPlants' net sales for the second quarter totalled 379 million (273),which is 39% higher than in the corresponding quarter last year. Thesecond quarter net sales for Services amounted to EUR 469 million(454), a growth of 3%.Wärtsilä's net sales for January-June 2009 grew strongly by 33% andtotalled EUR 2,574 million (1,942). Ship Power's net sales grew by40% and totalled EUR 852 million (609). Net Sales for Power Plantsdeveloped very strongly during the review period and totalled EUR 810million (448), a growth of 81% compared to the corresponding periodlast year. Net sales from the Services business grew 2% from lastyear's high level and amounted to EUR 902 million (882). Net saleswere evenly spread between the businesses in the review periodJanuary-June 2009. Ship Power accounted for 33%, Power Plants for 32%and Services net sales for 35% of the total net sales.Second quarter net sales by businessMEUR 4-6/2009 4-6/2008 ChangeShip Power 479 365 31%Power Plants 379 273 39%Services 469 454 3%Net sales, total 1 333 1 092 22%Net sales for the review period by businessMEUR 1-6/2009 1-6/2008 Change 1-12/2008Ship Power 852 609 40% 1 531Power Plants 810 448 81% 1 261Services 902 882 2% 1 830Net sales, total 2 574 1 942 33% 4 612FINANCIAL RESULTSThe second quarter operating result before nonrecurring expenses wasEUR 155 million (124), representing 11.7% of net sales (11.4).Wärtsilä recognised EUR 6 million of nonrecurring expenses related tothe adjustment measures taken within the Ship Power business.Including these, the operating result for the second quarter totalledEUR 149 million representing 11.2% of net sales. For the reviewperiod January-June 2009, the operating result before the saidnonrecurring expenses rose to EUR 286 million (206), which is 11.1%of net sales (10.6). Including the nonrecurring expenses theoperating result grew to EUR 280 million or 10.9% of net sales.Financial items amounted to EUR -16 million (0). Net interesttotalled EUR -10 million (-5). Financial items developed negativelydue to the increase in interest expenses and the fair valuation offoreign exchange hedging contracts. Dividends received totalled EUR 5million (6). Profit before taxes amounted to EUR 263 million (206).Taxes in the reporting period amounted to EUR -73 million (-61).Earnings per share were EUR 1.90 (1.45).BALANCE SHEET, FINANCING AND CASH FLOWWärtsilä's cash flow from operating activities was EUR -72 million(207) in January-June 2009. Net cash generated by operatingactivities is burdened by the net working capital being tied up inhigh delivery volumes, and by lower advances received due to thedecrease in ordering activity. Net working capital at the end of theperiod totalled EUR 591 million (107). Net working capital hasincreased by EUR 324 million since the beginning of the year. Theincrease comes mainly from the increase in inventories of EUR 166million, and from EUR 223 million in trade receivables. Advancesreceived decreased by EUR 101 million. Advances received at the endof the period totalled EUR 1,143 million (1,214). Net working capitalhas been very low in 2007 and 2008 due to the high amount of advancesreceived and the long order book. Working capital management is oneof Wärtsilä's management's key focus areas going forward. Liquidreserves at the end of the period amounted to EUR 118 million (143).Net interest-bearing loan capital totalled EUR 759 million (267).Wärtsilä had loans from financial institutions totalling EUR 890million (422) at the end of June 2009. The existing fundingprogrammes include long term loans EUR 646 million, CommittedRevolving Credit Facilities totalling EUR 535 million and FinnishCommercial Paper programmes totalling EUR 600 million. At the end ofthe period non-utilised committed credit facilities totalled EUR 445million. In addition Wärtsilä has agreed on a EUR 30 millionlong-term loan that will be disbursed in August 2009. The totalamount of short-term debt maturing within the next 12 months is EUR208 million.The solvency ratio was 32.7% (36.7) and gearing was 0.61 (0.25).HOLDINGSWärtsilä owns 7,270,350 B shares in Assa Abloy, or 2.0% of the total.This holding has been booked in the balance sheet at its market valueat the end of the reporting period, EUR 72 million.CAPITAL EXPENDITUREGross capital expenditure in the review period totalled EUR 72million (87), which comprised EUR 15 million (14) in acquisitions andinvestments in securities of which the Navim Diesel acquisitionaccounts for the biggest share, and EUR 58 million (73) in productionand information technology investments. Depreciation amounted to EUR61 million (42).Due to the high delivery volumes, efficiency improvements, andServices related logistical development plans, the total capitalexpenditure excluding acquisitions for 2009, is expected to beapprox. EUR 180 million.STRATEGIC ACQUISITIONS, JOINT-VENTURES AND EXPANSION OF NETWORKWärtsilä continued expanding its Service network with theinauguration of a new Wärtsilä Land & Sea Academy training centre andnew modern service premises in the Netherlands as well as new officeand workshop facilities in the city of Veracruz in Mexico.In May, Wärtsilä acquired 60% of the shares of Wärtsilä Navim Dieselof Italy, thus increasing its ownership of the company to 100%.Wärtsilä Navim Diesel, which specialises in marine sales and service,has a strong market position, particularly in the Cruise & Ferrysegment. The transaction resulted in EUR 8 million of new goodwill.MANUFACTURINGIn April, Wärtsilä together with China Shipbuilding IndustryCorporation (CSIC) and Mitsubishi Heavy Industries (MHI) inaugurateda jointly owned, low-speed marine engine factory QMD in Qingdao,Shandong Province, China. The joint venture company Qingdao QiyaoWartsila MHI Linshan Marine Diesel Co. Ltd. (QMD) is owned jointly byCSIC (50%), Wärtsilä Corporation (27%) and MHI (23%).In May, Wärtsilä and 3. Maj Shipbuilding Industry Ltd. of Croatiasigned a ten-year renewal of the existing licence agreement for themarketing, sale, manufacturing and servicing of Wärtsilä low-speedmarine diesel engines.An important milestone was reached for the Wärtsilä 32 engine withthe 6000th engine being rolled out of the factory in Vaasa, Finland.RESEARCH & DEVELOPMENTIn June, Wärtsilä inaugurated its Manufacturing Technology Center(MTC) in Vaasa, Finland. The MTC is dedicated to securing and furtherdeveloping the company's manufacturing competencies, and to sharingmanufacturing know-how throughout the global Wärtsilä network.PERSONNELIn May Wärtsilä Ship Power announced that it had initiated the formalprocess to reduce 400-450 jobs. The negotiations were initiated toadjust to the substantially weakened global marine market situation.The annual savings from these measures will be approximately EUR 30million. The effect of the savings will start to materialisegradually from the second half of 2009, and will take full effect bythe end of 2010. In the second quarter Wärtsilä recognised EUR 6million of nonrecurring expenses in its operating result related tothe adjustment measures taken in the Ship Power business.In Finland, the co-operation negotiations, which ended in June,resulted in the reduction of 77 jobs. The major part of these jobreductions will be implemented through internal job transfers withinthe company and by the expiration of temporary employment contracts.As a result of the negotiations 28 Ship Power employees in Finlandare under threat of redundancy. Similar negotiations have also cometo an end in several other countries. In the remaining countries, theadjustment process is proceeding as planned. Altogether, WärtsiläShip Power employs sales, project management, engineering servicesand ship design personnel in 30 countries.Wärtsilä had 19,016 (17,552) employees at the end of June. Theaverage number of personnel during January-June 2009 totalled 18,910(17,084). Services had 11,316 employees (10,394), a growth of 9%.SUSTAINABLE DEVELOPMENTThe global strive for sustainable and environmentally sounddevelopment is an important demand driver for Wärtsilä. Increasedenvironmental concerns and more stringent regulations both globallyand locally put pressure on the marine industry to constantlyinvestigate new ways of reducing the environmental impact of ships.Greenhouse gas emission reduction continues to drive change also inthe energy sector. Wärtsilä is well positioned to reduce seatransport emissions and greenhouse gas emissions with its varioustechnologies and specialised services.CHANGES IN MANAGEMENTThe following appointments have been made to Wärtsilä Corporation'sBoard of Management, with effect from 1 August 2009:Christoph Vitzthum (40) MSc (Econ.) has been appointed Group VicePresident, Services. Tage Blomberg, the current Group Vice President,Services, will in line with his employment contract retire during2009.Vesa Riihimäki (43) MSc (Eng.) has been appointed Group VicePresident, Power Plants and a member of the Board of Management.SHARES AND SHAREHOLDERSSHARES ON HELSINKI EXCHANGES30 June 2009 Number of Number of Number of shares traded shares votes 1-6/2009WRT1V 98 620 565 98 620 565 82 569 7531 Jan. -30 June 2009 High Low Average 1) Close Share price 30.91 15.81 21.78 22.941) Trade-weighted average price. 30 June 30 June 2008 2009Market capitalisation, EUR 2 262 3 940millionForeign shareholders 46.1% 50.0%DECISIONS TAKEN BY THE ANNUAL GENERAL MEETINGWärtsilä's Annual General Meeting held on 11 March 2009 approved thefinancial statements and discharged the members of the Board ofDirectors and the company's President & CEO from liability for thefinancial year 2008. The Meeting approved the Board of Directors'proposal to pay a dividend of EUR 1.50 per share totalling EUR 148million. Dividends were paid on 23 March 2009.The Annual General Meeting decided that the Board of Directors shallhave six members. The following were elected to the Board: Ms MaaritAarni-Sirviö, Mr Kaj-Gustaf Bergh, Mr Kari Kauniskangas, Mr AnttiLagerroos, Mr Bertel Langenskiöld and Mr Matti Vuoria.The firm of authorised public accountants KPMG Oy Ab, was appointedas the company's auditors.Organisation of the Board of DirectorsThe Board of Directors of Wärtsilä Corporation elected AnttiLagerroos as its chairman and Matti Vuoria as the deputy chairman.The Board decided to establish an Audit Committee, a NominationCommittee and a Compensation Committee. The Board appointed fromamong its members, the following members to the Committees:Audit Committee:Antti Lagerroos, chairmanMaarit Aarni-SirviöBertel LangenskiöldNomination Committee:Antti Lagerroos, chairmanMatti VuoriaKaj-Gustaf BerghCompensation Committee:Antti Lagerroos, chairmanMatti VuoriaBertel LangenskiöldRISKS AND BUSINESS UNCERTAINTIESDue to the uncertainty in the shipping industry, the main risks inShip Power remain the slippage of shipyard delivery schedules, aswell as the risk of cancellation of existing orders. Wärtsilä ShipPower sees a potential cancellation risk of approximately EUR 800million. The estimate at the end of the previous quarter was EUR1,000 million.The market risks in the Power Plant business remain unchanged. Thecurrent financial crisis has some effect on the timing of orders. Theactual impact of the financial crisis is still small, but thepossible effect on orders in the pipeline is difficult to predict.The financing of many future projects appears secure, and there is anincreased level of activity from utilities and governmentally fundedpower producers.In Services, the biggest risks still relate to a furtherdeterioration of the underlying shipping industry leading to largerscale lay-ups of ships, which could reduce demand for maintenance andservices within this segment. During the second quarter, businessactivity in Services remained stable.The current market situation has impacted the whole supply chain andWärtsilä is monitoring the stability of its supplier base. The risklevel has not significantly changed during the period. The supplychain is becoming more flexible with a shortening of lead times, inorder to effectively respond to the rapid changes in the market.MARKET OUTLOOKThe shipping markets have been at a virtual standstill for more orless 9 months now, and a quick recovery seems unlikely. Record lowfreight rates and expensive fuel costs have penalised many operatorsand have led to financial difficulties. Various measures are beingtaken by players in the market in order to mitigate the current risksin the marine industry. There is a lot of national interest involvedas shipbuilding represents a significant employer in many nations.Consequently, all the major shipbuilding nations have launchednational support packages for their shipyards. Industry consolidationamong ship owners will also follow as weaker players get taken overby bigger and more solid ship owners.It is still questionable if the recent increase in oil prices hasbeen based on demand driven factors. In the mid-term, however, newinvestments in the offshore segment are expected to be activated asthe industry moves to deeper waters and other unconventional oil andgas exploration areas.In the short term, the market will continue focusing on specialisedtonnage, whereas conventional volume segments, such as containervessels and bulk carriers, are expected to continue at a standstill.Wärtsilä's core business is clearly within the more specialisedtonnage. During the latter part of 2009 the market in general isexpected to become slightly more active.The demand in the Power Plants market remains at a good level, butthe timing of orders in dependent on the availability of financing.The fundamental global need for a more flexible, efficient, andenvironmentally friendly power generation mix remains and continuesto position Wärtsilä well for the future. The quest for increasedefficiency and better energy security through fuel versatility andflexibility, are trends that clearly work in Wärtsilä's favour. Theflexible baseload segment is forecasted to remain active throughoutthe Middle East, Africa and the Americas. Increased interest in gridstability and peaking solutions in North America and throughout thedeveloped world can be seen, whereas less activity is shown in theindustrial self-generation segment. Power Plants ordering activity isexpected to be at a good, albeit lumpy level.Services continues its stable development, but due to the uncertaintywithin the marine industry, visibility has become shorter.WÿRTSILÿ'S PROSPECTS FOR 2009 REITERATEDDespite the risk of cancellations and the nonrecurring restructuringitems booked in the second quarter, the substantial order book shouldsupport a 10-20 percent growth in net sales for 2009, which wouldmaintain profitability at last year's good level.WÿRTSILÿ INTERIM REPORT JANUARY - JUNE 2009This interim financial report is prepared in accordance with IAS 34(Interim Financial Reporting) using the same accounting policies andmethods of computation as in the annual financial statements for2008. All figures in the accounts have been rounded and consequentlythe sum of individual figures can deviate from the presented sumfigure.Use of estimatesThe preparation of the financial statements in accordance with IFRSrequires management to make estimates and assumptions that affect thevaluation of the reported assets and liabilities and otherinformation, such as contingent liabilities and the recognition ofincome and expenses in the income statement. Although the estimatesare based on the management's best knowledge of current events andactions, actual results may differ from the estimates.IFRS amendmentsOf the amended International Financial Reporting Standards (IFRS) andinterpretations mandatory as of 1 January 2009 the following areapplicable to the Group reporting:- IFRS 8 Operating Segments- IAS 23 Borrowing Cost- IAS 1 Presentation of financial Statement- IFRIC 16 Hedges of Net Investment in a foreign OperationThe adaption of the revised standards and interpretations does nothave any material effect on the interim report.This interim report is unaudited.CONDENSED INCOME STATEMENTMEUR 1-6/2009 1-6/2008 2008Net sales 2 574 1 942 4 612Other income 19 10 26Expenses -2 254 -1 706 -4 015Depreciation and impairment -61 -42 -99Share of profit of associates and jointventures 2 1Operating result 280 206 525Financial income and expenses -16 -9Profit before taxes 263 206 516Income taxes -73 -61 -127Profit for the financial period 190 145 389Attributable to:Owners of the parent 187 142 380Non-controlling interest 3 4 9Total 190 145 389Earnings per share attributable to equity holders of theparent company:Earnings per share, EUR 1.90 1.45 3.88Diluted earnings per share, EUR 1.90 1.45 3.88STATEMENT OF COMPREHENSIVE INCOMEProfit for the financial period 190 145 389Other comprehensive income after tax:Exchange differences on translatingforeign operations 5 -6 -27Investments available for sale 10 -27 -37Cash flow hedges 12 18 -44Share of other comprehensive income of associates and jointventures -1Other income/expenses 6Other comprehensive income for the period 28 -15 -103Total comprehensive income for the period 219 130 286Total comprehensive income attributableto:Owners of the parent 214 127 277Non-controlling interest 5 3 9 219 130 286CONDENSED BALANCE SHEETMEUR 30 June 2009 30 June 2008 31 Dec. 2008Non-current assetsIntangible assets 801 648 793Property, plant and equipment 462 388 446Equity in associates and jointventures 48 42 41Investments available for sale 118 121 106Deferred tax receivables 80 69 85Other receivables 25 17 26 1 536 1 285 1 498Current assetsInventories 1 823 1 503 1 656Other receivables 1 522 1 124 1 392Cash and cash equivalents 118 143 197 3 463 2 770 3 245Assets 4 998 4 055 4 743Shareholders' equityShare capital 336 336 336Other shareholders' equity 915 698 848Total equity attributable to equity holders of theparent 1 251 1 034 1 184Minority interest 12 11 15Total shareholders' equity 1 262 1 044 1 199Non-current liabilitiesInterest-bearing debt 682 335 448Deferred tax liabilities 86 76 86Other liabilities 281 841 394 1 049 1 251 927Current liabilitiesInterest-bearing debt 208 86 216Other liabilities 2 479 1 674 2 400 2 687 1 759 2 616Total liabilities 3 736 3 010 3 544Shareholders' equity and liabilities 4 998 4 055 4 743CONDENSED CASH FLOW STATEMENTMEUR 1-6/2009 1-6/2008 2008Cash flow from operating activities:Profit before taxes 263 206 516Depreciation and impairment 61 42 99Financial income and expenses 16 -1 9Selling profit and loss of fixed assets andother adjustments -6 -5 2Share of profit of associates and jointventures -2 -2Changes in working capital -305 6 -250Cash flow from operating activities beforefinancial items and taxes 28 247 377Net financial items and income taxes -100 -40 -99Cash flow from operating activities -72 207 278Cash flow from investing activities:Investments in shares and acquisitions -15 -14 -198Net investments in tangible and intangibleassets -58 -68 -168Proceeds from sale of shares -20 1 30Cash flow from other investing activities 3 6 8Cash flow from investing activities -90 -75 -329Cash flow from financing activities:New long-term loans 239 100 260Amortization and other changes in long-termloans -10 -4Changes in short term loans and otherfinancing activities -2 54 129Dividends paid -156 -410 -412Cash flow from financing activities 81 -266 -26Change in liquid funds, increase (+) /decrease (-) -80 -135 -76Cash and cash equivalents at beginning ofperiod 197 296 296Joint ventures' cash and cash equivalents at beginningof period -13 -18Fair value adjustments, investments 1 1Exchange rate changes 1 -6 -6Cash and cash equivalents at end of period 118 143 197 STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Total equity attributable to equity holders MEUR of the parent Minority Total interest equity Fair Share value and Share issue Translation other Retained capital premium differences reserves earnings Shareholders' equity on 1 January 2009 336 61 -27 50 764 15 1 199 Dividends -148 -8 -156 Total comprehensive income for the period 9 18 187 5 219 Shareholders' equity on 30 June 2009 336 61 -18 68 803 12 1 262 Shareholders' equity on 1 January 2008 336 61 3 127 788 10 1 325 Dividends -408 -2 -410 Total comprehensive income for the period -5 -10 142 3 129 Shareholders' equity on 30 June 2008 336 61 -2 117 522 11 1 044Geographicaldistribution ofnet sales Europe Asia Americas Other GroupMEURNet sales1-6/2009 792 947 537 298 2 574Net sales1-6/2008 699 773 315 155 1 942INTANGIBLE ASSETS AND PROPERTY, PLANT & EQUIPMENTMEUR 1-6/2009 1-6/2008 2008Intangible assetsBook value at 1 January 793 646 646Changes in exchange rates 14 -5 -30Acquisitions 12 8 191Additions 8 14 29Depreciation and impairment -29 -16 -42Disposals and intra-balance sheet transfer 2 -1Book value at end of period 801 648 793Property, plant and equipmentBook value at 1 January 446 377 377Changes in exchange rates 1 -1 -3Acquisitions 1 3 9Additions 49 58 139Depreciation and impairment -32 -26 -57Joint ventures' opening balances -17 -6Disposals and intra-balance sheet transfer -3 -6 -13Book value at end of period 462 388 446GROSS CAPITAL EXPENDITUREMEUR 1-6/2009 1-6/2008 2008Investments in securities and acquisitions 15 14 198Intangible assets and property, plant andequipment 58 73 168Group 72 87 366During the review period investment in the enlargement of propulsionequipment manufacturing in the Netherlands and China amounted to EUR5 million, and Wärtsilä had commitments related to the enlargementsamounting to EUR 2 million at the end of the review period. Wärtsiläcentralises warehousing and logistics of spare parts by investing ina new distribution centre in the Netherlands. The commitmentsrelated to the new distribution centre amounted to EUR 56 million atthe end of the review period.INTEREST-BEARING LOAN CAPITALMEUR 30 June 2009 30 June 2008 31 Dec. 2008Long-term liabilities 682 335 448Current liabilities 208 87 216Loan receivables -14 -12 -12Cash and bank balances -118 -143 -197Net 759 267 455FINANCIAL RATIOS 1-6/2009 1-6/2008 2008Earnings per share, EUR 1.90 1.45 3.88Equity per share, EUR 12.68 10.48 12.01Solvency ratio, % 32.7 36.7 34.3Gearing 0.61 0.25 0.39PERSONNEL 1-6/2009 1-6/2008 2008On average 18 910 17 084 17 623At end of period 19 016 17 552 18 812CONTINGENT LIABILITIESMEUR 30 June 2009 30 June 2008 31 Dec. 2008Mortgages 56 13 61Chattel mortgages 10 7 10Total 66 21 71Guarantees and contingentliabilitieson behalf of Group companies 647 463 664Nominal amount of rentsaccordingto leasing contracts 67 71 87Total 714 534 751NOMINAL VALUES OF DERIVATIVE INSTRUMENTSMEUR Total amount of which closedInterest rate swaps 90Foreign exchange forward contracts 1 407 238Currency options, purchased 43COMMODITY DERIVATIVES Amount in of which metric tons closedOil swaps 4 275Copper futures 300CONDENSED INCOMESTATEMENT, QUARTERLYMEUR 4-6/2009 1-3/2009 10-12/2008 7-9/2008 4-6/2008 1-3/2008Net sales 1 333 1 241 1 530 1 140 1 092 850Other income 13 5 10 6 5 5Expenses -1 167 -1 087 -1 313 -996 -953 -753Depreciationand impairment -30 -30 -31 -26 -21 -21Share of profitof associatesand jointventures 1 1 1 -1 1Operatingresult 149 130 197 123 124 81Financialincome andexpenses -9 -7 -14 5 7 -7Profit beforetaxes 141 123 183 127 131 75Income taxes -39 -34 -36 -30 -36 -25Profit for thefinancialperiod 102 89 147 97 96 49Attributableto:Owners of theparent 100 87 144 95 94 47Non-controllinginterest 2 1 3 3 2 2Total 102 89 147 97 96 49Earnings per share attributableto equity holders of the parentcompany:Earnings pershare, EUR 1.01 0.89 1.46 0.97 0.96 0.49CALCULATION OF FINANCIAL RATIOSEarnings per share (EPS)Profit for the financial period attributable to equity holders of theparent companyAdjusted number of shares over the financial yearEquity per shareEquity attributable to equity holders of the parentcompanyAdjusted number of shares at the end of the periodSolvency ratioShareholders' equity x 100Balance sheet total - advances receivedGearingInterest-bearing liabilities - cash and bank balancesShareholders' equity21 July 2009Wärtsilä CorporationBoard of Directorshttp://hugin.info/131481/R/1330201/314331.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Bereitgestellt von Benutzer: hugin
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Datum: 22.07.2009 - 07:31 Uhr
Sprache: Deutsch
News-ID 3811
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"WÿRTSILÿ CORPORATION INTERIM REPORT JANUARY - JUNE 2009>"
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