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Highlights of 2010

Solid performance at all levels

The year 2010 was a year of restructuring and recovery. The ordering of new ships started to pick up earlier than expected, and the orders for Wärtsilä Ship Power more than doubled compared to 2009. The activity in our Power Plants and Services divisions has remained high. As a consequence, our order intake grew 22%. Net sales developed as expected and fell by 13 percent to EUR 4,553 million, while profitability remained at a good 10.7% level, well in line with Wärtsilä's estimate for 2010. The cash flow from operating activities was at an all time high level and totalled EUR 663 million (349).

The recovery in the shipbuilding industry was a much faster and more significant recovery than expected. The improvement was backed by a recovery in trade and ship owner earnings, as well as by attractive new building prices.

The financial crisis which led to the postponement of investments for power generation in 2009, eased during 2010 and market activity was at a good level during the year. The installed base of wind power generation has also increased, which is creating a need for flexible power generation.

During the year, the global economic downturn had its effect on the marine service market which focused strongly on cost savings. Marine customers, especially in the merchant segment continued to limit their maintenance and modernisation investments. A large number of ships were slow steaming and idled. The power plants service business was less affected by the downturn.

In January 2010, Wärtsilä started the adaptation of manufacturing capacity to both the structural changes in the market and to a lower demand environment. Some of the manufacturing capacity has been moved to China and two factories in the Netherlands are in the process of being closed. Lower capacity utilisation has also triggered an analysis and adaptation of all Wärtsilä's global services and staff functions with the aim of streamlining processes, decreasing overlaps, and improving the cost efficiency.

Net sales      
MEUR 2010 2009 Change %
Ship Power 1 201 1 767 -32
Services 1 823 1 830 0
Power Plants 1 525 1 645 -7
Eliminations and adjustments 4 17  
Group 4 553 5 260 -13