Strategy

Wärtsilä’s purpose is to enable sustainable societies with smart technology. The demand for clean and flexible energy and the need for efficient and safe transportation are increasingly affecting the way that customers operate. This forms the basis for Wärtsilä’s Smart Marine and Smart Energy visions.

Wärtsilä's profitable growth ambitions are supported by its strong presence in key markets and a superior global service network. An integrated portfolio of services, systems, and products that covers customer needs throughout the full lifecycle positions Wärtsilä well to respond to the demand for energy efficient and innovative solutions. Emphasis is given to optimising performance through upgrades, modernisations, fuel conversions, and safety solutions, and to using data analytics and artificial intelligence to support customer business decisions. The utilisation of connectivity and smart technologies plays a key role in the optimisation of assets and in providing strategic input to customers in order to enhance their business growth. Asset management will drive future growth in lifecycle solutions and enable new "as-a-service" business models.

Wärtsilä’s digital transformation provides enhanced customer value through an increased focus on collaboration and knowledge sharing. With its flexible production and supply chain management, Wärtsilä constantly seeks new ways to maintain high quality and cost efficiency - often in co-operation with customers and leading industrial partners. Investments in research and development, and specifically in digitalisation, create a strong foundation for securing and strengthening the company’s position at the forefront of market innovation.

This innovative culture, together with a constant emphasis on safety, diversity, and high ethical standards, attracts skilled and committed people and creates the basis for a high performing organisation. The focus on operational excellence ensures that Wärtsilä is a company easy to do business with and drives increased productivity and efficiencies for its customers.

Strategy implementation

Smart Marine

Wärtsilä’s aim is to lead the industry’s transformation towards a Smart Marine Ecosystem. Building on the sound foundation of being a leading provider of innovative products, integrated solutions, and lifecycle services to the marine and oil & gas industries, we aim to unlock new sources of customer value through connectivity, digitalisation, and use of smart technologies.

The maritime industry faces the challenge of realising decarbonisation by the end of the century. In order to do so, the industry will have to collaborate to introduce new technologies, legislations, and fuels (e.g. bioLNG, synthetic gases, hydrogen, ammonia). Industry players are faced with major sources of inefficiency that impose a significantly negative impact on business operations, environmental performance, and profitability. The three most notable of these are overcapacity, inadequate port-to-port fuel efficiency, and time wasted waiting when entering ports and other high traffic areas. Eliminating these inefficiencies forms the basis of Wärtsilä’s marine strategy towards decarbonisation and ecosystem thinking.

Wärtsilä is ideally positioned, together with its customers and partners, for positive disruptive development and to lead the transformation into a new era of shipping. Building on our extensive offering portfolio, and our vast installed base and industry know-how, we will continue to develop the smart technologies, business models, and competences needed to create a Smart Marine Ecosystem.

By applying smart technology and performance optimisation services, Wärtsilä aims to deliver greater efficiencies, minimised climate impact, and a higher level of safety to the shipping industry. This will result in more sustainable, safe, and profitable operations for ship owners and operators around the world. The ultimate goal is to enable sustainable societies with smart technologies.

Smart Energy

The energy landscape is in transition towards more flexible and sustainable energy systems. Wärtsilä envisions a 100% renewable energy future. Wärtsilä Energy’s objective is to be its customers’ most trusted partner in unlocking the value of an optimised energy transition by providing all the essential technologies, services, and solutions for sustainable, reliable, and affordable power systems.

The transition from traditional inflexible baseload generation to renewable dominated energy is driven by the decreasing cost of new technologies. The operating environment is becoming more complex, and new players are entering different parts of the value chain. Storage technology is changing old design principles, and the importance of flexible gas is increasing. Simultaneously, the role of consumers is gradually gaining importance in power production and as a source of flexibility. Digitalisation throughout the industry brings new opportunities for predicting consumption and maintenance needs and can deliver improved competitiveness.

Wärtsilä is at the very core of future energy systems. The company’s flexible power generation solutions and energy storage systems provide a unique combination of energy efficiency as well as fuel and operational flexibility in baseload, balancing, and peaking applications. These solutions provide the needed backup for existing high renewable content power systems or can later be shifted from baseload or intermittent operations to backup mode, as the energy transition proceeds. The aim is to continuously develop optimal and environmentally sound solutions for customers by focusing on Wärtsilä’s core competences: market and system understanding, EPC capabilities, system optimisation, and lifecycle support.

Wärtsilä’s energy services provide a broad range of high-quality services and solutions to enhance business performance of power generation companies. The solutions range from spare parts and maintenance services to ensuring maximised operational life, increased efficiency, and guaranteed power plant performance. Wärtsilä maintains and optimises power plant performance with comprehensive lifecycle solutions encompassing technology, software, and service expertise, as well as a holistic view and understanding of installations on a system level. Our goal is to secure our customers’ investments with guaranteed power plant availability and reliability.

Sustainability

Economic
Wärtsilä aims to meet shareholder expectations and contribute towards the well-being of society. This requires efficient, profitable, and competitive company operations. Good economic performance establishes a platform for the other aspects of sustainability – environmental and social responsibility.

Environment
Wärtsilä's aim is to be a forerunner in sustainable innovation and furthermore reduce emissions in our customer’s operations and in societies overall. Wärtsilä supplies smart technologies and services that help to mitigate climate change and protect our oceans and seas. We continuously work on achieving high environmental standards in our operations, and improving the environmental performance and efficiency of our products and solutions through R&D, collaboration, partnerships, and active engagement in ecosystems. In doing this, we help our customers and society at large to meet the goals of the tightening global environmental regulations and guidelines.

Social
We have high ethical standards and we care about the communities in which we operate. Our business operations and relations with our stakeholders are governed by our Code of Conduct. Wärtsilä is a responsible employer, and we seek to offer our employees an interesting and exciting workplace where openness, respect, trust, equal opportunities, and scope for personal development prevail. A further aim is to offer a hazard-free working environment to our employees and contractors, and to minimise the health and safety risks associated with the use of our products and services. Through effective supply chain management and continuous development we strive to ensure that our values expressed in the Code of Conduct are promoted in our whole value chain.

Strategy implementation in 2019

2019 saw the introduction of several new concepts and solutions to support the realisation of Wärtsilä’s strategy. These included navigation solutions for the marine markets, a new hybrid solution for the energy markets that pairs engines with storage technology, as well as service solutions leveraging advanced diagnostics to optimise performance.

Wärtsilä’s Smart Marine and Smart Energy initiatives resulted in a number of important orders that validated the commercial feasibility of this approach. Among the most notable of these orders was one to equip Anglo-Eastern’s fleet of over 600 vessels with a fleet optimisation solution. Wärtsilä also secured its first order for the SmartDock system, making it the world’s first commercially available auto-docking solution. The need for flexible power solutions to support the expansion of renewable energy and secure grid reliability was illustrated by the strong growth in energy storage and optimisation orders. Won contracts included the 100 MW/100 MWh total capacity energy storage project awarded to Wärtsilä in South East Asia. The energy storage system, which includes the advanced energy management software platform GEMS, will support the region in reducing its reliance on fossil fuels. Another order reflecting the benefits of flexibility was the contract awarded to Wärtsilä to supply a 200 MW engine power plant to Cambodia. In addition to adding much needed capacity to the grid, the plant will provide fast-starting, balancing flexibility to enable the future integration of increased levels of renewable energy into the power system.

Collaboration with industry stakeholders is an essential element in the development of technologies needed to meet the changing market requirements, and Wärtsilä signed several new partnership agreements during the year. Among these were agreements aimed at accelerating the development and commercialisation of renewable fuels in the energy markets, and joint initiatives to promote the decarbonisation of shipping.

Several major milestones were reached during 2019 with regards to the construction of the Smart Technology Hub, a new centre of research, product development and production. The project progressed from planning to implementation, with excavation work and construction started in August, and the first partners selected for the Smart Partner Campus.

Wärtsilä has continued its leadership development programmes in many areas. Increased emphasis is being placed on establishing virtual learning solutions, since these can ease and offer greater flexibility in accessing learning opportunities, while also saving time and cost. A new leadership development programme for senior managers was launched mid-2019, with the focus on creating a Wärtsilä culture that builds and sustains high performance. The programme contains elements related to leading high performing teams, leadership and performance excellence, and customer centricity.

The health and safety of personnel is a priority for Wärtsilä, and zero lost-time injuries continues to be the company’s global target. Lost-time injury frequency was 2.25 in 2019, which represents a decrease of 10% compared to the previous year. Proactive measures to further strengthen the safety culture within Wärtsilä continued throughout the year. As a highlight, management safety walks increased by 56%, and near miss reporting by 14% compared to the previous year. Furthermore, altogether 3,900 persons completed ‘Champions in Safety’, a new training programme for front line employees. Wärtsilä’s fifth global safety day was arranged in March, the objective being to raise awareness of Wärtsilä’s lifesaving rules.

? 2020 W?rtsil?
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