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8/10/2019 Capital Market 2008
1/20
POWER PLANTS UPDATE ,
Wrtsil Capital Markets Day1 Wrtsil
8/10/2019 Capital Market 2008
2/20
Agenda
1. Demand drivers
2. Wrtsils competitive advantages
3. New market focus and positioning4. Why is it different this time?
Wrtsil Capital Markets Day2 Wrtsil
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The demand drivers
Economic develo ment
Growth in Electricity Generationin the World
5%
6% Electricity demand growth and eco-
nomic growth correlate almost 1:1
4%
Industrial sector demand may
decrease
2%
3%
continue to grow unless the
recession becomes long
1%
o a consump on grow may
cease but will hardly become
negative
91 93 95 97 99 01 03 05 07 onstruct on o arge ong- ea
time projects (coal, CCGT,
nuclear) will slow downActual Trend Average
Wrtsil Capital Markets Day3 Wrtsil
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Wrtsils competitive advantages
Fuel flexibility
Ability to use available fuels
Competit ive capital cost
Standardized solutions
Ability to use low cost fuels
Ability to convert from one fuel to
Modularity
Professional delivery
Backup fuel capability
Operational flexibili ty
Compliance with all
norms, incl. California
ynam c ea ures Continuous base load
Delivery flexibility
e a y va a y Proven products
O&M services
Scope of supply
Competitive delivery times
Local service
Global service network close to
Sustainable power generation and
high fuel prices demand and favor
24/7 service
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Wrtsils competitive advantages
Global EPC
Wrtsil is the only power plant
High Business Entry Barrier
Prime mover development, 3-5 year
contractor delivering EPC in the
whole developing world
Main enablers
R&D
Modular, standardized power plant
products
Modular pre-fabricated power
plant product. Minimized site work
Global sales and service network
Global experience in project
developing countries 40,000 MW reference base
Wrtsil Capital Markets Day6 Wrtsil
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Power Plants Mission
We provide superior value to our customers with our
distributed, flexible, efficient and environmentally advanced
energy solutions, which enable a global transition to a more
sustainable and modern energy infrastructure.
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Power Plants repositioning
We take an active role in im rovin the world
through active market development
We focus on products and services, businesses
and ro ects that rovide un uestionableenvironmental benefits, and make economical
sense
We osition ourselves as the active ENABLER of
Renewables (Wind, Solar, Hydro) and
Other sustainable and modern energy
,
Distributed power
Nuclear power safety
Grid stability
Energy security
Wrtsil Capital Markets Day8 Wrtsil
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New market focus and positioning
Wrtsils has 4 legs with different
customers and industr c cles
1. OIL power plants
2. GAS power plants
3. Renewable power plants
4. OIL & GAS industry applications
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Wrtsils legs
1. HFO ower lants LFO ower lants
2 separate markets:
Islands and remote areas:
Demand steady despite high oil
prices. Mainly stand-by
availability of other practical fuel
options
Reserve capacity constraints in
Europe open a new market
depends more on oil price as
the projects often compete withLBF power plants
Prices for existin LBF have
options
Wrtsils market share
increased and slowed down the
demand
Competition: MAN
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HFO Power lant market
HFO Power Plants / 1-60 MW Engines2008
incl. crude
4000
4500
Wrtsil Recip. Competitors Gas Turbines
Gas
Turbines
5%
Wrtsil
2000
2500
3000
3500
MW
Recip.
Competitors
46%
49%4050MW
500
1000
1500
Gas
Turbines
9%
2007
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Recip.
Competitors
53%
Wrtsil
38%
Market size
1520MWCumulative power plant market since 1996
35000Gas Turbines
Reci . Com etitors
GasTurbines
13%
2006
20000
25000
30000
MW
Wrtsil
Recip.
Competitors
53%
Wrtsil
34%
Market size
3180MW
5000
10000
15000
Wrtsil Capital Markets Day11 Wrtsil
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
8/10/2019 Capital Market 2008
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LFO Power lant market includin bio-oils
LFO & LBF Power Plants / 3.5-60 MW Engines
2008
1600
1800
Wrtsil Recip. Competitors Gas Turbines
Gas
Turbines
21%
Wrtsil
20%
Market size
1000
1200
1400
MW
Recip.
Competitors
1300MW
200
400
600
Gas
Turbines
24%
Wrtsil
24%
2007
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
14000
Gas Turbines
Recip.
Competitors
52%
Market size
1685MWCumulative power plant market since 1996
8000
10000
12000
MW
Recip. Competitors
Wrtsil
Gas
Wrtsil
23%
2006
2000
4000
6000 Turbines
45%
Recip.
Competitors
Market size
1195MW
Wrtsil Capital Markets Day12 Wrtsil
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
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Wrtsils legs
2. GAS ower lants Wind ower rowth o ens u a
2 separate markets
Developing world:
new market for dynamic
resources
Reci rocatin en ines are the
construction expands the
markets to gas power plants
best technology option
Wrtsil position: Strong
Contender .
Distributed power model due
to lack of grid capacity
Competition: Aeroderivate gasturbines
r s pos on very s rong
Competition: GE-Jenbacher,
CAT, gas turbines
based power opens doors for
Nuclear power
Industrialized world
Traditionally industrial CHP
and large CCGTs
ecentra zat on o pea ng
reserve capacity with small gas
power plants
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Recip.
GAS Power Plants / 3.5-60 MW EnginesGAS Power plant market (incl. Dual)
Competitors
4%Wrtsil
8%
16000
18000
Wrtsil Recip. Competitors Gas Turbines
Gas
Turbines
Market size
15630MW
8000
10000
12000
14000
MW
88%
20072000
4000
6000
Recip.
Competitors
4%
Wrtsil
12%
140000
Gas Turbines
Cumulative power plant market since 1996
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Cumulative power plant market since 1996Gas
Turbines
Market size
10860MW
80000
100000
120000 Recip. Competitors
Wrtsil
Recip.
Competitors5%Wrtsil
8%
2006
20000
40000
60000
M
Gas
Turbines
Market size
10370MW
Wrtsil Capital Markets Day14 Wrtsil
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
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Wrtsils legs
3. Renewable power plants
BioPower serves the market within Euro e and other subsidized
regions
R&D for small scale gasification & reciprocating engine based power
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Wrtsils legs
4. OIL & GAS industry applications Industr c cle different from electricit business
High investments on exploration and transportation infra
Wrtsil a niche player in Gas compression in selected markets
Field power applications in South America, Africa, Russia
Selected um in a lications world wide
Expansion opportunities
Product capable to combust crude oil and flare gases directly without on-
s e ue rea men
High efficiency engines with reciprocating compressor enable major
savings in pipeline gas compression compared to traditional gas turbine
cen r uga compressor. ma es a o a y new pro uc s ze
(12000 hp) available for this business
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All fuels, Power Plants / Engines2008
ue s, ower p an mar e - , . - , . -
25000
Wrtsil Recip. Competitors Gas Turbines
Recip.
Competitors
Wrtsil
17%
Market size
15000
20000 Gas
Turbines
67%
16%
5000
10000
M
Wrtsil
16%
2007
180000 Gas Turbines
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Gas
Turbines
69%
Recip.
Competitors
15%
Market size
14065MW
Cumulative power plant market since 1996
120000
140000
160000Recip. Competitors
Wrtsil
Wrtsil15%
2006
40000
60000
80000MW
Gas
Turbines
68%
Recip.
Competitors
17%
Market size
14750MW
Wrtsil Capital Markets Day17 Wrtsil
0
20000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
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All fuels, Power Plants / Engines
Market share changes, linear average
51.3%
60.1%
51.6%
.
52.0% 51.6%
60.0%
.%
36.6%
44.6% 46.5%
47.4%
40.2%
47.4%44.5%
40.0%
50.0%
16.3%
22.9%
15.0% 16.3% 16.7%20.0%
30.0%
11.3% 11.7% . . .
9.8%7.9%
10.4%
10.0%
.
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Wrtsil share, Recips Wrtsil share, Recips + GT
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Why is it different this time?
Wrtsils has 4 Legs with different customers and industry cycles
OIL
Power Plants
GAS
Power Plants
Renewable
Power Plants
OIL & GAS
Industry
Opportunistic Focused New focus areas
Standardized modular products enable customization Total accessible markets are growing due to
,
wind and nuclear
Mind set change in large (western) utilities
Grid capacity optimization Locate peaking units inside the load pockets
Wind firming requires a new type of dynamic generation segment in the portfolio
Wrtsil Capital Markets Day19 Wrtsil
ccess o gas n eve op ng coun r es ue o gas n ras ruc ure eve opmen
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