The year 2009 in brief - A Strong year in challenging environment

The year 2009 was in many ways very successful for Wärtsilä. Group net sales, EUR 5,260 million grew by 14 percent compared to the year 2008. Operating profit reached an all time high level of EUR 638 million (525) and the operating margin stood at 12.1 percent (11.4 percent). The cash flow for the review period was very strong at EUR 349 million (278).

At the same time our order intake decreased clearly as a result of weak demand particularly for marine equipment.  New shipbuilding orders continued to be at a standstill during the first half of the year. An environment of oversupply within the major vessel segments prevailed throughout the year. In the latter part of the year market activity picked up somewhat and first signs of recovery can be seen in some Offshore and Special vessel segments.

In the power plant markets, ordering activity during 2009 was hampered by difficulties in arranging financing although demand for power plants was at a good level and offering activity remained high. Ordering activity improved in the fourth quarter, mainly due to the improved situation in the financial markets. Most parts of the world have neglected to make adequate investments into power generation capacity for years. Environmental considerations favour investment into renewable power sources and the active search and exploration of natural resources, particularly in Africa, requires electricity. Wärtsilä’s technology is well positioned to respond to the needs arising from these trends.

The situation on the Services market remained quite stable. Although approximately 10% of the total vessel fleet is laid-up and the active engine base is underutilised, the medium-speed engine base has largely maintained its planned maintenance schedules. In some market segments, fuel conversions, retrofits or other larger investments have been postponed while customers focus on essential repairs and maintenance. Demand for power plant services remained stable. 

Wärtsilä’s order intake for the review period totalled EUR 3,291 million (5,573), a decrease of 41%. During the year adjustments to the weakened market situation in the shipbuilding sector were started in Ship Power and manufacturing.
 

• Order intake for the review period decreased 41% and totalled EUR 3,291 million (5,573)
• Order book decreased 35% and totalled EUR  4,491 million (6,883)
• Net sales grew 14% to EUR 5,260 million (4,612). Ship Power accounted for 34%, Power Plants for 31% and Services for 35% of the total net sales
• Profitability grew strongly and was 12.1% of net sales (11.4). Operating result (before nonrecurring restructuring items) totalled EUR 638 million (525)
• Earnings per share excluding nonrecurring items amounted to 4.30 euros (3.88)
• Wärtsilä continued pursuing its strategy of expanding its network with new service facilities in many countries, including Ukraine, Cameroon, Hungary, Chile, Dubai, Russia and Sweden. 
• The concentration of shipbuilding activity to Asia, particularly to China, is expected to continue. This is the basis for the capacity adjustments within Wärtsilä Ship Power and Industrial operations that were initiated during 2009 and early 2010.