Wärtsilä (WRT1V) Pre-silent call summary

Executive summary

• Portfolio business divestments are nearly complete, with Gas Solutions to close in Q2 2026 and Water & Waste in Q3 2026; no portfolio businesses expected from Q4 2026 onward.

• Order book is lower year-on-year due to divestments and reduced energy storage intake, but marine and energy segments remain strong.

• Data center market pipeline grew 50% in six months, though project volatility remains high.

• Capacity expansion at STH is on track for a 35% increase by 2028, with supply chain readiness emphasized.

Trading performance and revenue trends

• Order book lengthening due to longer-term contracts and shift from EPC to EEQ.

• Gas Solutions order book was adjusted by approximately EUR 900 million, with annual revenue in 2025 at EUR -225 million.

• Water & Waste business reported annual revenue of approximately EUR 50 million in 2025.

• Existing order book sales are distributed across 2024, 2025, and 2026 for Marine, Energy, and Energy Storage segments.

• Energy storage order intake remains weak and market is disrupted, impacting short-term outlook.

Profitability and margins

• Cost inflation risks mitigated by long-term supply agreements and improved coordination between supply management and quoting.

• Engines and components less exposed to inflation than EPC/integration businesses.

• Margin impact from shift to equipment deliveries, with fixed overheads below gross profit.