W?TSIL?CORPORATION FINANCIAL STATEMENT BULLETIN 2009
(Thomson Reuters ONE) - W?sil?orporation FINANCIAL STATEMENTS RELEASE 28 January 2010 at 8.30 localtimeALL TIME HIGH NET SALES AND OPERATING PROFIT, STRONG CASH FLOWFOURTH QUARTER HIGHLIGHTS- Strong net sales EUR 1,519 million (1,530)- All time high profitability 14.4 % of net sales (12.9). Operating result(before nonrecurring items) grew to EUR 219 million (197). EUR 40 million ofnonrecurring expenses related to restructuring measures recognised - Earnings per share excluding nonrecurring items amounted to 1.48 (1.46)- Order intake at last year's level, EUR 823 million (823). Recovery in PowerPlants orders and signs of recovery in offshore. Services continued strong.- Adjustment of production capacity to lower order intake was accelerated- Cash flow from operating activities EUR 207 million (23)HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-DECEMBER 2009- Strong year, net sales grew 14%, to EUR 5,260 million (4,612),- Profitability at record level, 12.1% of net sales (11.4). Operating resultbefore nonrecurring restructuring items grew to EUR 638 million (525). Includingthe restructuring items, the operating result totalled EUR 592 million, 11.2% ofnet sales.- Earnings per share excluding nonrecurring items amounted to 4.30 euros (3.88)- Strong cash flow from operating activities EUR 349 million (278)- Order intake EUR 3,291 million (5,573), a decrease of 41%- Order book total EUR 4,491 million (6,883), a decrease of 35%- Materialised order cancellations totalled EUR 410 million- Dividend proposal 1.75 euros/shareOLE JOHANSSON, PRESIDENT AND CEO:"The year 2009 was very successful for W?sil?n many ways. Group net salesgrew by 14%, coupled with an all time high operating profit. The demand forpower plants continued on a healthy level and the Services business maintainedits volumes in spite of significant lay ups of vessels. The global recession ofthe marine market was reflected as low ordering activity and cancellations inthe Ship Power business. While the standstill of new shipbuilding orders atlarge is expected to continue for another two years, first signs of recovery canbe seen in some Offshore and Special vessel segments. W?sil?'s activity in allmajor segments of shipping is a valuable element of future competitiveness. Theconcentration of shipbuilding activity to Asia, particularly to China isexpected to continue. This is the basis for the capacity adjustments withinW?sil?hip Power and Industrial operations that were initiated during 2009and early 2010. With power plant demand continuing at a healthy level,opportunities in Services, operations and manufacturing adjusted to the changingglobal markets and with continued focus on innovation, W?sil?s wellpositioned for the year 2010 and beyond".W?TSIL?'S PROSPECTS FOR 2010Due to the weakness of the shipbuilding sector we expect net sales to decline by10-20 percent in 2010. As a result of a stable service business, good demand forpower plants and proper adaptation of capacity, our operational profitability(EBIT% before nonrecurring items) should be between 9-10 %, well within theupper end of our long-term target range.ANALYST AND PRESS CONFERENCEAn analyst and press conference will be held on Thursday 28 January 2010, at10.45 a.m. Finnish time (8.45 a.m. UK time), at the W?sil?eadquarters inHelsinki, Finland. The combined web- and teleconference will be held in Englishand can be viewed on the internet at the following address:http://194.100.179.139/wip/directlink.do?newbrowser=1&pid=3161110To participate in the teleconference please call: +44 (0)20 7162 0125 and enterthe Conference ID: 854586. If you want to ask questions during theteleconference, press the number 1 on your phone to register for a question andthe # -key to withdraw a question. The event title for the call is: AnnualResults. Please be ready to state your details and the name of the conference tothe operator. If problems occur, please press the *-key followed by the 0-key.We would recommend that you would register to the conference in advance at thefollowing address:https://eventreg2.conferencing.com/webportal3/reg.html?Acc=158744&Conf=200493An on-demand version of the webcast will be available on the company websitelater the same day.W?sil?n briefW?sil?s a global leader in complete lifecycle power solutions for the marineand energy markets. By emphasising technological innovation and totalefficiency, W?sil?aximises the environmental and economic performance of thevessels and power plants of its customers. In 2009, W?sil?'s net salestotalled EUR 5.3 billion with more than 18,000 employees. The company hasoperations in 160 locations in 70 countries around the world. W?sil?s listedon the NASDAQ OMX Helsinki, Finland.FINANCIAL STATEMENTS BULLETIN JANUARY-DECEMBER 2009The annual figures in this financial statements bulletin are audited.FOURTH QUARTER 10-12/2009 IN BRIEF MEUR 10-12/2009 10-12/2008 Change Order intake 823 823 0% Net sales 1 519 1 530 -1% Operating result (EBIT) before nonrecurring restructuring items 219 197 11% % of net sales 14.4% 12.9% Nonrecurring items 40 Operating result 179 % of net sales 11.8% Profit before taxes 170 183 Earnings/share, EUR 1.48 1) 1.46 Cash flow from operating activities 207 231) Earnings/share excluding nonrecurring items (EPS including nonrecurring itemstotal EUR 1.17)REVIEW PERIOD JANUARY-DECEMBER 2009 IN BRIEF MEUR 1-12/2009 1-12/2008 Change Order intake 3 291 5 573 -41% Order book at the end of the period 4 491 1) 6 883 -35% Net sales 5 260 4 612 14% Operating result (EBIT) before nonrecurring restructuring items 638 525 21% % of net sales 12.1% 11.4% Nonrecurring items 46 Operating result 592 % of net sales 11.2% Profit before taxes 558 516 8% Earnings/share, EUR 4.30 2) 3.88 Cash flow from operating activities 349 278 Interest-bearing net debt at the end of the period 414 455 Gross capital expenditure 152 3661) Cancellations amounting to EUR 410 million have been eliminated form theorder book during the review period January-December 2009.2) Earnings/share excluding nonrecurring items (EPS including nonrecurring itemstotal EUR 3.94)MARKET DEVELOPMENTCONTINUED WEAKNESS IN THE SHIP POWER MARKETIn 2009, only 400 new ships were ordered, which is less than 10% of average neworders during the all time high years. The first half of the year wasparticularly difficult, an environment of oversupply within the major vesselsegments prevailed throughout the year. In the latter part of the year marketactivity picked up somewhat and a slight recovery was seen. Project financingstill seems to remain the most important factor in many new investments, andthis can be seen for example in offshore projects where there has not yet been arecovery, despite a surge in the price of oil. The strong and on-going recessionin the shipping and shipbuilding industry has left its marks on the market, withboth freight rates and new build prices at very low levels. Cancellations andrearrangements of existing orders will continue.Ship Power geographical marketsIn 2009, China secured approximately 50% (39) of global new building orders interms of number of vessels, followed by Korea with approximately 30% (29) of theorders. China's gain of market share continues to be at the expense of Japan 2%(16) and Europe 9% (10). In terms of Dead Weight Tons (DWT), China and Koreaeach secured around 45% of the global contracted volume. Once the broaderrecovery commences, the Asian shipbuilding market is expected to emerge evenstronger than earlier. The dominance will grow in all areas, including the morespecialised vessel segments.Ship Power market sharesW?sil?'s market share in medium speed main engines increased from 31% at theend of the previous quarter to 36%. The company's market share in low speed mainengines remained stable at 12% (13). In auxiliary engines the market sharesdecreased to 2% (4). Market shares have become more sensitive to individualorders since the total contracting volume is low.POWER PLANTS MARKETS RECOVERED SLIGHTLY BY THE END OF THE YEARIn 2009, demand for power plants was at a good level and offering activityremained high. Ordering activity was hampered by difficulties in arrangingfinancing and customer decision-making processes were slow. Ordering activityimproved in the fourth quarter, due mainly to the improved situation in thefinancial markets.Power Plants market sharesAccording to statistics compiled by Diesel and Gas Turbine magazine, the globalmarket for oil and gas power plants in W?sil?'s power range declined to11,570 MW (20,980) between June 2008 and May 2009. The market for gas powerplants, including both reciprocating engines and gas turbines, declined to7,090 MW (15,630), W?sil?'s share of the market being 13% (8). The market forheavy fuel oil plants decreased to 3,430 MW (4,050), W?sil?'s share being 46%(49). In light fuel oil plants the market decreased to 1.050 MW (1,300) andW?sil?'s market share was 3% (20). For W?sil?he relevant markets for lightfuel oil power plants are those running on liquid bio-fuels where hardly any newplants were ordered.SERVICES BUSINESS STABLE DESPITE CHALLENGING MARINE MARKETThe economic crisis has affected customers' businesses, cash flow and investmentlevels. Marine customers have been especially hit and this has also impactedthe maintenance of their installations, especially in the Merchant vesselsegment. However, although approximately 10% of the total vessel fleet islaid-up and the active engine base is underutilised, the medium-speed enginebase has largely maintained its planned maintenance schedules. In some marketsegments, fuel conversions, retrofits or other larger investments have beenpostponed while customers focus on essential repairs and maintenance. Powerplant installations continue to run at high levels with a stable demand formaintenance.W?sil?'s installed engine base in the Ship Power and Power Plant marketstotals over 160,000 MW and consists of thousands of installations distributedthroughout the world. Both end markets consist of several customer segments forServices, and W?sil?'s portfolio is the broadest in the market. These factorslimit the impacts of fluctuations in any individual market or customer segment.ORDER INTAKEThe Group order intake for the fourth quarter was at the same level as in thecorresponding period last year, and totalled EUR 823 million (823).The order intake for Ship Power totalled EUR 54 million (152), 64% below thecorresponding period last year. The fourth quarter order intake was 21% lowerthan in the third quarter of 2009 (EUR 68 million in the third quarter of2009). The order intake for Power Plants in the fourth quarter totalled EUR 300million (263), which was 14% higher than for the corresponding period last year.The order intake was 77% higher than in the previous quarter. This was mainlydue to the improved situation in the financial markets. During the quarter thelargest oil-fired power plant orders were those received from Greece and Kenya.During the fourth quarter W?sil?as contracted to supply a 170 MW gas-firedpower plant to Texas, USA. The power plant is to be located close to significantwind farm generation, and will serve to stabilise the grid when the output fromthe wind farms change unexpectedly because of weather changes. W?sil?lsoreceived several orders for gas-fired power plants to Turkey during the quarter.Order intake for the Services business totalled EUR 470 million (410) in thefourth quarter, a growth of 15% compared to the corresponding period 2008.Compared to the third quarter order intake decreased by 3% (EUR 483 million inthe third quarter of 2009). During the quarter an operation & maintenanceagreement was signed for a 160 MW coal plant located in India supplied by athird party. In December, a major 5-year agreement with Maersk LNG for five LNGvessels equipped with W?sil?0DF dual-fuel engines.W?sil?'s order intake for the review period January-December 2009 totalled EUR3,291 million (5,573), a decrease of 41%. W?sil?hip Power's order intakefor the review period was EUR 317 million (1,826), a decrease of 83% from thecorresponding period last year. The main part of the year reflected the verydifficult circumstances in the market. The Merchant customer segment represented36%, Offshore 17%, Navy 16% and Cruise & Ferry 15% of total orders received inShip Power during the review period.For the review period January-December 2009, the Power Plants order intaketotalled EUR 1,048 million (1,883), a 44% decrease compared to last year.Ordering activity was low during the first three quarters of the review perioddue to the financial crisis but improved during the fourth quarter. W?sil?ower Plants' order intake for the review period is the third highest orderintake in the business' history, which is notable considering the challengingmarket environment.Services' order intake for the review period January-December totalled EUR1,917 million (1,858). During the review period W?sil?ervices signed severaloperations and maintenance contracts in Brazil, Pakistan and the Philippinesamong others.ORDER BOOKAt the end of the review period W?sil?'s total order book stood at EUR 4,491million (6,883), a decrease of 35%.The Ship Power order book stood at EUR 2,553 million (4,486), -43%. During thereview period January-December 2009, cancellations of EUR 410 millionmaterialised and were deducted from the order book. The cancellations weremainly within the Merchant and Offshore segments. W?sil?ees a cancellationrisk in the year-end order book of approximately EUR 500 million (EUR 800million at the end of 2008).At the end of the review period the Power Plants order book amounted to EUR1,362 million (1,949), which is 30% lower than at the same date last year.The Services order book totalled EUR 576 million (445) at the end of the reviewperiod, an increase of 29%. Fourth quarter order intake by business MEUR 10-12/2009 10-12/2008 Change Ship Power 54 152 -64% Power Plants 300 263 14% Services 470 410 15% Order intake, total 823 823 0% Order intake Power Plants MW 10-12/2009 10-12/2008 Change Oil 293 290 1% Gas 332 207 60% Renewable fuels 0 0 0% Order intake for the review period by business MEUR 1-12/2009 1-12/2008 Change Ship Power 317 1 826 -83% Power Plants 1 048 1 883 -44% Services 1 917 1 858 3% Order intake, total 3 291 5 573 -41% Order intake Power Plants MW 1-12/2009 1-12/2008 Change Oil 1 172 2 029 -42% Gas 800 1 240 -35% Renewable fuels 35 80 -56% Order book by business MEUR 31 Dec. 2009 31 Dec. 2008 Change Ship Power 2 553 4 486 -43% Power Plants 1 362 1 949 -30% Services 576 445 29% Order book, total 4 491*) 6 883 -35%*) Cancellations amounting to EUR 410 million have been eliminated form theorder book during the review period January-December 2009.STRONG SALES GROWTHDuring the fourth quarter, W?sil?'s net sales totalled EUR 1,519 million(1,530). Net sales for Ship Power totalled EUR 538 million (579), a decrease of7%. Power Plants' net sales for the fourth quarter totalled 476 million (464),+3%. In Services the fourth quarter of 2009 represented an all time high quarterand amounted to EUR 504 million (495), +2%.W?sil?'s net sales for January-December 2009 grew by 14% and totalled EUR5,260 million (4,612). Ship Power's net sales grew 15% to EUR 1,767 million(1,531). Net Sales for Power Plants totalled EUR 1,645 million (1,261), a growthof 30%. Net sales from the Services business remained stable and on a good levelamounting to EUR 1,830 million (1,830). Net sales were evenly distributedbetween the businesses during the review period, Ship Power accounted for 34%,Power Plants for 31% and Services for 35% of the total net sales. Fourth quarter net sales by business MEUR 10-12/2009 10-12/2008 Change Ship Power 538 579 -7% Power Plants 476 464 3% Services 504 495 2% Net sales, total 1 519 1 530 -1% Net sales for the review period by business MEUR 1-12/2009 1-12/2008 Change Ship Power 1 767 1 531 15% Power Plants 1 645 1 261 30% Services 1 830 1 830 0% Net sales, total 5 260 4 612 14%PROFITABILITY IMPROVED CONSIDERABLYThe fourth quarter operating result before nonrecurring expenses was EUR 219million (197), 14.4% of net sales (12.9). For the review period January-December2009, the operating result before nonrecurring expenses rose to an all time highEUR 638 million (525), 12.1% of net sales (11.4). Including the nonrecurringexpenses, the operating result was EUR 592 million or 11.2% of net sales.W?sil?ecognised EUR 46 million of nonrecurring expenses related to therestructuring measures during the year.Financial items amounted to EUR -34 million (-9). Net interest totalled EUR -17million (-19). Dividends received totalled EUR 6 million (7). Other financialitems include impairment write-offs of non-operating receivables of EUR 10million and the interest rate differences on derivatives amounted to EUR 1million (10). Profit before taxes amounted to EUR 558 million (516). Taxes inthe reporting period amounted to EUR 161 million (127). The profit for thefinancial period amounted to EUR 396 million (389). Earnings per share were EUR3.94 (3.88). Return on Investment (ROI) was 29.9% (32). Return on equity (ROE)was 29.2% (31).BALANCE SHEET, FINANCING AND CASH FLOWW?sil?'s fourth quarter cash flow from operating activities was strong andtotalled EUR 207 million (23). For January-December 2009 the cash flow fromoperating activities was EUR 349 million (278). Working capital in the cash flowdecreased by EUR 25 million during the fourth quarter. Net working capital atthe end of the period totalled EUR 482 million (267). Advances received at theend of the period totalled EUR 879 million (1,243). Net working capital has beenexceptionally low during the past years due to the high amount of advancesreceived. Cash and cash equivalents at the end of the period amounted to EUR244 million (197).Net interest-bearing loan capital totalled EUR 414 million (455). W?sil?adinterest bearing loans totalling EUR 664 million (664) at the endof December 2009. The existing funding programmes include long-term loans ofEUR 591 million, unutilised Committed Revolving Credit Facilities totallingEUR 555 million and Finnish Commercial Paper programmes totalling EUR 700million. The total amount of short-term debt maturing within the next 12 monthsis EUR 73 million.The solvency ratio was 40.0% (34.3) and gearing was 0.28 (0.39).HOLDINGSW?sil?wns 7,270,350 B shares in Assa Abloy, or 2.0% of the total. Thisholding has been booked in the balance sheet at its market value at the end ofthe reporting period, EUR 98 million.CAPITAL EXPENDITUREGross capital expenditure in the review period totalled EUR 152 million (366),which comprised EUR 16 million (198) in acquisitions and investments insecurities, and EUR 136 million (168) in production and information technologyinvestments. Depreciation and amortisations for the review period amounted toEUR 165 million (99), of which EUR 40 million is related to the restructuringmeasures announced at the beginning of 2010.Maintenance capital expenditure for 2010 will be in line with or belowdepreciation. W?sil?ontinues to pursue its strategy to expand the Servicesoffering and network, and any acquisition opportunities in this market mayaffect total capital expenditure for the year.STRATEGIC ACQUISITIONS, JOINT VENTURES AND EXPANSION OF THE NETWORKW?sil?ontinued pursuing its strategy of expanding its network with newservice facilities in many countries, including Ukraine, Cameroon, Hungary,Chile, Dubai, Russia and Sweden. These facilities provide a good base for futureservice growth, and expansion the network will continue to be one of W?sil?'sstrategic focus areas in the future.In May, W?sil?cquired 60% of the shares of W?sil?avim Diesel of Italy,thus increasing its ownership of the company to 100%. W?sil?avim Diesel,which specialises in marine sales and service, has a strong market position,particularly in the Cruise & Ferry segment. The transaction resulted in EUR 8million of new goodwill.MANUFACTURINGIn April, W?sil?China Shipbuilding Industry Corporation (CSIC) andMitsubishi Heavy Industries (MHI) inaugurated a jointly owned, low-speed marineengine factory in Qingdao, Shandong Province, China. The joint venture companyQingdao Qiyao Wartsila MHI Linshan Marine Diesel Co. Ltd. (QMD) is owned by CSIC(50%), W?sil?orporation (27%), and MHI (23%).In May, W?sil?nd 3. Maj Shipbuilding Industry Ltd. of Croatia signed aten-year renewal of the existing licence agreement for the marketing, sale,manufacturing and servicing of W?sil?ow-speed marine diesel engines.During the second quarter, an important milestone was reached for the W?sil?2 engine with the 6000th engine produced Vaasa, Finland factory.The newest expansion investment in the W?sil?ME Zhenjiang Propeller Co. Ltdjoint venture in Zhenjiang, China was concluded and inaugurated in the secondquarter according to plan.The concentration of shipbuilding activity to Asia, particularly to China isexpected to continue. This is the basis for the adjustments of capacity withinW?sil?ndustrial operations that were initiated during 2009. At the beginningof the year 2010 a plan was announced to move the main part of the propeller andW20 generating set production to China.RESEARCH & DEVELOPMENTDuring 2009 several R&D milestones were passed. The Hercules-Beta researchproject proposal was approved by the European Commission in March. Hercules-Betarepresents a major international co-operative effort to maximise fuel efficiencywhile producing ultra-low emissions, and to develop future generations ofoptimally efficient and clean marine diesel engines.After performing successfully in a series of tests, the W?sil?ulphur oxides(SOx) scrubber was awarded the Sulphur Emission Control Area (SECA) ComplianceCertificate during the third quarter, by the classification societies Det NorskeVeritas and Germanischer Lloyd.In the fourth quarter, W?sil?xtended its dual-fuel technology to the lowerpower range with the launch of the new environmentally advanced W?sil?0DFengine. The new W?sil?0DF engine is a testimony to W?sil?'s ability tosuccessfully utilise gas as a main fuel for marine operations.The joint development project between W?sil?nd Mitsubishi Heavy IndustriesLtd. to design and develop new small, low-speed marine diesel engines of lessthan 450 mm cylinder bore, proceeded according to plan. This agreement is anextension of the strategic alliance created by W?sil?nd Mitsubishi in 2005.W?sil?s one of the three leading companies driving a major nationalthree-year combustion engine research programme in Finland. The initiative hasbeen set up by a wide and cross-functional consortium of Finnish technologycompanies and leading research institutes. The principle aim of the FutureCombustion Engine Power Plant (FCEP) programme is to develop reciprocatingengine and related power plant technologies. The aim is to maintain a leadingposition in global markets while meeting the requirements of tighteningenvironmental legislation.In 2009, W?sil?'s research and development expenses totalled EUR 141 million(121), or 2.7% of net sales.PERSONNELIn May 2009, W?sil?hip Power announced that it had initiated the formalprocess to reduce 400-450 jobs. The negotiations were initiated to adjust to thesubstantially weakened global marine market situation. The annual savings fromthese measures will be approximately EUR30 million. The effect of the savingsstarted to materialise gradually from the second half of 2009, and will takefull effect by the end of 2010. In the second quarter W?sil?ecognised EUR 6million of nonrecurring expenses in its operating result related to theadjustment measures taken in the Ship Power business. Altogether, W?sil?hipPower employs sales, project management, engineering services and ship designpersonnel in 30 countries.As the order book started to diminish also the Industrial Operations commencedpersonnel reductions in the form of temporary lay-offs and by reducing temporaryemployment contracts. In January 2010 W?sil?nnounced its plans to adjust tothe fundamental changes in the market by reducing its manufacturing capacity.W?sil?lso plans to move the majority of its propeller production andW20-generating set production to China, close to the main marine markets. In thecourse of 2010 W?sil?lans to reduce approximately 1,400 jobs globally withinthe Group.During the review period W?sil?'s personnel on average was 18,830 (17,623). Atthe end of December W?sil?ad 18,541 (18,812) employees. As the biggestsingle business, Services had 11,219 employees (11,011) globally.SUSTAINABLE DEVELOPMENTAt the beginning of 2009, W?sil?as for the first time included in the listof the 100 most sustainable companies in the world. The list was published atthe World Economic Forum in Davos, Switzerland.To illustrate its strong commitment to sustainability, W?sil?igned theUnited Nations Global Compact in 2009.W?sil?'s Sustainability Report, which is part of the annual report, isprepared in accordance with the GRI G3 guidelines. It represents a balanced andreasonable view of W?sil?'s economic, environmental and social performance.The Sustainability Report is assured.CHANGES IN MANAGEMENTThe following appointments were made to W?sil?orporation's Board ofManagement, with effect from 1 August 2009:Christoph Vitzthum (40) MSc (Econ.) was appointed Group Vice President,Services.Vesa Riihim? (43) MSc (Eng.) was appointed Group Vice President, Power Plantsand a member of the Board of Management.Tage Blomberg, Group Vice President, Services, retired during 2009 in line withhis employment contract.SHARES AND SHAREHOLDERSSHARES ON HELSINKI EXCHANGES 31 December 2009 Number of Number of Number of shares Shares votes traded 1-12/2009-------------------------------------------------------------------------------- WRT1V 98 620 565 98 620 565 137 102 273-------------------------------------------------------------------------------- 1. Jan - 31 Dec. 2009 High Low Average 1) Close-------------------------------------------------------------------------------- Share price 30.91 15.81 23.46 28.07-------------------------------------------------------------------------------- 1) Trade-weighted average price 31 Dec. 2009 31 Dec. 2008------------------------------------------------------------------------- Market capitalisation, EUR 2 768 2 072 million------------------------------------------------------------------------- Foreign shareholders 45.4% 45.8%-------------------------------------------------------------------------DECISIONS TAKEN BY THE ANNUAL GENERAL MEETINGW?sil?'s Annual General Meeting held on 11 March 2009 approved the financialstatements and discharged the members of the Board of Directors and thecompany's President & CEO from liability for the financial year 2008. TheMeeting approved the Board of Directors' proposal to pay a dividend of EUR 1.50per share totalling EUR 148 million. Dividends were paid on 23 March 2009.The Annual General Meeting decided that the Board of Directors shall have sixmembers. The following were elected to the Board: Ms Maarit Aarni-Sirvi?rKaj-Gustaf Bergh, Mr Kari Kauniskangas, Mr Antti Lagerroos, Mr BertelLangenski?and Mr Matti Vuoria.The firm of authorised public accountants KPMG Oy Ab, was appointed as thecompany's auditors.Organisation of the Board of DirectorsThe Board of Directors of W?sil?orporation elected Antti Lagerroos as itschairman and Matti Vuoria as the deputy chairman. The Board decided to establishan Audit Committee, a Nomination Committee and a Compensation Committee. TheBoard appointed from among its members, the following members to the Committees:Audit Committee:Antti Lagerroos, chairmanMaarit Aarni-Sirvi?rtel Langenski?Nomination Committee:Antti Lagerroos, chairmanMatti VuoriaKaj-Gustaf BerghCompensation Committee:Antti Lagerroos, chairmanMatti VuoriaBertel Langenski?EVENTS AFTER THE REPORTING PERIODOn January 19th 2010, W?sil?nnounced its plans to adjust to the fundamentalchanges in the market by reducing its manufacturing capacity. W?sil?lsoplans to move the majority of its propeller production and W20 generating setproduction to China, close to the main marine markets. The current propellermanufacturing in Drunen, and the component manufacturing DTS in Zwolle, both inThe Netherlands, are planned to be closed. The W?sil?0 generating setproduction in Vaasa Finland is planned to be closed and moved to China in orderto stay competitive in this market.In the course of 2010 W?sil?lans to reduce approximately 1,400 jobs globallywithin the Group. Of these reductions 570 are planned to be in the Netherlands,where W?sil?mploys 1,561 people. The remaining reduction will impact variousdivisions, functions and countries and will be clarified during the first halfof this year.The nonrecurring costs related to the restructuring will be approximately EUR140 million. This includes non-cash write-offs of approximately EUR 50 millionof which EUR 40 million is recognised in 2009. W?sil?s looking for an annualcost savings of approximately EUR 80-90 million. The effect of the savings willstart to materialise gradually during 2010, and will take full effect in thefirst half of 2011.BOARD OF DIRECTOR'S DIVIDEND PROPOSALThe Board of Directors proposes that a dividend of 1.75 euros per share be paidfor the financial year 2009. W?sil?'s distributable funds at the end of theperiod totalled EUR 585,892,877.82. The Annual Report 2009, including thefinancial review and the review by the Board of Directors, will be available onthe company website www.wartsila.com
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