Wärtsilä (WRT1V) Strategy update summary

Market and demand outlook

• Strong demand persists in both energy and marine segments, with energy driven by electrification, aging infrastructure, and balancing needs as renewables grow.

• Data centers and air conditioning are highlighted as major future growth drivers, with air conditioning potentially surpassing data centers.

• Marine demand remains robust, especially in cruise, ferry, offshore, and LNG carrier segments, with decarbonization and fuel flexibility as key themes.

• Australia and the U.S. are notable for increasing balancing power needs, with Australia moving away from coal and expanding renewables.

Capacity expansion and order intake

• Production capacity is set to expand by 120% by 2029 compared to 2025, with most of the new capacity allocated to energy engines.

• The company is largely sold out for 2028 and has begun selling into 2029, with lead times for new contracts stretching to three years.

• Only firm orders are announced, not slot reservations, to ensure stability and transparency in reporting.

• Capacity expansion investments focus on both in-house facilities and supply chain partners, with flexibility to further expand in Vaasa.

Competitive landscape and product positioning

• Engines are the dominant and fastest-growing product group, with a focus on larger engines suitable for expanding data center needs.

• Competitors use different sales models and manufacturing footprints; the company relies on direct sales and a concentrated production base.

• High-speed engines from competitors are selling due to shorter lead times, but long-term value is expected to favor larger, more efficient engines.