We hosted a strategy call with our CEO Håkan Agnevall on November 27. 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 positioned for growth through focus on Marine and Energy
As the year draws to a close, Wärtsilä remains firmly focused on capturing long-term opportunities across our core businesses. Despite a dynamic global environment and evolving regulatory frameworks, our priorities are clear: advancing decarbonisation, strengthening lifecycle services, and delivering solutions that enable sustainable growth for our customers.
Services are a key enabler of growth and profitability, with agreement renewal rates exceeding 90% and book-to-bill ratios above 1 in both Marine and Energy. Our strong balance sheet supports continued investment in innovation, while maintaining resilience in a dynamic global environment.
Decarbonisation leadership in Marine
The Marine business continues to demonstrate resilience and growth potential. Our service offering is expanding steadily, supported by digital tools and performance-based agreements. Today, more than 30% of our installed base is covered by agreements, and this share is increasing year on year. This progress reflects Wärtsilä’s commitment to helping customers optimise operations and reduce emissions throughout the lifecycle of their assets.
Core segments remain robust, with contracting activity trending above historical averages. The decarbonisation journey continues, driven by customer demand for fuel flexibility and efficiency. While the IMO’s decision on a global carbon pricing mechanism has been postponed, regional regulations such as the EU ETS and FuelEU Maritime are already shaping investment decisions. Wärtsilä’s leadership in dual-fuel and multi-fuel technologies, methane slip reduction, and carbon capture solutions ensures we are well positioned to support customers in navigating these changes.
Market activity remains solid across key segments. Cruise and ferry orders are healthy, container traffic is holding up well, and oil and gas is reactivating. These trends, combined with Wärtsilä’s technology leadership, create a good foundation for continued growth in Marine.
Enabling renewable integration in Energy and capturing new opportunities in data centers
In Energy, global electricity demand continues to rise, reinforcing the need for flexible solutions that enable renewable integration. Wärtsilä’s balancing power technology plays a critical role in maintaining grid stability as wind and solar penetration increases. Activity remains strong in the United States, particularly in regions such as Texas, where affordability drives the renewables agenda, and similar opportunities are emerging in Latin America and Asia.
At the same time, structural changes in the data center market present a significant opportunity. As data centers scale to hundreds of megawatts, lead times for traditional utility connections become longer and not viable. This is prompting a shift towards off-grid baseload generation. This trend aligns well with Wärtsilä’s capabilities. Our modular, efficient engine technology offers clear advantages, including no thermal derating, minimal water requirements, and competitive capital costs. Recent orders and a robust pipeline highlight the potential in this segment, which could structurally reshape Wärtsilä’s market share in the United States over time.
Wärtsilä has identified a phased approach to data center power generation. Initially, off-grid solutions enable rapid deployment. As grid connections become available, balancing power can be sold back to the grid. Subsequently, data center customers integrate renewables, with engines providing balancing as needed. Looking ahead, there is potential to utilise renewable fuels, further enhancing sustainability.
Q&A
How do you prioritize between Marine and Energy orders when lead times range from 18 to 36 months?
It’s a complex strategic decision rather than a simple formula. We weigh long-term partnerships in both segments, assess future growth potential, and prioritize customers with global reach. In today’s environment, demonstrating commitment to core customers and partners is a key.
Are data center opportunities concentrated in states with existing business, or are new geographic areas involved?
Data center opportunities are emerging both in established states like Texas, where there is a strong installed base and customer relationships, and in new geographic areas. Wärtsilä is leveraging decades of experience in the US to expand into these markets.
What are the main drivers for engine adoption in US data centers?
Key drivers include lack of thermal derating above 100°F, short lead times, low water requirements, modular and cost-effective CapEx, and strong fuel efficiency. These factors make engines attractive, especially as data center sizes grow and utilities face long lead times for new grid connections.
Why are US data center developers considering off-grid power generation?
As data centers scale to hundreds of megawatts or gigawatts, utilities can require even 7–10 years to build new power lines or plants, making off-grid generation with engines a practical solution.
How is Wärtsilä positioned in methane slip reduction for marine engines?
Wärtsilä is a clear leader in methane slip reduction for four-stroke engines, which is a key differentiator as operators transition to LNG and bio-LNG.
Has regulatory uncertainty, such as MEPC/IMO delays, affected marine investment appetite?
It is too early to determine the full impact of regulatory delays on marine investment decisions. While some postponements of retrofits are possible, the overall project pipeline remains strong and there is continued interest in fuel flexibility and decarbonization.
