We hosted a strategy call with our CEO Håkan Agnevall on June 9. The CEO strategy calls aim to offer an opportunity to discuss Wärtsilä’s strategy and the progress of its implementation with the CEO. No material new information was disclosed during the call.
The recording of the call is available here.
Wärtsilä is well positioned to capture future growth opportunities in marine and energy markets
Håkan Agnevall opened the call by highlighting the continued strong demand in energy markets. While data centres remain a key driver, the growth outlook is broader, supported by ongoing electrification across industries, increasing cooling demand, and aging power infrastructure, particularly in the United States. Additionally, the growing share of renewable energy is increasing the need for balancing solutions, an area where Wärtsilä has long been active. Markets such as Australia illustrate this trend, as the shift away from coal is driving demand for flexible balancing solutions.
Demand in marine markets also remains solid. Core segments such as cruise and ferries continue to perform well, with long-term order visibility supported by forward-looking investments. At the same time, there are early signs of recovery in offshore and LNG-related segments. Regulatory developments and decarbonisation efforts are further strengthening demand for fuel-efficient and fuel-flexible technologies, reinforcing Wärtsilä’s position as a technology leader in this space.
Strategy implementation continues with the completion of Portfolio Business divestments
Wärtsilä has now completed its Portfolio Business divestments, marking a milestone in the company’s strategic focus. On 1 June 2026, Wärtsilä announced the completion of the final two divestments: Gas Solutions was transferred to Mutares SE & Co. KGaA, and the Water & Waste business to Solix Group AB, following agreements signed in December 2025 and February 2026. The businesses, including their personnel, were fully transferred to the new owners on the same date. In 2025, Gas Solutions generated approximately EUR 390 million in annual revenue, while Water & Waste contributed around EUR 50 million.
These final steps follow earlier divestments completed in 2025, including Automation, Navigation & Control Systems (ANCS) divestment in July and Marine Electrical Systems (MES) divestment in October, with a combined annual revenue of approximately EUR 225 million and an order book adjustment of around EUR 900 million.
With the completion of the latest transactions, Wärtsilä Portfolio Business no longer has any remaining business activities.
Strengthening the technology foundation and accelerating capacity growth
Wärtsilä’s Sustainable Technology Hub (STH) in Vaasa, Finland has developed into a central platform that brings together technology innovations and large-scale production in the energy and marine sectors. The development during 2025 and 2026 demonstrates a clear progression: first strengthening research and development capabilities, followed by an expansion of production capacity.
In April 2025, Wärtsilä announced an investment of approximately EUR 50 million focused on enhancing testing facilities and accelerating the development of low- and zero-carbon technologies, with the aim of shortening development cycles and bringing new solutions to market more efficiently.
Building on this foundation, Wärtsilä moved forward with significant production investments. In February 2026, the company announced an investment of approximately EUR 140 million to increase production capacity by 35%, followed by an additional EUR 90 million investment in May 2026. Together, these steps will increase total capacity by around 65% compared with 2025 technical production capacity, with expansion scheduled for completion in phases between 2028 and 2029. Once all capacity expansions will have been commissioned, we will be able to produce 120% more gigawatts compared to the operational level in 2025.
These decisions are driven by expectations of continued demand growth in both energy and marine markets, supported by trends such as increasing electricity consumption, the rise of data centers, the growing share of renewable energy, and tightening environmental regulation. Overall, the developments highlight the role of the Sustainable Technology Hub as an integrated ecosystem where research, production, and expertise reinforce each other and enable Wärtsilä’s long-term growth strategy.
Q&A
How should we interpret the announced capacity expansion in relation to marine equipment, how large a share is marine engines?
The current capacity expansion at the Sustainable Technology Hub is entirely focused on engine production. While Wärtsilä also delivers other marine equipment such as propulsion systems, gearboxes and exhaust treatment systems, engines constitute its largest individual product category. The majority of the capacity increase will support energy-related engines, although the same facilities serve both energy and marine segments. Wärtsilä has not publicly disclosed a precise numerical split.
With capacity increasingly sold out, how will Wärtsilä balance demand between segments?
Wärtsilä will maintain a diversified approach and not prioritise one customer group exclusively, such as data centres. The company intends to continue serving long-term strategic customers across both energy and marine. However, customers should be aware that lead times are extending due to high demand, and early planning and dialogue are essential.
What is the total investment of the recently announced expansion?
We will invest altogether EUR 230 million in expanding our technical production capacity, consisting of EUR 140 million announced in February 2026 and EUR 90 million announced in May 2026. Additionally in April 2025, we announced a EUR 50 million investment to expand the R&D testing capabilities and facilities announced in April 2025.
How much will you expand the physical site?
This recent investment doesn’t include any facility expansion, as the STH facility expansion announced in April 2025 will also enable this latest capacity increase.
Did you consider any other locations (like USA) for capacity expansion?
When creating business cases, we always look at all options and opportunities for improvement. For these latest investments, an expansion in Vaasa was providing the best value for Wärtsilä. It is also good to note that the majority of our supply chain is in Europe.
Does rapid growth among competitors create pressure on Wärtsilä’s supply chain?
No. Wärtsilä does not see competitor growth as a supply chain constraint for its own operations, as the supply chains differ due to variations in engine size and design.
Are customers becoming more hesitant to commit to engine orders for deliveries in 2029–2030, due to expectations that grid capacity or turbines may become available?
Wärtsilä only books firm contracts and does not operate with reservation slots. Wärtsilä does not see customers shifting away from engines in anticipation of alternatives such as gas turbines or grid availability. Instead, key advantages such as fuel efficiency, flexibility, lower water consumption, and stable performance continue to support strong customer demand. While engines are not the optimal solution for every project, Wärtsilä expects continued growth.
How are IMO developments and regulatory uncertainty affecting the marine business and services?
Overall, long-term demand remains supported by the need for fuel efficiency and fuel flexibility, as vessels have long lifecycles and require strategic planning. However, delays in regulatory decisions at the IMO have negatively impacted retrofit activity. Other areas of the services business continue to perform well.
How does Wärtsilä view capital allocation, following the completion of Portfolio Business divestments?
Wärtsilä maintains a strong balance sheet and continues to prioritise organic growth, supported by ongoing R&D investment (around 4.8% of net sales in 2025). While Wärtsilä monitors acquisition opportunities, its primary focus remains on internal development. The company also expects to maintain strong working capital dynamics over the long term.
Are advance payment terms changing due to longer delivery times?
Payment structures remain largely unchanged. Customers typically pay down payments at or shortly after contract signing, regardless of delivery timing. Wärtsilä also includes contractual protections in case of cancellations but does not disclose details.
What feedback is Wärtsilä receiving from customers?
Customers value Wärtsilä’s ability to deliver reliable solutions on time and with expected performance. Wärtsilä highlights increasing appreciation for its expanding service capabilities, particularly in the US, where it is moving towards more advanced service agreements and operations-based offerings.
