Wärtsilä (WRT1V) Pre-silent call summary

Executive summary

• Q4 performance aligned with expectations, with stable markets and positive trends in key marine segments, especially cruise and ferry, driven by fleet replacement and regulatory tightening.

• Energy sector outlook remains strong, with balancing and storage demand supported by renewables and grid limitations.

• Divestment of ANCS announced; financial impact to be disclosed with Q4 earnings.

Trading performance and revenue trends

• Marine segment saw continued growth in cruise, ferry, offshore, and container vessels, with regulatory changes driving demand.

• Energy segment experienced robust demand for storage and engine power plants, with renewables as the cheapest electricity source.

• Aftermarket service revenue streams show structural growth, with book-to-bill ratios above one across segments.

• Q4 order intake in storage and thermal improved over Q3, with more than one major order in storage.

Profitability and margins

• Comparable operating margin typically peaks in Q4, but 2024 is not expected to follow this seasonality; no material deviation from previous margin guidance.

• Selectivity in order intake for storage projects supports margin quality.

• 12% operating margin target remains in focus, supported by aftermarket growth.