General/market environment
2025 was a strong year for Wärtsilä. Despite increased uncertainty, the global economy showed greater resilience than anticipated.
In the energy market, global power consumption continued to grow as electrification accelerates, industries expand, and the need for data centre capacity rises. The transition towards renewables continued to advance, and investments in renewables are expected to have posted another record high year in 2025, supported by favourable economics. This trend continues to drive demand for Wärtsilä’s balancing solutions, both for engine power plants and battery energy storage systems.
In 2025, Wärtsilä continued its growth in the data centre segment. These applications require highly reliable and efficient power solutions to support their critical operations, and our medium-speed engine technology is well suited to meet these demands. During the year, we secured our first two projects in the US, which together included delivering 789 MWs of power from Wärtsilä engines. We continue to see interesting opportunities in this market going forward.
In the marine market, the year was impacted by geopolitical tensions and shifting trade patterns. Ordering eased across most vessel segments compared to the extraordinary activity seen in 2024, but the market sentiment for Wärtsilä’s key customer segments remained on a good level. The decarbonisation transition continues, despite the IMO’s postponement in October of a decision regarding the adoption of global regulations on shipping emissions. This postponement opens the door to a more fragmented landscape of carbon pricing mechanisms introduced by individual regions and countries. However, we continue to support our customers on their decarbonisation journey, offering a wide range of solutions ranging from improving fuel efficiency to abatement technologies such as carbon capture, and to alternative fuel and hybrid technologies.
Order intake, net sales, operating result and cash flow
In 2025, Wärtsilä's order intake increased organically by 6%. Equipment order intake increased in both Marine and Energy. In Energy Storage, the order intake was below the levels seen in 2024, but revived during the last quarter of the year. The Energy Storage business continues to face headwinds from elevated US tariffs and regulatory changes particularly related to FEOC (Foreign Entity of Concern), as well as intensified competition in other markets. Service order intake remained stable, supported by good development in agreements, while retrofits and upgrades decreased. The rolling 12-month book-to-bill ratio in service remains well above 1, indicating future growth. Organic net sales increased, with growth both in equipment and services.
The comparable operating result increased by 20% to EUR 829 million, representing 12.0% of net sales in 2025. The result was supported by good development in Marine, Energy and Portfolio Business, while the result in Energy Storage decreased, mainly due to lower volumes.
Cash flow from operating activities was at an all-time high level, following the improved result and a good level of received customer payments. We expect the negative working capital level to be sustained over the next years, and will continue our active efforts to manage working capital to maintain it well below the long-term historical average.
Outlook
Marine
Wärtsilä expects the demand environment for the next 12 months (Q1/2026-Q4/2026) to be similar to that of the comparison period.
Energy
Wärtsilä expects the demand environment for the next 12 months (Q1/2026-Q4/2026) to be better than in the comparison period.
Energy Storage
Wärtsilä expects the demand environment for the next 12 months (Q1/2026-Q4/2026) to be better than in the comparison period. However, the current geopolitical uncertainty particularly impacts this business and may affect growth.
In general, Wärtsilä underlines that the current high external uncertainties make forward-looking statements challenging. Due to high geopolitical uncertainty, the changing landscape of global trade, and the lack of clarity related to tariffs, there are risks of postponements in investment decisions and of global economic activity slowing down.
Q&A
You expect the demand environment to be “better” for the next 12 months (Q1/2026–Q4/2026) for Energy. What are the main drivers for this?
- The demand for electricity is rising at a faster pace.
- Renewable energy (wind and solar) is anticipated to be the most affordable way to generate electricity going forward. The growing share of renewable energy in the system requires balancing power to cover for intermittency.
- Data centres offer an interesting baseload business opportunity driven by grid capacity limitations and long lead times to grid access. According to IEA, data centre demand is a key driver for recent increases in global electricity demand forecasts, and this has benefitted the engine power plant demand environment.
- Long lead times for competitor technologies like gas turbines have increased awareness of, and interest in engines, and there is a good pipeline of business opportunities.
- Increasing number of customers realise the intrinsic benefits of engines compared to gas turbine technology: high energy efficiency, ultra-low water consumption, no thermal or altitude derating, modular solution with high flexibility.
- Order intake in Q1 2026 has so far been good, with two orders in the US already announced totaling 552 MW.
- The utilisation of our Energy installed base is stable, providing good service opportunities going forward and enabling us to continue moving up the service value ladder.
- In general, we underline that the current high external uncertainties make forward-looking statements challenging. Due to high geopolitical uncertainty, the changing landscape of global trade, and the lack of clarity related to tariffs, there are risks of postponements in investment decisions and of global economic activity slowing down.
You expect the demand environment to be “similar” for the next 12 months (Q1/2026–Q4/2026) for Marine. What are the main drivers for this?
- Clarksons forecasts that vessel contracting activity in 2026 will remain broadly in line with 2025. Contracting activity in many of Wärtsilä’s key vessel segments has been very strong in recent years and has supported Wärtsilä’s equipment order intake. While these key segments continue to perform well, contracting volumes in 2026 are expected to remain supportive but largely similar to those seen in 2025.
- Typically, there is a 3–12 month lag between placing a vessel order and ordering the equipment, although this varies by equipment type and vessel segment.
- The regulations already in place today are incentivising ship owners to invest in decarbonisation. We offer a broad and flexible portfolio of technologies to support a wide range of decarbonisation strategies for our customers. We are helping our customers navigate the transition by optimising fuel efficiency and de-risking the future through fuel flexibility, leveraging hybrid solutions, alternative fuels, and carbon capture.
- The decision to postpone the vote to adopt the IMO's Net Zero Framework by one year opens the door to a fragmented landscape of carbon pricing mechanisms introduced by individual regions and countries. The EU already has its system in place, while others are signaling plans for their own programs, adding complexity to global shipping.
- In service, we see good opportunities with our strategy of moving up the service value ladder and supporting our customers in improving their operational efficiency.
- In general, we underline that the current high external uncertainties make forward-looking statements challenging. Due to high geopolitical uncertainty, the changing landscape of global trade, and the lack of clarity related to tariffs, there are risks of postponements in investment decisions and of global economic activity slowing down.
You expect the demand environment to be “better” for the next 12 months (Q1/2026–Q4/2026) for Energy Storage. What are the main drivers for this?
- The need for energy storage systems has grown rapidly and is expected to further increase driven by the energy transition.
- However, the current geopolitical uncertainty and trade tariffs particularly impact this business and may affect growth.
- The US market is facing headwinds from tariffs on China and other nations and regulatory changes particularly related to FEOC (Foreign Entity of Concern). These are also leading to increased competition in other markets.
- Order intake during the comparison period (last 12 months) has experienced weaker development. The market dynamics in Energy Storage have changed significantly following the implementation of the US tariff measures. Equipment order intake in Energy Storage is lumpy by nature, which means that order intake can vary significantly from one quarter to another.
- In general, we underline that the current high external uncertainties make forward-looking statements challenging. Due to high geopolitical uncertainty, the changing landscape of global trade, and the lack of clarity related to tariffs, there are risks of postponements in investment decisions and of global economic activity slowing down.
How does the data centre market look? How many orders can we expect in 2026?
- We continue to see strong interest in data centre power, particularly in the US, where the market fundamentals remain attractive. For Wärtsilä, the sweet spot is specifically in the 50-400 MW baseload power range, with customers being third-party Energy Centres, Independent Power Producers (IPPs) and Utilities. We secured our first two data centre orders in the US in 2025, as well as a large U.S. data‑center‑driven utility order already in January 2026.
- Currently, the US tariffs are not considered a major concern, given the high demand.
- While the data centre market is most active in the US, we are also working on opportunities in Europe, Asia, and the Middle East.
- We have ongoing discussions regarding several data centre projects, which are at various stages of maturity. We see good opportunities, but the exact timing of the orders is difficult to estimate.
Wärtsilä's order book for 2026 deliveries is lower than what it was a for 2025 deliveries a year ago. How does this affect sales?
- Wärtsilä’s current order book for 2026 deliveries is EUR 4,991 million (5,075). The year-on-year decline is explained by several factors.
- First, the divestments of Automation, Navigation and Control Systems (ANCS), and Marine Electrical Systems (MES) business units removed approximately EUR 900 million from the order book.
- Second, our order book will be delivered over a longer time period, driven by demand and market dynamics.
- Third, order intake in Energy Storage was weak in 2025. This lower level of new orders directly affects the size of the order book for 2026 deliveries.
- Finally, the shift from Engineering, Procurement and Construction (EPC) projects toward Engineering and Equipment supply (EEQ) affects the size of the contract as well as the timing of revenue recognition. Revenue from EEQ projects is recognised at a point in time, normally when equipment is delivered, whereas revenue from EPC projects was gradually recognised over the duration of the contract using the percentage-of-completion method. The impact is that in EPC contracts order intake converts gradually into sales, whereas in EEQ contracts order intake converts as a whole into sales at delivery.
- The 2026 order book for Marine and Energy combined is 8% higher from one year ago, while the 2026 order book of Energy Storage is 40% lower.
- The current order book for 2026 deliveries is EUR 2,341 million (2,227) for Marine, EUR 1,619 million (1,434) for Energy, and EUR 426 million (707) for Energy Storage.
Why did your Q4 order intake decrease by 11% vs. Q4/2024?
- Group level decrease was due to strong comparison period of Energy Storage as well as divestment of two of our Portfolio Business units (ANCS and MES).
- Order intake for Marine and Energy combined increased by 6% (+15% for equipment and -1% for service). Also exchange rate differences had a significant impact. Organically order intake for Marine and Energy combined increased 11%.
Wärtsilä ROCE has improved significantly and was 65.4% for 2025. What were the main drivers behind that?
- The improvement is driven by both our profitability development as well as the decreasing trend of capital employed. Decrease in capital employed has been driven by favourable working capital development.
Your Marine service rolling 12-month book-to-bill ratio has been trending downwards in 2025. Why is this?
- Marine service closed 2025 with a full‑year book‑to‑bill slightly above 1, indicating continued growth.
- Rolling 12-month book-to-bill for agreements declined in Q4 due to a combination of factors: the significant Royal Caribbean agreement booked in Q4/2024 dropped out of the rolling 12‑month order intake, agreement order intake in Q4/2025 was lower with only few new agreements due to periodisation. These factors combined with deliveries in Q4/2025 being very strong created a double negative impact on the book-to-bill for agreements in Q4/2025.
- The rolling 12-month book-to-bill ratio for retrofit projects remained well below 1. Deliveries in 2025 were strong, supported by a strong backlog. Retrofits and upgrades are lumpy by nature, and the timing of orders can have a significant impact on the book-to-bill ratio.
How did the Portfolio Business divestments impact your key financials in 2025, and what should we expect for 2026?
- When reviewing the Group level figures, it is good to note that the divested Portfolio Business units Automation, Navigation and Control System (ANCS) and Marine Electrical Systems (MES) were fully included in 2024 figures but have not been included in the figures after the closing of the divestments (July 2025 for ANCS and November 2025 for MES).
- Order intake of ANCS and MES totaled ~500 MEUR in 2024 and ~200 MEUR in 2025, while net sales totalled ~330 MEUR in 2024 and ~225 MEUR in 2025. At closing of the divestments, ANCS and MES had a combined order book of ~900 MEUR, of which ~100 MEUR was services. With the closing of the divestments, this order book is no longer included in the reported figures. Excluding the impact of these two business units, the order book grew by 10% in 2025.
- In 2026, ANCS and MES are no longer contributing to Wärtsilä figures. The divestment of Gas Solutions business to Mutares SE & Co. KGaA is expected to be completed in Q2/2026. Net sales of this business were ~390 MEUR in 2025. After the divestment of Gas Solutions, only Water and Waste (annual sales of ~50 MEUR) remains in Portfolio Business.
You once again had very strong cash flow from operating activities in Q4, what are your expectations going forward?
- Cash flow from operating activities improved to EUR 652 million, compared to EUR 437 million a year ago. The good development was supported by the improved result and a good level of received customer payments. Working capital further improved and was EUR -1,263 million at the end of Q4.
- We expect the negative level to be sustained over the next years and will continue our active efforts to manage working capital to maintain it well below the long-term historical average.
What are your capital allocation principles? What would be the optimal balance sheet position for you?
- We prioritise investments in areas that align with our strategic goals, such as R&D for the development of decarbonization technologies. Our R&D expenditure in 2025 was 4.8% of net sales. In 2026, we also anticipate our R&D expenditure to be >4% of net sales.
- We are also committed to delivering value to our shareholders through dividends. Our financial target is to distribute at least 50% of earnings through dividends. For financial year 2025, the Board of Directors proposes a base dividend of 0.54 EUR per share and an extraordinary dividend of 0.52 EUR per share.
- When it comes to M&A, we believe we have what it takes to pursue our strategy of decarbonising the marine and energy markets. Some smaller bolt-on acquisitions might happen.
- We currently have a strong balance sheet, which positions us well to navigate the current geopolitical uncertainties. Our target is to maintain gearing below 0.50
How has the capacity utilisation rate in Vaasa factory developed and how will the new, recently announced expansion impact on your capacity going forward?
- Recently, we have been operating the Vaasa factory at 75% of technical capacity.
- After the reporting period, we communicated that we will invest approximately EUR 140 million to further expand our technical production capacity by 35% at our state-of-the-art Sustainable Technology Hub (STH) and associated global supply chain. Earlier in the year, we also announced a EUR 50 million expansion of our R&D testing and manufacturing capacity at STH.
- The expanded capacity will increase Wärtsilä’s industrial capacity and strengthen the capacity of the associated global supply chain, positioning Wärtsilä to meet growing market demand in energy and marine. The expanded capacity will enable Wärtsilä to deliver a higher volume of engines, and better support customer needs. Furthermore, we are reinforcing Wärtsilä’s role as a long-term partner for customers in both energy and marine, supporting their evolving needs and advancing the decarbonisation of these industries. The capacity expansion is expected to be operational in the first quarter of 2028.
