The year 2010 in brief - Solid performance at all levels
The year 2010 developed as expected. Group net sales, EUR 4,553 million, declined by 13% compared to the year 2009. Operating profit remained at a high level and amounted to EUR 487 million (638) and the operating margin stood at 10.7% (12.1). Cash flow from operating activities was record high at EUR 663 million (349).
New vessel contracting activity stronger than expected
The number of vessels contracted in 2010 represented an increase of 75% compared to the previous year. This was a much faster and more significant recovery than expected. While the first half of the year was characterised by high contracting activity for bulk carriers, the second half saw a similar increase in contracting activity for container vessels and more specialised vessel types. The offshore segment continued strong throughout the year and demand was good especially for floating production units. As a consequence of this development Wärtsilä Ship Power's order intake for 2010 more than doubled and totalled EUR 657 million (317).
Power Plant markets remained solid
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. Industrial output is increasing in most emerging markets which, in combination with population growth and enhanced standards of living, is driving the need for more power generation. The installed base of wind power generation has also increased, which is creating a need for flexible power generation. For the review period January-December 2010, the Power Plants order intake totalled EUR 1,413 million (1,048), a 35% increase compared to last year.
Marine service customers were affected by slow market
During 2010, 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 which reduces maintenance and repair expenditures. At the end of the year, the amount of idled vessels had decreased to 6% from its peak of 10% at the beginning of 2010. The power plants service business was less affected by the downturn. Wärtsilä Services' order intake and net sales remained at last year's good level.
Restructuring measures initiated to meet lower demand
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. New and more efficient ways to operate have been introduced, thus enabling the closure of smaller units and the consolidation of operations to larger entities in various countries, as well as the consolidation of manufacturing close to growing markets. Wärtsilä also initiated processes to reduce approximately 400 jobs globally in its support functions during the fourth quarter. Through all of these measures initiated in different phases, Wärtsilä is reducing the number of personnel by approximately 1,800 employees.
|MEUR||2010||Q4 / 2010||Q3 / 2010||Q2 / 2010||Q1 / 2010||2009||2008|
|Net sales||4 553||1 462||1 039||1 131||922||5 260||4 612|
|Ship Power||1 201||371||277||276||278||1 767||1 531|
|Power Plants||1 525||577||321||390||237||1 645||1 261|
|Services||1 823||516||435||463||409||1 830||1 830|
|Depreciation and amortisations||-116||-29||-29||-28||-30||-165||-99|
|Operating result1, %||10.7||10.9||11.2||10.4||10.2||12.1||11.4|
|Profit before taxes||548||251||140||109||49||558||516|
|Earnings per share, EUR1||3.35||0.99||0.83||0.86||0.68||4.30||3.88 2|
|Balance sheet total||4 696||4 696||4 711||4 737||4 647||4 655||4 743|
|Interest-bearing liabilities, gross||628||628||688||678||682||664||664|
|Cash and cash equivalents||776||776||578||331||252||244||197|
|Order book, end of period||3 795||3 795||4 243||4 315||4 330||4 491||6 883|
|Order intake||4 005||1 003||1 004||1 117||881||3 291||5 573|
|Personnel, end of period||17 528||17 528||17 704||17 905||18 410||18 541||18 812|
|Year-end market capitalisation||5 631||-||-||-||-||2 768||2 072|
|1 2009 and 2010 figures exclude nonrecurring restructuring items and selling profits.|
|2 3.96 euros before the effect of the combination of Wärtsilä's share series.|