Wärtsilä published its Interim Report for January–September 2025 on Tuesday 28 October 2025 at 8:30 am EET. Here are the key messages and Q&A on the report.
General/market environment
Wärtsilä's third quarter of 2025 was characterised by steady activity in both the energy and marine markets. The external macroeconomic environment remained uncertain throughout the period.
In the energy market, global electricity demand continues to rise, driven by accelerating electrification across sectors, growing industrial activity, and expanding data centre capacity. In parallel, the growing deployment of renewable energy is transforming power systems and increasing the need for flexible generation capacity. These market dynamics were evident in customer activity during the quarter.
In the marine market, sentiment has improved recently following a slow start to the year, supported by trade agreements between major economies, and the resilience in global trade. However, the impact on shipping demand has been uneven across segments, and growth in seaborne trade has moderated. While new vessel ordering activity has slowed compared to the extraordinary levels seen in 2024, it remains above the 10-year average. Notably, activity in Wärtsilä's key segments continued to be healthy.
After the reporting period, the vote to adopt the IMO’s Net Zero Framework was postponed by one year. This outcome opens the door to a fragmented landscape of carbon pricing mechanisms introduced by individual regions and countries. The EU already has its system in place, while China is signalling plans for its own programs, adding complexity to global shipping. At Wärtsilä, we offer a broad and flexible portfolio of technologies to support a wide range of decarbonisation strategies. Our commitment to sustainable innovation remains strong, aligned with evolving customer needs.
Order intake, net sales, operating result and cash flow
Order intake in the third quarter increased organically by 6%. Equipment order intake increased in Marine and Energy, while it decreased in Energy Storage. The Energy Storage business is facing headwinds from elevated US tariffs and regulatory changes particularly related to FEOC (Foreign Entity of Concern), as well as intensified competition in other markets. Service order intake remained stable, supported by several new long-term agreements and renewals, while retrofits and upgrades decreased. The rolling 12-month book-to-bill ratio in service remains well above 1, indicating future growth. Organic net sales remained stable. Service net sales increased, while equipment net sales decreased primarily due to the timing of deliveries in Energy.
The comparable operating result increased by 10% to EUR 195 million, representing 11.9% of net sales. The result was supported by increases in Marine and Energy Storage, while results in Energy and Portfolio Business decreased. In Energy, the comparable operating result was mainly impacted by lower equipment sales. In Portfolio Business, the comparable operating result decreased as the ANCS business unit is no longer reported under the segment following the successful closure of its divestment on 1 July 2025.
Cash flow from operating activities increased to EUR 340 million, following the improved result and a good level of received customer payments. The current working capital position is very favourable for our business, and we expect the negative level to be sustained over the next years. We will continue our active efforts to manage working capital to maintain it well below the long-term historical average.
Outlook
Marine
Wärtsilä expects the demand environment for the next 12 months (Q4/2025-Q3/2026) to be better than in the comparison period.
Energy
Wärtsilä expects the demand environment for the next 12 months (Q4/2025-Q3/2026) to be similar to that of the comparison period.
Energy Storage
Wärtsilä expects the demand environment for the next 12 months (Q4/2025-Q3/2026) to be better than in the comparison period.
However, the current geopolitical uncertainty particularly impacts this business and may affect growth.
In general, Wärtsilä underlines that the current high external uncertainties make forward-looking statements challenging. Due to high geopolitical uncertainty, the changing landscape of global trade, and the lack of clarity related to tariffs, there are risks of postponements in investment decisions and of global economic activity slowing down.
Q&A
You expect the demand environment to be “better” for the next 12 months (Q4/2025–Q3/2026) for Marine. What are the main drivers for this?
- We see that Wärtsilä’s key segments continue to perform well. While there are uncertainties related to the macroeconomic outlook and trade growth going forward, seaborne trade volumes have been less negatively affected than initially anticipated, supporting the demand for ship capacity.
- The regulations already in place today are incentivising ship owners to invest in decarbonisation. We offer a broad and flexible portfolio of technologies to support a wide range of decarbonisation strategies. We are helping our customers navigate the transition by optimising fuel efficiency and de-risking the future through fuel flexibility, leveraging hybrid solutions, alternative fuels, and carbon capture.
- The decision to postpone the vote to adopt the IMO's Net Zero Framework by one year opens the door to a fragmented landscape of carbon pricing mechanisms introduced by individual regions and countries. The EU already has its system in place, while China is signalling plans for its own programs, adding complexity to global shipping.
- In service business, we see good opportunities with our strategy of moving up the service value ladder and supporting our customers in improving their operational efficiency.
- In general, we underline that the current high external uncertainties make forward-looking statements challenging. Due to high geopolitical uncertainty, the changing landscape of global trade, and the lack of clarity related to tariffs, there are risks of postponements in investment decisions and of global economic activity slowing down.
You expect the demand environment to be “similar” for the next 12 months (Q4/2025–Q3/2026) for Energy. What are the main drivers for this?
- The growing demand for electricity driven by the ongoing electrification in many industries is expected to continue.
- Renewable energy (wind and solar) is anticipated to be the most affordable way to generate electricity going forward. The growing share of renewable energy in the system requires balancing power to cover for intermittency.
- Data centres offer an interesting baseload business opportunity driven by grid capacity limitations and long lead-times to grid access.
- There is a good pipeline, but it is good to note that order intake during the last 12 months has been strong, especially in Q2/2025 with all-time high quarterly order intake. The equipment business is lumpy by nature and the timing of a single order may have a large impact on the quarterly order intake.
- The utilisation of our Energy installed base is stable, providing good service opportunities going forward.
- In general, we underline that the current high external uncertainties make forward-looking statements challenging. Due to high geopolitical uncertainty, the changing landscape of global trade, and the lack of clarity related to tariffs, there are risks of postponements in investment decisions and of global economic activity slowing down.
You expect the demand environment to be “better” for the next 12 months (Q4/2025–Q3/2026) for Energy Storage. What are the main drivers for this?
- The need for energy storage systems has grown rapidly and is expected to further increase driven by the energy transition.
- However, the current geopolitical uncertainty particularly impacts this business and may affect growth.
- The US market is facing headwinds from tariffs on China and other nations and regulatory changes particularly related to FEOC (Foreign Entity of Concern). These are also leading to increased competition in other markets.
- Order intake during the comparison period (last 12 months) has experienced weaker development. The market dynamics in Energy Storage have changed significantly following the implementation of the April 2025 US tariff measures. Equipment order intake in Energy Storage is lumpy by nature, which means that order intake can vary significantly from one quarter to another.
- Equipment order intake is anticipated to pick up in the last quarter of this year.
- In general, we underline that the current high external uncertainties make forward-looking statements challenging. Due to high geopolitical uncertainty, the changing landscape of global trade, and the lack of clarity related to tariffs, there are risks of postponements in investment decisions and of global economic activity slowing down.
International Maritime Organization (IMO decided to postpone the vote on the Net Zero Framework for one year. What does this mean for the decarbonisation transition in Marine and what is the impact on Wärtsilä?
- The decision to postpone the vote to adopt the IMO's Net Zero Framework by one year opens the door to a fragmented landscape of carbon pricing mechanisms introduced by individual regions and countries. The EU already has its system in place, while China is signalling plans for its own programs, adding complexity to global shipping.
- We offer a broad and flexible portfolio of technologies to support a wide range of decarbonisation strategies. We are helping our customers navigate the transition by optimising fuel efficiency and de-risking the future through fuel flexibility, leveraging hybrid solutions, alternative fuels, and carbon capture.
- The regulations already in place today are incentivising ship owners to invest in decarbonisation. We offer a broad and flexible portfolio of technologies to support a wide range of decarbonisation strategies. We are helping our customers navigate the transition by optimising fuel efficiency and de-risking the future through fuel flexibility, leveraging hybrid solutions, alternative fuels, and carbon capture.
How does the market look like for Energy related to data centres for the rest of the year? Will you book another order during Q4/2025?
- We continue to see strong interest in data centre power, particularly in the US, where the market fundamentals remain attractive. For Wärtsilä, the sweet spot is specifically in the market for off-grid baseload power in the 50-400 MW range, with customers being third-party Energy Centres and Independent Power Producers (IPPs). We secured our first data centre order in the US during Q2/2025.
- Currently, US tariffs are not considered a major concern, given the high demand.
- For Europe, we have announced a partnership with AVK through which we are involved in a couple of projects in Ireland.
- We have ongoing discussions regarding several data centre projects, which are at various stages of maturity. We see good growth opportunities, but the exact timing of the orders is difficult to estimate.
Why did net sales in Energy decrease by 30%?
- Net sales increased by 3% in service while it decreased by 64% in equipment. Equipment net sales decreased due to the timing of deliveries. Equipment deliveries in Energy are tilted towards the last quarter of the year.
- Wärtsilä's current order book mainly consists of EEQ (extended equipment supply) deliveries, where revenue recognition is connected to the timing of the delivery. Earlier Wärtsilä had more EPC (engineering, procurement and construction) deliveries where the revenue recognition was recognised through the percentage-of-completion (POC) method, typically distributed over time.
Your book-to-bill for that retrofits and upgrades continues to be well below 1 both in Marine and Energy. What are the drivers for that?
- Retrofits and upgrades are lumpy by nature, and timing of an order may impact very much on quarterly figures. We have good opportunities going forward.
- Solutions that drive fuel efficiency continue to see good demand in both Marine and Energy.
You once again had very strong cash flow from operating activities in Q3, what are your expectations going forward?
- Cash flow from operating activities improved to EUR 340 million, compared to EUR 296 million a year ago. The good development was supported by the improved result and a good level of received customer payments. Working capital further improved and was EUR -1,091 million at the end of Q3.
- The current working capital position is very favourable for our business. We expect the negative level to be sustained over the next years and will continue our active efforts to manage working capital to maintain it well below the long-term historical average.
What are your capital allocation principles? What would be the optimal balance sheet position for you?
- We prioritise investments in areas that align with our strategic goals, such as R&D for the development of decarbonization technologies. R&D is expected to be around 4% of net sales.
- We are also committed to delivering value to our shareholders through dividends. Our financial target is to distribute at least 50% of earnings through dividends.
- When it comes to M&A, we are focused on smaller bolt-on acquisitions.
- We currently have a strong balance sheet, which positions us well to navigate the current geopolitical uncertainties. Our target is to maintain gearing below 0.50.
