Wärtsilä Q4'21: Huomattavat kasvumahdollisuudet

Hey, nice to meet you. Nice to meet you.

Yes, we saw very good numbers basically on all five key financial parameters: orders, net sales, profitability, as well as cash flow. All were very strong, all improved from last year Q4 and also on the full year, so really going well. Order intake really significant growth, 32% up from last year. On the service side, 17% up, so also really good. And service is of course very important for us because of the good profitability you have in that section. On the net sales side, on the full year, 4% up. If you correct it for FX rates and also divestments, it's 6% growth organically, which is in line with our financial targets, also going in the right direction. Profitability also up. And also operating cash flow really, really good.

Yes, I'm happy with the numbers of last year, absolutely. Especially order intake was strong and...

We see good momentum. The good momentum is in particular in the storage side, thermal balancing power, but definitely also in services for both energy and marine businesses. So yeah, order activity is solid and it looks good. And that's also how we guide it. We guided now the upcoming quarter to be better than the previous year. When you look at the net sales side, of course due to the big amount of order intake that we had last year, in particular on the new build side, this year from a net sales point of view will be dominantly new build driven, which of course through the mix has an impact on profitability. But yeah, it's good to have a growing volume scenario. I think that is also good for the long term.

Potential is based on two key strategic themes: transform and perform. And those words have also been mentioned in the CMD, yes. So you can find a lot of data about that. But the transform is basically about the decarbonization, how to explore new business opportunities when the world is more going to electrification, balancing power solutions, but definitely also in the services both for energy and marine. So there's lots of potential there. The perform theme is more related to the growth and the recovery. We are of course still with COVID, and yeah, we need to work our way out of it. Things are moving in a better direction, but not everywhere where we are operating. So there are also still places where it's really severe actually. When you're out of COVID, you need to make sure that you have a robust performance. Even in COVID, you need to make sure that you deliver upon customer commitments under any circumstance. So we really emphasize under this perform theme the robust performance, but also our commitment to our financial and sustainability targets.

We look at this as an average annual target. There will be years where it's higher, there will be years where it's lower. I just mentioned the performance of last year, for example, organically 6%, so that's around this 5%. So you need to look at it as an average annual growth target. There will be years when it's more and there will probably also be years where it's a little bit less.

Yes, I am positive, yes.

Natural gas is absolutely a necessary bridge in the whole energy transition. The world, when moving to all renewable power generation, cannot jump from gas and coal just like that and then think that everything will be generated by wind and sun. Then there will be for sure blackouts. And that's why gas as a transition will be very important for a long time to come. And we have good solutions for it. Wärtsilä's solutions have good flexibility. You don't ramp up big amounts of megawatts if there is no need for it. You can be flexible. Engine start and stop times are really fast, within minutes. So you can be really flexible if you embed that in the system. And today they run on natural gas, for example. Tomorrow they can run on the new fuels, the green fuels.

So basically what you ask is what differentiates us, right? Yes. So what differentiates us? I would say one key element is that we can go beyond battery storage. Battery storage solutions are good for backing up a renewable power system for hours, I would say max a day. But if you go beyond that, you need something else, because then the battery is not the best solution actually. And again, coming back to your earlier question, initially these balancing power solutions will be running on natural gas, most likely. In the future, and hopefully that's not too far away, it will be the new fuels coming. Another element that really differentiates us is our energy management software, GEMS, which also many customers claim is the best in the market. And that software is critical. It determines basically the earnings of the customer because it optimizes between forecasted power need, weather conditions because that relates to wind and sun power generation, economics of the customer, but also the lifetime of the batteries, for example. So in all these equations, you try to find the optimal mix that there is maximum economics coming out for the customer. And that's really the core and the heart, I would say, of a renewable power system. And I think that we are really unique in the combination.

Energy storage is deeply integrated into Wärtsilä Energy, and there are lots of synergies that we can explore between the storage side and the thermal balancing side. And I don't think we should give up on that one. So there are no plans in that direction.