General/market environment
In the first quarter of 2026, Wärtsilä recorded higher order intake, contributing to an all-time high order book, and delivered an improved comparable operating result. At the same time, the global macroeconomic environment remained challenging due to elevated and prolonged geopolitical tensions.
In the energy market, load growth continued to accelerate, driven by electrification across industries and transport, the growing need for cooling, as well as the rapid expansion of data centres. This has resulted in strong demand for power‑generating capacity and for solutions that ensure availability during peak demand periods. The momentum for renewables remained positive, supported by favourable economics and an increased focus on energy security amid ongoing uncertainty in global fuel supply chains. The growing share of intermittent renewable generation continues to drive demand for Wärtsilä’s solutions, which enable efficient, flexible, and secure power systems.
Furthermore, we continued to see growing interest from the data centre segment during the quarter. Our pipeline for data centre orders is strong, although remaining volatile. The size of data centre orders is trending upwards. Data centres require highly reliable and efficient power solutions to support their critical operations, and our medium‑speed engine technology is well suited to meet these demands. During the quarter, we announced an order for 24 Wärtsilä 50SG engines, delivering an output of 429 MW, for a power plant located in the United States serving a data centre application.
In the marine market, 2026 has started robustly, supported by a healthier earnings environment across most vessel segments, contributing to positive market sentiment. Newbuild activity increased markedly, with 549 vessel orders reported in the first quarter of 2026, compared to 235 in 2025, excluding late reporting. Despite geopolitical tensions dominating the agenda for both the shipping and shipbuilding industries, decarbonisation remains a key structural theme, driven by fleet renewal, energy‑saving retrofits, and operational measures such as slower sailing speeds.
Order intake, net sales, operating result and cash flow
In the first quarter of 2026, Wärtsilä's order intake increased organically by 22%, with Energy recording its highest-ever quarterly order intake. Equipment order intake increased in both Energy and Marine. Order intake in Energy Storage was low, reflecting the ongoing headwinds from elevated US tariffs and regulatory changes, as well as intensified competition in other markets. The low order intake continues to put significant pressure on Energy Storage profitability going forward. Unless short-term order intake improves significantly, we will start incurring losses in the second half of the year. The competitiveness of the business remains in our focus, and we have already taken actions to reduce our cost structure.
Service order intake remained stable, supported by good development in agreements. Organic service order intake increased by 9%. The rolling 12-month service book-to-bill ratio remains above 1.
Net sales increased organically by 8%, with growth in equipment deliveries. Equipment delivery times have increased, impacting the timing of revenue recognition. Consequently, the existing order book will generate sales that are distributed further into the future.
The comparable operating result increased by 16% to EUR 199 million, representing 12.8% of net sales. The result was supported by good development in all businesses. Cash flow from operating activities decreased, primarily due to increased working capital from an exceptionally low level in the fourth quarter, reflecting higher project execution activity. We expect the negative working capital 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.
Outlook
Marine
Wärtsilä expects the demand environment for the next 12 months (Q2/2026-Q1/2027) to be similar to that of the comparison period.
Energy
Wärtsilä expects the demand environment for the next 12 months (Q2/2026-Q1/2027) to be better than in the comparison period.
Energy Storage
Wärtsilä expects the demand environment for the next 12 months (Q2/2026-Q1/2027) 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 (Q2/2026–Q1/2027) for Energy. What are the main drivers for this?
- The demand for electricity is continuously rising driven by electrification across industries and transport, the growing need for cooling, as well as the rapid expansion of data centres.
- 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. According to IEA, the data centre demand is a key driver for the recent increases in global electricity demand forecasts, and this has benefitted the engine power plant demand environment.
- Long lead times for competitor technologies like gas turbines have increased awareness of and interest in engines, and there is a strong pipeline of business opportunities.
- Increasing number of customers realise the intrinsic benefits of engines compared to gas turbine technology: high energy efficiency, ultra-low water consumption, no thermal or altitude derating, modular solution with high flexibility.
- The utilisation of our Energy installed base is stable, providing good service opportunities going forward and enabling us to continue moving up the service value ladder.
- 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 (Q2/2026–Q1/2027) for Marine. What are the main drivers for this?
- Clarksons forecasts that vessel contracting activity in 2026 will remain broadly in line with 2025. Contracting activity in many of Wärtsilä’s key vessel segments has been strong in recent years and is anticipated to continue on a similar level, supporting Wärtsilä’s equipment order intake.
- 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 for our customers. We are helping our customers to navigate the transition by optimising fuel efficiency and de-risking the future through fuel flexibility, leveraging hybrid solutions, alternative fuels, and carbon capture.
- As the industry is waiting for the vote of IMO's Net Zero Framework, there is more room for a fragmented landscape of carbon pricing mechanisms introduced by individual regions and countries. The EU already has its system in place, while others are signaling plans for their own programs, adding complexity to global shipping.
- In service, we see good opportunities with our strategy of moving up the service value ladder and supporting our customers in improving their operational efficiency and environmental footprint.
- 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 (Q2/2026–Q1/2027) for Energy Storage. What are the main drivers for this?
- Order intake during the comparison period (last 12 months) was on a low level. However, the need for energy storage systems has grown rapidly and is expected to further increase driven by the energy transition.
- There are, however, clear challenges in the market environment. The US market continues to face 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. At the same time, battery cell manufacturers have integrated vertically, increasing competition, and battery energy storage systems have increasingly become commoditised.
- Equipment order intake in Energy Storage is lumpy by nature, which means that order intake can vary significantly from one quarter to another.
- 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.
How does the closure for Strait of Hormuz and increased oil and gas prices impact on your operations?
- Wärtsilä’s share of net sales from the Middle East was less than 5% in 2025.
- The intensifying Middle East conflict is increasing logistical complexity, transportation costs, and strategic uncertainty for Wärtsilä's customers and operations in the region.
- The impact on Wärtsilä has so far been limited and remains highly dependent on the duration and potential escalation of the conflict.
- Higher oil and gas prices currently have a limited effect on Wärtsilä due to low direct exposure, with fuel primarily used for testing purposes. Risks could increase if the crisis is prolonged, leading to limited fuel availability and global inflation.
Service order intake remained stable. Why didn't it grow?
- While the reported service order intake remained stable (-1%), the underlying ordering activity improved. Service order intake grew organically (excluding FX impact and divestments) by 9%. The impact of Portfolio Business divestments on service order intake was -5% while FX impact burdened the service order intake by -4%. The main currency impact is related to weaker USD.
- Reported service order intake increased in Marine while remained stable in Energy. In Energy, order intake increased in retrofits and upgrades as well as for agreements, but decreased for spare parts and field service, where the comparison period was high. As we continue to move up the service value ladder, an increasing share of service activity is reported under service agreements.
Your order book was all-time high at the end of Q1. What does this mean for revenue recognition during 2026?
- We have a good order book for deliveries during the remainder of 2026, which are EUR 2,038 million for Marine, EUR 1,383 million for Energy and EUR 329 million for Energy Storage.
- Equipment delivery times have increased, impacting the timing of revenue recognition. Consequently, the existing order book will generate sales that are distributed further into the future.
- The new engine orders to be booked during the remainder of 2026 will not have material impact on revenue recognition in 2026. During Q1, our manufacturing facility, Sustainable Technology Hub in Vaasa, Finland was operating close to technical production capacity to facilitate the deliveries this year and the years after.
What supported Marine's comparable operating margin improvement?
- The comparable operating result increased by 7% while net sales remained stable.
- The biggest driver behind improved comparable operating result was better operating leverage, driven by improved capacity utilisation in Sustainable Technology Hub (close to technical production capacity), leading to higher efficiency and better cost absorption.
What should we expect from Energy Storage profitability during this year?
- Profitability has remained good as the order book has been very healthy in terms of margins, supported by excellent project execution.
- However, low order intake continues to put significant pressure on Energy Storage profitability going forward. Unless short-term order intake improves significantly, we will start incurring losses in the second half of the year. The competitiveness of the business remains in our focus, and we have already taken actions to reduce our cost structure.
What factors contributed to the decrease in cash flow following a sustained strong performance? What to expect going forward?
- Cash flow from operating activities was EUR 7 million compared to EUR 190 million a year ago, and it decreased primarily due to increased working capital from an exceptionally low level in the fourth quarter, reflecting higher project execution activity.
- Despite the increase, working capital continued on a strong level of EUR -1,139 million at the end of Q1/2026. 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 does your data centre pipeline look like? How are your lead times currently?
- Our pipeline for data centre orders is strong but volatile. The size of data centre orders is trending upwards.
- Our manufacturing capacity is shared between Marine and Energy and the good demand for both businesses has been supporting the improving capacity utilisation. In 2025, the capacity utilisation was approximately 75% of the technical production capacity, and in Q1/2026 we operated close to technical production capacity.
- Our capacity extension in Vaasa, Finland, aiming to increase the technical production capacity by 35% compared to current technical capacity, is progressing well towards a target commissioning early 2028. This means, that by 2028, our capacity will increase by 80% compared to 2025 operational level.
- Lead times are gradually increasing for Wärtsilä. Depending on engine configuration and order size, we still have some unsold production slots for 2027 and 2028, while discussions with customers are increasingly extending into 2029 and beyond.
What is the impact of the recently announced new Section 232 steel and aluminium tariffs on Wärtsilä?
- Based on our initial assessment, the new Section 232 steel and aluminium tariffs announced on the 6 April have no additional negative impact compared to the situation before these new tariffs were announced.
- It is good to remember, that there is no direct tariff impact on our Marine business, as shipyards are primarily located outside the US. In our Energy business, the US demand remains strong despite the tariff risk.
- In the vast majority of cases, the customer is responsible for paying the tariffs.
Why does organic growth for both order intake and net sales differ from reported figures so much?
- Organic growth better reflects our operational performance as the impact of acquisitions and divestments as well as foreign exchange (FX) impact have been excluded.
- The foreign exchange (FX) impact mainly came from USD burdening the reported growth both for order intake and net sales during Q1. In Q1/2026, 59% of Wärtsilä’s net sales was EUR denominated and 23% was USD denominated, with the remainder being split between several currencies.
- Reported Group order intake increased by 10%. The organic order intake growth was 22%. Divestments of Portfolio Business units had -6% impact, while FX impact had -5% impact on the growth.
- Reported Group net sales remained stable (0%). The organic net sales growth was 8%. Divestments of Portfolio Business units had -6% impact, while FX impact had -3% impact on the growth.
- Due to effective hedging policies and practices in our commercial operations, the impact of exchange rate movements on the result was immaterial.
