Wärtsilä (WRT1V) Strategy update summary

Market outlook and demand trends

• Strong demand continues in both energy and marine sectors, with data center growth and balancing power opportunities driving optimism across multiple regions, including the U.S., Australia, and parts of Europe.

• Data center demand is robust, with significant off-grid opportunities expected to grow, especially in the U.S., and similar trends emerging in Japan through cooperation with Tokyo Gas.

• Balancing power is a key growth driver, supported by electrification, increased cooling needs, aging infrastructure, and renewable integration.

• Marine demand remains solid, with core segments like cruise and LNG performing well, though some service slowdowns are noted due to customer budget reallocations.

• Order backlogs are strong, with energy new build margins up 500 basis points since early 2025.

Capacity, delivery, and supply chain

• Production capacity is fully sold out for 2028, with sales now extending into 2029 and 2030, reflecting sustained demand and a moving delivery window.

• Expansion at the Vaasa site is staged, with flexibility built into the supply chain and workforce to manage demand swings.

• Further capacity expansion is possible if long-term demand trends persist, with a disciplined, stepwise investment approach.

• No slot reservations are offered to customers, maintaining flexibility in allocation.

Competitive positioning and technology

• Medium-speed reciprocating engines are positioned as highly competitive due to fuel efficiency, flexibility, and low water consumption compared to gas turbines.

• The company leverages a strong service network and long-standing relationships, such as with Tokyo Gas, to maintain strategic market positions.

• AI and digitalization are integral to service offerings, with significant investments in edge platforms and data architecture to enhance uptime, reliability, and customer value.