Financial review 2025


			Annual report 2025	2



	This is Wärtsilä	/	Governance	/	Financial review
Board of Directors' report Sustainability statement Financial statements Audit and assurance reports Wärtsilä in the capital markets

Board of Directors' Report

Business model

Wärtsilä provides the marine and energy markets with

innovative technologies and lifecycle solutions. Wärtsilä

delivers customer value through two set of value streams:

equipment and services. The equipment value stream

encompass the delivery of new installations to customers

including shipyards, ship owners, power producers and

utilities. In the energy industry, Wärtsilä offers power

system optimisation with a portfolio of future fuel enabled

thermal balancing and baseload power solutions, as well

as energy management and storage systems, primarily on

an equipment only basis. The marine offering includes

power and propulsion systems, voyage optimisation

solutions, as well as exhaust treatment applications and

shaft line solutions. Our service value stream delivers

customer value over the lifetime of the Wärtsilä solutions.

Wärtsilä’s portfolio of services include spare parts, field

service, retrofits and upgrades and lifecycle agreements,

inlcuding performance-based agreements under which

Wärtsilä operates the customer assets, such as power

plants, for them. The company aims to deliver maximised


Targets	Development in 2025	Development in 2024
Marine and Energy combined
5% annual organic net sales growth	15%	13%
14% operating margin	13.8%	12.8%
Energy Storage
Low double-digit annual organic net sales growth	-11%	-15%
3-5% operating margin	3.3%	4.1%
Group
Gearing below 0.50	-0.70	-0.31
Dividend at least 50% of earnings per share*	99.7%	51.5%
*proposal of the Board of Directors

environmental and economic performance by

emphasising innovation in sustainable technology and

services.

To support its geographically dispersed customer base,

Wärtsilä’s sales and service network covers 199 locations

in 78 countries around the world. Wärtsilä operates

primarily through its subsidiaries and strategic joint

ventures. The company’s manufacturing model is

assembly-based, thus emphasising the importance of

developing long-term relationships. Wärtsilä’s global

network of suppliers includes approximately 5,500 direct

procurement suppliers. Wärtsilä’s personnel is made up of

approximately 17,900 employees comprising 123

nationalities. By recruiting and retaining the best talent,

Wärtsilä can be the most valued business partner to its

customers, and the employer of choice for current and

future employees. Wärtsilä is committed to conducting its

business in a responsible manner, and requires its

suppliers and business partners to follow the same high

legal and ethical standards and business practices.

Strategy

Strategy implementation in 2025

Our strategy, the Wärtsilä Way, remains intact. The

company’s value creation potential is based on two

strategic themes: Transform and Perform. Transform

refers to attractive growth opportunities arising from the

decarbonisation transformation. It involves leveraging

growth in electricity generation, balancing and baseload

power, green marine transport, and related service

businesses. Perform centres around a clear path for

operational improvements and increased profitability, as

well as the company’s commitment to both financial and

sustainability targets. Wärtsilä’s purpose to enable

sustainable societies through innovations in technology

and services, is well connected to the themes of

Transform and Perform. The company’s five strategic

priorities emphasise customer value, high-performing

teams, decarbonisation, service growth, and continuous

improvement. Wärtsilä is proceeding towards its target to

become a more stable, focused and profitable company.

At the end of March 2025, Wärtsilä concluded the strategic

review of the Energy Storage and Optimisation business

that was started in Autumn 2023. Following the

conclusion, the Energy business was separated into two

independent segments: Energy, focusing on the power

plants business and related lifecycle business, and Energy

Storage, focusing on the battery storage business and

related lifecycle business. Effective from 1 April 2025,

Wärtsilä has now three reporting segments: Wärtsilä

Marine, Wärtsilä Energy, and Wärtsilä Energy Storage.

Portfolio Business continues to be reported as other

business activities. In the same connection, Wärtsilä

introduced new financial targets to better reflect the new

organisational structure.

Wärtsilä has continued its journey to become a more

focused and profitable company, and concluded the

divestment of two business units reported under Portfolio

Business during the year. The sale of the Automation,

Navigation and Control System (ANCS) business was

announced in December 2024 and was completed on 1

July 2025. Furthermore, the divestment of Marine Electric

Systems was announced in July 2025 and completed on 31

October 2025. Additionally, Wärtsilä announced the

divestment of Gas Solutions business in December 2025,

expected to be completed in the second quarter of 2026,

subject to approvals.

Wärtsilä remains committed to R&D activities and

continues to invest around 4% of net sales in R&D.

Wärtsilä has a comprehensive development programme

for sustainable fuel technologies, with proven 4-stroke

technology enabling the use of LNG, LPG, methanol, and

ammonia. In 2025, Wärtsilä launched the maritime

sector's first commercial carbon capture solution

following its world-first full-scale installation success. Also,

we expanded our methane slip reduction solutions to two

engine types and advanced our 4-stroke ammonia fuel

solution to deliver greater than ever value and

performance. During the year, Wärtsilä also launched the

new Wärtsilä 46TS engine, which is designed to balance

intermittent renewable energy output, provide highly

efficient baseload power, and be able to run on

sustainable fuels in the future.

While much of the decarbonisation work still lies ahead,

Wärtsilä already has solutions and technologies that

enable 100% renewable power systems and fuel flexibility

to support decarbonisation. Wärtsilä’s engine power

plants can already use 100% synthetic and carbon-neutral

methane and methanol. They are also capable of using

hydrogen/natural gas blends containing up to 25%

hydrogen. Wärtsilä also offers a 100% hydrogen-ready


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engine power plant concept ready for future hydrogen

conversion.

During 2025, Wärtsilä continued its growth in the data

centre segment. Wärtsilä announced two deals with US

data centre customers, providing them with a total of 789

MWs of reliable power. The data centre market offers

Wärtsilä further growth opportunities, both in equipment

and lifecycle sales.

Wärtsilä has announced several measures during the year

to support its ability to meet the growing demand for

developing and delivering sustainable technologies and

services. In April, Wärtsilä announced the expansion of its

R&D testing and manufacturing capacity at its state-of-

the-art Sustainable Technology Hub in Vaasa, Finland with

a EUR 50 million investment. Additionally, Wärtsilä

announced in November a 40% expansion of its main

spare parts distribution centre in Kampen, the

Netherlands. In December, Wärtsilä announced that it will

strengthen its supply chain through a strategic

partnership with Siempelkamp Giesserei, a key supplier of

large components for Wärtsilä engines.

Moving up the service value ladder plays an important

role in Wärtsilä’s strategy, with significant growth

opportunities on all steps of the service value ladder.

During the year, Wärtsilä signed several new service

agreements, and the renewal rate of service agreements

continues to exceed well the 90% levels, both in Marine

and Energy.

Wärtsilä has ambitious climate targets. The company’s

goal is that by 2030 it will become carbon-neutral in its

own operations, and be able to provide a product

portfolio ready for zero-carbon fuels. In 2025, Wärtsilä

also committed to a target of reducing its suppliers’

greenhouse gas emissions by 25%. In the reporting year,

the company’s efforts focused on low- and medium-cost

measures, such as electrification and energy efficiency

across the operations, reducing GHG emissions from

engine testing, and increasing the share of self-generated

and purchased renewable electricity. In addition, Wärtsilä

continued to advance sustainable fuel product

development in line with its decarbonisation roadmap.

The company was focused on building the necessary

infrastructure to enhance engine testing capabilities for

sustainable fuels. For reducing supply chain emissions,

Wärtsilä established a structured framework for reporting

supplier GHG emissions, including data collection

processes, and baseline definition.

The health and safety of personnel is a high priority for

Wärtsilä, and the company's long-term target continues to

be zero injuries. In 2025, the Total Recordable Injury

Frequency (TRIF) was 2.44, compared to 2.20 in 2024. This

increase prompted a comprehensive review of work

practices and conditions, with employee-submitted

improvement ideas integrated into updated safety plans.

In 2025, the 11th annual Safety Day focused on teamwork,

collaboration, and belonging under the theme "Safer

Together".

Financial targets and outcome in 2025

Wärtsilä introduced new combined financial targets for

Marine and Energy, and separate new financial targets for

the Energy Storage businesses in April 2025. Marine and

Energy, which have strong operational synergies, share a

combined target of 5% annual organic growth and a 14%

operating margin. The targets for Energy Storage are low

double-digit annual organic growth and a 3-5% operating

margin. Wärtsilä will continue its firm strategy execution

and has a clear path to reach the updated targets. Group

financial targets continue to be gearing below 0.5, and a

dividend distribution of at least 50% of earnings.

Marine and Energy combined reached 15% annual

organic net sales growth and a 13.8% operating margin.

Energy Storage reached -11% annual organic net sales

growth and a 3.3% operating margin. Gearing resulted at

-0.70. The Board of Directors proposes a base dividend of

EUR 0.54 per share and extraordinary dividend of EUR

0.52 per share, totalling EUR 1.06 per share.

The year 2025

Operating environment

General macro environment

The global economy proved to be more resilient and

robust in 2025 than initially expected. The OECD stated in

its December economic outlook report that despite mixed

activity indicators globally and ongoing policy uncertainty,

global trade volumes remained strong. This was primarily

driven by the front-loading of production and trade ahead

of tariffs, strong AI-related investments, and supportive

fiscal and monetary policies. As the front-loading of

consumption and investment spending started to unwind

later in the year, industrial production eased in places like

Germany and Japan, but remained steadier in China and

the USA. However, signs of slowing momentum emerged,

particularly in industrial production in major economies,

while consumer confidence remained subdued.

Furthermore, the impact of higher effective tariff rates

became increasingly visible, especially in the USA,

impacting both prices and business costs.

Marine market

The marine market in 2025 was impacted by geopolitical

tensions, shifting trade patterns, and the IMO decision to

delay the adoption of global carbon pricing mechanism.

The announced tariff policies, the growing national

interests in shipbuilding, concerns on security of supply,

and the disruptions to critical shipping routes have led to

increasing uncertainty, especially among shipowners.

Market sentiment remained on a good level. The

uncertainty caused by the tariff policies eased towards the

end of the year, along with a truce to hostilities being

established in the war in the Middle East, raised the

prospects of more widespread use of the Suez canal. In

October, 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

being introduced by individual regions and countries.

Ordering eased across most segments compared to the

extraordinary activity seen in 2024, but activity was seen

to pick up especially in Q4. Meanwhile, ordering has

continued to be strong in some segments, notably

containerships, cruise vessels, and LNG bunkering ships.

In total, 2,029 newbuild contracts were reported in

January-December, compared to 2,386 contracts reported

in 2024, excluding late reporting of contracts. A total of

366 orders for new alternative fuel capable ships were

reported in January-December, accounting for 18% (27) of

all contracted vessels and 37% (50) of the capacity of

contracted vessels.

With moderating ordering volumes, increasing shipyard

capacity and high delivery output, average newbuild ship

prices declined modestly throughout the year. Despite

this, the shipyards’ forward cover remains largely

unchanged at 3.9 years globally, the highest level since

2009.

In the cruise segment, market sentiment continues to be

positive, driven by growth in demand for cruises. This

momentum has enabled cruise operators to firm up plans

for acquiring additional ship capacity to support their

long-term expansion objectives. Additionally, service

demand is being bolstered by the growth in active fleet

capacity, interest in efficiency enhancements required for

regulatory compliance, and efforts to reduce operational

costs.

In the ferry segment, market sentiment remained positive

with fleet renewal being the key driver for solid newbuild

activity in 2025. However, high newbuild prices and

limited yard slots continued to limit the near-term

investment appetite for newbuilds. The demand for

service was supported by improving fleet utilisation rates,

and operator interest in maintaining and improving the

efficiency of their ageing fleets.


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In the offshore segment, capex commitments to oil & gas

projects picked up in late 2025, supporting the demand

especially for mobile oil and gas production units. This

uptick indicates that oil companies have moved past some

of the earlier uncertainty. Newbuild activity continued to

be limited by high prices, the availability of finance, a

shortage of yard capacity, and moderating day rates.

Sentiment in the offshore wind sector was impacted by

uncertainty in political support across countries, as well as

by ongoing cost pressures impacting investor confidence.

This has resulted in project delays and a more limited

interest in newbuilds. The demand for service across both

offshore sub-segments was driven by relatively high asset

utilisation rates.

In the LNG carrier segment, market conditions were

challenging despite a seasonal uptick in Q4. Increased

short-haul trade constrained demand for ships, while

strong fleet capacity growth continued, putting significant

pressure on spot and utilisation rates for mostly the older

ships. Newbuild activity has moderated significantly from

prior years, due to strong orderbooks and delays to LNG

export projects. Newbuild ordering for LNG bunkering

vessels reached a new annual record as the current fleet

capacity struggles to keep pace with the increase in use of

LNG as fuel. The demand for service was negatively

affected by the higher idling of ships, and by owners

seeking to cut costs in adverse market conditions.

In the containership segment, market sentiment

remained mixed and uncertain. Freight market conditions

continued to soften, while the timecharter market was

more balanced. Geopolitics and the Red Sea rerouting

remain key sources of uncertainty to the demand outlook

for containerships. Despite this, the investment appetite

for newbuilds remained very strong as liner operators and

tonnage providers have progressed with their fleet

renewal plans. The high uncertainty over demand for ship

capacity affected demand for service, but overall service

demand remained healthy and was supported by high

ship utilisation rates.

Energy market

The global energy transition continues to move forward

despite certain countries having a reduced climate

ambition. Most research agencies, such as IEA and

BloombergNEF, have kept their global forecasts for wind

and solar similar to previous levels, highlighting continued

short- and long-term growth and annual capacity

additions of hundreds of gigawatts. Favourable

economics shield wind and solar from changes in policy,

while at the same time, in most countries, policies

continue to be supportive of renewables.

Two key themes stood out in energy-related

macroeconomic development in 2025: load growth and

tariff-related uncertainty. Accelerated load growth from

the electrification of industry, transport, and heating, as

well as from data centre investments, have led to high

demand for all power-producing assets, including gas-

fuelled power. The uncertain tariff and regulatory

situation poses challenges to all actors due to its impact

on global energy technology supply chains, and is

expected to continue in 2026. This situation has led to

longer delivery times, and industry participants have

responded by expanding manufacturing capacity.

The investment environment for energy technologies has

improved along with global macroeconomic conditions.

During 2025, global natural gas and LNG prices

decreased. Prices are expected to somewhat decrease in

the second half of the decade due to increased supply,

and volatility has also decreased. Prices for lithium

rebounded slightly after hitting a four-year low during the

summer.

In engine power plants, the market demand for

equipment and services has been strong. In the balancing

segment, the pace of the renewable energy transition

continued to be an important demand driver. The total

market for thermal balancing in 2025 is expected to be

larger than in any previous year, based on data from both

McCoy Power Reports and that gathered internally. The

drivers for balancing demand are also expected to

continue to develop favourably. For example,

BloombergNEF expects wind and solar capacity addition

projects to grow towards 2035, while supportive market

reforms are developing, and old, inflexible coal and gas

plants are being retired. The baseload segment remains a

consistent source of demand for thermal power.

Reciprocating engines are important providers of

baseload generation, particularly in remote locations and

other locations where access to grid power is uncertain or

time sensitive.

Demand for baseload generation is expected to remain

stable, with further growth opportunities in data centres.

The data centre power landscape is undergoing a

significant transformation. Rapid growth in high-tech

industries and AI applications is driving unprecedented

energy demand, making reliable on-site power essential.

In battery energy storage, demand is closely linked to the

increasing share of intermittent renewables in the energy

system, which continues to progress strongly. The annual

market for utility-scale battery storage is expected to have

surpassed 200 GWh in 2025, and is expected to exceed

400 GWh before the end of the decade, according to

BloombergNEF. The US market is facing regulatory

headwinds, though several drivers remain solid, with data

centres as a potential new opportunity. Globally,

competition has tightened as battery manufacturers, for

example, have expanded downstream, putting pressure

on profitability.

Order intake and order book

Order intake remained stable at EUR 8,102 million (8,072).

Service order intake remained stable at EUR 3,740 million

(3,812), supported by growth in agreements, while retrofit

and upgrades decreased. Equipment order intake

remained stable at EUR 4,362 million (4,260). The

equipment order intake increased in Energy and Marine,

while it decreased in Energy Storage. The Energy Storage

business is facing headwinds from elevated US tariffs,

regulatory changes, and intensified competition in other

markets.

The order book at the end of the year remained stable at

EUR 8,248 million (8,366). The order book has been

corrected during the year after elimination of

approximately EUR 900 million following the divestments

of Automation, Navigation and Control Systems (ANCS),

and Marine Electrical Systems (MES) business units.

Wärtsilä’s current order book for 2026 deliveries is EUR

4,991 million (5,075).

Net sales and operating result

Net sales increased by 7% to EUR 6,914 million (6,449).

Service net sales increased by 4% to EUR 3,575 million

(3,422), driven by growth in Marine and Energy.

Equipment net sales increased by 10% to EUR 3,338

million (3,027), supported by Marine and Energy. Of

Wärtsilä’s net sales, 57% was EUR denominated and 29%

USD denominated, with the remainder being split

between several currencies.

The operating result amounted to EUR 833 million (716) or

12.1% of net sales (11.1). The comparable operating result

totalled EUR 829 million (694) or 12.0% of net sales (10.8).

The comparable operating result was supported by

increases in Marine, Energy, and Portfolio Business. Items

affecting comparability amounted to EUR 4 million (23),

and were mostly related to the divestments, the asset

held for sale categorisation of the Gas Solutions business

unit as well as the restructuring of engine manufacturing

in Europe. The comparable adjusted EBITDA amounted to

EUR 1,045 million (847) or 15.1% of net sales (13.1).

Purchase price allocation amortisation amounted to EUR

16 million (19).

Financial items amounted to EUR -5 million (-29). Net

interest totalled EUR 17 million (7). The result before taxes

amounted to EUR 828 million (687). Taxes amounted to

EUR -198 million (-180), implying an effective tax rate of

23.9% (26.2). The result for the financial year amounted to


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EUR 630 million (507). Basic earnings per share totalled

EUR 1.06 (0.85). The return on investment (ROI) was 26.2%

(23.7), while the return on equity (ROE) was 23.3% (21.3).

Group net sales development

Result

Financing and cash flow

Cash flow from operating activities totalled EUR 1,598

million (1,208), the improvement being driven by the

improved result and a good level of received customer

payments. Working capital totalled EUR -1,263 million at

the end of the year (-787). Advances received totalled EUR

1,347 million (898).

Wärtsilä aims to ensure sufficient liquidity at all times

through efficient cash management, and by maintaining

the availability of sufficient committed and uncommitted

credit lines. Refinancing risk is managed by having a

balanced and sufficiently long loan portfolio.

Cash and cash equivalents amounted to EUR 2,590 million

(1,554). Additionally, EUR 0 million of cash and cash

equivalents pertained to assets held for sale (4). Unutilised

committed credit facilities totalled EUR 636 million (644).

Wärtsilä had interest-bearing debt totalling EUR 581

million at the end of the year (766). The total amount of

short-term debt maturing within the next 12 months was

EUR 38 million. Long-term loans amounted to EUR 315

million. Additionally, EUR 4 million of interest-bearing

liabilities pertained to assets held for sale (15).

Net interest-bearing debt totalled EUR -2,006 million

(-777). Gearing was -0.70 (-0.31), while the solvency ratio

was 40.5% (37.4). Equity per share was EUR 4.89 (4.29)

Loans

48%

65%

40%

45%

44%

48%

30%

39%

40%

Gearing

Maturity profiles of long-term loans

Committed revolving credit facilities (end of period)


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Capital expenditure

Capital expenditure related to intangible assets and

property, plant, and equipment amounted to EUR 150

million (170). Depreciation, amortisation, and impairment

amounted to EUR 211 million (131), including depreciation

of right of use assets of EUR 48 million (51).

In 2026, capital expenditure related to intangible assets

and property, plant, and equipment is expected to be

above depreciation, amortisation, and impairment.

Gross capital expenditure

Innovations, research and development

Wärtsilä is committed to helping minimise the

environmental footprint of the marine and energy

industries. Investments in R&D are central to securing

Wärtsilä’s future positioning and will continue despite the

prevailing market uncertainty. Developing the use of

alternative, commercially viable clean fuels for the future

is a key focus area of research and development, as is

improving the connectivity, efficiency, sustainability, and

safety of customer operations through the increased use

of digital solutions.

Research and development expenditure totalled EUR 329

million (296) in 2025, which represents 4.8% of net sales

(4.6).

In February, Wärtsilä introduced its next-generation 46TS

engine, which is designed to balance renewable energy,

provide highly efficient baseload power, and to run on

future sustainable fuels. Built on 85 years of engine

expertise, the 46TS represents Wärtsilä’s most advanced

solution to date.

In April, Wärtsilä announced that it will invest EUR 50

million in the expansion of its R&D and innovation

capabilities in Vaasa, Finland. Expanding the R&D testing

capabilities and facilities will enhance Wärtsilä’s ability to

meet the growing demand for developing and delivering

sustainable technologies in marine and energy, and to

support fuel applications needed in the future. The nearly

8,000 square meter extension is expected to be

commissioned in 2028.

In April, Wärtsilä introduced a new methane slip reduction

solution for its Wärtsilä 50DF dual-fuel engine, further

reducing methane slip by up to 75 percent. The new

solution is optimised for LNG fuel. Wärtsilä has an

extensive track-record in reducing methane slip from

LNG-fuelled engines, not only as newbuild solutions, but

also through retrofitting existing installations.

In May, Wärtsilä launched a carbon capture solution to the

shipping market after its world-first full-scale installation

success. According to Wärtsilä’s tests, the new CCS

solution is proven to reduce vessel CO₂ emissions by up to

70%, providing ship owners with an immediate solution to

meet increasingly stringent environmental regulations.

Strategic projects

Wärtsilä actively manages its business portfolio to support

the strategy and financial targets.

In March 2025, Wärtsilä announced the finalisation of the

strategic review of Energy Storage and Optimisation

(ES&O) that was started in October 2023. As a conclusion,

the reporting segment Energy was separated into two

independent reporting segments. Effective from 1 April

2025, Wärtsilä has three reporting segments: Wärtsilä

Marine, Wärtsilä Energy, and Wärtsilä Energy Storage.

Portfolio Business continues to be reported as other

business activities. In the same connection, Wärtsilä

revised its strategic targets, which are presented in the

section Financial targets and outcome in 2025 in the

Board of Directors’ report.

In December 2024, Wärtsilä announced that it had agreed

to divest its Automation, Navigation and Control System

(ANCS) business to the Swedish investment company Solix

Group AB. The transaction was completed on 1 July 2025.

In July 2025, Wärtsilä announced that it had agreed to

divest its Marine Electrical Systems business to Vinci

Energies. The transaction was completed on 31 October

2025.  

In December 2025, Wärtsilä announced that it had agreed

to divest its Gas Solutions business to Mutares SE & Co.

KGaA. Subject to approvals, the transaction is expected to

be completed in the second quarter of 2026.

Related party transactions

Loans for Group companies are current and unsecured,

interest rates are at arm's length. Further information is

presented in Notes to the parent company financial

statements, Note 18. Related party loans and other

commitments.

Personnel

Wärtsilä had 17,879 (18,338) employees at the end of the

year. On average, in 2025 the number of personnel

totalled 18,295 (18,110).

Of Wärtsilä’s total number of employees, 25% (23) were

located in Finland and 33% (36) elsewhere in Europe.

Personnel employed in Asia represented 21% (21) of the

total, personnel in the Americas 14% (14), and personnel

in other countries 6% (5).

In conjunction with outcome of the strategic review

concluded in March 2025, Tamara de Gruyter assumed

leadership of Energy Storage as President of Energy

Storage and EVP as of 1 April 2025. She continues as a

member of Wärtsilä’s Board of Management and reports

to Wärtsilä’s President & CEO, Håkan Agnevall. Following

this, Tamara de Gruyter left her role as President of

Portfolio Business and EVP. Bernd Bertram, who was

leading the business unit Propulsion in Wärtsilä Marine,

took over leadership of Portfolio Business as of 1 April

2025 in parallel with his other business unit leadership

role. In his role as Head of Portfolio Business, Bernd

Bertram reports to Wärtsilä’s President & CEO, Håkan

Agnevall but is not a member of Wärtsilä’s Board of

Management. Anders Lindberg continues in his role as

President of Energy and EVP.

In September, Wärtsilä announced that Mr Kari Hietanen,

Executive Vice President, Public Affairs and Sustainability,

has informed the company of his intention to retire in the

spring of 2026. As of 1 January 2026, Public Affairs and

Sustainability responsibilities were transferred to

Executive Vice President, Legal and Compliance Nora

Steiner-Forsberg; Cyber Security responsibilities to

Executive Vice President and Chief Financial Officer Arjen

Berends; and Safety and Corporate Security

responsibilities to Executive Vice President, Human

Resources Teija Sarajärvi.


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Research and development expenditure

* Figure in the comparison period 2021 has been restated to reflect a

change in the definition of research and development expenditure.

Personnel

Reporting segments

Wärtsilä Marine

Order intake increased by 8% to EUR 3,926 million (3,637).

Service order intake decreased by 3% to EUR 2,242 million

(2,307), supported by higher activity in agreements, but

negatively impacted by a decrease in the number of

retrofits and upgrades. Service order intake increased

primarily in the merchant and special vessels segments,

while it decreased in the navy, ferry and gas carrier

segments. Equipment order intake increased by 27% to

EUR 1,684 million (1,329), driven by the ferry and navy

segments.

The order book at the end of the year increased by 9% to

EUR 3,725 million (3,409). Equipment delivery times

increased, which has impact on revenue recognition going

forward. Conversion times from order intake to net sales

have increased driven by longer yard backlogs. Marine's

current order book for 2026 deliveries is EUR 2,341 million

(2,227).

Net sales increased by 14% to EUR 3,494 million (3,053).

Service net sales increased by 8% to EUR 2,222 million

(2,050), driven by the merchant and ferry segments.

Equipment net sales increased by 27% to EUR 1,272

million (1,002), supported by the merchant, ferry and

special vessels segment deliveries.

The comparable operating result amounted to EUR 443

million (360) or 12.7% of net sales (11.8). The result was

supported by higher service and equipment volumes

providing better operating leverage. Conversely, the

result was negatively impacted by the increased R&D cost

needed to support the development of decarbonisation

technology. The comparable operating margin improved,

despite a less favourable mix impact between equipment

and service. Items affecting comparability totalled EUR 6

million (4) and were mainly related to the restructuring of

engine manufacturing in Europe.

Wärtsilä Energy

Order intake increased by 31% to EUR 2,940 million

(2,238). Service order intake increased by 4% to EUR 1,311

million (1,255), supported by higher activity in

agreements and field service, while it was negatively

impacted by a decrease in retrofit and upgrades.

Equipment order intake increased by 66% to EUR 1,629

million (983), driven primarily by the particularly high

closing activity of projects during the second quarter of

2025.

The order book at the end of the year increased by 31% to

EUR 3,009 million (2,296). Equipment delivery times

increased towards the end of the year, which has impact

on revenue recognition going forward. Energy's current

order book for 2026 deliveries is EUR 1,619 million (1,434).

Net sales increased by 8% to EUR 2,048 million (1,897).

Service net sales increased by 3% to EUR 1,188 million

(1,158), supported primarily by higher activity in spare

parts and field service. Equipment net sales increased by

16% to EUR 860 million (738).

The comparable operating result amounted to EUR 315

million (269) or 15.4% of net sales (14.2). The result was

supported by higher equipment and service volumes.

Conversely, the result was negatively impacted by the

increased R&D cost needed to support the development

of decarbonisation technology. The comparable operating

margin increased despite a less favourable mix between

equipment and services.

Wärtsilä Energy Storage

Order intake decreased by 60% to EUR 455 million (1,128).

Service order intake decreased by 20% to EUR 28 million

(36). Equipment order intake decreased by 61% to EUR

427 million (1,093). The US market continues to face

headwinds from tariffs on China and other nations, as well

as from regulatory changes particularly related to FEOC

(Foreign Entity of Concern).

The order book at the end of the year decreased by 36%

to EUR 719 million (1,117). Energy Storage's current order

book for 2026 deliveries is EUR 426 million (707).

Net sales decreased by 13% to EUR 694 million (794).

Service net sales increased by 52% to EUR 23 million (15),

supported by the growing installed base and long-term

service agreements signed with customers. Equipment

net sales decreased by 14% to EUR 672 million (779) due

to the timing of project delivery milestones.

The comparable operating result amounted to EUR 24

million (33) or 3.4% of net sales (4.2). The result and

margin were positively impacted by solid project

execution, as well as higher service volumes. Conversely,

the result was negatively impacted by lower equipment

volumes, higher R&D costs, and the increased headcount

to support new markets, customers and products.

Other business activities

Wärtsilä Portfolio Business

Wärtsilä Portfolio Business consists of business units

which are run independently with the aim of accelerating

performance improvement and unlocking value through

divestments or other strategic alternatives. At the end of

2025 Portfolio Business includes Gas Solutions, and Water

& Waste.

In December 2024, Wärtsilä announced that it had agreed

to divest its Automation, Navigation and Control System

(ANCS) business to the Swedish investment company Solix

Group AB. The transaction was completed on 1 July 2025.

Annual revenue of the business was EUR 127 million in

2025 until disposed (227).

On 17 July 2025, Wärtsilä announced that it had agreed to

divest its Marine Electrical Systems business to Vinci

Energies. The transaction was completed on 31 October

2025. Annual revenue of the business was EUR 92 million

in 2025 until disposed (105).


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On 22 December 2025, Wärtsilä announced that it had

agreed to divest its Gas Solutions business to Mutares SE

& Co. KGaA. Subject to approvals, the transaction is

expected to be completed in the second quarter of 2026.

Annual revenue of the business was EUR 394 million in

2025 (301).

Order intake decreased by 27% to EUR 781 million (1,069),

mainly due to a decline in the Marine Electrical Systems

business unit as well as the divestment of the Automation,

Navigation and Control Systems (ANCS) business unit.

Services order intake decreased by 26% to EUR 158 million

(214), while equipment order intake decreased by 27% to

EUR 622 million (855). The order book at the end of the

year decreased by 48% to EUR 796 million (1,544)

following the divestments of business units.

Net sales decreased by 4% to EUR 677 million (706).There

was good development in the Gas Solutions business unit,

but a decline in the ANCS business unit. Services net sales

decreased by 28% to EUR 142 million (198), while

equipment net sales increased by 5% to EUR 535 million

(508).

The comparable operating result amounted to EUR 47

million (32) or 6.9% of net sales (4.5). The increase was

supported by good development in the Gas Solutions

business unit but also negatively impacted by the

divestment of the ANCS business unit. Items affecting

comparability totalled EUR -1 million (20), related mainly

to the divestment of the ANCS business unit and Marine

Electrical Systems and the asset held for sale

categorisation of the Gas Solutions business unit.

Risks and business uncertainties

The prolonged and elevated geopolitical tensions, and

uncertainty over trade policies exacerbated by the US

policy announcements, combined with announced and

potential further countermeasures, have clearly increased

risks related to further global fragmentation and

uncertainty to the macroeconomic outlook. Business

operations globally are being impacted by continued

inflationary pressure, changing trade flows and volumes,

tighter monetary policies, concerns over the health of the

Chinese economy, rising protectionism, the sanctions in

place and planned against Russia and various other

nations, and rising international trade tensions. Together,

these factors are contributing to uncertainty that may

limit global economic growth. Further escalation of any of

the forementioned factors could result in increased

uncertainty over future demand for the equipment and

services provided by Wärtsilä. Furthermore, the volatility

of the geopolitical environment, and the enforcement of

sanctions or embargos, pose a risk to the company’s

customer relations and international business activities.

With the rapidly growing use of data in shipping and

shipbuilding, as well as in the energy markets, cyber

threats can potentially result in various forms of financial,

operational, or reputational damage to the business.

Changes in the regulatory environment, financiers'

policies, or market sentiment could negatively impact the

availability and cost of financing for Wärtsilä and

Wärtsilä’s customers, which could result in a lower

demand for Wärtsilä's solutions.

The shipping and shipbuilding markets are under

increasing pressure to reduce carbon emissions because

of regional regulations, such as the EU’s Fit for 55, and the

revised greenhouse gas strategy from the International

Maritime Organisation, green financing, and the

individual sustainability goals of end-customers. This,

coupled with shifting trade flows resulting from increased

geopolitical tensions and disruptions at key waterways,

may lead to increased costs for shipowners and operators

that cannot be fully passed on to end customers.

The elevated geopolitical tensions, including emerging

national interests in revitalising shipbuilding activity and

ensuring security of supply, disruptions at key waterways,

and the uncertainty over barriers to global trade, may

have a negative impact on global economic activity and

growth. This could result in reduced demand for ship

capacity, shifts in the global shipbuilding footprint and

shipping trade flows, and higher inflationary pressure.

Other geopolitical tensions that could impact shipping

include the announced measures by US Trade

Representative to address China's maritime, logistics and

shipbuilding dominance, China's countermeasures

including port fees on US-linked ships and sanctions on

entities considered to be supporting the US measures,

disruptions at key waterways, and the uncertainty over

barriers to global trade, may have a negative impact on

global economic activity and growth. This could result in

reduced demand for ship capacity, shifts in the global

shipbuilding footprint and shipping trade flows, and

higher inflationary pressure.

The constraints on shipyard capacity, the development

and deployment of sustainable future technologies and

fuels, the need to find the optimal pace and timing of

investments based on financial feasibility, and compliance

with emission regulations may affect the investment

appetite of ship owners and operators. This concerns both

newbuilding programmes and the management of

existing fleets, and may pose a risk of the global shipping

fleet not reaching targeted emission reduction levels. A

lack of clarity at the global level around decarbonisation-

related regulations and financial incentives may lead to an

increase in regional regulations that could add complexity

and costs for shipping.

Sufficient global availability of sustainable future fuels will

be crucial for shipping to reach its decarbonisation

targets. Without a secured supply and clear incentives to

drive the uptake of sustainable fuels, ship owners and

operators may postpone investments in the uptake of

technology capable of using these fuels. This may lead to

a slower increase in the production of these fuels, and

ultimately slow the decarbonisation of shipping. Ship

owners and operators, as well as shipyards, may face risks

to their business profitability due to the limited ability or

desire of people to travel, a lower demand for goods and

services because of persistent high inflation, higher

barriers to global trade or economic slowdown, as well as

higher voyage, operating, and financing costs. Highly

indebted ship owners, operators or shipyards may not

withstand the potential risk of slower than expected

growth in demand, higher financing costs, or a lowered

credit rating.

Uncertainty around the longer-term demand for crude oil,

oil price volatility, and the pressure to decarbonise are

pushing oil majors to re-evaluate their spending on

exploration activities and operational costs. This may lead

to lower future demand for offshore drilling or support

assets, as well as having an impact on the related tanker

ship fleet. It may also hinder newbuild investments, due to

concerns regarding residual asset values.

The overarching trend in the energy markets is the

transition to renewable energy sources, such as wind and

solar. The pace of this shift is the principal driver in the

growth of battery energy storage and thermal balancing

technologies. New technology innovations, as well as the

price and availability of fuels and raw materials, affect

Wärtsilä’s business. High and volatile gas prices directly

impact the relative competitiveness of the portfolio

against other generating technologies, especially in

thermal baseload plants. Similarly, policies related to the

energy and electricity markets have direct and indirect

impacts on future energy capacity and the generation

mix. For example, energy and climate policies may speed

or delay the energy transition. Recent years have

highlighted the impact of geopolitical tensions on energy

market policy and investment decisions. Concentrated

supply chains in some countries, and the tight competitive

situation impose direct risks on Energy and Energy

Storage. Energy commodities and supply chains have

lately been at the heart of trade policies, presenting risks

for all energy technologies. While the scale and scope of

potential tariffs related to current US trade policy remain

uncertain, they may impact Wärtsilä’s Energy and Energy

Storage businesses, particularly in the US. In Energy


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Storage, headwinds in the US market are increasing

competition in other markets, which may hamper growth

and profitability. Competition between and among energy

technologies presents price pressure. Uncertainty related

to any of the aforementioned factors tends to delay

investment decisions. General news coverage relating to

safety issues may affect customer perceptions of product

safety, which could have a negative impact on Wärtsilä’s

business.

The Group is a defendant in a number of legal cases that

have arisen out of, or are incidental to, the ordinary

course of its business. These lawsuits mainly concern

issues such as contractual and other liability, labour

relations, property damage, and regulatory matters. From

time to time, the Group receives claims of different

amounts and with varying degrees of substantiation.

There is currently one unusually sizeable claim. It is the

Group’s policy to provide for amounts related to the

claims as well as for litigation and arbitration matters

when an unfavourable outcome is probable, and the

amount of loss can be reasonably estimated.

The Risks and Risk Management section of the annual

report contains a more detailed description of Wärtsilä’s

risks and risk management.

Shares and shareholders

In 2025, the number of shares traded on Nasdaq Helsinki

was 228,809,600, equivalent to a turnover of EUR 4,853

million. Wärtsilä’s shares are also traded on alternative

exchanges, including Turquoise, BATS, Chi-X and CBOE

DXE. The total trading volume on these alternative

exchanges amounted to 135,292,993 shares.

Flagging notifications

Under the provisions of the Finnish Securities Markets Act,

shareholders of listed companies have an obligation to

notify both the Finnish Financial Supervision Authority and

the listed company of changes in their holdings when

crossing predefined thresholds.

During 2025, Wärtsilä received 28 notifications of change

in holding pursuant to Chapter 9, section 5 of holding in

Wärtsilä’s shares according to which the total number of

holding in Wärtsilä’s shares and voting rights owned by

BlackRock, Inc. and its funds directly or through financial

instruments had decreased below 5 per cent or increased

above 5 per cent. All flagging notifications received by

Wärtsilä during 2025 can be found on Wärtsilä’s website at

www.wartsila.com/investors/shareholders/flaggings.

Wärtsilä shares on Nasdaq Helsinki


31.12.2025	Number of shares outstanding	Number of treasury shares	Number of shares and votes	Number of shares traded 1-12/2025
WRT1V	588,436,960	3,286,430	591,723,390	228,809,600

1.1.-31.12.2025	High	Low	Average	Close
Share price	31.34	14.07	21.19*	30.4
*Trade weighted average price

Market capitalisation			31.12.2025	31.12.2024
MEUR			17,988	10,124

Foreign shareholders			31.12.2025	31.12.2024
%			61.6	57.7


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Decisions taken by the Annual

General Meeting

Wärtsilä’s Annual General Meeting was held on 13 March

2025 at Messukeskus, Helsinki. The Meeting approved the

financial statements for the year 2024, reviewed the

Remuneration Report 2024 for Governing Bodies and the

Remuneration Policy for Governing Bodies, and

discharged the members of the Board of Directors and

the company’s President & CEO from liability for the

financial year 2024.

The Annual General Meeting decided that the Board of

Directors shall have eight members. The following were

elected to the Board: Karen Bomba, Henrik Ehrnrooth,

Morten H. Engelstoft, Karin Falk, Johan Forssell, Tom

Johnstone, Tiina Tuomela, and Mika Vehviläinen.

The audit firm PricewaterhouseCoopers Oy was elected as

the auditor of the Company for the year 2025 and the

same firm was elected as the sustainability auditor..

The Annual General Meeting approved the proposed

changes to the Articles of Association. The changes reflect

the prevailing regulatory requirements for an audit firm

as well as prepare for the upcoming mandatory auditor

tendering process as per the requirements of the EU Audit

Regulation.

Dividend distribution

The Annual General Meeting approved the Board of

Directors’ proposal to pay a dividend of EUR 0.44 per

share, with the dividend to be paid in two instalments. The

first instalment of EUR 0.22 per share was paid on 24

March 2025. The second instalment of EUR 0.22 per share

was paid on 24 September 2025.

Authorisation to repurchase the company’s

own shares

The Board of Directors was authorised to resolve to

repurchase a maximum of 57,000,000 shares in the

Company. Shares may be repurchased also otherwise

than in proportion to the shareholders’ holding in the

Company. The authorisation to repurchase the Company’s

own shares shall be valid until the close of the next Annual

General Meeting, however no longer than for 18 months

from the decision by the Annual General Meeting.

Authorisation to issue shares

The Board of Directors was authorised to resolve to issue

a maximum of 57,000,000 shares in the Company. The

shares can be issued for consideration or without

consideration. They can also be issued in deviation from

the shareholders’ pre-emptive rights by way of a directed

issue if there is a weighty financial reason for the

Company to do so. A directed issue may be decided upon

to develop the capital structure of the Company or to

finance or carry out acquisitions or other arrangements.

Additionally, the authorisation can also be used as part of

the Company’s incentive schemes for up to 10,000,000

shares, which represents 1.69% of all the shares in the

Company. The authorisation for the Board of Directors to

issue shares shall be valid for 18 months from the

decision by the Annual General Meeting. However, the

authorisation regarding incentive schemes shall be valid

for five years from the decision. This authorisation

revokes the authorisation given by the Annual General

Meeting on 7 March 2024.

Organisation of the Board of Directors

Convening after the Annual General Meeting, the Board of

Directors elected Tom Johnstone as its Chair and Mika

Vehviläinen as the Deputy Chair. The Board decided to

establish an Audit Committee and a People Committee.

The Board appointed from among its members the

following members to the committees:

Audit Committee: Chair Tiina Tuomela, Karen Bomba,

Morten H. Engelstoft

People Committee: Chair Tom Johnstone, Karin Falk,

Mika Vehviläinen


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Wärtsilä's outlook

Marine

Wärtsilä expects the demand environment for the next 12

months (Q1/2026-Q4/2026) to be similar to that of the

comparison period.

Energy

Wärtsilä expects the demand environment for the next 12

months (Q1/2026-Q4/2026) to be better than in the

comparison period.

Energy Storage

Wärtsilä expects the demand environment for the next 12

months (Q1/2026-Q4/2026) 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.

Board of Director’s dividend

proposal

The Board of Directors proposes to the Annual General

Meeting that a base dividend of EUR 0.54 per share and

an extraordinary dividend of EUR 0.52 per share, totalling

EUR 1.06 per share shall be paid for the financial year

2025. The parent company’s distributable funds total EUR

1,110,118,876.54, which includes EUR 132,492,704.34 in

result for the year. There are 588,436,960 shares with

dividend rights. The dividend shall be paid in two

instalments.

The first instalment, including a base dividend of EUR 0.27

per share and an extraordinary dividend of EUR 0.52 per

share, totalling EUR 0.79 per share, shall be paid to the

shareholders who are registered in the list of

shareholders maintained by Euroclear Finland Oy on the

dividend record date of 16 March 2026. The payment day

proposed by the Board for this instalment is 23 March

2026.

The second instalment of EUR 0.27 per share shall be paid

to the shareholders who are registered in the list of

shareholders maintained by Euroclear Finland Oy on the

dividend record date of 16 September 2026. The payment

date proposed by the Board for this instalment is 23

September 2026.

Dividend

0.52

0.54

*Proposal of the Board.

The free share issue approved by Wärtsilä Corp. Annual General Meeting on 2018 increased the total number of Wärtsilä

shares to 591,723,390. Figures for the comparison periods 2011-2017 have been adjusted to reflect the increased

number of shares.


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Sustainability Statement


1. General information	12
1.1. Wärtsilä’s approach to sustainability	12
1.2. Basis for preparation	12
1.3. Governance	13
1.4. Strategy, business model and value chain	16
1.5. Interest and views of stakeholders	18
1.6. Material impacts, risks and opportunities and their interaction with strategy and business model	21
1.7. Description of the process to identify and assess material impacts, risks and opportunities	24
1.8. Resilience analysis	25
1.9. Disclosure requirements complied with in preparing the Sustainability Statement	30

2. Environmental information	36
2.1. EU Sustainable finance taxonomy disclosures	36
2.2. Climate change	41
2.3. Pollution	51

3. Social information	53
3.1. General information on Wärtsilä’s employees	53
3.2. Occupational health and safety	53
3.3. Skills and career development	56
3.4. Occupational health and safety: Value chain workers	61

1. General information

1.1. Wärtsilä’s approach to sustainability

Wärtsilä is a purpose-driven organisation, with sustainability at the core of the company’s purpose and strategy. Along with

the company’s values, principles, and sustainability objectives, they create the framework for a strong drive towards

decarbonisation and responsible business practices. Wärtsilä’s sustainability strategy is based on three closely interrelated

pillars: economic, environmental, and social performance. With the company’s strong emphasis on decarbonising the

marine and energy markets, innovative and efficient solutions are playing a central role in making a positive contribution

towards a low carbon future. Wärtsilä businesses focus on developing and providing solutions and services that optimise

the environmental and economic performance of fleets and individual vessels, power plants, and entire energy systems.

This focus is further enhanced through the use of lifecycle data, analytics, and artificial intelligence.

Wärtsilä aims at having a working culture, where ethics and compliance are central to the company’s business practices.

Wärtsilä’s Code of Conduct e-learning programme provides information regarding the Code and its themes, as well as

guidance for employees on making the right decisions in their everyday work. Employees are required to participate in the

mandatory training programme every second year. The Code of Conduct covers areas such as climate change, respecting

human and labour rights, preventing corruption and bribery, and competition regulation. Wärtsilä maintains an extensive

training programme that is mandatory for all employees on anti-corruption principles and applicable legislation, as well as

the relevant company policies and procedures. The company also has in place a competition compliance programme for

managing risks relating to competition law.

1.2. Basis for preparation (BP-1, BP-2)

This Sustainability Statement (“Group Sustainability Report” as per Finnish Accounting Act (1336/1997)) has been prepared

in accordance with the European Sustainability Reporting Standards (ESRS), Finnish Accounting Act chapter 7, and the EU

Sustainable Finance Taxonomy disclosures. It is presented on a consolidated basis, with the scope of consolidation being

the same as for the financial statements. The disclosed sustainability information is based on Wärtsilä’s double materiality

assessment. The assessment covers Wärtsilä’s own operations and value chain, including both upstream and downstream.

The process to define material impacts, risks and opportunities is outlined in section 1.7 Description of the process to

identify and assess material impacts, risks and opportunities. The extent to which the policies, actions, targets, and metrics

extend to the value chain, is explained in each topic-specific section.

Wärtsilä has not used the option to omit a specific piece of information corresponding to intellectual property, know-how or

the results of innovation, nor the exemption from disclosure of impending developments or matters in the course of

negotiation, as provided for in articles 19a(3) and 29a(3) of Directive 2013/34/EU.

Time-horizon deviations: For the disclosures E1 SBM-3 and E1 IRO-1 concerning Wärtsilä’s process for assessing climate

risks and opportunities, the following time horizons have been applied in alignment with the Taskforce on Climate Change

related Financial Disclosures (TCFD) recommendations: Short term: year 2025; Medium term: year 2030, and Long term:

year 2050.


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A metric including value chain data estimates is the Scope 3, category 4: GHG emissions from the upstream transportation

and distribution. For purchased outbound logistics, the emissions for logistics services are calculated mainly based on the

Global Logistics Emissions Council (GLEC) Framework, the global method for the calculation and reporting of logistics

emissions. Furthermore, primary emissions data from transport vehicles has been collected to improve the data quality.

Data coverage is 83% of the total transportation spend and extrapolation is made for the remaining share.

A quantitative metric subject to a high level of measurement uncertainty is the Scope 3, category 11: CO₂e emissions from

the use of sold products. The calculation is based on the number of engines sold in the reporting year, related engine

running hours, engine output and engine load multiplied with relevant emission factors. The emissions from sold engines

as direct use-phase emissions were accounted for.

Wärtsilä has recalculated the GHG emissions from the Scope 3 category 11 Use of sold products for the previous reporting

period due to a change in the calculation methodology. The main elements of the calculation formula for the category 11

remain unchanged from the previous reporting period, however sustainable fuel scenarios that were previously considered,

are excluded in the revised figures. Long-term scenarios are changing on a regular basis and therefore, to ensure

comparability of the presented figures, these scenarios are no longer reflected in the revised calculations.

Wärtsilä has decided to use the phase-in provisions, and therefore the following disclosures have been omitted from this

report: E1-9, E2-6, S1-7, and S1-14 paragraph 88 (e).

1.3. Governance (ESRS 2, GOV 1-5)

The role of the administrative, management and supervisory bodies (GOV-1)

Board of Directors

Responsibility for the management of the company and the proper organisation of its operations lies with the company’s

Board of Directors, which is composed of five to ten members. Board members serve for one year at a time and are elected

by the General Meeting. The Board elects a chair and a deputy chair from among its members. The Board steers and

supervises the company’s operations and decides on policies, goals, and strategies of major importance.

The members of the Board of Directors at the end of 2025 were Tom Johnstone (Chair of the Board), Mika Vehviläinen

(Deputy Chair of the Board), Karen Bomba, Henrik Ehrnrooth, Morten H. Engelstof, Karin Falk, Johan Forssell, and Tiina

Tuomela. There is no representation of employees or other workers in the Board of Directors. All eight Board members are

non-executive and were determined to be independent of the company. Six members, i.e. 75%, were determined to be

independent of significant shareholders.

For the Board of Directors to discharge its duties in the most effective manner, the Board must be highly qualified and

sufficiently diverse. Members of the Board have extensive and diverse experience from, for example, the marine and

energy sectors and international capital goods companies, which is relevant to Wärtsilä’s strategy. When preparing its

proposal for the Board’s composition, the Shareholders’ Nomination Board considers the educational and professional

background of the individual candidates, as well as their international experience, thus enabling the composition of the

Board to represent a wide variety of competences and qualifications. The Shareholders’ Nomination Board also considers

the candidates’ age, as having different seniority levels on the Board is considered beneficial in terms of ensuring a

mutually complementary experience. With regards to gender, Wärtsilä’s objective is to have a balanced representation of

genders on the Board. In December 2025, Wärtsilä had three female and five male board members.

In addition, the Nomination Board reviews and adjusts the diversity principles of the Board of Directors, as necessary, and

prepares successor planning of the directors.

Roles and responsibilities of the Board of Directors

The Board considers all matters stipulated to be the responsibility of a board of directors by legislation, other regulations,

and the company’s Articles of Association. The most important of these include approving financial statements, matters for

shareholder meetings, appointing key executives, and the organisation of financial supervision.

The Board addresses strategic and significant issues such as:

▪ approval of long-term goals and strategies

▪ approving annual business plans and risk management principles

▪ monitoring the developments, opportunities, and threats in the external environment, as well as their impact on goals

and strategy

▪ approval of the remuneration and pension benefits of the President & CEO

▪ approval of the corporate governance principles

▪ overseeing compliance with laws and regulatory requirements, its Code of Conduct, and other established values and

ethical principles in its operations

▪ discussing and monitoring the research and product development plans of the company

The Board of Directors reviews the implementation and monitors progress on the sustainability strategy and sustainability

targets, including major related issues, at least annually. It is responsible for the strategic management of the company and

is supported in its work by the Board Committees, which are appointed annually from among its members. The Board

members have access to relevant internal sustainability expertise and are provided with sustainability-related training as

necessary, thereby ensuring they possess the appropriate competences to fulfil their oversight responsibilities.

Audit committee

The Board defines the duties of the Audit Committee in the charter confirmed for the Committee. The Audit Committee

oversees financial and sustainability reporting processes, internal controls, audits, and risk management. The Committee

reviews the description of the main features of the internal control and risk management systems pertaining to the

financial and sustainability reporting processes, monitors the statutory audit, evaluates the independence of the statutory

audit firm, and prepares the proposal for resolution on the election of the statutory audit firm and the sustainability

auditor. The Committee receives regular updates on the progress of the sustainability reporting and assurance activities


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from the Public Affairs and Sustainability function, as well as from external assurance providers. The Chair of the Audit

Committee reports to the Board of Directors on the Committee’s meetings and proposals.

People committee

The Board defines the duties of the People Committee in the charter confirmed for the Committee. The People Committee

prepares for the Board of Directors, as necessary, matters concerning the appointment of the President & CEO, the CEO’s

deputy, if any, and other members of the Board of Management. The Committee prepares for the Board of Directors

proposals concerning the remuneration principles, incentive schemes, and remunerations that apply to the President &

CEO and the members of the Board of Management. Furthermore, the People Committee reviews the organisation’s

development needs and corporate culture alignment with strategy, monitors talent management processes and strategies,

as well as reviewing leadership development strategies and succession plans. External consultants used by the Committee

are independent of the company and management.

Diversity among the members of the Board of Directors and Board of Management


Members of the Board of Management (BoM) and Board of Directors (BoD) by gender	2025		2024
	BoM (%)	BoD (%)	BoM (%)	BoD (%)
Female	45.0	37.5	37.5	37.5
Male	55.0	62.5	62.5	62.5


Members of the Board of Management (BoM) and Board of Directors (BoD) by age group	2025		2024
	BoM (%)	BoD (%)	BoM (%)	BoD (%)
< 30 years	0	0	0	0
30-50	0	0	12.5	0
> 50 years	100	100	87.5	100

Board of Management

The members of the Board of Management at the end of 2025 were Håkan Agnevall (President & CEO), Arjen Berends

(Executive Vice President and Chief Financial Officer), Tamara de Gruyter (President, Energy Storage Business and Executive

Vice President), Kari Hietanen (Executive Vice President, Public Affairs and Sustainability), Roger Holm (President, Wärtsilä

Marine and Executive Vice President), Anders Lindberg (President, Wärtsilä Energy and Executive Vice President), Teija

Sarajärvi (Executive Vice President, Human Resources), Anu Sirkiä (Executive Vice President, Marketing and

Communications), and Nora Steiner-Forsberg (Executive Vice President, Legal and Compliance).

Members of the Board of Management are appointed by the company’s Board of Directors. The Board of Management is

chaired by the President & CEO, and all members are executives. There is no representation of employees or other workers

on the Board of Management. The members of the Board of Management have diverse and extensive experience related to

Wärtsilä’s strategy, both within the company as well as in relevant industries. Several members of the Board of

Management have more than 15 years of experience in Wärtsilä, providing the Board of Management with ample expertise

on Wärtsilä's sector, products and geographic locations.

Roles and responsibilities of the Board of Management

The President & CEO leads day-to-day management of the company and chairs the Board of Management. The Board

considers strategic issues related to the Group and its businesses, as well as investments, product policy, and the Group’s

structure and corporate steering systems. It also supervises the company’s operations. Until the end of the reporting year,

sustainability matters were overseen by the Executive Vice President, Public Affairs and Sustainability. This role included

responsibility for the sustainability strategy, environmental and occupational health and safety, as well as security, including

cyber security. Effective 1 January 2026, following the retirement of Wärtsilä’s Executive Vice President, Public Affairs and

Sustainability, these responsibilities were redistributed. Sustainability matters were transferred to the Executive Vice

President, Public Affairs and Legal. Cyber security responsibilities were assigned to the Executive Vice President and Chief

Financial Officer. Safety and corporate security responsibilities were transferred to the Executive Vice President, Human

Resources, who also continues to oversee people-related processes.

The Board of Management is responsible for overall sustainability performance. It approves group-level sustainability

policies, targets and action plans, reviews key risks and mitigation measures, and sets priorities to ensure effective risk

management. It ensures that sustainability is integrated into operations and monitors progress against the targets across

the Group. To manage material impacts, risks, and opportunities, the Board of Management leverages expertise from

different functions and businesses. For climate, energy, and pollution topics, it relies on strategic business leads, technology

departments, and global functions such as risk management, supply management, and sustainability. Occupational health

and safety expertise is provided by the Health & Safety function and the businesses’ QEHS organisations, while global HR

supports skills and career development matters.

Risk management framework and governance

Wärtsilä’s Board of Directors sets the company’s risk appetite and tolerance limits, monitoring the overall risk profile

through frequent reviews. The President & CEO and the Board of Management are responsible for fostering a culture of risk

awareness throughout Wärtsilä, making sure risk management is integrated into all major processes with the appropriate

tools and resources. The Board of Management quarterly assesses the Group’s risk profile—which highlights the most

significant risks and their mitigation strategies—providing guidance and setting priorities as needed to ensure that risk

management measures and controls are sufficient.

Wärtsilä's businesses are tasked with adhering to their strategies and achieving their operational and financial targets.

Additionally, the businesses and their management teams are responsible for implementing ongoing risk management

actions to identify, manage, and address all significant risks. This responsibility extends to the business unit level and

beyond within the organization. Each business quarterly presents its risk profile to the President & CEO, the Chief Financial


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Officer, and the rest of the Board of Management. Significant sustainability risks are included in the enterprise risk

management process.

The Corporate Risk Management function within Corporate Treasury oversees the risk reporting process, and supports the

businesses and their underlying organizations in risk management. This function also leads the internal risk management

peer group with business representatives to ensure proper alignment, knowledge sharing, and the continuous

improvement of risk management practices. Wärtsilä’s Internal Audit function regularly evaluates and verifies the

effectiveness of the risk management framework and process.

Opportunity governance

Strategy is governed by the Board of Directors and Board of Management. The Board of Directors reviews strategy annually

and oversees its implementation monthly. The Board of Management has overall responsibility for group strategy and

execution. In addition to the Board of Management’s weekly and monthly meetings, there is a specific thematic Board for

strategy, as well as quarterly Business Reviews and three Functional Reviews annually to review strategy execution. The

thematic Board for strategy is sponsored by the President & CEO. The business and global function management teams

ensure their respective strategy execution. All the businesses have a clear profit and loss responsibility, enabling decisions

to be made close to where the customer value is created.

Information provided to and sustainability matters addressed by the undertaking’s

administrative, management and supervisory bodies (ESRS 2, GOV-2)

Both the Board of Management and Board of Directors consider the impacts, risks and opportunities as a part of their

overall decision-making process when overseeing strategy, its decisions on major transactions, and its risk management

process. In addition, risks are especially considered in detail as part of the due diligence process accompanying every

significant transaction, such as mergers and acquisitions. Every major decision includes considering trade-offs associated

with the impacts, risks and opportunities.

The Board of Directors reviews the implementation and monitors progress on the sustainability strategy and sustainability

targets, including major related issues, at least annually. Typically, these topics are presented to the Board by the CEO or

another member of the Board of Management. In 2025, key agenda items included the sustainability strategy and progress

regarding the Set for 30 decarbonisation targets. In addition, the focus was on the status of the Sustainability Statement

and related regulations, particularly the Omnibus regulation. Matters relating to the organisation, for example people

processes and remuneration principles, and the health and safety of personnel, have also been priorities. The Audit

Committee oversees the sustainability reporting process and is regularly informed on its progress and related assurance

activities by the Vice President, Public Affairs and Sustainability, as well as by the assurance providers.

Within the Board of Management, sustainability issues are discussed in periodic meetings or when important matters arise.

Periodic meetings include the Corporate Affairs Board, which is sponsored from the Board of Management by the Executive

Vice President, Public Affairs and Sustainability, and Functional reviews. Sustainability issues for the Corporate Affairs Board

meetings are prepared by the cross-functional Corporate Relations and Sustainability Committee. In 2025, the committee

convened 6 times and the Corporate Affairs Board twice. In 2025, the Board of Management addressed matters related to

sustainability strategy, sustainability targets and follow-up, occupational health and safety, as well as developments in

sustainability regulation.

Incentive schemes and remuneration policies linked to sustainability matters for the Board of

Management (ESRS 2, GOV-3)

Board of Directors

Members of the Board are not covered by incentive programmes and do not receive performance-based remuneration, nor

do they have a pension scheme arranged by Wärtsilä.

Board of Management

Long-term incentive (LTI) schemes are established and approved by the Board of Directors annually. Each incentive scheme

comprises a Performance Share Plan (PSP) with a three-year performance period, designed to align the interests of

participants with those of Wärtsilä’s shareholders. At the end of 2025, Wärtsilä had three active long-term incentive

schemes including sustainability related targets for the Board of Management, for the periods 2023-2025, 2024-2026 and

2025-2027. These incentive schemes measure Economic Value Added (EVA) and sustainability targets connected to

Wärtsilä’s decarbonisation strategy, namely to become carbon neutral in the company’s own operations, and to have a

product portfolio ready for zero carbon fuels. The product portfolio target is followed through technology readiness level

reviews.

The People Committee reviews, and the Board of Directors approves, scheme realisations against the set targets before

pay-out. The pay-out is made shortly following the performance period and can be made in cash and/or in shares.

The long-term incentive schemes for the periods 2023-2025, 2024-2026 and 2025-2027 are performance share plans. The

participants are granted company shares if the pre-determined minimum level in the company’s Economic Value Added

(85% weight) and Sustainability targets linked to decarbonisation (15% weight) are reached, as well as having met the

employment requirement for the period. For the 2025-2027 plan, the weighting is Economic Value Added (80% weight) and

Sustainability targets (20% weight).


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Due diligence mapping (ESRS 2, GOV-4)


Core elements of due diligence	Paragraphs in the sustainability statement
a) Embedding due diligence in governance, strategy and business model	Strategy, business model and value chain Incentive schemes and remuneration policies linked to sustainability matters for the Board of Management E1, E2, S1, S2 Policies
b) Engaging with affected stakeholders in all key steps of the due diligence	Interest and views of stakeholders Description of the process to identify and assess material impacts, risks and opportunities S1-2 Engagement with employees on health and safety S1-2 Wärtsilä’s listening strategy
c) Identifying and assessing adverse impacts	Description of the process to identify and assess material impacts, risks and opportunities Results of double materiality assessment
d) Taking actions to address those adverse impacts	E1, E2, S1, S2 Actions S1-3 Processes to remediate negative impacts and channels for own workforce to raise concerns S2-3 Processes for providing or contributing to remedy
e) Tracking the effectiveness of these efforts and communicating	E1, E2, S1, S2 Metrics E1, S1, S2 Targets S1-4 Health and safety actions

Risk management and internal controls over sustainability reporting (ESRS 2, GOV-5)

Wärtsilä has established an internal control framework to ensure the accuracy, completeness, and timeliness of

sustainability reporting. It applies across all Group entities and covers all the environmental and social data collected for the

Sustainability Statement.

Internal controls over sustainability reporting are based on the identification and assessment of risks. The sustainability risk

profile consists of findings from external and internal audits, as well as from detailed process descriptions of material

metrics. The risk assessment related to sustainability reporting encompasses all phases of the reporting process, from

preparing the reporting instructions and manuals, through data collection and calculation, to compilation of the

sustainability report. The risks are identified for each process phase and are prioritised based on their impact on data

quality, timeliness of data availability, and the materiality of the information. Therefore, risks that could affect the

completeness and accuracy, as well as the availability, of the material information, receive the highest level of scrutiny. The

Group sustainability function oversees risk identification related to sustainability reporting and the planning of internal

controls to mitigate those risks. Depending on the risk type, the control activities are performed by the Sustainability

function, cascaded down to Group companies or other functions responsible for data collection. Wärtsilä is currently

enhancing its internal control framework for sustainability reporting through co-development between Sustainability

function and Financial control.

Wärtsilä has defined and implemented controls at process and entity level. Control activities at different levels are needed

to directly mitigate risks at the respective levels. Control activities include training, instructions, automated checkpoints,

access controls, periodic data reviews, and the documentation of data calculation principles. For critical risks associated

with the accuracy and completeness of material information, enhanced mitigation measures are adopted. These can

include, for example, cross-verification of data.

Sustainability reporting is managed by the Group sustainability function, which collects, reviews and consolidates the

sustainability information from Group companies and prepares the Sustainability Statement. The sustainability function

evaluates the integrity and compliance of processes for collecting and reporting sustainability data, identifies potential

risks, and ensures that adequate internal controls are implemented to mitigate errors. The findings, including any issues or

areas for improvement, are communicated to the respective process owners or subsidiaries through info calls, KPI

reporting, or feedback discussions.

The governance model adopted to ensure the effectiveness of the internal control environment over sustainability

reporting, complies with Wärtsilä’s common principles. The Audit Committee of the Board of Directors oversees the

financial and sustainability reporting processes and monitors the assurance of the consolidated sustainability reporting.

The Audit Committee is regularly informed on the progress of the sustainability reporting, as well as on the assurance by

the Public Affairs and Sustainability function and assurance providers. In addition, the Audit Committee assesses and

assures the adequacy and effectiveness of Wärtsilä’s internal controls and risk management. The Internal Audit function

assists the Audit Committee in this work by performing regular audits of Group legal entities, businesses, and support

functions in accordance with its annual plan.

Wärtsilä’s senior management regularly monitors the company’s overall sustainability performance. The Board of

Management, in its periodic meetings, reviews the progress of the sustainability reporting, including the findings of the risk

assessment and internal controls.

The Managing Directors of Group subsidiaries are responsible for ensuring that the subsidiary’s operations fulfil the

requirements stipulated in the Group processes, including the quality and timeliness of sustainability reporting.

1.4. Strategy, business model and value chain (SBM-1)

Wärtsilä’s strategic framework, The Wärtsilä Way, is the foundation for the company’s operations. It explains why the

company exists and guides the way forward. Wärtsilä is dedicated to shaping the decarbonisation of marine and energy –

enabling its customers in these industries to cut emissions. Succeeding in this will help to build sustainable societies that

are livable, financially secure and environmentally stable. Wärtsilä drives decarbonisation through innovative solutions,

collaboration and partnerships, while simultaneously embracing diversity, promoting equal opportunities, and

demonstrating high ethical standards. Wärtsilä’s values, Customer success, Passion and Performance, guide the company’s


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actions and decision-making. As anchored in these values, Wärtsilä drives sustainability, values teamwork and inclusiveness,

and is committed to safety and zero injuries.

The company’s value creation potential is based on two key strategic themes: Transform and Perform. Transform refers to

attractive growth opportunities at the centre of the decarbonisation transformation by leveraging growth in electricity

generation, balancing power, greener marine transport, and related service businesses. The Perform theme centres around

a clear path for operational improvements and increased profitability, leveraging on market growth and the company’s

commitment to financial and sustainability targets. Wärtsilä’s climate-related targets are included in the company’s Set for

30 commitment: by 2030, Wärtsilä will become carbon neutral in own operations, be able to provide a product portfolio

ready for zero-carbon fuels, and reduce suppliers’ GHG emissions by 25%. The commitment, especially its product-related

target, is central to Wärtsilä’s role in enabling decarbonisation in the marine and energy sectors. By ensuring its portfolio is

ready for zero-carbon fuels, Wärtsilä provides customers with advanced, fuel-flexible technologies that support compliance

with evolving environmental regulations and enable a transition to sustainable energy systems.

To support sustainable fuel product development, Wärtsilä remains committed to R&D activities and continues to invest

over 4% of net sales in R&D. While much of the aforementioned decarbonisation work still lies ahead, Wärtsilä already has

solutions and technologies that enable 100% renewable power systems, and fuel flexibility to support decarbonisation.

Wärtsilä has three reporting segments: Marine, Energy and Energy Storage.

Wärtsilä Marine is a major actor in power supply, propulsion, and lifecycle solutions for the maritime sector. The company

develops advanced technologies that enable the maritime industry’s transition to sustainable fuels and a net-zero

greenhouse gas emissions future. Wärtsilä offers a comprehensive portfolio of maritime solutions, including fuel-flexible

engines, fuel supply and propulsion systems, electrical systems for hybrid and full electric vessels, shaft line solutions,

exhaust gas treatment technologies, such as on-board carbon capture, and digital technologies, including fleet optimisation

solutions. The offering also includes maintenance services supported by a global network of field services, workshops and

expertise centres, spare parts logistics centres, as well as advanced digital capabilities. Wärtsilä can improve the efficiency

and environmental performance of existing fleets through a broad range of retrofit packages, including energy saving

devices, shore power, hybridisation, power derating, and engine upgrades. Wärtsilä Marine’s decarbonisation services

encompass analyses of the current fleet, focusing on environmental compliance or decarbonisation modelling based on

real operational data. This approach enables an assessment of current vessel operations and identifies the solutions

needed to achieve regulatory compliance.

Wärtsilä Energy aims to lead the transition towards a 100% renewable energy future. Through advanced technologies and

deep power system expertise, the company supports societies and customers in accelerating their decarbonisation

journeys.

In the Engine Power Plant business, Wärtsilä operates as an OEM (Original Equipment Manufacturer) and service provider.

This includes the design, manufacturing, delivery, and lifecycle support of engines and power plants. Wärtsilä Energy

provides fuel-flexible engine power plants and comprehensive lifecycle services that support energy installations

throughout their entire operational life. Wärtsilä’s power plant solutions include flexible baseload systems that ensure a

steady and reliable power supply, as well as balancing power systems that maintain grid stability during periods of low

renewable energy generation. The offering also includes low-emission solutions tailored for data centers, and combined

power generation and heat recovery plants that enhance overall energy efficiency. Lifecycle services for power plants range

from spare parts and remote monitoring and support, to complete Operation & Maintenance (O&M) solutions and lifecycle

upgrade services. In addition, Wärtsilä offers decarbonisation services that help customers optimise their power solutions

through system modelling, digital platforms, and outcome-based service agreements. Wärtsilä Energy’s track record

includes 79 GW of delivered power plant capacity in 180 countries around the world.

Since April 2025, Wärtsilä Energy Storage has operated as an independent reporting business segment. It serves the utility-

scale market with fully integrated battery energy storage systems and lifecycle services that decarbonise the grid while

ensuring stability and reliability. The offering combines advanced hardware and intelligent software for the real-time

optimisation of renewables, thermal assets, and storage, thereby enabling system-wide efficiency and grid support.

Environmental performance is central to Wärtsilä Energy Storage’s product development. Recent innovations have reduced

the environmental impact of key hardware components, including a transition to lower-GWP refrigerants that support

global regulatory compliance. From design and procurement to installation, commissioning, and long-term operations,

Wärtsilä Energy Storage enables customers to enhance grid flexibility, accelerate the energy transition, and ensure

dependable power across over 18 GWh of energy storage and 130+ sites worldwide.

Wärtsilä’s business model is built on innovation, global expertise, and strategic collaboration to drive decarbonisation in the

marine and energy sectors. Key inputs include advanced technologies, a skilled and diverse workforce, collaborative

partnerships, and strong data and regulatory insights. To secure these inputs, Wärtsilä invests in R&D to create new

technologies, supports talent development and retention, strengthens supplier relationships, and engages in strategic

partnerships throughout its value chain.

Wärtsilä’s revenue in 2025 was EUR 6,914 million. At the end of 2025, Wärtsilä had 18,504 employees (reported as

headcounts).


	Revenue by business
MEUR	2025	2024
Marine	3,494	3,053
Energy	2,048	1,897
Energy storage	694	794
Portfolio business	677	706
Total	6,914	6,449


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	Headcount of employees
Market area	2025	2024
Global	18,504	18,913
Europe	11,102	11,532
Asia	3,928	4,006
Americas	2,528	2,514
Other	946	861

ⓘ Accounting principles for employees

Data on Wärtsilä employees is reported as headcount at the end of the reporting period and is mainly derived from

the global Employee Central Success Factors. Less than 1% of employees, the amount varying between indicators,

lack having all their employment details in the global HR databases. No measurements of the metrics are validated

by an external body other than the assurance provider.

Value chain

Own operations

Wärtsilä’s own operations span the key phases of research and development, manufacturing, project execution, and

maintenance and overhaul. Research and development efforts focus on advancing decarbonisation, fuel flexibility, and

digital technologies, and are supported by collaboration with industry stakeholders. The manufacturing and assembly

model is asset-light with the emphasis on power and propulsion systems, digital solutions, and energy storage

technologies. Project execution covers deliveries across newbuilds, conversions, and upgrades in both the marine and

energy sectors. Maintenance and overhaul services provide lifecycle support through field operations, operations &

maintenance services, and digital platforms, contributing to long-term reliability and efficiency.

To support its geographically dispersed customer base, Wärtsilä’s sales and service network covers 199 locations in 78

countries around the world. Wärtsilä operates primarily through its subsidiaries and strategic joint ventures.

Upstream and downstream

Wärtsilä operates in multiple value chains centred around marine and energy solutions, positioning itself as a technology

provider and lifecycle partner. The upstream value chain relies on the strategic procurement of raw materials including

steel products, electronics, and other specialised components, and services from an extensive supplier network of almost

24,000 active suppliers, including approximately 5,500 global direct procurement suppliers primarily located in Europe. The

company secures these inputs through long-term partnerships that emphasise compliance with legal, ethical, and

sustainability standards. Its upstream activities span the entire supplier ecosystem, from raw material providers to

component manufacturers and technology partners. These relationships are maintained through structured long-term

contracts that ensure supply security, while promoting sustainable business practices across the supply base.

The company’s outputs include marine propulsion systems, energy generation solutions, and energy storage systems that

deliver enhanced operational efficiency, reduced emissions, and sustainable value creation for customers, investors, and

society in general. Wärtsilä serves as a solutions integrator, combining purchased components with proprietary technology

and engineering services. Downstream activities comprise the delivery of solutions to end-users through multiple channels.

In Marine, Wärtsilä maintains direct relationships with shipowners, shipyards, and operators of passenger, offshore,

merchant, and special vessels, supported by global service networks throughout vessel lifecycles. In Energy and Energy

Storage, the main customer segments are utilities, Independent Power Producers (IPP), and industrial companies

generating power for energy markets, end-users, or for their own use.

Activities in fossil fuel, chemical, controversial weapons or tobacco industries

Wärtsilä is not active in the fossil fuel, chemical production, controversial weapons, or tobacco industries.

1.5. Interest and views of stakeholders (ESRS 2 SBM-2)

Active engagement with Wärtsilä’s stakeholders is vital for the development of the company’s business activities, as well as

for exchanging information, building long-lasting relationships, and contributing to sustainable societies. Wärtsilä has a

solid approach to collaboration and innovation together with partners and stakeholders. Ecosystems, consisting of Wärtsilä

representatives, customers, partner companies, organisations and academia, play an important role in research,

development, innovation and piloting products and solutions.

Stakeholder interaction is carried out at different organisational levels. At the corporate level, Wärtsilä’s most important

stakeholders are customers, personnel, investors and financiers, suppliers, media, and local societies. Wärtsilä subsidiaries

define their own primary stakeholders. In addition to those mentioned above, these typically include residents close to

production plants, educational institutes, and public authorities.

The table below summarises the engagement with key stakeholders, including the main topics and channels of

engagement and a description of how the outcomes are used at Wärtsilä. Stakeholders’ interest and views provide

important input to Wärtsilä’s strategy and business model development. For example, insights gathered from employees

through various means, including surveys, dedicated committees and the WeCare reporting system, support strategic

decisions related to working conditions, occupational health and safety, and overall employee wellbeing. Similarly, supplier

assessments help identify development needs and enable targeted support, including initiatives focused on improving

health and safety practices within the suppliers’ businesses.

In addition, stakeholder feedback is incorporated into the process of assessing the company’s material impacts, risks and

opportunities. Beyond identifying material sustainability matters, the double materiality assessment also serves as the

foundation for setting corporate-level targets and related action plans, where deemed necessary.

Wärtsilä’s Board of Management and Board of Directors are informed regarding the interest and views of affected

stakeholders concerning environmental and social impacts through various channels. Typically, the Board of Directors

receives information on all relevant topics primarily from the Board of Management which, in turn, is informed of material

matters by the respective functions and business management teams.


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Stakeholder	Key topics	Engagement channels	How outcomes are used at Wärtsilä
Customers	▪ Supporting customers in decarbonising operations through reliable and efficient solutions, aligned with regulatory developments and customer needs ▪ Ensuring performance guarantees and operational excellence across offerings ▪ Providing customer support throughout the lifecycle	▪ Regular meetings between Wärtsilä representatives and customers to exchange insights and feedback ▪ Collaboration through joint projects, ecosystems, and co- development initiatives ▪ Participation in workshops, events, seminars, and exhibitions to foster dialogue ▪ Dedicated communications tailored to customer segments and needs ▪ Collection and analysis of customer feedback to guide continuous improvement	▪ Guiding product and service development and ensuring solutions meet evolving operational and environmental requirements ▪ Supporting innovation and co-creation of sustainable technologies ▪ Informing strategic planning, lifecycle support models, and performance guarantees to strengthen customer value
Employees	▪ Ensuring a safe and healthy workplace environment for all employees ▪ Supporting professional growth, providing fair and equal opportunities and building an inclusive culture ▪ Building impactful leadership that drives strategy and empowers teams ▪ Offering competitive compensation and benefits to attract and retain talent ▪ Promoting responsible business conduct and ethical practices	▪ Continuous dialogue between employees and their line managers through daily interaction and regular performance and development dialogue to perform and develop ▪ The MyVoice employee engagement survey and pulse surveys to measure engagement and gather insights ▪ Collaboration with national statutory employee bodies and the European Works Council ▪ Local health and safety committees to address workplace wellbeing ▪ OHS reporting through the WeCare system	▪ Information gathered is used as input for the People Strategy as well as in making strategic decisions related to the working conditions, health and safety, and wellbeing of employees ▪ Insights from the WeCare system, OHS committees, and employee surveys are analysed and used to identify risks, implement corrective actions, and shape strategic programmes, such as Success Through Safety
Investors and financiers	▪ Communicating Wärtsilä’s strategy and its implementation, including long-term value creation and profitability ▪ Sharing performance and expectations related to environmental and social topics ▪ Providing reliable and timely sustainability data to support transparency and stakeholder decision-making	▪ Regular dialogue with investors through roadshows, one-on-one, group meetings, and theme events ▪ The Annual General Meeting and Capital Markets Day as key engagement events ▪ Participation in global and local investor conferences and seminars ▪ Stock exchange releases and trade press communications ▪ Financial and sustainability reporting through periodic reports, webcasts, and online channels ▪ Engagement through ESG ratings, indices, and sustainability assessments	▪ Developing strategy and sustainability initiatives in response to evolving expectations ▪ Developing reporting practices that support informed decision- making by providing accurate, sufficient, and current data on Wärtsilä’s business strategy, market developments, and financial performance


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Stakeholder	Key topics	Engagement channels	How outcomes are used at Wärtsilä
Suppliers and value chain workers	▪ Identifying business opportunities and supporting long-term profitability ▪ Promoting fair and responsible business practices throughout the supply chain ▪ Ensuring health and safety	▪ Regular dialogue with suppliers on performance and expectations ▪ Supplier Days to engage with suppliers ▪ Providing support to suppliers on the implementation of improvement actions ▪ Site visits to strengthen collaboration and monitor compliance	▪ Enabling stronger integration of strategic suppliers into Wärtsilä’s value chain to support long-term collaboration and performance ▪ Building a deeper understanding of supplier capabilities, capacity limitations, and potential risks to inform sourcing and operational decisions ▪ Providing targeted support and development opportunities to suppliers
Media	▪ Communicating Wärtsilä’s purpose, strategy and progress towards strategic goals ▪ Promoting sustainability initiatives	▪ Management and expert interviews to share insights ▪ Participation in exhibitions, webinars and conferences to engage with trade press representatives ▪ Site, factory, and reference visits to demonstrate operational practices and innovations ▪ Annual and interim reports and posts to social media to share updates ▪ Industry insights and fact-based reporting to drive thought leadership, information sharing, transparency, and credibility	▪ Understanding and responding to public perception ▪ Clarifying misunderstandings or negative viewpoints ▪ Considering public sentiment in strategic and business model development ▪ Strengthening communication on sustainability and strategic goals
Local communities	▪ Creating employment and supporting local development ▪ Providing training and education to employees ▪ Promoting responsible business conduct and environmental sustainability	▪ Local communication and dialogue with community stakeholders ▪ Collaboration with public officials on issues such as the environment as well as occupational health and safety ▪ Contribution to local initiatives and open-door days to foster transparency	▪ Gaining insight into how Wärtsilä’s activities are perceived locally to strengthen trust and social license to operate ▪ Supporting alignment with environmental expectations and regulatory requirements through dialogue with public officials


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1.6. Material impacts, risks and opportunities and their interaction with

strategy and business model (ESRS 2 SBM-3; E1 SBM-3; E2 IRO-1; S2 SBM-3)

Wärtsilä’s material sustainability matters are related to greenhouse gas (GHG) emissions, energy consumption, air

pollution, substances of concern, occupational health and safety, and skills and career development. These sustainability

matters are covered in the following topical ESRS Standards: ESRS E1 Climate change, ESRS E2 Pollution, ESRS S1 Own

workforce and ESRS S2 Workers in the value chain.

Wärtsilä conducted its first double materiality assessment (DMA) in 2023. The assessment results were validated in 2024 to

support the sustainability disclosures for the 2025 reporting year. Following the validation process, Wärtsilä confirmed that

no changes were required to the original assessment outcomes. A DMA is valid for three years unless there are significant

changes in either the company’s structure, strategy, or its risk and opportunity profile. The DMA results are validated

annually, during the second half of the previous reporting year.

The impacts, risks and opportunities included in this statement are covered by the ESRS Disclosure Requirements, and thus

Wärtsilä has not created any entity-specific disclosures.


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Material impacts, risks and opportunities in Wärtsilä’s value chain


ESRS topic	ESRS Sub-(sub)-topic	Description of impact, risk or opportunity	Location in value chain	Expected time-horizon
E1 Climate change	Climate change mitigation	Opportunity The tightening GHG emission regulations create opportunities for Wärtsilä to provide marine and energy industry customers with decarbonisation solutions. These include enabling power generation with sustainable fuels and energy storage technologies.	Own operations	Long-term
	Climate change mitigation	Actual negative impact Upstream GHG emissions originate from the extraction, processing, and production of raw materials and components used in Wärtsilä’s technologies. The most significant emissions occur downstream, during the operational phase, when Wärtsilä engines consume fuel and emit GHGs in vessels and power plants.	Upstream Downstream	Short-term Medium-term Long-term
	Energy	Actual negative impact Wärtsilä’s engines rely on fuel combustion to generate energy while operating in vessels and power plants. This fuel consumption is the primary source of downstream greenhouse gas emissions.	Downstream	Short-term Medium-term Long-term
E2 Pollution	Pollution to air	Actual negative impact The use of Wärtsilä's products in customer vessels and power plants generates pollutant emissions to air, including nitrogen oxides, sulphur oxides, total hydrocarbons, particulates and VOC.	Downstream	Short-term Medium-term Long-term
	Substances of concern	Risk The proposed EU/EEA restriction on PFAS poses a potential risk to Wärtsilä, as PFAS-containing fluoropolymer materials are critical to ensuring the safety and reliability of its products. A ban without exemptions or transitional measures could significantly impact Wärtsilä’s ability to manufacture and eventually sell key products.	Own operations	Medium-term Long-term
	Substances of concern	Actual negative impact Some Wärtsilä products contain substances of concern which may cause adverse effects to human health and the environment. Upstream impacts relate to extraction and processing, potentially causing air pollution and health risks for workers. The most significant risks arise downstream during dismantling and end-of-life treatment, where improper waste handling could lead to environmental contamination and worker exposure.	Upstream Downstream	Short-term Medium-term Long-term
S1 Own workforce	Health and safety	Actual negative impact Wärtsilä operates in industries where the nature of production, maintenance, and installation work exposes employees—particularly those in production facilities, workshops, shipyards, and customer sites—to occupational health and safety risks. Insufficient health and safety measures could negatively impact the physical wellbeing of Wärtsilä employees’, as well as their work ability.	Own operations	Short-term Medium-term Long-term
S1 Own workforce	Training and skills development	Actual positive impact Wärtsilä aims at strengthening the continuous learning mindset of employees and enabling fair and non-discriminating opportunities to encourage professional growth, and to recruit and retain talent in the company.	Own operations	Short-term Medium-term Long-term
S2 Workers in the value chain	Health and safety	Actual negative impact Workers involved in early-stage upstream supply chain operations may face hazardous working conditions in the suppliers’ own premises. Contracted workers delivering services to Wärtsilä, whether at Wärtsilä’s own sites or customer locations such as shipyards or power plants, are exposed to occupational health and safety risks. Deficiencies in supplier and contractor health and safety practices, or insufficient oversight and management, could negatively impact the value chain workers' physical wellbeing, as well as their work ability.	Upstream	Short-term Medium-term Long-term


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Climate change

Looking at Wärtsilä’s most material impacts on the environment, climate change related greenhouse gas (GHG) emissions

emerge as the most critical area, along with the closely related topic of energy consumption. The emissions originate from

both upstream and downstream supply chain activities associated with Wärtsilä’s products. Upstream emissions are linked

to the extraction and processing of raw materials and the production of components and products needed in Wärtsilä's

technologies. However, the most substantial impact occurs downstream, during the operational use of Wärtsilä’s engines.

The impacts are mainly due to Wärtsilä engines consuming fuels and emitting GHG when in use, either in a vessel or a

power plant. Lifecycle assessments conducted on Wärtsilä engines across various vessel and power plant installations

consistently show that over 99% of their lifecycle GHG emissions, when running on fossil fuels, occur during the operational

phase of their long lifetimes, which typically span 25 to 30 years. Both upstream and downstream GHG emissions were

considered notable in global context. Wärtsilä’s own operations also create GHG emissions, but they are significantly

smaller in scale compared to those of its supply chain. Information on Wärtsilä’s current impact on climate change through

GHG emissions, can be found in chapter 2.2.6 GHG emissions data (E1-6).

Wärtsilä offers a range of decarbonisation solutions that positively impact the overall GHG emissions of its customers.

These include biogas solutions, digital voyage optimisation, decarbonisation services, as well as battery energy storage and

system optimisation solutions. For decades, the company has also been developing the energy efficiency of its products.

The convertibility of Wärtsilä’s engines and auxiliary systems to run on multiple zero-carbon fuels in the future enables

customers to plan their transition to cleaner energy sources, thus helping to mitigate the risk of stranded assets.

While climate-related risks did not exceed the materiality threshold in the double materiality assessment, Wärtsilä has

carried out a resilience analysis in line with the recommendations of the Task Force on Climate Related Financial Disclosures

(TCFD) covering its full value chain. The analysis included two climate scenarios, a “Very low Greenhouse Gas (GHG)

emissions scenario”, which starts from the assumption that the global average temperature will be limited to 1.5°C above

preindustrial levels by 2100, and a “Very high GHG emissions” scenario, which assumed that global GHG emissions will

continue increasing at the current rate, leading to a minimum 4°C increase in global average temperatures by 2100,

compared to pre-industrial levels. The time horizons considered in the analysis were short: year 2025, medium: year 2030,

and long: year 2050.

The primary transition risks identified relate to legislation - specifically, tightening GHG emission regulations and potential

fossil fuel bans. Additional risks include competitors advancing similar or disruptive technologies more rapidly or effectively

than Wärtsilä. A third area of concern is the cost and availability of raw materials, driven by the global green transition and

climate-related policies, such as the EU Carbon Border Adjustment Mechanism (CBAM). In addition, Wärtsilä has identified

two physical climate risks affecting its facilities and employees: rising global average temperatures, and the increasing

frequency and intensity of heatwaves and flooding due to extreme precipitation events. However, altogether they do not

create a major financial risk to Wärtsilä. The resilience analysis is described more in detail in section 1.8 Resilience analysis.

Climate change, on the other hand, is seen as creating material opportunities for Wärtsilä through its strategy’s main pillar

of decarbonising the marine and energy industries. While transitional regulatory risks clearly exist, the continuously

tightening GHG emission regulations create significant opportunities for Wärtsilä already today in providing customers with

decarbonisation solutions on a wide front, and Wärtsilä sees this at the core of its strategy also going forward. Although the

impacts of GHG emissions continue to build, there is uncertainty related to the speed of regulatory developments in the

future, especially within the longer time horizon, which will have an effect on both the risks and opportunities in this area.

Overall, at the moment, Wärtsilä estimates that both the risks and opportunities will, in general, increase in the short to

medium time horizon, and further to the long time horizon. The company also sees attracting and retaining talented

employees due to its climate change mitigating profile and brand image, as an opportunity.

Wärtsilä’s business model has remained largely similar for some years, and the company’s strategic response to both

transition risks and opportunities related to climate change is similar: its extensive R&D investments in developing low

emission technologies both prepares Wärtsilä for the tightening GHG emission regulations, and gives the company a

competitive advantage. The rigorous R&D activities will continue generating substantial costs for Wärtsilä, but at the same

time, will improve its future business potential.

Substances of concern

Substances of concern and substances of very high concern have been assessed as a material impact related to Wärtsilä’s

business activities. Substances of concern can cause adverse effects on humans or the environment throughout their

lifecycle: during extraction, production, use, and disposal. There are thousands of these substances identified to be harmful

to different degrees and some of these substances of concern are present in Wärtsilä products. The main impact occurs

downstream, at the end-of-life stage, where improper dismantling or waste treatment may lead to health risks for workers

and environmental contamination. Wärtsilä eliminates and restricts certain substances of concern in its products to comply

with EU REACH and international regulations, such as those set by the International Maritime Organisation (IMO). The

company also provides its customers with information on the substances of very high concern in its products. The negative

impacts caused by these substances are greater in the company’s supply chain than in Wärtsilä’s own operations. Wärtsilä’s

policies to restrict substances of concern in Wärtsilä products are valid also to Wärtsilä´s suppliers.

Of all the topics assessed in the double materiality assessment, substances of very high concern is the only one seen as

creating a material financial risk for Wärtsilä. The risk arises from the proposal to restrict per- and polyfluoroalkyl

substances (PFAS) in the EU/EEA. An initial open consultation on the restriction dossier was completed in September 2023,

and the European Chemicals Agency’s (ECHA) scientific committees are now conducting a risk assessment and socio-

economic analysis. Wärtsilä has participated in the consultation process and explained that the PFAS-containing

fluoropolymer materials are present in Wärtsilä’s components to guarantee the safety and reliability of the products. PFAS

materials are essential in eliminating leakages of flammable or toxic fuels, preventing fires in electrical systems, securing

energy generation in critical applications, and ensuring the manoeuvrability of marine vessels. Failures in these critical

components could lead to severe consequences, impacting human lives and the environment. In many Wärtsilä

applications, there are no alternative materials available that can fulfil the stringent safety and reliability requirements.

PFAS containing fluoropolymer materials are also needed in developing technologies that enable reaching EU and global

decarbonisation goals. Wärtsilä has requested exemptions and the maximum derogation time for fluoropolymers and

perfluoropolyethers in Wärtsilä applications.


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In the unlikely event that the PFAS included in Wärtsilä’s products would be banned without any exemptions or time-limited

derogations, this would create a very significant risk to Wärtsilä. This would prohibit many of the company’s core products

from being manufactured or sold eventually. In the short term, the risks related to substances of concern is deemed low

but will increase greatly in the medium and long-time horizons. In preparation for this risk, Wärtsilä will search for

alternative materials and products to replace the ones containing substances of concern.

Pollution of air

Air pollution has been identified as having a material impact related to Wärtsilä’s business activities. The use of Wärtsilä's

products in customer vessels and power plants generates pollutant emissions to the air, including nitrogen oxides (NOx),

sulphur oxides (SOx), total hydrocarbons (THC), particulates (PM) and volatile organic compounds (VOCs). Lifecycle

assessments show that while emissions do occur throughout the supply chain and within Wärtsilä’s own operations, the

majority of air pollution originates downstream during customer use. Taking this into account, Wärtsilä did not use external

consultations, nor conduct site-specific assessments for pollution, while it should be noted that all Wärtsilä production sites

and workshops follow local regulations and environmental permits in their operations. Through developing more efficient

products, as well as emission reduction technologies, the impacts are expected to reduce over the short to long time

horizons.

Occupational health and safety

Occupational health and safety (OHS) has been identified as having a material impact for Wärtsilä. Although the OHS impact

assessment for Wärtsilä’s own operations scored slightly below the materiality threshold in the DMA, Wärtsilä considers

OHS material in this statement because it has reported on the topic for many years and regards it to be highly important.

The company’s operations span industries where production, maintenance, and installation work inherently involve

exposure to health and safety risks. These risks affect both Wärtsilä’s own employees and workers across its value chain.

Wärtsilä’s own employees, particularly those engaged in manual and technical work at production facilities, workshops,

shipyards, and customer sites, are exposed to occupational hazards. Insufficient health and safety measures could

negatively impact the physical wellbeing of Wärtsilä employees, as well as their work ability. These impacts are addressed

through Wärtsilä’s strategic framework, The Wärtsilä Way, which embeds safety as a core commitment and a prerequisite

for sustainable performance. Wärtsilä is committed to zero injuries and promotes a proactive safety culture aligned with its

values of Customer Success, Passion, and Performance. Wärtsilä continuously develops and implements preventive

measures, training programmes, and safety protocols to mitigate risks.

Wärtsilä’s supply chain comprises approximately 24,000 active supplier accounts, encompassing a wide range of activities,

from raw material extraction and processing, to component manufacturing and logistics. Workers in these upstream

operations may face hazardous conditions, particularly in environments with inadequate safety management systems.

Additionally, contracted workers delivering services to Wärtsilä, whether at Wärtsilä’s own sites or customer locations such

as shipyards, power plants, and energy storage facilities, are exposed to similar occupational risks. Wärtsilä applies its

health and safety standards to all workers under its operational control, including contractors. However, in cases where

Wärtsilä does not control the working environment, its ability to influence safety conditions is more limited. Nonetheless,

Wärtsilä sets clear expectations for contractors and partners to adhere to its safety protocols and ethical standards.

The company acknowledges that it has not yet developed a granular understanding of specific worker groups most at risk

within the supply chain. However, it assumes that manual labourers in upstream operations are particularly vulnerable.

Wärtsilä is committed to enhancing oversight and collaboration with suppliers to improve health and safety outcomes

across the value chain.

Skills and career development

Skills and career development represent an identified material positive impact for Wärtsilä. In specific terms, the topic

relates to material impacts on professional growth and the non-discrimination of Wärtsilä’s employees. Ensuring that

employees possess the necessary skills to perform their roles effectively and safely is essential to Wärtsilä’s operational

success. This topic is closely aligned with Wärtsilä’s strategy. Driving decarbonisation in the marine and energy sectors

requires a skilled and experienced workforce. Wärtsilä aims to strengthen a culture of continuous learning and to provide

fair and non-discriminating opportunities for professional growth. These efforts support talent recruitment and retention,

and are expected to enhance the company’s positive impact in this area over time.

1.7. Description of the process to identify and assess material impacts,

risks and opportunities (ESRS 2 IRO-1; E2 IRO-1)

Wärtsilä conducted its first Double Materiality assessment in 2023. The assessment results were validated in 2024 to

support the sustainability disclosures for the 2025 reporting year. Following the validation process, Wärtsilä confirmed that

no changes were required to the original assessment outcomes.

In the assessment, the company endeavoured to identify those sustainability matters that are most significant for Wärtsilä

in the sense of their impact on people or the environment, and which create the greatest risks and opportunities for the

company. The process was divided into three phases, each of which involved a varying group of internal experts and

leaders to ensure having all the necessary knowledge and strategic insight available for the process to properly evaluate

the wide range of different aspects in the field of sustainability. The process was led by the Group sustainability function,

which conducted the first phase of setting the context internally. In addition, the sustainability function collected and

analysed stakeholder views, as well as information from the enterprise risk management system and compliance data for

the second phase. They also created the evaluation process for the third phase. The process did not focus on specific

activities, business relationships, geographies, or other factors that give rise to a heightened risk of adverse impacts due to

Wärtsilä’s global presence and various business activities. The double materiality assessment process was created by the

sustainability function and reviewed by the Board of Management and the Board of Directors’ Audit Committee. The results

of the double materiality assessment and proposal for the threshold were approved by the Board of Management, the

Audit Committee of the Board of Directors, and finally by the Board of Directors.

The first phase was setting the sustainability context for Wärtsilä. This included the mapping of sustainability aspects and

impacts on a general level over Wärtsilä’s value chain, considering the extractive industry, suppliers, service providers,


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contractors, business partners, logistics partners, Wärtsilä’s own operations, customers and end-of-life service providers.

The mapping results were compared with the list of European Sustainability Reporting Standards (ESRS) matters, and at this

phase certain obviously irrelevant topics were removed from further assessment. Here it was also considered whether any

entity-specific topics were necessary to be created, but no need for such was found.

The second phase was the mapping of potential sustainability aspects for the final phase of detailed evaluation. In this

phase, the key stakeholders for Wärtsilä were decided on, and information on their interests in Wärtsilä in relation to the

various sustainability matters were collected through a questionnaire to internal key stakeholder contacts. External experts

were not consulted. Here, impacts having strategic importance to Wärtsilä were also identified, as were recognized risks

and opportunities.

The third and final phase was to conduct a detailed materiality assessment for the list of potential material aspects. This was

done through a series of workshops involving people from various relevant functions in Wärtsilä, in which the company’s

impacts on the environment and people were assessed, as were relevant risks and opportunities. Certain assumptions were

applied in the process, the main ones being that climate change will continue to develop roughly along current lines; that

the international regulatory environment related to climate change will continue to tighten, and that regulations related to

hazardous substances will become stricter in the future. In the assessment, the sustainability impacts, risks, and

opportunities were assessed by the various criteria required, and each impact, risk and opportunity ended with a specific

value. For each sustainability aspect, first the impacts were assessed, followed by the related risks and opportunities caused

by those impacts. The risks and opportunities were then assessed separately from the impacts in the sense that a risk or

opportunity related to a topic may arise independently from Wärtsilä’s impacts on the topic. The upstream, own operations,

and downstream impacts were each evaluated separately on their scale, scope, irremediability and probability. They were

assessed on a scale of 1-5, and for risks and opportunities their likelihood and potential magnitude, each also on a scale of

1-5 per three time-horizons. All the relevant sustainability risk areas were assessed in cooperation with the Corporate Risk

Management function, by using the same evaluation scales as in the Enterprise Risk Management system (ERM). Risks

identified in the ERM were also taken into consideration in the double materiality assessment. The input for the

opportunities evaluation came mainly from the participating strategy leaders of the Businesses. A threshold was set for the

final values for impacts, risks and opportunities, and those exceeding the threshold were deemed material. Finally, the

material sustainability aspects were compared to the list of sustainability topics in the ESRS Standards to define the

reporting content based on the double materiality assessment. The list of material topics identified in the double materiality

assessment are also used as the basis for setting corporate level targets and related action plans, where deemed necessary.

ESRS 2 Appendix C: IRO-1 Additional double materiality assessment information related to

certain non-material topics:

ESRS E3 Water and marine resources

Non-material topic. The double materiality assessment did not include a detailed screening of Wärtsilä’s assets and activities

in order to identify its actual and potential water and marine resources-related impacts, risks and opportunities in its own

operations and its upstream and downstream value chains, as the topic was excluded during an early phase of the process

from a detailed assessment. No consultations were conducted related to water and marine resources.

ESRS E4 Biodiversity and ecosystems

Non-material topic. The double materiality assessment did not include a detailed assessment of actual and potential

impacts on biodiversity and ecosystems at the company’s own site locations, or in the upstream and downstream value

chains, dependencies on biodiversity and ecosystems, transition or physical risks and opportunities related to biodiversity

and ecosystems, systemic risks, or consultations with affected communities. Wärtsilä has two sites near bio-diversity

sensitive areas: in Trieste, Italy and Le Havre, France. Both are located adjacent to a protected area of high biodiversity

value but neither site has been identified as having any impact on those areas. Thus, it has been concluded that it is not

necessary to implement biodiversity mitigation measures.

ESRS E5 Resource use and circular economy

Non-material topic. The double materiality assessment did not include a detailed screening of its assets and activities to

identify its actual and potential impacts, risks and opportunities in its own operations and its upstream and downstream

value chain. No consultations were conducted related to resource use and circular economy.

ESRS G1 Business Conduct

Non-material topic. The double materiality assessment was based on considering unethical conduct related to i.a.

corruption, anti-competitive behaviour, or trade sanctions evasion. Location, activity, sector or the structure of a specific

transaction were not considered separately.

1.8. Resilience analysis (E1 IRO-1)

Resilience analysis

In line with the double materiality assessment, where climate change mitigation is seen as the only material opportunity for

Wärtsilä, a resilience analysis was conducted on the company’s strategy. Although in the double materiality assessment,

climate related risks were not assessed as exceeding the materiality threshold, Wärtsilä has evaluated its climate related

risks in the resilience analysis.

The resilience analysis covers Wärtsilä’s entire value chain. The analysis was first conducted during 2023 by implementing

the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). The scenario analysis was updated

in 2024 and revalidated in 2025.

Scenario analysis

The process of scenario analyses included an assessment of climate risks and opportunities through the review of relevant

information, key stakeholder engagement in workshops and interviews, and a survey. An extensive list of chronic and acute

physical, and transitional risks was considered in building a long list of climate-related topics, which was further reviewed to

prioritise key risks and opportunities based on probability and impact.


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Two climate scenarios were built based on widely accepted scientific scenarios (Intergovernmental Panel on Climate Change

(IPCC)’s SSP) and informed by data from other scenarios (NGFS and IEA). Three time-horizons selected for the assessment

were reviewed based on Wärtsilä’s business cycles, approach to budgeting, and strategy planning.

A scenario assessment for transitional risks was made qualitatively for both probability and impact, referring to socio-

economic trends and available statistical data and information. For physical risks, in addition to the above, statistical data

was used to consider hazards (see below).

Costs related to Wärtsilä’s climate mitigation activities were also considered, the main cause being R&D efforts to develop

products and solutions supporting the decarbonisation efforts of Wärtsilä’s customers. These costs are seen as being

crucial in ensuring Wärtsilä’s competitiveness going forward.

Identification and assessment of climate-related risks and opportunities

Those participating in the process included representatives from business strategy functions, key sites and operations,

including finance and risk management. Site interviews were conducted to better understand the physical risks to Wärtsilä

and its supply chains, based on the materiality and geographical locations. Wärtsilä’s entire product portfolio was

considered in the assessment. The probability and impact over three time-horizons of transition and physical risks and

opportunities were considered, taking into account regulatory developments, key industry trends, and technology, among

other factors.

For the physical risks of climate change, the following factors were also considered:

▪ Risk management function’s database of Wärtsilä facilities globally;

▪ A site-level analysis of material locations using quantitative and qualitative data, including coordinates and climate

indices; and

▪ Interviews with representatives from the most critical production sites.

Physical risks related to Wärtsilä’s upstream and downstream value chain were considered during the interviews with site

and risk management leaders. Wärtsilä’s Business Continuity Plan, applicable to key suppliers and delivery centres, includes

an assessment of physical risks resulting from climate change, providing Wärtsilä with an understanding of the physical

risks to be faced, as well as means to develop mitigation plans together with suppliers.

Climate scenarios used

The analysis included two climate scenarios developed by the IPCC. The scenarios were selected to present different ends of

possible temperature pathways:

Very low GHG emissions scenario, which starts from the assumption that the global average temperature will be limited

to 1.5°C above pre-industrial levels by 2100 (IPCC SSP1-1.9);

Very high GHG emissions scenario, which assumed that global GHG emissions will keep increasing at the current rate,

leading to a minimum 4°C increase in global average temperatures by 2100, compared to pre-industrial levels (IPCC

SSP5-8.5).

The ”Very low GHG emissions” scenario (SSP1-1.9) assumes i.a. that:

▪ extreme weather events may be common, but the effects of climate change are not likely to be critical,

▪ the average global sea-level rise will reach 0.28–0.55 m by 2100 relative to the 1995–2014 average; and

▪ global regulations surrounding GHG emissions and relevant technologies and products contributing to GHG

emissions will be rigorous and tightened

The “Very high GHG emissions” scenario (SSP5-8.5) assumes i.a. that:

▪ extreme weather events are common and the impacts of climate change are likely to be critical;

▪ the average global sea-level rise will reach 0.63–1.01 m by 2100 relative to the 1995–2014 average; and

▪ regulations on GHG emissions may become stricter in the short term, then halt at those levels, and no further

significant policy tightening will be introduced globally.

Time horizons

The time horizons considered in the analysis were:

Short: Up to year 2025,

Medium: Up to year 2030, and

Long: Up to year 2050.

Wärtsilä’s main decarbonization targets are set for 2030.

Analysis of resilience

Very low GHG emissions scenario

Based on the results of the scenario analysis, Wärtsilä’s considers that its business model and strategy are clearly fit for the

“Very low GHG” scenario, where climate change related transition opportunities with regards to customer demand, R&D

and innovation, and regulations are expected to increase substantially over time.

In the marine industry, for example, the International Maritime Organisation (IMO) has already introduced regulations to

drive the green transformation. Wärtsilä’s broad portfolio of engines, digital technologies, propulsion systems, hybrid

technology, and integrated powertrain systems aim to deliver the efficiency, reliability, safety, and environmental

performance needed to support its customers during the transformation and beyond.

In the energy industry, Wärtsilä envisions a 100% renewable energy future under the very low GHG emission scenario.

Wärtsilä aims to support its customers to decarbonise with sustainable-fuel enabled balancing power plants, hybrid

solutions, as well as with energy storage and optimisation technology.

For both industries, Wärtsilä aims to have a product portfolio ready for zero-carbon fuels by 2030.


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However, in this scenario there is a transitional risk of raw material costs starting to increase by 2030, mainly due to EU

regulations on emissions, such as the Carbon Border Adjustment Mechanism (CBAM), and a plausible scarcity of battery

materials should supply chains fail to function as expected. To this, Wärtsilä aims to respond by ensuring material

availability and cost visibility end-to-end of the supply chain through entering into long-term supply agreements and by

diversifying the supply base.

Another considerable transitional risk is that of competitors commercialising similar technologies faster or more

successfully than Wärtsilä, particularly in the long run. There may be disruptive technologies emerging, impacting the

future of low to zero-emission technologies. Wärtsilä aims to continue and even increase its R&D efforts related to zero-

carbon fuel/decarbonisation-related products and services to mitigate this risk.

Regulations aimed at limiting GHG emissions can also be seen as a transition risk. The level of impact will depend on the

stringency of the regulations, for example whether installations running on fossil fuels can be sold at all.

For Wärtsilä, overall, the possibilities to overcome future transitional risks will also depend on the availability of sustainable,

zero-carbon fuels and their infrastructure readiness, as well as the company’s capabilities in developing technologies that

fulfil the regulatory requirements.

The probability of physical risks creating a significant impact on Wärtsilä is considered very limited in this scenario.

Very high GHG emissions scenario

Wärtsilä’s business outlook under this scenario is considered to be more challenging, and related risks may require Wärtsilä

to partially reconsider its current strategy and R&D programmes.

However, it should be noted that customer demand may still increase in this scenario, for example through the demand for

energy solutions and dual fuel power generating solutions, thereby positively impacting Wärtsilä’s EBIT in the short to

medium term. Also, in this scenario, R&D would still present opportunities, although smaller, for example in engine

performance improvement.

The probability of physical risks, such as heatwaves and flooding due to extreme precipitation events, is greater in this

scenario, thus impacting Wärtsilä’s supply chain and customers to varying degrees. However, Wärtsilä will aim to mitigate

this impact by way of precautionary measures. While it is anticipated that some of the most heavily affected, smaller sites

may become unproductive or costly to run, and relocation may be considered, Wärtsilä expects to benefit from the fact that

it mostly leases rather than owns facilities.

No stranded assets or business activities were identified in either of these scenarios, with the unlikely but possible

exception of an immediate, complete ban on fossil fuels in the short term. The convertibility of Wärtsilä’s engines and

auxiliary systems to run with alternative zero-carbon fuels in the future enables customers to plan ahead on switching to

such energy sources, thus reducing the risk of stranded assets for Wärtsilä or its customers.

Wärtsilä’s various GHG emission sources and amounts are disclosed in section 2.2.6, followed by their accounting principles.

In the financial statements there are no critical climate-related assumptions made in relation to the climate scenarios.

Overview of risks and opportunities identified, and Wärtsilä’s response

The table below lists the most relevant risks and opportunities related to climate change for Wärtsilä, as well as the

strategic responses to mitigate these risks and maximise the possibility of realising the full potential of such opportunities.

Each risk and opportunity is presented for the three time-horizons on two consecutive rows, the first based on the “Very low

GHG” scenario, and the following row on the “Very high GHG” scenario. The risk and opportunity exposure values are

expressed on a scale with five levels: “VL-Very low”, “L-Low”, “M-Medium”, “H-High” and “VH-Very High”.


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Wärtsilä’s climate change risks and mitigation actions – transition risks


Risk	Description	Climate scenario	Risk exposure			Mitigation actions
Risk	Description	Climate scenario	2025	2030	2050	Mitigation actions
Regulations or claims	Stricter regulations on GHG emissions (incl. possible fossil fuel ban).	Very low GHG	VL	M	M	Set for 30: Become carbon neutral in own operations by 2030. Provide a product portfolio that will be ready for zero-carbon fuels by 2030. In the meantime, continue developing products and services supporting customers in their decarbonisation efforts.
Regulations or claims		Very high GHG	VL	L	M	Continue developing efficient and reliable products and services.
Competitors	Competitors commercialising similar technologies faster or more successfully (incl. disruptive technologies).	Very low GHG	VL	M	H	Continue or even increase R&D efforts related to zero-carbon fuel/decarbonisation-related products and services.
Competitors		Very high GHG	VL	M	H	Continue developing efficient and reliable products and services.
Raw material cost and availability	Raw material availability for certain, e.g. battery materials, becoming limited, leading to cost increases. Costs also elevated, including through higher cost of logistics, by regulations (e.g. CBAM).	Very low GHG	L	M	H	Ensure material availability and cost visibility end to end of the supply chain by entering into long-term supply agreements and diversifying the supply base.
Raw material cost and availability		Very high GHG	L	L	M	Ensure material availability and cost visibility end to end of the supply chain by entering into long-term supply agreements and diversifying the supply base.

Wärtsilä’s climate change risks and mitigation actions – physical risks


Risk	Description	Climate scenario	Risk exposure			Mitigation actions
Risk	Description	Climate scenario	2025	2030	2050	Mitigation actions
Increasing global average temperatures, and increased frequency and intensity of heatwaves	Heatwaves can burden health and emergency services and also increase the strain on water, energy and transportation, resulting in power shortages or even blackouts. Food and livelihood security may also be strained if people lose their crops or livestock due to extreme heat.	Very low GHG	VL	L	L	Health related effects need to be taken into consideration, i.e. sufficient breaks, cool/ shaded rest areas, drinking water availability, first aid to heat stress, suitable PPE. Affected sites to be provided with necessary water tanks, emergency generators and cooling.
		Very high GHG	VL	L	H	As above, with more emphasis on the precautionary measures. The most heavily affected sites may turn unproductive/ costly and relocation may be considered – in these cases Wärtsilä not owning i.e. renting the facilities, is a strategic benefit.
Flooding due to increased severity of extreme precipitation events	Flooding can lead to i.a. possible property damage, or interruptions to production or supply chains.	Very low GHG	VL	L	M	When establishing or acquiring new sites, consider locations that are less prone to flooding or on higher ground and capable of withstanding future changes in flooding. Investing in flood control infrastructure, including grey infrastructure such as seawalls and levees if needed, as well as green infrastructure solutions like green roofs, holding ponds, and enhancing the tree canopy to be studied. Limiting the use of non-permeable surfaces such as pavements and concrete, and taking flood insurance where necessary.
		Very high GHG	VL	L	M	As above, with more emphasis on the precautionary measures. Most heavily affected sites may turn unproductive/ costly and relocation may be considered – in these cases Wärtsilä not owning i.e. renting the facilities is a strategic benefit.


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Wärtsilä’s climate change opportunities and the company’s response


Opportunity	Description	Climate scenario	Exposure			Wärtsilä’s response
Opportunity	Description	Climate scenario	2025	2030	2050	Wärtsilä’s response
Regulations or claims	Stricter GHG emissions regulations (incl. the ban on the use of fossil fuels).	Very low GHG	VL	M	H	Set for 30: Become carbon neutral in our own operations by 2030. Provide a product portfolio that will be ready for zero-carbon fuels by 2030. Meanwhile, continue developing products and services supporting the customers’ decarbonisation journeys.
Regulations or claims		Very high GHG	VL	L	M	Continue developing efficient and reliable products, as customer demand for such will remain, and energy prices may increase.
R&D and innovation	New low emission technologies via R&D and innovation in our own operations (incl. disruptive technologies).	Very low GHG	VL	M	H	Provide a product portfolio that will be ready for zero-carbon fuels by 2030. Meanwhile, continue developing products and services supporting the customers’ decarbonisation journeys. Undertake further R&D programmes in order to stay a leading technology company.
R&D and innovation		Very high GHG	VL	L	M	In the medium term, continue developing a product portfolio that will be ready for zero-carbon fuels by 2030, as regulations become increasingly stringent for some years still. A partial strategic review to be taken when regulatory tightening stalls.
Customer demand	Increased customer demand for low- carbon energy or products.	Very low GHG	L	M	H	Starting from the short-term onwards, Wärtsilä is well positioned with its current and upcoming offerings to benefit from customer needs for support in decarbonising their energy and marine portfolios.
Customer demand		Very high GHG	L	M	L	In the short-to-medium term, Wärtsilä is well positioned with its current and upcoming offerings to benefit from customer needs for support in decarbonising their energy and marine portfolios. A partial strategic review to be taken should customer demand reduce as regulatory tightening stalls.
Attracting or retaining talent	Attracting or retaining employees because of the company’s climate risk profile and brand image.	Very low GHG	L	M	M	Increase efforts to decarbonise the company’s value chains, building a strong brand image based on mitigating climate change.
Attracting or retaining talent		Very high GHG	L	L	L	Remain a leading technology company attracting talent in the short-term based on the company’s decarbonisation efforts. In the longer term, when regulatory tightening stalls, keep other aspects of sustainability at the centre of R&D and operational development efforts.


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1.9. Disclosure requirements complied with in preparing the Sustainability

Statement (ESRS 2 IRO-2)

Wärtsilä has included all material data points in the ESRS standards related to material topics in accordance with the double

materiality assessment.


Standard	Disclosure requirement	Disclosure requirement description
ESRS 2	BP-1	General basis for preparation of sustainability statements
	BP-2	Disclosures in relation to specific circumstances
	GOV-1	The role of the administrative, management, and supervisory bodies
	GOV-2	Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies
	GOV-3	Integration of sustainability-related performance in incentive schemes
	GOV-4	Statement on due diligence
	GOV-5	Risk management and internal controls over sustainability reporting
	SBM-1	Strategy, business model and value chain
	SBM-2	Interests and views of stakeholders
	SBM-3	Material impacts, risks and opportunities and their interaction with strategy and business model
	IRO-1	Description of the process to identify and assess material impacts, risks and opportunities
	IRO-2	Disclosure requirements in ESRS covered by the undertaking’s sustainability statement
ESRS E1	E1 GOV-3	Integration of sustainability-related performance in incentive schemes
	E1-1	Transition plan for climate change mitigation
	E1 SBM-3	Material impacts, risks and opportunities and their interaction with strategy and business model
	E1 IRO-1	Description of the processes to identify and assess material climate-related impacts, risks and opportunities
	E1-2	Policies related to climate change mitigation and adaptation
	E1-3	Actions and resources in relation to climate change policies
	E1-4	Targets related to climate change mitigation and adaptation
	E1-5	Energy consumption and mix
	E1-6	Gross Scopes 1, 2, 3 and Total GHG emissions
	E1-7	GHG removals and GHG mitigation projects financed through carbon credits
	E1-8	Internal carbon pricing


Standard	Disclosure requirement	Disclosure requirement description
ESRS E2	E2 IRO-1	Description of the processes to identify and assess material pollution-related impacts, risks and opportunities
	E2-1	Policies related to pollution
	E2-2	Actions and resources related to pollution
	E2-3	Targets related to pollution
	E2-4	Pollution of air, water and soil
ESRS S1	S1 SBM-2	Interests and views of stakeholders
	S1 SBM-3	Material impacts, risks and opportunities and their interaction with strategy and business model
	S1-1	Policies related to own workforce
	S1-2	Processes for engaging with own workers and workers’ representatives about impacts
	S1-3	Processes to remediate negative impacts and channels for own workers to raise concerns
	S1-4	Taking action on material impacts on own workforce, and approaches to mitigating material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions
	S1-5	Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities
	S1-6	Characteristics of the undertaking’s employees
	S1-13	Training and skills development metrics
	S1-14	Health and safety metrics
	S1-16	Compensation metrics (pay gap and total compensation)
	S1-17	Incidents, complaints and severe human rights impacts
ESRS S2	S2 SBM-2	Interests and views of stakeholders
	S2 SBM-3	Material impacts, risks and opportunities and their interaction with strategy and business model
	S2-1	Policies related to value chain workers
	S2-2	Processes for engaging with value chain workers about impacts
	S2-3	Processes to remediate negative impacts and channels for value chain workers to raise concerns
	S2-4	Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those action
	S2-5	Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities


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Data points that derive from other EU legislation (ESRS 2 IRO-2)


Disclosure requirement and related data point	SFDR reference	Pillar 3 reference	Benchmark Regulation reference	EU Climate Law reference	Section/ Not material
ESRS2 GOV-1 Board's gender diversity paragraph 21 (d)	Indicator number 13 of Table #1 of Annex 1		Commission Delegated Regulation (EU) 2020/1816 , Annex II		1.3. Governance
ESRS2 GOV-1 Percentage of board members who are independent paragraph 21 (e)			Delegated Regulation (EU) 2020/1816, Annex II		1.3. Governance
ESRS2 GOV-4 Statement on due diligence paragraph 30	Indicator number 10 Table #3 of Annex 1				1.3. Governance
ESRS2 SBM-1 Involvement in activities related to fossil fuel activities paragraph 40 (d) i	Indicators number 4 Table #1 of Annex 1	Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/245328Table 1: Qualitative information on Environmental risk and Table 2: Qualitative information on Social risk	Delegated Regulation (EU) 2020/1816, Annex II		1.4. Strategy, business model and value chain
ESRS2 SBM-1 Involvement in activities related to chemical production paragraph 40 (d) ii	Indicator number 9 Table #2 of Annex 1		Delegated Regulation (EU) 2020/1816, Annex II		1.4. Strategy, business model and value chain
ESRS2 SBM-1 Involvement in activities related to controversial weapons paragraph 40 (d) iii	Indicator number 14 Table #1 of Annex 1		Delegated Regulation (EU) 2020/1818 , Article 12(1) Delegated Regulation (EU) 2020/1816, Annex II		1.4. Strategy, business model and value chain
ESRS2 SBM-1 Involvement in activities related to cultivation and production of tobacco paragraph 40 (d) iv			Delegated Regulation (EU) 2020/1818, Article 12(1) Delegated Regulation (EU) 2020/1816, Annex II		1.4. Strategy, business model and value chain
ESRS E1-1 Transition plan to reach climate neutrality by 2050 paragraph 14				Regulation (EU) 2021/1119, Article 2(1)	2.2.1. Transition plan
ESRS E1-1 Undertakings excluded from Paris-aligned Benchmarks paragraph 16 (g)		Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 1: Banking bookClimate Change transition risk: Credit quality of exposures by sector, emissions and residual maturity	Article12.1 (d) to (g), and Article 12.2		2.2.1. Transition plan


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Disclosure requirement and related data point	SFDR reference	Pillar 3 reference	Benchmark Regulation reference	EU Climate Law reference	Section/ Not material
ESRS E1-4 GHG emission reduction targets paragraph 34	Indicator number 4 Table #2 of Annex 1	Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 3: Banking book – Climate change transition risk: alignment metrics	Delegated Regulation (EU) 2020/1818, Article 6		2.2.4. Climate change targets
ESRS E1-5 Energy consumption from fossil sources disaggregated by sources (only high climate impact sectors) paragraph 38	Indicator number 5 Table #1 and Indicator n. 5 Table #2 of Annex 1				2.2.5. Energy data
ESRS E1-5 Energy consumption and mix paragraph 37	Indicator number 5 Table #1 of Annex 1				2.2.5. Energy data
ESRS E1-5 Energy intensity associated with activities in high climate impact sectors paragraphs 40 to 43	Indicator number 6 Table #1 of Annex 1				2.2.5. Energy data
ESRS E1-6 Gross Scope 1, 2, 3 and Total GHG emissions paragraph 44	Indicators number 1 and 2 Table #1 of Annex 1	Article 449a; Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 1: Banking book – Climate change transition risk: Credit quality of exposures by sector, emissions and residual maturity			2.2.6. GHG emissions data
ESRS E1-6 Gross GHG emissions intensity paragraphs 53 to 55	Indicators number 3 Table #1 of Annex 1	Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 3: Banking book – Climate change transition risk: alignment metrics	Delegated Regulation (EU) 2020/1818, Article 8(1)		2.2.6. GHG emissions data
ESRS E1-7 GHG removals and carbon credits paragraph 56				Regulation (EU) 2021/1119, Article 2(1)	2.2.7. GHG removals, storage, carbon credits and internal pricing
ESRS E1-9 Exposure of the benchmark portfolio to climate-related physical risks paragraph 66			Delegated Regulation (EU) 2020/1818, Annex II Delegated Regulation (EU) 2020/1816, Annex II		2nd year omitted


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Disclosure requirement and related data point	SFDR reference	Pillar 3 reference	Benchmark Regulation reference	EU Climate Law reference	Section/ Not material
ESRS E1-9 Disaggregation of monetary amounts by acute and chronic physical risk paragraph 66 (a); E1-9 Location of significant assets at material physical risk paragraph 66 (c)		Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 paragraphs 46 and 47; Template 5: Banking book - Climate change physical risk: Exposures subject to physical risk.			2nd year omitted
ESRS E1-9 Breakdown of the carrying value of its real estate assets by energy-efficiency classes paragraph 67 (c).		Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 paragraph 34;Template 2:Banking book -Climate change transition risk: Loans collateralised by immovable property - Energy efficiency of the collateral			2nd year omitted
ESRS E1-9 Degree of exposure of the portfolio to climate related opportunities paragraph 69			Delegated Regulation (EU) 2020/1818, Annex II		2nd year omitted
ESRS E2-4 Amount of each pollutant listed in Annex II of the EPRTR Regulation (European Pollutant Release and Transfer Register) emitted to air, water and soil, paragraph 28	Indicator number 8 Table #1 of Annex 1 Indicator number 2 Table #2 of Annex 1 Indicator number 1 Table #2 of Annex 1 Indicator number 3 Table #2 of Annex 1				2.3.3. Pollution data from Wärtsilä’s own operations
ESRS E3-1 Water and marine resources paragraph 9	Indicator number 7 Table #2 of Annex 1				Not material
ESRS E3-1 Dedicated policy paragraph 13	Indicator number 8 Table 2 of Annex 1				Not material
ESRS E3-1 Sustainable oceans and seas paragraph 14	Indicator number 12 Table #2 of Annex 1				Not material
ESRS E3-4 Total water recycled and reused paragraph 28 (c)	Indicator number 6.2 Table #2 of Annex 1				Not material
ESRS E3-4 Total water consumption in m3 per net revenue on own operations paragraph 29	Indicator number 6.1 Table #2 of Annex 1				Not material
ESRS 2- IRO 1 - E4 paragraph 16 (a) i	Indicator number 7 Table #1 of Annex 1				Not material
ESRS 2- IRO 1 - E4 paragraph 16 (b)	Indicator number 10 Table #2 of Annex 1				Not material
ESRS 2- IRO 1 - E4 paragraph 16 (c)	Indicator number 14 Table #2 of Annex 1				Not material
ESRS E4-2 Sustainable land / agriculture practices or policies paragraph 24 (b)	Indicator number 11 Table #2 of Annex 1				Not material
ESRS E4-2 Sustainable oceans / seas practices or policies paragraph 24 (c)	Indicator number 12 Table #2 of Annex 1				Not material
ESRS E4-2 Policies to address deforestation paragraph 24 (d)	Indicator number 15 Table #2 of Annex 1				Not material


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Disclosure requirement and related data point	SFDR reference	Pillar 3 reference	Benchmark Regulation reference	EU Climate Law reference	Section/ Not material
ESRS E5-5 Non-recycled waste paragraph 37 (d)	Indicator number 13 Table #2 of Annex 1				Not material
ESRS E5-5 Hazardous waste and radioactive waste paragraph 39	Indicator number 9 Table #1 of Annex 1				Not material
ESRS 2- SBM3 - S1 Risk of incidents of forced labour paragraph 14 (f)	Indicator number 13 Table #3 of Annex I				Not material
ESRS 2- SBM3 - S1 Risk of incidents of child labour paragraph 14 (g)	Indicator number 12 Table #3 of Annex I				Not material
ESRS S1-1 Human rights policy commitments paragraph 20	Indicator number 9 Table #3 and Indicator number 11 Table #1 of Annex I				3.2.1. Occupational health and safety policy 3.3.1. Policy on skills and career development
ESRS S1-1 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 21			Delegated Regulation (EU) 2020/1816, Annex II		Not material
ESRS S1-1 processes and measures for preventing trafficking in human beings paragraph 22	Indicator number 11 Table #3 of Annex I				Not material
ESRS S1-1 workplace accident prevention policy or management system paragraph 23	Indicator number 1 Table #3 of Annex I				3.2.1. Occupational health and safety policy
ESRS S1-3 grievance/complaints handling mechanisms paragraph 32 (c)	Indicator number 5 Table #3 of Annex I				3.2.3. Processes to remediate negative impacts and channels for own workforce to raise concerns 3.3.3. Channels to raise concerns
ESRS S1-14 Number of fatalities and number and rate of work- related accidents paragraph 88 (b) and (c)	Indicator number 2 Table #3 of Annex I		Delegated Regulation (EU) 2020/1816, Annex II		3.2.6. Health and safety metrics
ESRS S1-14 Number of days lost to injuries, accidents, fatalities or illness paragraph 88 (e)	Indicator number 3 Table #3 of Annex I				2nd year omitted
ESRS S1-16 Unadjusted gender pay gap paragraph 97 (a)	Indicator number 12 Table #1 of Annex I		Delegated Regulation (EU) 2020/1816, Annex II		3.3.7. Remuneration metrics
ESRS S1-16 Excessive CEO pay ratio paragraph 97 (b)	Indicator number 8 Table #3 of Annex I				3.3.7. Remuneration metrics
ESRS S1-17 Incidents of discrimination paragraph 103 (a)	Indicator number 7 Table #3 of Annex I				3.3.8. Number of complaints to raise concerns, cases of discrimination including harassment, and fines, penalties and compensation for damages
ESRS S1-17 Non-respect of UNGPs on Business and Human Rights and OECD paragraph 104 (a)	Indicator number 10 Table #1 and Indicator n. 14 Table #3 of Annex I		Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818 Art 12 (1)		Not material
ESRS 2- SBM3 – S2 Significant risk of child labour or forced labour in the value chain paragraph 11 (b)	Indicators number 12 and n. 13 Table #3 of Annex I				Not material


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Disclosure requirement and related data point	SFDR reference	Pillar 3 reference	Benchmark Regulation reference	EU Climate Law reference	Section/ Not material
ESRS S2-1 Human rights policy commitments paragraph 17	Indicator number 9 Table #3 and Indicator n. 11 Table #1 of Annex 1				3.4.1. Policy on value chain workers’ occupational health and safety
ESRS S2-1 Policies related to value chain workers paragraph 18	Indicator number 11 and n. 4 Table #3 of Annex 1				Not material
ESRS S2-1 Non-respect of UNGPs on Business and Human Rights principles and OECD guidelines paragraph 19	Indicator number 10 Table #1 of Annex 1		Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Art 12 (1)		Not material
ESRS S2-1 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 19			Delegated Regulation (EU) 2020/1816, Annex II		Not material
ESRS S2-4 Human rights issues and incidents connected to its upstream and downstream value chain paragraph 36	Indicator number 14 Table #3 of Annex 1				Not material
ESRS S3-1 Human rights policy commitments paragraph 16	Indicator number 9 Table #3 of Annex 1 and Indicator number 11 Table #1 of Annex 1				Not material
ESRS S3-1 non-respect of UNGPs on Business and Human Rights, ILO principles or and OECD guidelines paragraph 17	Indicator number 10 Table #1 Annex 1		Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Art 12 (1)		Not material
ESRS S3-4 Human rights issues and incidents paragraph 36	Indicator number 14 Table #3 of Annex 1				Not material
ESRS S4-1 Policies related to consumers and end-users paragraph 16	Indicator number 9 Table #3 and Indicator number 11 Table #1 of Annex 1				Not material
ESRS S4-1 Non-respect of UNGPs on Business and Human Rights and OECD guidelines paragraph 17	Indicator number 10 Table #1 of Annex 1		Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Art 12 (1)		Not material
ESRS S4-4 Human rights issues and incidents paragraph 35	Indicator number 14 Table #3 of Annex 1				Not material
ESRS G1-1 United Nations Convention against Corruption paragraph 10 (b)	Indicator number 15 Table #3 of Annex 1				Not material
ESRS G1-1 Protection of whistleblowers paragraph 10 (d)	Indicator number 6 Table #3 of Annex 1				Not material
ESRS G1-4 Fines for violation of anti-corruption and anti-bribery laws paragraph 24 (a)	Indicator number 17 Table #3 of Annex 1		Delegated Regulation (EU) 2020/1816, Annex II)		Not material
ESRS G1-4 Standards of anticorruption and anti- bribery paragraph 24 (b)	Indicator number 16 Table #3 of Annex 1				Not material


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2. Environmental information

2.1. EU Sustainable Finance Taxonomy disclosures

Wärtsilä has carried out an assessment regarding its economic activities against the EU Sustainable Finance Taxonomy’s

Delegated Acts, as required by the Delegated Act on Article 8. Wärtsilä Taxonomy KPIs for the year 2025 are presented in

the tables on the following pages. The majority of Wärtsilä’s economic activities, such as services, are currently not covered

in the Delegated Acts. Services accounted for 52% of Wärtsilä’s turnover in 2025. Services are a key enabler of installation

uptime, reliability, reduced fuel consumption, and lower emissions. Wärtsilä has a key role to play in decarbonising vessel

operations and the overall shipping value chain. The company’s extensive product and solutions portfolio, including

engines, digital technologies, propulsion systems, hybrid solutions, integrated powertrain systems, and emission

abatement solutions are key contributors to making zero-emissions shipping possible. However, they are all outside the

taxonomy scope, since only the manufacturing of vessels – not vessel technologies or components – is included. In Energy,

engines ready for carbon-neutral fuels, running on natural gas or other fossil fuels, are also excluded.

In total, 11% of Wärtsilä’s turnover was estimated to be eligible, including the energy storage business, biogas solutions,

and digital voyage optimisation solutions. For capital expenditure, capitalised R&D costs related to energy storage, digital

voyage optimisation and sustainable fuels development, as well as new buildings and new vehicles, were deemed eligible.

For operating expenditure, non-capitalised R&D costs related to energy storage, biogas solutions, digital voyage

optimisation solutions and sustainable fuels development were deemed eligible. None of the categories could be

considered as aligned.


	Turnover	CapEx	OpEx
Non-eligible	89%	69%	83%
Eligible	11%	31%	17%
Aligned	0%	0%	0%

In order to report this information, Wärtsilä has assessed its economic activities against the economic activities included in

the Delegated Acts. Eligible economic activities have been identified by comparing the referred NACE codes in the

Delegated Acts to Wärtsilä’s economic activities. Turnover, capital expenditure, and operating expenditure for eligible

economic activities were collected from the accounting system. As a next step, Wärtsilä compared the economic activities

against the technical screening criteria, including the ‘do no significant harm’ criteria and minimum social safeguards, and

has searched for supporting proof points. With the approach being a stringent interpretation of the alignment criteria

provided by the European Union’s regulation on taxonomy, Wärtsilä cannot claim any of the taxonomy-eligible turnover

streams in 2025 as being also taxonomy-aligned. The same applies to both capital and operational expenditures in 2025.

Despite the low taxonomy coverage Wärtsilä’s products and services play a key role in decarbonising the energy and marine

sectors and Wärtsilä invests significant R&D funds to support and enable the transition.


KPI	Identified eligible economic activities	Notes
Turnover	▪ Energy storage business (CCM 3.4) ▪ Biogas solutions (CCM 3.6) ▪ Digital voyage optimisation solutions (CCM 8.2)	Wärtsilä considers its energy storage business as a Taxonomy eligible economic activity. Wärtsilä energy storage solutions and energy management systems enable the effective storage of renewable electricity. Wärtsilä biogas solutions are considered to be eligible through the “manufacturing of other low carbon technologies” category. Digital voyage optimisation solutions are considered to be eligible through the “data driven solutions for GHG reduction” category. Wärtsilä did not consider any multifuel engine solutions to be eligible at this point.
CapEx	▪ New buildings (CCM 7.1) ▪ Passenger cars and light commercial vehicles (CCM 6.5) ▪ Capitalised R&D costs related to energy storage (CCM 3.4) ▪ Capitalised R&D costs related to voyage optimisation (CCM 8.2) ▪ Capitalised R&D costs related to sustainable fuels (CCM 4.7)	Any capital expenditure for a new building or a new vehicle is eligible. With respect to the capitalised R&D, eligibility follows the same logic as with the identified turnover KPI eligible activities. However, capitalised R&D costs related to the engines’ capability to run on sustainable, zero-carbon fuels was considered eligible because these fuels enable Wärtsilä’s customers to generate electricity from renewable non-fossil gaseous and liquid fuels in the future. No capital expenditure related to taxonomy eligible manufacturing was identified.
OpEx	▪ Non-capitalised R&D costs related to energy storage (CCM 3.4) ▪ Non-capitalised R&D costs related to biogas solutions (CCM 3.6) ▪ Non-capitalised R&D costs related to voyage optimisation (CCM 8.2) ▪ Non-capitalised R&D costs related to sustainable fuels (CCM 4.7)	With respect to the non-capitalised R&D, eligibility follows the same logic as with the identified turnover KPI eligible activities. However, operating expenditure related to non- capitalised R&D for the engines’ capability to run on sustainable, zero-carbon fuels was considered eligible because these fuels enable Wärsilä’s customers to generate electricity from renewable non-fossil gaseous and liquid fuels in the future. No operating expenditure related to taxonomy eligible manufacturing was identified.


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Proportion of turnover from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2025


Financial year 2025	2025			Substantial Contribution Criteria						DNSH criteria ('Does No Significant Harm')(h)
Economic Activities (1)	Code (a) (2)	Turn over (3)	Proportion of Turnover, year 2025 (4)	Climate Change Mitigation (5)	Climate Change Adaptation (6)	Water (7)	Pollution (8)	Circular Economy (9)	Biodiversit y (10)	Climate Change Mitigation (11)	Climate Change Adaptation (12)	Water (13)	Pollution (14)	Circular Economy (15)	Biodiversit y (16)	Minimum Safeguards (17)	Proportion of Taxonomy aligned (a.1.) or eligible (A.2.) Turnover, year 2024 (18)	Category enabling activity (19)	Category transition al activity (20)
Text		MEUR	%	Y; N; N/EL (b) (c)	Y; N; N/ EL (b) (c)	Y; N; N/ EL (b) (c)	Y; N; N/ EL (b) (c)	Y; N; N/EL (b) (c)	Y; N; N/ EL (b) (c)	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	%	E	T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
No aligned activity		0	0%														0
Turnover of environmentally sustainable activities (Taxonomy- aligned) (A.1)		0	0%	0%	0%	0%	0%	0%	0%								0
Of which Enabling		0	0%	0%	0%	0%	0%	0%	0%								0	E
Of which Transitional		0	0%	0%													0		T
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
				EL; N/EL (f)	EL; N/EL (f)	EL; N/EL (f)	EL; N/EL (f)	EL; N/EL (f)	EL; N/EL (f)
Manufacture of batteries	CCM 3.4	671	10%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								12%
Manufacture of other low-carbon technologies	CCA 3.6	21	0%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								1%
Data-driven solutions for GHG emissions reductions	CCM 8.2	40	1%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								1%
Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2)		732	11%	11%	0	0	0	0	0								14%
A. Turnover of Taxonomy eligible activities (A.1 + A.2)		732	11%	11%	0	0	0	0	0								14%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non- eligible activities		6,182	89%
Total		6,914	100%

Turnover in 2025: EUR 6,914 million is also reported in Financial statements, Consolidated statement of income. EL = Eligible; N/EL = Non-eligible


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Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2025

Financial year 2025

2025

Substantial Contribution Criteria

DNSH criteria

('Does No Significant Harm')(h)

Economic Activities (1)

Code

(a) (2)

CapEx

(3)

Proportion

of CapEx,

year 2025

(4)

Climate

Change

Mitigation (5)

Climate

Change

Adaptation (6)

Water (7)

Pollution (8)

Circular

Economy (9)

Biodiversity

(10)

Climate

Change

Mitigation (11)

Climate

Change

Adaptation (12)

Water (13)

Pollution (14)

Circular

Economy (15)

Biodiversity

(16)

Minimum

Safeguards

(17)

Proportion of

Taxonomy

aligned (a.1.)

or eligible

(A.2.) CapEx,

year 2024 (18)

Category

transitional

activity (20)

Text

MEUR

Y; N; N/EL

(b) (c)

Y; N; N/EL

(b) (c)

Y; N; N/EL

(b) (c)

Y; N; N/EL

(b) (c)

Y; N; N/EL

(b) (c)

Y; N; N/EL

(b) (c)

Y/N

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1. Environmentally sustainable activities (Taxonomy-aligned)

No aligned activity

CapEx of environmentally sustainable

activities (Taxonomy-aligned) (A.1)

Of which Enabling

Of which Transitional

A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)

EL; N/EL (f)

Acquisition and ownership of buildings

CCM 7.7

N/EL

Transport by motorbikes, passenger cars and

light commercial vehicles

CCM 6.5

N/EL

Manufacture of batteries

CCM 3.4

14%

N/EL

12%

Data-driven solutions for GHG emissions

reductions

CCM 8.2

N/EL

Electricity generation from renewable non-fossil

gaseous and

liquid fuels

CCM 4.7

N/EL

11%

CapEx of Taxonomy-eligible but not

environmentally sustainable activities (not

Taxonomy-aligned activities) (A.2)

31%

36%

A. CapEx of Taxonomy eligible activities

(A.1 + A.2)

31%

36%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

CapEx of Taxonomy-non-eligible activities

146

69%

Total

211

100%

Total CapEx figure for 2025 is made up of relevant additions reported in 'Notes to the consolidated financial statements 3.2, 3.3 and 3.4'. EL = Eligible; N/EL = Non-eligible.


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Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2025


Financial year 2025	2025			Substantial Contribution Criteria						DNSH criteria ('Does No Significant Harm')(h)
Economic Activities (1)	Code (a) (2)	OpEx (3)	Proportion of OpEx, year 2025 (4)	Climate Change Mitigation (5)	Climate Change Adaptation (6)	Water (7)	Pollution (8)	Circular Economy (9)	Biodiversity (10)	Climate Change Mitigation (11)	Climate Change Adaptation (12)	Water (13)	Pollution (14)	Circular Economy (15)	Biodiversity (16)	Minimum Safeguards (17)	Proportion of Taxonomy aligned (a.1.) or eligible (A.2.) OpEx, year 2024 (18)	Category enabling activity (19)	Category transitional activity (20)
Text		MEUR	%	Y; N; N/EL (b) (c)	Y; N; N/EL (b) (c)	Y; N; N/EL (b) (c)	Y; N; N/EL (b) (c)	Y; N; N/EL (b) (c)	Y; N; N/EL (b) (c)	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	%	E	T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
No aligned activity		0	0%														0%
OpEx of environmentally sustainable activities (Taxonomy-aligned) (A.1)		0	0%	0%	0%	0%	0%	0%	0%								0%
Of which Enabling		0	0%	0%	0%	0%	0%	0%	0%								0%	E
Of which Transitional		0	0%	0%													0%		T
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
				EL; N/EL (f)	EL; N/EL (f)	EL; N/EL (f)	EL; N/EL (f)	EL; N/EL (f)	EL; N/EL (f)
Manufacture of batteries	CCM 3.4	24	9%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								7%
Manufacture of other low-carbon technologies	CCM 3.6	1	0%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								1%
Data-driven solutions for GHG emissions reductions	CCM 8.2	4	2%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								0%
Electricity generation from renewable non-fossil gaseous and liquid fuels	CCM 4.7	22	9%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								4%
OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2)		51	17%	17%	0%	0%	0%	0%	0%								11%
A. OpEx of Taxonomy eligible activities (A.1 + A.2)		51	17%	17%	0%	0%	0%	0%	0%								11%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activities		258	83%
Total		309	100%

EL = Eligible; N/EL = Non-eligible


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Nuclear and fossil gas related activities


Row	Nuclear energy related activities
1	The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.	NO
2	The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies.	NO
3	The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades.	NO
	Fossil gas related activities
4	The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.	NO
5	The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.	NO
6	The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.	NO


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2.2 Climate change (ESRS E1)

2.2.1. Transition plan (E1-1)

Wärtsilä is committed to mitigating climate change through its Set for 30 transition plan commitment. This plan outlines

Wärtsilä’s climate-related targets, key decarbonisation levers, and related actions. It has been approved by the Board of

Directors and is closely integrated with the company’s overall strategy, which places decarbonisation at its core.

The Set for 30 programme includes three decarbonisation targets covering the company’s own operations (Scope 1 and

Scope 2) and emissions from the value chain (Scope 3).

Scope 1 and 2: Wärtsilä targets carbon neutrality in its own operations by 2030, in line with the ambition level of the Paris

Agreement. At minimum, 42% of the emission reductions will be achieved through direct mitigation levers, as stipulated by

the Agreement. For the remaining emissions, carbon credits can be purchased to achieve carbon neutrality. The main levers

for reducing Scope 1 and 2 emissions are related to electrification and energy efficiency, GHG emissions from engine

testing, as well as self-generated and purchased renewable energy.

Scope 3 – Products: Wärtsilä’s target is to provide a product portfolio ready for zero-carbon fuels by 2030. Decarbonisation

is a priority in the company’s product and product portfolio development. Carbon-neutral fuels can be used already today,

and the development of the product portfolio further continues so that zero-carbon fuels, such as, ammonia and hydrogen,

can be widely used by 2030. An intrinsic part of this development work is the ongoing effort to improve the energy

efficiency of the products.

Scope 3 – Suppliers: Wärtsilä targets a 25% reduction in GHG emissions from Tier 1 direct suppliers by 2030, focusing on

their Scope 1 and 2 emissions related to Wärtsilä deliveries.

Scope 3 targets cannot be considered as being in line with the Paris Agreement.

The key decarbonisation levers and corresponding actions driving Wärtsilä’s transition plan are detailed in section E1-3. This

section also includes a breakdown of the capital and operational expenditure (CapEx and OpEx) allocated to support the

implementation of the transition plan. The financial planning, along with non-financial resources, ensures that sufficient

support is directed towards technology development, operational improvements, and supplier engagement to drive

emission reductions throughout the value chain.

Most of Wärtsilä's core economic activities related to its customers’ environmental impacts, such as engine development or

service activities, are excluded from the EU Taxonomy reporting, and thus currently Wärtsilä has no plans to work towards

taxonomy alignment.

Wärtsilä is not excluded from the EU Paris-aligned Benchmarks in accordance with the exclusion criteria stated in Articles

12.1 (d) to (g) 53 and 12.2 of Commission Delegated Regulation (EU) 2020/1818 (Climate Benchmark Standards Regulation).

Locked-in GHG emissions from key assets and products

Wärtsilä considers that neither its key assets nor products contain significant locked-in GHG emissions, including such that

would pose a risk to achieving its GHG reduction targets. For many years, the company has designed its products and

solutions to be future-proof. As a result, its production facilities are adapted to manufacture also zero-carbon fuel products.

In addition, Wärtsilä's entire installed base, i.e. currently operating vessels and power plants, is already able to run either on

bio-fuels or synthetic fuels, and can be upgraded to operate on zero-carbon fuels. The rate and timing of the upgrades that

the customers will in practice order depend on the availability and price of the zero-carbon fuels in the future.

Progress in implementing transition plan

Scope 1 and 2: During 2025, Wärtsilä was able to reduce its GHG emissions by 53,192 tCO₂e compared to the baseline. Since

the target’s base year, emissions reductions account for 53% of progress towards the target, which is in line with the

pathway to reaching the carbon neutrality target.

Scope 3 - Products: The development of concepts for pure hydrogen continued throughout 2025 and the concept for

industrialisation was selected. The step from technology development to prototype testing was taken when the 10V31H

hydrogen engine was installed at the Bermeo engine laboratory. Energy is searching for a feasible pilot installation. The

development and validation of technology selected for ammonia industrialisation continued during 2025. The first ammonia

fuelled Wärtsilä 25A engine passed factory acceptance testing and is ready for customer delivery. In addition, methanol

research and technology development has continued throughout 2025. Intensive customer support is ongoing for the

Wärtsilä 32M engine’s industrialised methanol technology.

Scope 3 - Suppliers: In 2025, Wärtsilä initiated the collection of GHG emissions data from its Tier 1 direct suppliers,

including their Scope 1 and 2 emissions related to Wärtsilä deliveries, and established the 2024 baseline. Additionally,

supplier engagement tools were defined to strengthen collaboration on developing decarbonisation roadmaps and to

enable the monitoring of suppliers’ GHG emissions performance and progress.

2.2.2. Policies on climate change (E1-2)

Wärtsilä’s approach to climate change mitigation, related opportunities, and energy efficiency is embedded in the Code of

Conduct and the Quality, Environmental, Health and Safety (QEHS) policy. Both guidelines apply to all activities, employees

and subsidiaries in all geographical locations. The Code of Conduct extends to suppliers and business partners, who are

expected to uphold similar ethical and environmental standards.

The Code outlines Wärtsilä’s commitment to addressing climate change, both through operational practices and strategic

innovation. This includes the development of technologies and services aimed at decarbonising the energy and marine

sectors, as well as efforts to reduce emissions within its own operations and supply chain. In its Code, Wärtsilä commits to

reducing greenhouse gas emissions by investing in continuous research and development, supporting customers with

decarbonisation solutions, and prioritising energy efficiency and renewable energy sources. Wärtsilä actively works to

advance energy efficiency across its operations and offerings, recognising it as an important element in reducing


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greenhouse gas emissions from its products. Wärtsilä sets measurable emission reduction targets and monitors progress

regularly, while also taking necessary actions to adapt its operations to the impacts of climate change.

The QEHS policy reinforces the company’s environmental commitments by setting objectives, reducing risks, and ensuring

continuous improvement. It also affirms Wärtsilä’s dedication to driving decarbonisation within its own operations and

across the value chain.

2.2.3. Actions and resources related to climate change mitigation and

adaptation (E1-3)


Material topic	Scope	Decarbonisation lever	Time horizon	Actions in 2025	Achieved GHG emissions reduction (from base year to 2025)	Expected GHG emissions reduction (2026 vs. 2030)	Related target
Climate change & energy	1 & 2	Electrification and energy efficiency	Base year* –2030	▪ Utilisation of heat pumps in heating ▪ Energy efficiency and energy savings ▪ Switching to low emission company vehicles	6,322 tCO₂e	9,078 tCO₂e	Set for 30: To become carbon neutral in our own operations by 2030. Reduce energy consumption by at least 7% in terms of absolute consumption by 2025.
Climate change	1	GHG emissions from engine testing	Base year*–2030	▪ Replacing fossil fuels in factory and R&D engine testing ▪ Optimising the time needed for R&D and factory engine testing	7,826 tCO₂e	31,774 tCO₂e	Set for 30: To become carbon neutral in our own operations by 2030.
Climate change	2	Self-generated solar power and purchased renewable energy	Base year*–2030	▪ Utilisation of self-generated energy from solar panels ▪ Purchase of renewable electricity ▪ Renewable district heating	39,044 tCO₂e	5,956 tCO₂e	Set for 30: To become carbon neutral in our own operations by 2030.
Climate change	3	Product portfolio development	2021–2030	▪ Developing product portfolio ready for zero- carbon fuels ▪ Collaborating in projects with external parties on R&D	Not quantifiable in CO₂e	Not quantifiable in CO₂e	Set for 30: To provide a product portfolio that will be ready for zero- carbon fuels by 2030.
Climate change	3	GHG emissions from Tier 1 suppliers	2024–2030	▪ Supplier GHG emissions data collection ▪ Calculation of baseline (kgCO₂e/EUR)	Baseline calculated in 2025	GHG emissions reduction: -25%	Set for 30: 25% reduction of suppliers' GHG emissions by 2030.

*3-year average (2019-2021), rounded figure

These policy frameworks reflect Wärtsilä’s strategic intent to create sustainable products and solutions while minimising its

environmental footprint. Climate change mitigation is a central pillar of the company’s sustainability strategy. Both policies

are reviewed and updated as necessary, with approvals from the Board of Management, which is ultimately accountable for

implementing the policies. The policies are accessible via Wärtsilä’s intranet and external website, and are actively

communicated through various channels, including visual materials at production sites.


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Wärtsilä’s decarbonization levers related to own operations

The main decarbonisation levers for Scope 1 and 2 GHG emissions, along with actions implemented during the reporting

year and those planned for the future, are presented below.

Electrification and energy efficiency

In 2025, Wärtsilä continued to implement energy efficiency measures across its operations. These actions primarily focused

on reducing electricity and heat consumption through targeted improvements in facility infrastructure and operational

practices.

To enhance heating efficiency, Wärtsilä installed new heat pumps at its site in Sweden, resulting in a notable reduction in

energy consumption. At the Central Distribution Center in Kampen, the Netherlands, a heat pump assessment is currently

underway with the aim of replacing the existing natural gas-based heating system.

In addition to heating system upgrades, Wärtsilä has taken measures to reduce electricity consumption. Traditional lighting

systems have been replaced with LED technology, and lighting operating times have been optimised through the use of

motion and daylight sensors. These improvements have reduced unnecessary energy use. Furthermore, enhanced space

efficiency has enabled better utilisation of heated and lit areas, contributing to overall energy savings.

Wärtsilä remains committed to continuing its energy-saving efforts beyond the expiration of its current target at the end of

2025. A new target has been established for the period 2026-2035 to ensure the company continues to advance its energy

efficiency improvements across its operations. This ongoing commitment supports the company’s broader decarbonisation

objectives. The Wärtsilä Real Estate Directive provides guidance for selecting environmentally certified buildings, with a

preference for BREEAM, LEED, or equivalent certification. A recent example is the new office in Vaasa, which has achieved

BREEAM certification. This directive ensures that new and renovated facilities meet high standards of energy and

environmental performance.

In support of sustainable mobility, Wärtsilä has introduced a vehicle policy that promotes the adoption of electric vehicles

throughout its fleet. The policy applies to Wärtsilä-owned and leased vehicles, including passenger cars, trucks, vans,

cranes, and forklifts. In addition to electric vehicles, the policy allows for the use of alternative low-emission fuels such as

HVO, thus further contributing to reducing operational emissions.

GHG emissions from engine testing

In 2025, Wärtsilä piloted the use of liquefied biogas (LBG), in its engine testing operations at the Sustainable Technology

Hub (STH) in Vaasa, Finland. This initiative contributes to reducing Wärtsilä’s Scope 1 GHG emissions. In parallel, the

company strengthened its research and development infrastructure by enhancing its capacity to test a broader range of

sustainable fuels. During the year, Wärtsilä increased its testing capacity and capabilities for methanol and continued

technology and product development for ammonia and hydrogen fuels.

To accelerate this transition, Wärtsilä announced plans in April to expand the Sustainable Technology Hub technology

centre. This investment, which includes advanced testing equipment, is designed to speed up product development, reduce

testing time and costs, and cut test-related emissions. The nearly 8,000 m² extension is scheduled for commissioning in

2028, reinforcing Wärtsilä’s ability to meet growing demand for sustainable technologies in the marine and energy sectors.

The timeline for switching to sustainable fuels in engine testing is dependent on factors such as availability and cost.

Wärtsilä evaluates the timing and maturity of various measures, interdependencies across projects, as well as the cost

implications of each emissions reduction measure.

These developments are progressing as planned and support Wärtsilä’s ambition to offer a product portfolio ready for zero-

carbon fuels by 2030, while reinforcing its commitment to achieving carbon neutrality in its own operations within the same

timeframe.

Self-generated and purchased renewable energy

Wärtsilä uses electricity throughout its global operations, including in manufacturing processes such as component

machining, as well as in its service workshops and office facilities. During engine test runs, both electricity and heat energy

are generated, and Wärtsilä aims to utilise this electricity internally and sell the surplus to local power utilities. To support

the transition to renewable energy consumption within its own operations, Wärtsilä has established a structured

purchasing model for renewable electricity. This model outlines the company’s approach to acquiring Guarantees of Origin

(GOs), Renewable Energy Certificates (RECs), and International Renewable Energy Certificates (I-RECs). In 2025, Wärtsilä

acquired certificates covering most of Europe, the Americas, and China. Several other Wärtsilä sites also source renewable

electricity directly from their energy providers. Overall, 79% (68 400 MWh) of Wärtsilä’s total electricity consumption in 2025

came from renewable sources. Solar energy forms a complementary part of Wärtsilä’s renewable electricity sourcing. For

many Wärtsilä locations, solar panels are an attractive alternative because of their self-sufficient nature and payback time.

In 2025, over 2,800 MWh of power was produced from solar panels installed at our sites.

Looking ahead, Wärtsilä is committed to further increasing the share of renewable energy in its operations. The company

has initiated a gradual transition to renewable electricity across all countries where it operates, in line with its structured

procurement model and taking into account the availability of renewable energy in each market. In parallel, Wärtsilä is

conducting assessments to identify opportunities for switching to renewable district heating solutions and for expanding

the use of on-site solar power generation.

Wärtsilä’s decarbonisation levers related to value chain

For reducing Scope 3 GHG emissions, Wärtsilä has two main levers, namely Product portfolio development and GHG

emissions from Tier 1 suppliers.


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Product portfolio development

Approximately 99% of Wärtsilä’s GHG emissions occur during the product use phase, primarily during engine operation.

Consequently, Wärtsilä’s most significant opportunities to reduce emissions across the value chain lie in advancing

sustainable product offerings and development, as outlined below:

▪ Products and services: Offering innovative technologies and lifecycle solutions with high efficiency and low emissions

▪ R&D: Developing sustainable and future-proof technologies

▪ Collaboration: Joining forces with stakeholders in promoting climate and environmental actions

In the long term, the most impactful part of Wärtsilä’s set of decarbonisation levers and actions is the process to develop a

product portfolio ready for zero-carbon fuels by 2030. However, it should be noted that the pace of the adoption of these

new technologies by customers will largely depend on the availability and pricing of sustainable fuels in the future.

Wärtsilä’s market analysis and modelling tools provide insights into the expected availability and cost development of

alternative fuels. The company anticipates that biofuels produced from non-food or non-feed organic sources will become

widely available during the 2030s. These include biodiesel, renewable diesel, biomethane, biomethanol, and bioethanol.

Following biofuels, blue fuels such as blue ammonia are expected to emerge, benefiting from scalability and existing oil and

gas infrastructures. Green synthetic fuels, derived from emission-free hydrogen produced using renewable electricity, are

projected to reach significant volumes from the late 2030s, primarily in regions with abundant solar and wind resources. In

the power generation segment, green hydrogen and hydrogen-natural gas blends currently represent the most promising

Power-to-X fuels for Wärtsilä’s power plants. However, the timeline for their deployment is influenced by the pace of

infrastructure development, and the availability of green hydrogen in sufficient quantities.

Collaborative R&D activities

An important part of Wärtsilä’s efforts in developing sustainable technologies for the marine industry takes place in

collaboration with external partners. For example, within the “Zero Emission Marine 2030” collaboration ecosystem,

Wärtsilä engages in multiple joint projects with universities and other companies, including:

▪ The CASEMATE (Computer-Aided Systems Engineering for Marine Advanced Technology for the Environment) project

develops and applies Model Based Systems Engineering methodology to engine development for new zero-carbon

fuels.

▪ The Green Engine simulation GECFD research project is creating an open simulation platform to develop new

technologies needed for sustainable fuels and for digital modelling of their use.

▪ The HENNES research project studies the physics and chemistry of hydrogen combustion.

▪ The Flexible Clean Propulsion Technologies (Flex-CPT) project consortium aims to develop innovative, clean, and

flexible solutions for maritime transport and off-road machinery.

▪ The three-year AINA (Ammonia Energy Conversion and Social Acceptance) project investigates the challenges related

to the use of ammonia.

▪ The HyWä project (Wärtsilä and Hycamite project) develops cost-effective hydrogen production from liquefied natural

gas (LNG) onboard vessels.

▪ The research project Data Analytics for Zero Emission Marine (DAZE) explores the use of data to significantly reduce

emissions from shipping.

▪ The research project Green Connect investigates the preconditions, needs, and business models needed to develop

and introduce green transport concepts to different transport chains and shipping markets.

Other collaborative research programmes in which Wärtsilä participates include:

▪ The research project led by Integrated Argon Power Cycle (iHAPC) consortium focusing on the use of argon – a non-

toxic ideal gas present in the atmosphere – to increase the efficiency of balancing engines.

▪ The GREEN RAY research project, which aims to develop technologies capable of reducing methane slip in two- and

four-stroke LNG engines, and the further use of after-treatment technology.

▪ The Waterborne technology platform has been set up as an industry-oriented Technology Platform to establish a

continuous dialogue between all waterborne stakeholders, such as classification societies, shipbuilders, shipowners,

maritime equipment manufacturers, infrastructure and service providers, universities or research institutes, and with

the EU Institutions, including Member States. It aims to contribute towards clean, competitive and safe waterborne

transport.

GHG emissions from Tier 1 suppliers

For reducing Scope 3 emissions from the supply chain, Wärtsilä targets a 25% reduction in GHG emissions from Tier 1

suppliers by 2030, focusing on their Scope 1 and 2 emissions related to Wärtsilä deliveries. In 2025, Wärtsilä established a

structured framework for supplier emissions reporting, including data collection processes, governance measures, and

baseline definition. Supplier engagement was strengthened through clear communication, onboarding, and the integration

of progress reviews into internal systems. Digital tools and reporting structures were deployed to support monitoring and

transparency.

Going forward, efforts will focus on improving data accuracy through verification and third-party assurance, as well as by

enhancing performance tracking. Wärtsilä will deepen its understanding of its suppliers’ decarbonisation ambitions, learn

from their best practices, and support them through coaching and other targeted initiatives. Continuous improvement will

be driven by process refinement and extended awareness training, thereby ensuring alignment with long-term

decarbonisation targets. A good example of successful supplier collaboration is Wärtsilä’s strategic partnership signed in

2025 with Siempelkamp Giesserei, a supplier of large cast components such as engine blocks. Siempelkamp aims to deliver

near carbon-neutral castings by 2030.

Resources to implement actions

To support the implementation of the climate change mitigation actions outlined in the Set for 30 transition plan for Scope

1 and 2 emissions, Wärtsilä incorporates related investments into operational and capital planning. To advance the

company’s carbon neutrality target, Wärtsilä allocated EUR 245 thousand in operational and capital expenditure in 2025 for


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the procurement of renewable electricity and biogas for engine testing, and for the installation of solar panels. In addition

to financial investments, key resources such as dedicated personnel, digital tools, and training programmes play an

important role in driving the Set for 30 actions.

To support the development of sustainable products, Wärtsilä invested EUR 329 million in research and development

during 2025, representing 4.8% of net sales. A substantial portion of this investment was directed towards improving

environmental performance, including energy efficiency. Specifically, R&D activities related to sustainable fuels accounted

for EUR 17 million in capital expenditure and EUR 22 million in operational expenditure. The total R&D expenditure also

includes those costs in Wärtsilä’s EU Sustainable Finance Taxonomy disclosures. It should be noted that the expenditures

reported in the EU Taxonomy disclosures include costs beyond the scope of the transition plan, although they contribute to

climate change mitigation in other ways.

2.2.4. Climate change targets (E1-4)


Material topic	Scope	Target	Base year	Base year value	Achievements by the end of 2025 (reduction compared to base year, %)
Climate change	1 and 2	Set for 30: To become carbon neutral in our own operations by 2030.	3-year average (2019-2021)	Scope 1: 55,000 tCO₂e Scope 2 market-based: 45,000 tCO₂e Combined: 100,000 tCO₂e	Combined Scope 1+2 reductions -53,192 tCO₂e (53%)
Climate change	3	Set for 30: To provide a product portfolio that will be ready for zero-carbon fuels by 2030.	2021	N/A	The development of hydrogen, ammonia, and methanol technologies progressed significantly in 2025, with hydrogen moving to prototype testing and the first ammonia delivery passing factory acceptance testing. Methanol research continued alongside intensive customer support for the industrialized W32M technology.
Climate change	3	Set for 30: 25% reduction of suppliers' GHG emissions by 2030.	2024	0.224 kgCO₂e/EUR	In 2025, the base year value was calculated.
Climate change & Energy	1 and 2	Reduce energy consumption by at least 7% (29.9 GWh) in terms of absolute consumption by 2025.	2017	427.5 GWh	Energy savings of 34 GWh were achieved, corresponding to an 8% decrease from the base year, exceeding the final target.


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The targets outlined above support Wärtsilä’s Code of Conduct, and the Quality, Environmental, Health and Safety (QEHS)

Policy, aimed at addressing climate change. With these commitments, Wärtsilä manages climate-related risks, reduces

environmental impacts, and captures opportunities in the energy transition. The carbon neutrality and energy saving

targets are absolute, while the supplier decarbonisation target is relative. The product portfolio target is measured through

the achieved technology readiness levels. The Set for 30 targets have been approved by the Board of Directors.

Wärtsilä targets carbon neutrality in its own operations by 2030, in line with the ambition of the Paris Agreement. At

minimum, 42% of the emission reductions will be achieved through direct mitigation levers, as stipulated by the Agreement.

For the remaining emissions, carbon credits can be purchased to achieve carbon neutrality. Since the target’s base year,

emissions reductions account for 53% of progress towards the target, which is in line with the trajectory required to achieve

it. In 2025, Wärtsilä’s actions focused on measures, such as purchasing renewable electricity, low emission company

vehicles, and piloting the use of liquified biogas (LBG) in engine testing in Vaasa, Finland. In 2025, of the total electricity

consumption, 79% was from renewable sources.

In the beginning of 2017, Wärtsilä’s Board of Management approved an energy saving target to reduce total energy

consumption in our own operations by at least 7% (29.9 GWh) in terms of absolute consumption from the 2015 level, by

2025. The target setting is linked to the Energy Efficiency Agreement in Finland. By the end of 2025, permanent energy

savings of 34 GWh had been achieved, enabling Wärtsilä to exceed its final 2025 target. Energy savings are mainly based on

reduced electricity or heat consumption and the implementation of energy efficiency measures. Wärtsilä remains

committed to advancing its energy-saving efforts beyond 2025 and has set a new target for the period 2026-2035. The goal

is to reduce energy consumption by 10% in top eight energy-consuming countries by 2035, using 2024 as the baseline year.

The energy saving target supports the overall carbon neutrality target.

As regards its products, Wärtsilä’s ‘Set for 30’ target is to provide a product portfolio ready for zero-carbon fuels by 2030.

Decarbonisation is a priority in the company’s product and product portfolio development. Wärtsilä is developing a broad

range of technologies and solutions to support its customers in their decarbonisation transition. The development of

concepts for pure hydrogen continued throughout 2025 and the concept for industrialisation was selected. The step from

technology development to prototype testing was taken when the 10V31H hydrogen engine was installed at the Bermeo

engine laboratory. Wärtsilä Energy is currently searching for a feasible pilot installation. The development and validation of

technology selected for ammonia industrialisation continued during 2025. The first ammonia fuelled Wärtsilä 25A engine

passed factory acceptance testing and is ready for customer delivery. In addition, methanol research and technology

development has continued throughout 2025. Intensive customer support is ongoing for the industrialised methanol

technology Wärtsilä 32M engine.

In 2024, Wärtsilä set a new target of a 25% reduction in its suppliers’ GHG emissions by 2030, compared to the 2024

baseline. The target covers Tier 1 direct suppliers to Wärtsilä, and their Scope 1 and 2 GHG emissions related to deliveries to

Wärtsilä. It is a relative target, for which the baseline is defined by Wärtsilä’s allocated GHG emissions and spend.

Targets related to Wärtsilä’s Scope 3 emissions are not considered to be in line with the Paris Agreement.

When setting the targets, Wärtsilä considered key future developments that could influence emissions and reduction

potential. These include growth in demand for products capable of running with zero-carbon fuels, such as ammonia and

hydrogen, by 2030, compliance with evolving decarbonisation regulations, for example those related to the International

Maritime Organization, and the acceleration of research and development for sustainable fuels and abatement

technologies. The target setting process involved engagement with internal stakeholders. For instance, the development of

the Set for 30 programme was aided via a comprehensive study that included interviews with key internal experts. Similarly,

the energy efficiency target was shaped through discussions around the Energy Efficiency Agreement. For the supplier

decarbonisation target, the category managers and strategic purchasers were engaged, including interviews with selected

suppliers, where supplier emission reduction roadmaps were reviewed.

ⓘ Accounting principles

For defining the baseline value for Set for 30 target on becoming carbon neutral in own operations, Wärsilä uses a

baseline value that is derived from a 3-year average (2019-2021), as this increased the representativeness of the

base line emissions. Another reason for choosing a 3-year average was to better take into account the business

impact of Covid-19.

Climate change targets are aligned with Wärtsilä’s GHG inventory, including boundaries, scope and calculation

principles as outlined in section E1-6. All relevant greenhouse gases are covered. The targets are not based on

conclusive scientific evidence as defined in the Science Based Targets initiative (SBTi).

Monitoring of the energy-saving target is conducted using site-level energy reduction data, derived from

permanent energy-saving actions and either calculated or estimated.

ⓘ


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2.2.5 Energy data (E1-5)


Energy Consumption and Mix	2025	2024
Fuel consumption from coal and coal products (MWh)	0	0
Fuel consumption from crude oil and petroleum products (MWh)	88,083	80,483
Fuel consumption from natural gas (MWh)	69,114	67,121
Fuel consumption from other fossil sources (MWh)	20	35
Consumption of purchased or acquired electricity and heat from fossil sources (MWh)	25,720	44,202
Total fossil energy consumption (MWh)	182,936	191,841
Share of fossil sources in total energy consumption (%)	72	76
Consumption from nuclear sources (MWh)	536	2,782
Share of consumption from nuclear sources in total energy consumption (%)	0	1
Fuel consumption from renewable sources (MWh)	1,522	0
Consumption of purchased or acquired electricity and heat from renewable sources (MWh)	66,297	57,026
Consumption of self-generated non-fuel renewable energy (MWh)	2,824	2,231
Total renewable energy consumption (MWh)	70,643	59,257
Share of renewable sources in total energy consumption (%)	28	23
Total energy consumption (MWh)	254,116	253,879
Non-renewable energy production (MWh)	14,002	12,203
Renewable energy production (MWh)	2,824	2,231
Total energy consumption from activities in high climate impact sectors (MWh)*	254,116	253,879
Energy intensity from activities in high climate impact sectors (total energy consumption per total net revenue (MEUR)*)	37	39

* All Wärtsilä’s activities fall within high climate impact sector NACE-code C28.11. - Manufacture of engines and turbines, except aircraft, vehicle

and cycle engines. Revenue in 2025: EUR 6,914 million is also reported in Financial statements, Consolidated statement of income.

ⓘ Accounting principles:

Energy consumption includes both direct and indirect energy usage. The direct energy usage includes the fuels

used by Wärtsilä subsidiaries. Lower heating values (LHV) are used to calculate the energy consumption of fuels.

LHVs are based on information supplied by vendors or results of fuel analyses for engine testing and R&D purposes,

and for other fuel consumption, the source is the UK Department for Environment, Food and Rural Affairs (Defra).

The indirect energy usage includes purchased electricity and heat.

Methodology for energy metrics:

Consumption of purchased or acquired electricity and heat from fossil sources: Purchased electricity from fossil

sources = Purchased electricity – electricity from renewable and nuclear sources. Purchased district heat from fossil

sources = Purchased district heat – renewable district heat.

Consumption from nuclear sources: The share of nuclear energy for all countries with Wärtsilä operations is

determined by the Association of Issuing Bodies (AIB) and International Atomic Energy Agency (IAEA).

Fuel consumption from renewable sources: Consumption of fuel from renewable sources includes biogas and

biodiesel.

Consumption of purchased or acquired electricity and heat from renewable sources: Electricity and district

heat consumption from renewable sources.

Consumption of self-generated non-fuel renewable energy: Self-generated electricity from solar panels.

Non-renewable energy production: Fossil fuels used for self-generated electricity and heat.

Energy intensity describes the ratio of total internal energy consumption divided by the total net sales of Wärtsilä

(MWh/ MEUR).

All energy consumption data is reported in Wärtsilä’s sustainability reporting tool and is based on either invoices or

measured values, with the exception of roughly 0,2% of total energy consumption estimated.

All of Wärtsilä’s energy consumption is derived from activities in high climate impact sectors.

No measurements of the metrics are validated by an external body other than the assurance provider.


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2.2.6 GHG emissions data (E1-6)


	Retrospective
	Base year*	2024	2025	Change % (2025/2024)	2030	Annual % target / Base year
Scope 1 GHG emissions (tCO₂e)
Gross Scope 1 GHG emissions	55,000	37,066	40,848	10	0	n/a
Percentage of Scope 1 GHG emissions from regulated emission trading schemes (%)		0%	0%
Scope 2 GHG emissions (tCO₂e)
Gross location-based Scope 2 GHG emissions**		19,849	18,127	-9
Gross market-based Scope 2 GHG emissions***	45,000	12,771	5,960	-53	0	n/a
Significant Scope 3 GHG emissions (tCO₂e)
Total Gross indirect (Scope 3) GHG emissions		115,127,000	112,086,700	-3
1 Purchased goods and services		2,008,600	2,034,700	1
3 Fuel and energy-related Activities (not included in Scope1 or Scope 2)		10,000	10,000	0
4 Upstream transportation and distribution		82,900	89,200	8
6 Business traveling		50,500	56,800	12
11 Use of sold products****		112,975,000	109,896,000	-3
Total GHG emissions (tCO₂e)
Total GHG emissions (location-based)		115,183,915	112,145,676	-3
Total GHG emissions (market-based)		115,176,837	112,133,508	-3

* The baseline values are based on 3-year average values (2019-2021); rounded figure. Starting from 2024, the boundaries include companies with less than 10 employees that were not included in the base year calculations.

** The target is based on market-based emissions.

*** Of the total electricity consumption, 79% (68,400 MWh) was from renewable sources in the form of self-generated electricity (solar panels), and bundled and unbundled energy attribute certificates purchased (EAC). Of the purchased renewable

electricity, 93% is related to unbundled energy attribute certificates (EAC) and 7% related to bundled EAC.

**** The 2024 emissions have been recalculated following a methodology update. Before the recalculation, emissions totaled 86,786,000 tCO₂e.


Biogenic emissions	2025	2024	Change % (2025/2024)
Outside of Scopes (tCO₂e)	128	n/a	n/a


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ⓘ Accounting principles:

Wärtsilä’s greenhouse gas (GHG) emissions are reported based on the Greenhouse Gas Protocol. Wärtsilä uses the

operational control approach to establish the organisational boundary for emissions reporting. As defined by the

GHG Protocol, Wärtsilä includes operations where the company has the full authority to introduce and implement

operating policies. Investees, such as associates, joint ventures, or unconsolidated subsidiaries, are excluded from

the reporting. Scope 1, 2, and 3 GHG emissions for energy are calculated by Sphera's Corporate Sustainability

Software. All relevant GHG emissions are included in the calculations.

Scope 1 emissions cover direct emissions from fuel consumption by Wärtsilä companies. Reported figures for R&D

and engine testing are mainly based on measured values, which are used to determine specific emission factors.

These factors have been established for various fuels and engine types through measurements, and they have been

externally assured (DNV). Emissions from heating boilers are calculated based on fuel consumption. The data is

measured and collected in each Wärtsilä company and reported via a global reporting tool.

Scope 2 include indirect GHG emissions from the generation of purchased electricity and heat consumed by

Wärtsilä companies. For electricity, location-based Scope 2 emissions are calculated using emission factors from the

International Energy Agency (IEA). Market-based Scope 2 emission are calculated using residual mix emission

factors where available (for Europe and USA), and IEA emission factors for other countries. For district heating,

Scope 3 emissions are reported for five categories identified as material for Wärtsilä: Category 1: Purchased Goods

and Services; Category 3: Fuel- and Energy-Related Activities; Category 4: Upstream Transportation and Distribution;

Category 6: Business Travel; and category 11: Use of sold products. 0.1% of GHG Scope 3 emissions have been

calculated using primary data.

Category 1: GHG emissions from purchased goods and services are calculated using a spend-based method. The

economic value of goods and services purchased is multiplied by the industry average emission factors obtained

from the EXIOBASE database (v3.8.2). Spend data is broken down according to Wärtsilä’s internal purchasing

categories, and allocated to the most appropriate product group category available within the EXIOBASE database.

Category 1 includes GHG emissions from category 2 Capital goods.

Category 3: Energy-related GHG emissions are calculated using the emission factors from IEA, MLC and DEFRA.

Category 4: For purchased outbound logistics, the emissions for logistics services are calculated mainly based on

the Global Logistics Emissions Council (GLEC) Framework, the global method for the calculation and reporting of

logistics emissions. Furthermore, primary emission data from transport vehicles has been collected to improve the

data quality. Data coverage is 83% of the total transportation spend and extrapolation is made for the remaining

share.

Category 6: Emissions from air travel are based on calculations by Wärtsilä’s travel agency and Thrust Data defined

emission factors are used.

Category 11: GHG emissions data from the use of sold products is calculated based on the number of engines sold

in the reporting year, related engine running hours, engine output, and engine load multiplied with relevant

emission factors. The emissions from sold engines as direct use-phase emissions were accounted for. The emission

factors for lifecycle CO₂e emissions per kWh of fuel are:

Well to tank (WtT) emission factors:

▪ Default emission factors provided in the Fuel EU maritime, Annex II are used for LNG, diesel and methanol.

▪ A separate emission factor was calculated for pipeline gas that is used for engines sold to the energy sector.

Tank to wake (TtW) emission factors:

▪ Wärtsilä maintains performance manuals for its engines that provide information on engine fuel consumption

and emissions data (e.g. CO₂, Total Hydrocarbon Content (THC)). THC is used to describe the quantity of the

measured hydrocarbon impurities present, and the data is used to determine the methane slip in gas operated

engines. Wärtsilä engines are tested in accordance with ISO 8178 standard reference conditions, and

information on CO₂e for each engine type, fuel type and engine load are available. Conversion factors are from

the Marine Environment Protection Committee (MEPC).

Methane slip is considered in engines powered by LNG: Global Warming Potential (GWP) for CH4 is 28 (over 100

years).

Biogenic emissions in Wärtsilä’s own operations originate from the combustion of biofuels used in engine testing

and other company operations, such as vehicle use. The biogenic emission factor covers CO₂ emissions, and the

source for this factor is the Defra database. The biogenic emissions are not available for Scope 2 and Scope 3.


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Scope 3 categories excluded from reporting:


Excluded category	Explanation
5. Waste generated in operations	Calculated but less than 0,1% of total scope 3 emissions.
7. Employee commuting	Calculated but less than 0,1% of total scope 3 emissions.
8. Upstream leased assets	Upstream leased assets are not material for Wärtsilä.
9. Downstream transportation and distribution	Calculated but less than 0,1% of total scope 3 emissions.
10. Processing of sold products	Wärtsilä does not sell any intermediate products. Wärtsilä's products are not processed downstream.
12. End-of-life treatment of sold products	Calculated but less than 0,1% of total scope 3 emissions.
13. Downstream leased assets	Wärtsilä has no relevant downstream leased assets that are reported on Group level.
14. Franchises	Wärtsilä is not using franchises.
15. Investments	Wärtsilä has no investments that would account to relevant GHG emissions.

Note on value chain data estimations: Wärtsilä continuously strives to improve data accuracy by increasing the

amount of primary data used in the Scope 3 calculations. For Category 1: Purchased goods and services, Wärtsilä

aims to be able to change the basis for calculations from spend-based to weight-based data for purchased goods as

soon as the company has developed the primary data on weights to an accurate level. For Category 4: Upstream

transportation, Wärtsilä aims at collecting more primary data from the logistic service providers, but this depends

on the further development of the service providers’ reporting capabilities.

No measurements of the metrics are validated by an external body other than the assurance provider.


Contractual instruments used for purchase of energy	2025	2024
Percentage of contractual instruments of electricity purchased (MWh)	94%	74%
Bundled energy attribute certificates (EAC)	4,899 MWh	4,358 MWh
Unbundled energy attribute certificates (EAC)	60,692 MWh	51,936 MWh
Percentage of contractual instruments used for sale and purchase of energy bundled with attributes about energy generation in relation to total electricity consumption (MWh)	7%	6%
Percentage of contractual instruments used for sale and purchase of unbundled energy attribute claims in relation to total electricity consumption (MWh)	87%	68%
Disclosure of types of contractual instruments used for sale and purchase of energy bundled with attributes about energy generation or for unbundled energy attribute claims	Bundled energy attribute certificates (EAC): Guarantees of origin (GOs) Unbundled energy attribute certificates (EAC): Guarantees of origin (GOs), IRECs

GHG emissions intensity


GHG intensity per net revenue*	2025	2024**	Change % (2025/2024)
Total GHG emissions (location-based) per net revenue (tCO₂e/MEUR)	16,220	17,861	-9%
Total GHG emissions (market-based) per net revenue (tCO₂e)/MEUR)	16,218	17,860	-9%

* Revenue in 2025: EUR 6,914 million is also reported in Financial statements, Consolidated statement of income.

** The 2024 emissions have been recalculated due to a change in the calculation methodology of Scope 3 category 11 Use of sold products.

GHG emissions intensity describes the ratio of total greenhouse gas emissions (Scope 1, 2 and 3) divided by Wärtsilä’s total

net sales in the reporting year (tCO₂e/MEUR). No measurements of the metrics are validated by an external body other than

the assurance provider.


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2.2.7. GHG removals, storage, carbon credits and internal pricing (E1-7,

E1-8)

Outside Wärtsilä’s value chain, the company considers purchasing carbon credits as a last resort, after other measures to

reduce or avoid emissions have been explored. High-quality carbon reduction projects will be selected together with a

credible supplier if carbon offsetting is needed. Wärtsilä has not implemented internal carbon pricing and no carbon credits

were used in 2025.

2.3. Pollution (ESRS E2)

2.3.1. Policies on pollution (E2-1)

The company has formalised its environmental principles through the Code of Conduct and the Quality, Environmental,

Health and Safety (QEHS) policy. Both guidelines apply to all activities, employees and subsidiaries in all geographical

locations. The Code of Conduct extends to suppliers and business partners, who are expected to uphold similar ethical and

environmental standards. The Code of Conduct and QEHS Policy are reviewed and updated as necessary, with approvals

from the Board of Management, which is ultimately accountable for implementation of the policies. The policies are

accessible via Wärtsilä’s intranet and external website, and are actively communicated through various channels, including

visual materials at production sites.

Complementing these, Wärtsilä’s Supplier Requirements include expectations for environmental management and the

reduction of environmental impacts. The publicly available requirements apply globally to all suppliers. Corporate Supply

Management carries the responsibility for implementing Supplier Requirements.

The Code of Conduct outlines the company’s dedication to enhancing the environmental performance of its products,

solutions, and operations. It articulates Wärtsilä’s role in advancing sustainable energy production and driving the

development of green marine transport. Wärtsilä commits to mitigating environmental impacts through awareness-raising,

pollution prevention, responsible resource use, and substituting and minimising the use of hazardous substances.

Environmental risks are proactively assessed and managed through adherence to internal policies and procedures,

precautionary actions, and structured reporting mechanisms. All Wärtsilä subsidiaries are required to operate in

accordance with an environmental management system.

Wärtsilä’s QEHS policy further positions the environmental principles at the core of the company’s operations. It emphasises

the delivery of safe, efficient, and environmentally sound solutions that comply with applicable regulations and standards.

The company’s Supplier Requirements mandates that suppliers maintain an environmental management system aligned

with ISO 14001 or EMAS, ensuring systematic control of environmental risks and preparedness for incidents and

emergencies. In relation to hazardous substances, Wärtsilä’s Supplier Requirements emphasise transparency and

cooperation to support regulatory compliance and to enable informed customer communication. Suppliers must comply

with all relevant laws and regulations related to substances and materials, including REACH and Wärtsilä’s Black & Grey list.

These define restrictions and prohibitions on the use of substances in Wärtsilä’s products, materials and production

processes, and may be more stringent than national regulations. Suppliers are also required to inform Wärtsilä regarding

substances of very high concern, in accordance with the legal requirements.

In terms of downstream impact, Wärtsilä’s product design is the primary lever for influencing substance use. There is no

direct requirement to phase out substances of concern as such, but this comes naturally through following applicable

regulations. At the same time, Wärtsilä must explore alternative substances to replace those that may become restricted in

the future.

2.3.2. Actions related to pollution (E2-2, E2-3)

For two decades already, Wärtsilä has been a significant contributor in the technology development and deployment of

LNG-fuelled marine propulsion. The use of LNG fuel has significantly reduced pollution levels compared to the technologies

it displaces, such as steam turbines and HFO-fuelled engines. In 2025, 74% of engine MW’s delivered to Marine customers

were capable of operating on cleaner gas fuels. For Energy deliveries, the share was 89% (deliveries also include those

engines sold by Wärtsilä that have been manufactured in two joint venture companies).

For Wärtsilä, considering the lifecycles of the company’s products, which can be up to 30 years or even longer, the vast

majority of pollution is emitted from engines being run by customers. Wärtsilä continuously develops more efficient

products, which in turn, reduces pollutant emissions. The company also continues to develop and improve a number of

existing pollution prevention technologies, which include, for example, the ultra-low-NOx catalysator capable of reducing

NOx emissions down to the levels required by today’s most stringent globally-applied regulations. In its own global

operations, Wärtsilä strictly follows local regulations on pollution limits. Any possible deviations from these limits are

recorded, reported, and rectified as quickly as possible.

As a good example of a current solution, Wärtsilä has developed and introduced to the market a new ultra-low emissions

version of its already efficient Marine Wärtsilä 31DF engine. When operating on LNG, in addition to a significant reduction in

methane emissions, this new version can further reduce NOx emissions at a 50% load point by up to 86%.

The most important development actions ongoing are those related to Wärtsilä’s ‘Set for 30’ commitment to develop a

product portfolio that will be ready for zero-carbon fuels by 2030. Here, the development actions are concentrated on

different engine types, along with their respective auxiliary systems. Although Wärtsilä has not set a specific target for

pollution reduction as such, the emerging sustainable fuels will also lower overall pollution levels. Compared to diesel,

methanol and ammonia will reduce NOx levels and have significantly lower levels of SOx and particulates. Hydrogen,

compared to natural gas, is expected to have similar NOx levels but will drastically reduce, for example, VOC emissions.

Throughout 2025, the development and validation of technology selected for ammonia industrialisation continued. The first

ammonia fuelled Wärtsilä 25A engine has passed factory acceptance testing and is ready for customer delivery. Methanol

research and technology development also progressed steadily, supported by intensive customer engagement for the

industrialised methanol technology on the Wärtsilä 32M engine. For hydrogen, the concept for industrialisation was


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selected. The step from technology development to prototype testing was taken when the 10V31H hydrogen engine was

installed at the Bermeo engine laboratory. Energy business is currently seeking a feasible pilot installation.

Wärtsilä actively monitors the development of global emission regulations, especially focusing on the EU, the International

Maritime Organisation (IMO) and the USA Environmental Protection Agency (EPA). The company also engages directly with

decision makers on pollution-related topics. In 2025, one of the engagement topics in the EU area was advocating for

greater certainty regarding the availability of sustainable fuels. Wärtsilä provides policymakers with insights into ongoing

technological advancements in emissions reduction, helping to establish the setting of new, technologically feasible

emission limits. Wärtsilä emphasises that pollution levels need to be decreased at system level, and regulations should have

this as an aim.

Activities in 2025 related to replacing hazardous substances in its products include Wärtsilä testing lead-free bearings and

alternatives for hard chrome coatings for piston rings and valves.

In 2025, Wärtsilä’s R&D expenses were EUR 329 million, which represents 4.8% of net sales. The clear majority of the total

sum is directed towards developing more sustainable products in various ways. The ‘Set for 30’ R&D target to have a

product portfolio running on zero carbon fuels by 2030 amounted to capital expenditures of EUR 17 million and operational

expenditures of EUR 22 million. For 2026 these expenditures are estimated at about EUR 24 million as capital expenditures

and EUR 25 million as operational expenditures. These R&D costs are not reported separately in Wärtsilä’s financial

reporting.

Wärtsilä does not currently have a public target related to substances of concern or substances of high concern. However,

the company ensures compliance with all regulations restricting the use of such substances. Wärtsilä does not identify

significant business opportunities related to hazardous substances and therefore considers regulatory compliance to be a

sufficient approach to managing the issue. Regarding pollution, there is no separate target as Wärtsilä’s strategic focus is

on decarbonisation. Nevertheless, as outlined above, the company’s R&D efforts towards sustainable fuels are expected to

contribute to reductions in pollution.

2.3.3. Pollution data from Wärtsilä’s own operations (E2-4)


Emissions (t)	2025	2024
Nitrogen oxides	566	440
Sulphur oxides	11	3
Total hydrocarbons	76	76
Particulates	3	4
VOC	9	15

ⓘ Accounting principles:

In 2025, the reported pollution data comprises emissions to air from R&D and engine testing. In the comparative

figures, emissions from company vehicles, trucks and generators were also included. These sources represent less

than 5% of the total reported emissions and are therefore considered non-material. The reported figures for R&D

and engine testing are mainly based on measured values, based on which specific emission factors are determined.

The five types of emissions reported are the most significant types emitted by Wärtsilä engines, as per emission

measurements. The specific emission factors have been determined for various fuels and engine types through

measurements, and they have been externally assured. Wärtsilä does not generate or use microplastics. No other

measurements of the metrics have been validated by an external body other than the assurance provider.


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3. Social information

3.1. General information on Wärtsilä’s employees (S1-6)

Characteristics of undertaking's employees - number of employees by gender


Headcount at year end	2025	2024
Total	18,504	18,913
Male	14,936	15,360
Female	3,566	3,553
Other	1	n/a
Not reported	1	n/a

Number of employees in countries with 50 or more employees representing at least 10% of

Wärtsilä’s total number of employees


Headcount at year end
Country	2025	2024
Finland	5,028	4,745

Information on employees by contract type and gender


	2025			2024
Number of employees by contract type and gender	Permanent	Temporary	Non- guaranteed hours	Permanent	Temporary	Non- guaranteed hours
Total	16,725	1,260	519	17,166	1,289	457
Male	13,594	1,000	343	14,018	1,021	320
Female	3,129	260	176	3,148	268	137
Other	1	0	0	n/a	n/a	n/a
Not reported	1	0	0	n/a	n/a	n/a

Number of employees who have left Wärtsilä during the reporting period and the rate of

employee turnover


	2025	2024
No. of employees that left Wärtsilä	1,119	1,310
Turnover rate, %	6.7%	7.7%

ⓘ Accounting principles:

Employees and non-employees: Data on Wärtsilä employees is reported as headcount at the end of the reporting

period and is mainly derived from the global Employee Central SuccessFactors. Less than 1% of employees, the

amount varying between indicators, lack having all their employment details in the global HR databases. Their

gender, employment and contract types have been assumed as being the same as an average global employee. The

numbers of employees that have left do not include estimates of employees whose employment or resignation has

not been formally recorded. Data on non-employees has been omitted from this statement.

Employee turnover is calculated by dividing the headcount number of permanent employees having left the

company voluntarily or due to dismissal, retirement, or death in service during the reporting period, by the total

headcount of permanent employees at the end of the reporting period.

No measurements of the metrics are validated by an external body other than the assurance provider.

3.2. Occupational health and safety (ESRS S1)

3.2.1. Occupational health and safety policy (S1-1)

Wärtsilä’s approach to occupational health and safety is governed by its Code of Conduct and the Quality, Environmental,

Health and Safety (QEHS) Policy. These documents collectively define the principles and expectations for maintaining a safe

and healthy working environment across all operations. The suppliers and business partners are expected to apply similar

principles of ethical behaviour as those reflected in the Code of Conduct. Details on the accessibility and accountability of

the implementation of these frameworks is provided in the chapter Policies on pollution (E2-1).

Wärtsilä is committed to ensuring a safe and healthy working environment for employees, contractors, and partners across

all areas of operation. The company operates on the principle that all accidents are preventable by promoting a strong

safety culture, continuously enhancing safety performance, and adhering to high standards in occupational health and

safety. Health, safety, and security requirements are rigorously followed, with proactive identification of potential hazards

and systematic reporting of near misses to support effective risk management. These practices are embedded within the

health and safety management system, which is mandatory for all Wärtsilä subsidiaries. Employees are empowered to stop

work if conditions are unsafe. In addition to physical safety, Wärtsilä promotes employee wellbeing through initiatives that

support personal development, work-life balance, and a caring workplace culture. These efforts contribute to a safe and

inclusive environment that supports everyone’s daily activities.


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In addition to workplace safety, Wärtsilä upholds stringent product safety standards to protect customers and end-users,

ensuring that safety is embedded throughout the product lifecycle.

In its Code of Conduct, Wärtsilä commits to respecting internationally recognised human rights and standards as outlined

in the International Bill of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, and the UN

Guiding Principles on Business and Human Rights. Wärtsilä strives to identify, prevent, and mitigate adverse impacts on

human rights within the company’s own activities and business relationships. As outlined in the Code, Wärtsilä does not

tolerate forced labour, child labour, or any form of exploitation within the company’s own activities or business

relationships. Particular attention is given to operations in countries with a high risk of human rights challenges, or working

with vulnerable groups such as migrant workers.

In addition, the Code of Conduct prohibits bullying, harassment, inappropriate treatment and violence. Wärtsilä is

dedicated to ensuring an environment free from discrimination based on race, ethnicity or national origin, colour, gender,

family status, sexual orientation, creed, disability, age, or religious or political beliefs. Any suspected violation of human

rights in the company’s own operations, or in those of the business partners, must be addressed and reported through the

reporting channels.

Wärtsilä monitors compliance with these standards primarily through internal reporting channels, such as the WeCare

reporting system, the whistleblowing channel, stakeholder engagement processes, as well as for health and safety

processes through internal audits and multi-site certifications compliant with ISO management standards.

Employee engagement on health and safety matters is facilitated through open dialogue with management and, in most

Wärtsilä entities, through formal occupational health and safety committees. In cases of work-related injuries or illnesses,

the company ensures access to appropriate medical treatment and insurance coverage, which meets or exceeds the legal

requirements.

3.2.2. Engagement with employees on health and safety (S1-2)

Wärtsilä engages with its workforce and their representatives through structured processes to identify, assess, and manage

actual and potential impacts related to occupational health, safety, and wellbeing. These processes are embedded in the

company’s health and safety management system and are supported by local and global mechanisms for dialogue and

feedback. Wärtsilä’s Board of Management and Business Management teams are responsible for ensuring that employee

engagement mechanisms are in place and effective, with support from the global EHSS team and local EHS managers.

Occupational Health and Safety (OHS) Committees are established in 80% of Wärtsilä entities. These committees,

comprising management and employee representatives, facilitate consultation and communication on health, safety,

environment, and wellbeing topics. Their structure, meeting frequency, and decision-making effectiveness, are adapted to

local operational needs.

Management–employee dialogue is maintained through regular town hall meetings at global, business and local levels,

enabling direct information sharing and feedback. At the European level, the Wärtsilä European Works Council provides a

formal mechanism for dialogue on workplace safety and wellbeing, ensuring representation and engagement across

borders. Consultation and negotiation with national works councils and trade unions are conducted in accordance with

local laws, regulations, and market practices. Team-level safety discussions are encouraged at operational sites to promote

peer-to-peer learning, raise concerns, and share experiences. These discussions complement formal reporting and

committee structures and help strengthen a safety culture at the grassroots level.

Employee perspectives are further captured through the global MyVoice survey, conducted biennially, and pulse surveys,

which provide trend data on engagement, safety, and other workforce-related topics. These tools help identify employee

groups that may be vulnerable to specific impacts. Survey results are reviewed at multiple organisational levels, and action

plans are developed and implemented based on identified themes. Progress is monitored, and effectiveness evaluated

through subsequent survey results and engagement metrics.

Reporting channels, such as the WeCare system, allow employees to report health, safety, and environmental events and

observations. Additionally, ethics and misconduct reporting is available via Wärtsilä’s online platform, ensuring

transparency and accountability. Compliance with safety processes is monitored through internal audits and multi-site

certifications compliant with ISO 9001, ISO 14001, and ISO 45001 standards.

3.2.3. Processes to remediate negative impacts and channels for own

workforce to raise concerns (S1-3)

Wärtsilä has established processes to remediate negative impacts related to occupational health and safety, and to ensure

that all employees have access to trusted channels for raising concerns. All employees have access to WeCare, a global

application for reporting occupational health and safety incidents, near misses, unsafe conditions, and safety observations.

Each report is automatically routed to the responsible line manager for review and investigation. The system ensures timely

follow-up and accountability at the operational level.

In addition to WeCare, Wärtsilä maintains an externally hosted whistleblowing channel for ethics and misconduct reporting.

It is available online, thus allowing employees and external stakeholders to report broader workplace concerns, including

ethical violations, harassment, and discrimination. Reports can be submitted anonymously, and all cases are investigated

confidentially and thoroughly. These channels are introduced during onboarding and promoted through internal

communications to ensure awareness and accessibility.

Wärtsilä is committed to maintaining a safe and open reporting culture. Both WeCare and the ethics reporting channel are

available in multiple languages and are accessible across all Wärtsilä locations. Employees and worker representatives are

protected from retaliation when raising concerns through any official channel. This commitment is embedded in Wärtsilä’s

Code of Conduct, which applies to all employees and business partners, and is reinforced through leadership accountability.

In cases of occupational injury or illness, Wärtsilä ensures that affected employees receive appropriate medical treatment

and insurance coverage. While insurance practices vary by country, they always meet or exceed the minimum legal

requirements. All accidents and hazardous situations are investigated to identify root causes and prevent recurrence, while

also assessing potential gaps in the safety management system.


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To assess the effectiveness and trust in its reporting and remediation processes, Wärtsilä includes relevant questions in the

MyVoice employee engagement survey, conducted biennially. In the latest survey, conducted in 2024, 85% of respondents

agreed with the statement “Safety risks are quickly corrected in my company”, indicating strong confidence in the

company’s responsiveness. Survey results are reviewed at multiple organisational levels, and action plans are developed

based on identified themes.

Reported WeCare cases are consolidated and analysed at regional, business, and global levels by EHS professionals and

responsible management. Insights from these analyses are used to identify systemic issues, improve safety processes, and

inform strategic decision-making. Wärtsilä also conducts internal audits and maintains multi-site certifications aligned with

ISO 9001, ISO 14001, and ISO 45001 standards to ensure compliance and process integrity.

3.2.4. Health and safety actions (S1-4)

Wärtsilä continues to take targeted action to address material health and safety impacts through its four-year strategic

programme Success through Safety, launched in 2023. The programme focuses on employee safety, contractor safety,

product safety, and occupational health, and is overseen by the Board of Management with support from the global EHSS

team, Business Management Teams, and local EHS managers.

To address identified risks, Wärtsilä implemented several initiatives in 2025. These included a global learning event and

refreshed training materials to improve learning and frontline engagement during safety walks and wellbeing talks. The

Safety and Wellbeing Pledge was published and integrated into the Services General Terms and Conditions in 2025. During

the reporting period, it was applied to Marine and Energy Services’ transactional orders and is in the process of being rolled

out for Marine agreements. The pledge has fostered constructive dialogue with customers on health and safety, helping to

identify opportunities to improve working conditions and reduce risk for our personnel. An updated version is planned for

release in 2026 based on feedback received. Implementation of the global framework for frequent traveler health checks

progressed in 2025 through the launch of a global service in six countries where health checkups were not previously

available. Local processes were also improved to support the organization of health checks. Wärtsilä remains committed to

achieving full coverage by 2026. A marine battery safety training programme was developed in response to the growing use

of battery systems on vessels, which introduces new operational risks. The “One Winning Team” safety awareness

programme progressed, with 86% of frontline employees trained by year-end, compared to 35% in 2024. Training sessions

will continue in 2026.

Following an increase in recordable injuries in early 2025, Wärtsilä launched a review of work practices and conditions.

More than 1,000 improvement ideas were submitted by employees, many addressing routine task hazards. These inputs

are being evaluated and integrated into local and global safety improvement plans.

The 11th annual Safety Day, held from 15–19 September 2025, focused on teamwork, collaboration, and belonging under

the theme Safer Together. Activities included town hall sessions with senior leaders, expert-led training, safety walks, and

local workshops. Wellbeing efforts in 2025 focused on mental health and continued implementation of the six wellbeing

elements defined in the global Wellbeing Framework. A key initiative was fostering regular wellbeing talks within teams to

promote psychological safety, strengthen team cohesion, and proactively identify support needs.

Employees and stakeholders are encouraged to report health and safety incidents, improvement ideas, and observations

through Wärtsilä’s reporting portal. All cases are investigated, and corrective actions are taken. Employees are covered by

work-related injury and illness insurance across all operations, with access to compensation and support mechanisms.

Wärtsilä is committed to the Stop Work Authority, as stated in its QEHS Policy. All employees and partners have the

responsibility and authority to stop work when identifying a hazard, which could put the safety of personnel, partners and/

or public in general at stake. Wärtsilä is committed to this Stop Work authority by preventing any retaliation in response to

exercising this authority.

The effectiveness of health and safety actions is tracked through both reactive and proactive indicators. These include

trends in injury frequency and severity, near-miss and hazard observations, and the number of safety walks. Safety

performance is monitored monthly at the business and company level, and results are reviewed by Wärtsilä’s Board of

Management. Companies with OHS committees follow their own performance and take necessary steps to improve

processes locally

Wärtsilä establishes and monitors EHS objectives based on significant environmental aspects, EHS risks and opportunities,

and stakeholder feedback. These objectives are informed by the QEHS Policy, strategy, audit reports, legal and other

requirements, technical and financial options, and operational needs. Action plans are approved by relevant management

teams and updated in response to significant changes in activities, products, services, or operating conditions.

Safety-related investments are embedded in Wärtsilä’s operational and capital planning to support safe and reliable

operations. Dedicated EHS personnel, digital tools, and training programmes are key resource areas supporting these

efforts.

Health and safety governance at Wärtsilä is embedded across all organisational levels. Line managers are accountable for

safety within their operations, supported by local EHS managers who implement policies and monitor performance.

Business Management Teams set QEHS targets and oversee progress, while the global EHSS team and Health & Safety

function provide strategic guidance and tools. The Board of Management holds ultimate responsibility for allocating

resources and setting global safety and wellbeing objectives.

3.2.5. Safety target (S1-5)

Wärtsilä has set a long-term corporate-level safety target of zero injuries for its own employees, aligned with the company’s

Code of Conduct and QEHS Policy. The target reflects a commitment to strengthening the safety culture and is supported by

the Success Through Safety programme. While the target is not fully aligned with ESRS requirements due to the absence of

a measurable baseline and time-bound elements, it remains a key strategic objective guiding our safety initiatives.

The Board of Management oversees the target and its implementation with support from the global EHSS team and local

EHS managers. While employee representatives were not directly involved in setting the corporate-level target, they

contribute to safety planning and performance tracking at the local level through OHS committees.


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Wärtsilä continues to pursue its long-term safety target of zero injuries for its own employees. In 2025, the total recordable

injury frequency (TRIF) was 2.44, an increase from 2.20 in 2024. This development prompted a comprehensive review of

work practices and conditions, with employee-submitted improvement ideas being integrated into updated safety plans.

Wärtsilä remains committed to continuous improvement through targeted training, leadership accountability, and frontline

engagement under the Success Through Safety programme.

Progress is tracked using both reactive and proactive indicators, including total recordable injury frequency and injury

severity, near-miss and hazard observations, and the number of safety walks. Safety performance is monitored monthly at

both the business and company level, and results are reviewed by Wärtsilä’s Board of Management.

Characteristics of Wärtsilä’s employees (S1-6)

S1-6 information has been reported in section 3.1.

3.2.6. Health and safety metrics (S1-14)

Wärtsilä requires all subsidiaries to operate in accordance with the QEHS Policy and EHS Directive, ensuring consistent

management of occupational health and safety throughout the organisation. The safety management system covers legal

compliance, risk mitigation, training, incident handling, emergency preparedness, and continuous improvement. By the end

of 2025, 68 Wärtsilä companies, representing approximately 91% of the total workforce, were operating under a certified

ISO 45001 occupational health and safety management system.


Type of injury and rates of injuries, and number of work-related fatalities	2025	2024
No. of fatalities of own employees, working on Wärtsilä premises, as a result of work- related injuries and work-related ill health	0	0
No. of fatalities of other workers working on Wärtsilä premises, as a result of work- related injuries and work-related ill health	0	0
No. of recordable work-related accidents for own employees	91	81
Rate of recordable work-related accidents for own employees/ million working hours	2.44	2.20

ⓘ Accounting principles:

Number of recordable work-related accidents for own workforce: a work-related injury that results in any of the

following: fatality, days away from work, restricted work or transfer to another job, and medical treatment beyond

first aid. Commuting injuries are not included in the recordable work-related accidents report.

The rate of recordable work-related accidents for employees is expressed as total recordable injuries per million

working hours. Working hours are actual paid working hours.

No measurements of the metrics are validated by an external body other than the assurance provider.

3.3. Skills and career development (ESRS S1)

3.3.1. Policy on skills and career development (S1-1)

Wärtsilä integrates continuous learning and equal growth opportunities into its strategic and ethical frameworks. The

People Strategy emphasises building workforce capabilities through ongoing development and promoting an inclusive

environment that supports engagement and performance. This approach ensures that employees are empowered to

develop and advance within the company.

Complementing this, the Wärtsilä Code of Conduct commits to creating a respectful and inclusive workplace where all

employees are treated fairly and have equal opportunities for growth. It highlights the company’s focus on diversity, merit-

based recruitment, equitable pay practices adapted to different regions, and continuous investment in employee

development.

The Code of Conduct prohibits bullying, harassment, inappropriate treatment and violence. Wärtsilä is dedicated to

ensuring an environment free from discrimination based on race, ethnicity or national origin, colour, gender, family status,

sexual orientation, creed, disability, age, or religious or political beliefs. The alignment of the Code of Conduct with the

internationally recognised human and labour rights instruments, as well as the monitoring of compliance, is described in

the Occupational health and safety policy chapter (S1-1).

Together, these frameworks provide fair and non-discriminatory access to professional growth, supporting talent

attraction, retention, and development as part of Wärtsilä’s long-term workforce planning.

Details on the accessibility and accountability of the implementation of Wärtsilä Code of Conduct is provided in the Policies

on pollution chapter (E2-1). The mechanisms for engagement with employees, including topics such as equal opportunities

and violations of the Code of Conduct, are outlined in chapter 1.5 Interest and views of stakeholders as well as below in

chapters 3.3.2 Wärtsilä’s listening strategy (S1-2) and 3.3.3 Channels to raise concerns (S1-3).


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3.3.2. Wärtsilä’s listening strategy (S1-2)

Wärtsilä’s Code of Conduct calls for ongoing and open dialogue between the company's management and employees. The

aim is to enable employees and line managers to openly discuss any issues the employees might have in relation to, among

other things, their skills and career development. The key topics of employee engagement, along with the channels used

and how the outcomes inform Wärtsilä’s decision-making, are presented in chapter 1.5 Interest and views of stakeholders.

Overall responsibility for employee engagement lies with the Executive Vice President, Human Resources, so as to ensure

that related activities take place and that their outcomes are informed to the Board of Management.

The effectiveness of engagement with the company’s workforce is assessed through the MyVoice employee engagement

survey that is run every second year, and which provides insights through five KPIs (engagement, wellbeing, inclusion,

intent to stay, and overall experience) and 25 driver themes (including for example, communication, collaboration, ethics,

and growth & development). In addition, through the driver themes, leadership is also assessed and given an overall score.

MyVoice was last run in 2024 with a response rate of 88%. The employee engagement score was 82%.

Line managers are responsible for implementing action plans and initiatives together with their teams. The plans should

address concerns and enhance positive outcomes. Additionally, the progress of these initiatives is tracked through yearly

engagement Pulses, ensuring follow-up on measurable improvements, while contributing to a stronger, more motivated

workforce.

3.3.3. Channels to raise concerns (S1-3)

Wärtsilä employees are encouraged to voice their concerns regarding any potential violations of the Code of Conduct and

its underlying policies and instructions. The primary means for reporting suspected misconduct incidents and workplace

concerns, such as discrimination, unfair treatment or barriers to professional growth, is via line management. However,

employees have alternative reporting routes. These include an externally hosted whistleblowing channel, reporting directly

to the compliance function, or by informing Legal Affairs. The whistleblowing channel is available online in multiple

languages and allows for anonymous submissions.

These channels are introduced during onboarding and promoted through internal communications to ensure awareness

and accessibility. The company ensures that employees who report a potential Code of Conduct violation in good faith will

not suffer harassment, retaliation, or adverse employment consequences. All reported incidents are investigated

confidentially and thoroughly, and appropriate corrective actions are taken, as necessary.

No cases of actual discrimination requiring remedial action were reported in 2025.

3.3.4. Action plans and resources to manage skills and career development

(S1-4)

Employee Value Proposition

Wärtsilä’s Employee Value Proposition (EVP), Fuel your power, aims at fostering a sustainable, people-centric work

environment that aligns professional growth with organisational success. With over 3,000 employees hired annually in a

highly competitive talent market, standing out is crucial to establishing Wärtsilä as an employer of choice. Our EVP serves as

a holistic commitment framework, integrating key areas such as performance management, professional growth, and

wellbeing into a clear commitment to both current employees and future talent. The EVP is designed to attract, engage, and

retain top talent, ensuring the long-term success of the organisation. The two main elements of the EVP, Growth and

Impact, are reinforced by fact-based proof points, highlighting the opportunities for personal development and making a

meaningful contribution – critical factors in convincing talent to join and stay with Wärtsilä. The results of the latest MyVoice

employee engagement survey, conducted in 2024, indicated that 81% of all employees wish to stay at Wärtsilä for longer

than three years. This was 14.8 pp above the global external benchmark, and as such is the top scoring item against the

benchmark.

Leading performance and growth

Wärtsilä’s Performance Management drives business success by

▪ setting performance goals that are aligned to the strategic goals of the organisation

▪ reviewing and assessing progress, removing obstacles, and taking action when required

▪ ensuring continuous dialogue and feedback

▪ and developing the knowledge, skills, and abilities of employees.

The Performance and Development Dialogue Process links The Wärtsilä Way and strategic business priorities to the

performance and development of teams and individuals. The process starts at the beginning of the year when the

performance and development goals are set. Through dialogue, the line manager and employee build a common

understanding of how the employee’s work and individual goals contribute to team and business success. Everyone

deserves to have clarity on what is expected of them in their roles i.e., what good performance looks like. The goal setting

dialogue is followed by discussions and feedback throughout the year and ends with a Performance and Development

Review. Well-defined development goals with clear action plans, also referred to as Individual Development Plans, support

all employees in knowing how they can develop their competences, skills, and career.

During the last few years, efforts have been made to improve the quality of Performance Management. The focus has been

on making enhancements to the annual process and building leadership capabilities through impactful leadership

development programmes. Thereto, a concept for addressing under-performance, as well as a Performance Improvement

Plan Process, were set up.

In 2025, further enhancements to the Performance and Development Review were made to promote forward-looking and

growth-focused conversations between line managers and employees. A renewed Performance Evaluation and a new


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Development Focus assessment were introduced. The new, detailed descriptors of the Performance Evaluation explain what

is expected at each performance level and how to achieve it. This provides a clear definition for excellence and offers

guidance for self-reflection and targeted development. Furthermore, it equips line managers to offer coaching and forward-

looking feedback. The new Development Focus assessment brings transparency to professional growth and career

planning, and ensures employees feel supported and know how to advance their careers at Wärtsilä.

This new approach aims at fostering collaboration, nurturing a learning culture, and driving continuous improvement,

ensuring stronger alignment with the company’s strategy, The Wärtsilä Way. In 2026, the focus will be on instilling the

renewed approach and further enabling line managers to lead performance and professional growth effectively within their

teams. Also, new analytics and structured methods to leverage the Development Focus assessment are being developed to

actively support career advancement across the organization. Furthermore, efforts are underway to enhance user

experience by implementing an improved interface to the Performance and Development Form (the online form that

supports the Performance and Development Dialogue process in the HR application).

Building leadership for impact

The Wärtsilä Leadership Model supports the company’s strategic growth by defining the desired leadership behaviour

across three areas, with 15 descriptive leadership qualities in total. It guides leaders on how to collaborate, communicate,

and lead effectively.

An eLearning on the model is available in 12 languages for all Wärtsilä employees and is mandatory for line managers, with

95% of all line managers having completed it. The goal is to strengthen leadership by ensuring leaders understand the

model and know how to apply the desired behaviour in practice.

The model is embedded in key people processes, including the 360-leadership assessment, the Talent Review Process, and

the Performance and Development Dialogue Process. To support our ambition of being an employer of choice, Wärtsilä

continues to enhance its talent management practices.

In 2025, the Talent Review Process covered 1,197 senior leaders and individual contributors. The Talent Review Process

builds leadership continuity and mitigates risk by ensuring that key competences are developed across the organisation

and that Succession Plans for critical roles are in place. In 2025, the Talent Review Process was integrated into the

Performance and Development Dialogue Process to further enable leaders to align the professional growth of such talent

with future business needs.

The key leadership development programmes - Orchestrator, Accelerator and Wärtsilä Leader, are essential for bringing

the desired leadership behaviour to life, thereby supporting the leaders in acquiring the needed competences. In 2025, a

new leadership development programme called ‘Line Manager Essentials’ was introduced. It is a practical training

programme aimed at increasing line manager awareness and ability to utilise Wärtsilä people processes in the best possible

way.

In 2024, Wärtsilä launched the ‘Driving High-Performance Culture Workshops’ to build a performance-driven mindset

among the 2,500 line managers. The programme helps them lead with clarity and strategic alignment, while strengthening

their confidence in conducting Performance and Development Dialogues, setting goals, and giving feedback. By the end of

2025, 1,898 line managers had attended at least one of the three workshops. As of 2025, new line managers are expected

to join the workshops as a part of their induction.

The programme supports Wärtsilä in achieving the company’s long-term goal of 100% Individual Development Plan (IDP)

coverage, which is a key part of the Professional Growth Approach. In 2025, IDP coverage reached 82.1%, up from 57.8% in

2024. This programme also contributes to reducing employee turnover and improving internal career mobility.

In 2025, the promotion rate at Wärtsilä was 7.7%, up from 7.4% in 2024, implying that employees can advance their careers

and develop their competences internally. Overall, this programme is central to one of Wärtsilä’s strategic priorities;

‘Developing high-performance teams that make a difference’.

Building a learning organisation

A learning organisation is a state of being, where everyone commits to learning, unlearning, sharing, and improving.

Wärtsilä aims to become a learning organisation, to stay competitive and innovative, and to inspire its people to make a

difference. The company wants to empower its people to stay curious and develop their competences and skills. Learning is

a continuous process, and the 70-20-10 learning principle supports us in knowing how to learn effectively, learn by doing

(70%), by sharing (20%) and by studying (10%).

In the MyVoice employee engagement survey, the favourability score for the statement ‘I have good opportunities to learn

and develop at this company’ is high. The score has steadily been improving; from 2020 to the latest assessment in 2024 it

grew by 21.3 percentage points (pp). 80% of Wärtsilä employees say that they agree or strongly agree with the statement,

this is 6.9pp above the global external benchmark. Wärtsilä’s work to become a learning organisation clearly gives visible

results and is valued by its employees.

The Wärtsilä Continuous Improvement model is built on values, principles, methods, and results. The mindset of

continuously wanting to improve and find better ways to serve customers is well aligned with Wärtsilä’s aim of becoming a

learning organisation. At the end of 2025, the WCI Foundation learning programme had been completed by 15,823

employees and the WCI Transformation programme by 5,876 employees. Both programmes support the implementation of

the Continuous Improvement Model across Wärtsilä.

Wärtsilä actively continues to build its coaching and mentoring capabilities to foster an open culture where growth and

development are valued, and to deliberately invest in it. Coaching and mentoring provide several benefits to the

organisation, such as supporting people in unlocking their personal potential, building relationships and collaboration

among colleagues, enabling the cross-border transfer of knowledge, fostering leadership and professional growth, as well

as expanding the professional network within the organisation. In 2025, Wärtsilä’s internal coach pool remained at a good

level, with 50 coaches and around 200 pairs having gone through the coaching process to date. In 2025, there were three

formal mentoring programmes, with 158 mentor/mentee pairs. 21 mentees participated in the Catalyst group mentoring

programme where Board of Management members act as mentors.


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In 2025, Wärtsilä began a long-term effort to strengthen its Professional Growth Approach. This includes updating the

Competence Management Framework to better support the development of competences, skills, and careers.

The new framework will be used in people processes such as the Performance and Development Dialogue. With the help of

technology, people can assess their competences and skills, and find impactful ways to grow in line with Wärtsilä’s future

needs. As part of this, Wärtsilä also created a Career Management Framework to help employees explore career options

and guide managers in strategic and forward-looking career conversations. In 2026, the focus will be on putting both

frameworks into action and ensuring strong governance practices for developing strategic competences. Overall, this

approach is key to helping employees grow and stay with Wärtsilä.

Financial resources to support skills and career development are embedded in Wärtsilä’s operational planning, with no

significant capex-related investments. Employees dedicate time for learning and development activities according to the

70-20-10 learning principle. They have access to several learning options, such as digital learning platforms, training events,

programmes, mentoring, and coaching opportunities. Line managers play a key role in facilitating these opportunities and

ensuring that development goals are integrated into the Individual Development Plan that is a part of the annual

Performance and Development Dialogue Process. The allocation and effectiveness of the resources are monitored through

participation rates, feedback, completion of development goals, and the employee engagement surveys. In 2025, Wärtsilä

employees completed an average of 19.8 hours of formal learning. The average amount spent on formal training and

development per employee headcount was 502 euros.

3.3.5. Target for Individual Development Plan (S1-5)

Everyone at Wärtsilä is encouraged to create an Individual Development Plan that includes well-defined development goals

and clear actions plans for the year, focusing on developing competences, skills, and career in line with business strategy

and personal aspirations. Reflecting Wärtsilä’s Code of Conduct commitment to continuous investment in people, the

company’s target is to achieve a long-term goal of 100% Individual Development Plan coverage for the eligible population.

The target was prepared and proposed by the Human Resources Leadership Team based on dialogues with key experts and

approved by the Board of Management in 2024. The target ensures that all employees have an Individual Development

Plan and are empowered to develop and advance within the company. The Individual Development Plan coverage is

followed on an annual basis and in 2025, it increased to 82.1%, compared to 57.8% in the 2024 baseline year.

Characteristics of Wärtsilä’s employees (S1-6)

S1-6 information has been reported in section 3.1.

3.3.6. Skills and career development data (S1-13)


Performance and career development reviews	2025	2024
Coverage of employees (% of total headcount)	95	96
Male (% of male headcount)	95	97
Female (% of female headcount)	94	95


Individual Development Plan coverage for eligible population	2025	2024
Coverage (% of eligible population)	82.1	57.8
Male (% of eligible male population)	82.6	57.7
Female (% of eligible female population)	80.7	58.1


Training hours / employee	2025	2024
All employees	19.8	16.3
Male	20.5	17.0
Female	16.5	13.6


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3.3.7. Remuneration metrics (S1-16)


Remuneration metrics	2025	2024
Gender pay gap	-1.26	-0.23
Annual total remuneration ratio of the highest paid individual (CEO) to the median annual total remuneration for all employees	67.5	43.6

3.3.8. Number of complaints to raise concerns on discrimination, cases of

discrimination including harassment, and fines, penalties and

compensation for damages (S1-17)


Number of complaints to raise concerns on discrimination, cases of discrimination including harassment, and fines, penalties and compensation for damages	2025	2024
Number of incidents of discrimination	0	0
Number of complaints on discrimination filed through channels for people in own workforce to raise concerns	2	1
Number of complaints on discrimination filed to National Contact Points for OECD Multinational Enterprises	0	0
Amount of material fines, penalties, and compensation for damages as result of violations regarding discrimination	0	0

ⓘ Accounting principles:

Performance and Development Dialogue Process starts at the beginning of the year when the performance and

development goals are set. Through dialogue, the line manager and employee build a common understanding of

how the employee’s work and individual goals contribute to team and business success. The performance and

development goals are mutually agreed upon and are documented in the SuccessFactors application (Wärtsilä’s

global HR information system).

The goal setting dialogue is followed by discussions and feedback throughout the year and can be documented in

the SuccessFactors application.

The process concludes at year-end with a structured evaluation. Employees begin by completing a self-assessment

in the SuccessFactors application, reflecting on their performance and development progress over the past year,

and sharing their career aspirations. This is followed by a dialogue between the employee and line manager to

reach alignment on performance outcomes and professional growth goals. As a part of this dialogue, the

performance and development goals are reviewed, and progress made during the past year is discussed.

To finalise the process, the line manager assigns the Performance Evaluation and Development Focus assessments

and reviews them with their own line manager.

Performance and Development Dialogue Process coverage: The process covers the eligible population. Progress

and completion of the process is followed via SuccessFactors. The process completion deadlines for current year

goal setting and previous year goal evaluation are by the end of February each year.

Individual Development Plan: One of the outcomes of the Performance and Development Dialogue Process is the

Individual Development Plan, with well-defined development goals and clear action plans to achieve the

development needs. Everyone is encouraged to create a long-term plan that includes the development of

competences, skills, and career in line with business strategy and one’s own aspirations.

Individual Development Plan (IDP) coverage: As a part of the Performance and Development Dialogue Process,

each employee within the eligible population having joined Wärtsilä before 30 September of the reporting year,

should have an Individual Development Plan. The coverage percentage is calculated by the following formula:

(Employees in the eligible population having completed the process with at least one recorded development goal/

those employees active in the reporting year and having had the form for recording IDP opened for the respective

reporting year) * 100

Eligible population for Performance and Development Dialogue Process and Individual Development Plan: By

default, Wärtsilä's active employees globally participate in the Performance and Development Dialogue Process. The

following employee groups are excluded from the eligible population: Trainees, blue collar workers, new hires after

30 September, employees who do not have access to SuccessFactors, employees on a long leave of absence (if an

employee is on a long leave of absence, the goals are set only when the person returns to work), and employees

who are leaving.

Training hours: Formal training hours are reported in Wärtsilä’s Learning Management System referred to as

WeLearn.

Training costs: The average amount spent on formal training and development per employee is calculated based

on costs from training expenses / headcount of employees. Costs are reported in EURO.

Promotion rate: Promotion is defined as the advancement of employees within an organisation. Often it involves a

higher rank and increased responsibilities, and a higher salary. Technically, promotion results in a Wärtsilä job

grade increase. The promotion rate is the number of employees promoted during a year divided by the average

headcount in the given year.

Gender pay gap is calculated with the following formula: (Average gross hourly pay level of male employees –

average gross hourly pay level of female employees) / (Average gross hourly pay level of male employees) * 100.

Planning for updated gender pay equity metrics incorporating both unadjusted and adjusted gaps is underway for

the 2026 reporting period. These will satisfy the requirements set in the EU Pay Transparency Directive.


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Annual total remuneration ratio of the highest paid individual (CEO) to the median annual total

remuneration for all employees is calculated with the following formula: Annual total remuneration for the

undertaking’s highest paid individual / Median employee annual total remuneration (excluding the highest paid

individual).

Number of complaints to raise concerns on discrimination, cases of discrimination including harassment, and

fines, penalties and compensation for damages: The data source for these figures is Wärtsilä compliance

function’s database.

No measurements of the metrics are validated by an external body other than the assurance provider.

3.4. Occupational health and safety: Value chain workers (ESRS S2)

3.4.1. Policy on value chain workers’ occupational health and safety (S2-1)

Wärtsilä’s approach to the occupational health and safety of suppliers, contractors, and other business partners is

embedded in the company’s Code of Conduct and in the Supplier Requirements. Details on the accessibility and

accountability of the implementation of these frameworks is provided in the chapter Policies on pollution (E2-1).

With its Code of Conduct, Wärtsilä promotes a safe and healthy working environment across its operations by requiring

suppliers and business partners to uphold similar high ethical standards and occupational health and safety principles to

those of Wärtsilä itself. Complementing this, the Supplier Requirements set expectations for suppliers to ensure safe,

hazard-free working conditions and to implement an occupational health and safety management system.

The Code outlines Wärtsilä’s commitment to health, safety and wellbeing. It affirms the belief that all accidents are

preventable by promoting a strong safety culture, continuously enhancing safety performance, and adhering to high

standards in occupational health and safety. The company rigorously follows health, safety, and security requirements, with

proactive identification of potential hazards and systematic reporting of near misses to support effective risk management.

Contractors are empowered to stop work if conditions are unsafe.

Wärtsilä’s Code of Conduct is aligned with internationally recognised human rights frameworks, including the International

Bill of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work,

and the United Nations Guiding Principles on Business and Human Rights. Wärtsilä strives to identify, prevent and mitigate

adverse impacts on human rights within the company’s own activities and business relationships. As outlined in the Code,

Wärtsilä does not tolerate forced labour, child labour, or any form of exploitation within the company’s own activities or

business relationships. Any suspected violation of human rights in the company’s own operations, or in those of the

business partners, must be addressed and reported through the reporting channels.

Wärtsilä monitors compliance with these standards primarily through reporting mechanisms such as the whistleblowing

channel, and supplier assessment and engagement processes. In 2025, no cases of non-respect of the standards, that

involve value chain workers, have been reported.

In line with the Code, the company fosters transparency and engagement with value chain workers by encouraging open

communication and continuous dialogue. Wärtsilä aims to build trust with stakeholders by sharing information that is clear,

accurate, and honest, and by promoting a culture of openness.

3.4.2. Engagement with value chain workers (S2-2)

The key topics of supplier engagement, along with the channels used and how the outcomes assist Wärtsilä’s decision-

making, are presented in chapter 1.5 Interest and views of stakeholders. As detailed in that section, Wärtsilä engages with

its value chain primarily through direct interactions with suppliers and customers. During supplier evaluations, Wärtsilä’s

Supply Management personnel are in close contact with supplier representatives. These interactions include discussions

and assessments that also cover Occupational Health and Safety (OHS) topics, ensuring that such considerations are

integrated into the evaluation process. There is, however, no formal process for direct engagement with value chain

employees.. The roles accountable for sourcing activities within each Business Unit are responsible for ensuring that

engagement mechanisms are in place and effective.

3.4.3. Processes for providing or contributing to remedy (S2-3)

Wärtsilä provides an externally hosted, anonymous whistleblowing channel that is accessible to suppliers, consultants,

contractors, and other individuals with a work connection to the company. The channel is publicly available via Wärtsilä’s

external website in multiple languages and is monitored by the compliance function. While the channel is accessible online,

Wärtsilä recognises that awareness and access among value chain workers may be limited, particularly in workplaces

without internet connectivity or digital infrastructure.

Currently, Wärtsilä does not have a formal non-retaliation policy specifically for value chain workers. However, anonymous

reporting is supported to help mitigate risks of retaliation. Value chain workers have not been involved in the design or

evaluation of the whistleblowing mechanism.

The remedy for realised harm is expected to be delivered by suppliers and contractors in accordance with applicable

legislation and contractual obligations. Wärtsilä requires legal compliance and ethical business conduct as part of its

supplier expectations, as reflected in the Wärtsilä Code of Conduct.

Contracted workers delivering services to Wärtsilä, whether at Wärtsilä’s own sites or customer locations such as shipyards,

power plants, and energy storage facilities, are exposed to similar occupational risks as those of Wärtsilä’s own employees.

Wärtsilä applies its health and safety standards to all workers under its operational control, including contractors. Safety is

continuously developed and monitored in collaboration with contractors, who are encouraged to report safety observations

and improvement ideas. All accidents and hazardous situations involving contractors are investigated to identify root

causes, prevent recurrence, and assess potential gaps in the safety management system. Wärtsilä sets clear expectations

for contractors and partners to adhere to its safety protocols and ethical standards, and promotes a shared responsibility

for maintaining safe working conditions across all operational sites.


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3.4.4. Actions and resources on value chain workers (S2-4)

Wärtsilä continues to take targeted action to address material occupational health and safety impacts on value chain

workers through its Supplier Compliance Assurance (SCA) process. This process ensures that suppliers align with Wärtsilä’s

Supplier Requirements, which include expectations for social accountability, ethical conduct, and occupational health and

safety management.

The Supplier Requirements, publicly available on Wärtsilä’s website and embedded in supplier agreements and purchase

orders, set clear expectations for OHS management. These include:

▪ Supporting and respecting human rights as defined by the UN Universal Declaration of Human Rights and basic

labour rights as defined by the International Labour Organization (ILO).

▪ Maintaining a certified OHS management system (ISO 45001), or equivalent policies and procedures including a valid

and implemented safety plan.

▪ Being fully responsible for employer liabilities.

▪ Providing installation and commissioning instructions for complex equipment, including safety precautions.

▪ Ensuring operational safety equipment is available and functional.

▪ Guaranteeing employee competence for safe task execution and emergency response.

▪ Reporting accidents and near-misses and taking appropriate follow-up actions.

▪ Complying with local OHS legislation and providing evidence of compliance.

To address identified risks, Wärtsilä has strengthened its supplier evaluation practices. Since 2024, the Supplier Assessment

Questionnaire (SAQ) has included specific questions on injury data, near-miss incidents, employee competences, and health

and safety documentation. Category teams conduct periodic evaluations and safety walks at supplier sites to identify

hazards, recognise safe practices, and promote continuous improvement. Personnel conducting supplier visits are required

to observe safety conditions and report concerns through Wärtsilä’s internal channels. In line with Wärtsilä’s Code of

Conduct, they are empowered to intervene or stop work in unsafe situations.

In 2025, Wärtsilä achieved 96% coverage of its Global Direct Procurement spend evaluated and rated through the SCA

process, meeting the annual target. More than 60 specialists across category teams manage supplier evaluations,

supported by EHS experts from Business Units when needed. While OHS assessments are embedded in the broader SCA

process, Wärtsilä does not currently quantify resources allocated specifically to OHS-related activities.

Corrective actions are mandated when risks are identified during supplier visits or audits. These are documented in audit

reports, supplier ratings, or the WeCare system. Wärtsilä’s aim is to ensure proper OHS management in its supplier base by

selecting suppliers that meet its requirements, or by supporting improvements where gaps exist. If a supplier fails to meet

Wärtsilä’s requirements after being given the opportunity to improve, it is excluded from the approved supplier list.

Contracted workers delivering services to Wärtsilä, whether at Wärtsilä’s own sites or customer locations, are subject to

similar safety protocols. Wärtsilä encourages contractors to report safety observations and improvement ideas, and all

incidents are investigated to identify root causes and prevent recurrence.

Wärtsilä acknowledges current limitations in its ability to ensure that remedy processes are available and effective across

the full value chain. In 2025, no actions were taken to provide or enable remedial actions in relation to actual injury or

illness cases outside Wärtsilä-controlled sites. The company does not currently receive systematic information about

injuries or fatalities in its broader supply chain.

3.4.5. Targets on value chain workers (S2-5)

Wärtsilä has set long-term targets to improve occupational health and safety (OHS) outcomes for value chain workers,

aligned with the company’s Code of Conduct and responsible sourcing strategy. OHS is a key component of the Supplier

Compliance Assurance (SCA) process, which Wärtsilä applies to its suppliers. Global Direct Procurement accounts for 34% of

Wärtsilä’s total spend. The company aims to ensure that at least 96% of this spend is covered by suppliers evaluated

through the SCA process. Annual targets are set based on the previous year’s performance to drive continuous

improvement in coverage. In 2025, Wärtsilä achieved this goal, with 96% of Global Direct Procurement spend assessed

through the SCA process. The target-setting process is governed through Wärtsilä’s supply management structure, with

annual proposals for key performance indicators and methodologies. Targets are cascaded across global, regional, and

local teams, and performance is monitored regularly.

In 2024, Wärtsilä launched a sustainability target under the Success Through Safety programme: Zero Injuries to

Contractors: a continuous, long-term commitment to reduce the total recordable injury frequency (TRIF) year-on-year. The

baseline year is 2024, with a TRIF of 5.01, based on 34 total recordable injuries. In 2025, contractor TRIF decreased to 4.05,

with 25 total recordable injuries. This development reflects progress toward the target and supports Wärtsilä’s

commitment to creating and maintaining a safe and healthy work environment for employees, contractors, and partners,

wherever it operates.

Progress against targets is tracked using both reactive and proactive indicators, including contractor TRIF, near-miss and

hazard observations, and supplier evaluation (SCA) coverage. Safety performance is reviewed regularly across operational

levels.

Contractors working at Wärtsilä premises or under Wärtsilä supervision at customer sites, are subject to Wärtsilä’s OHS

management practices. These include incident reporting through the WeCare platform and adherence to safety protocols

during project execution, such as turnkey power plant deliveries.

Value chain workers have not been directly involved in setting or reviewing these targets, nor in identifying improvements

based on performance.


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ⓘ Accounting principles:

The number of recordable work-related accidents for contractors (number of contractor TRI): a work-related

injury to a contractor is one that results in any of the following: fatality, days away from work, restricted work or

transfer to another job, or medical treatment beyond first aid. Commuting injuries are not included as recordable

work-related accidents. Contractor injuries are reported in the WeCare reporting tool by a Wärtsilä representative.

Some contractors have access to the tool, and can report cases by themselves, but it is always Wärtsilä’s

responsibility to ensure reporting in WeCare.

The rate of recordable work-related accidents for contractors (Contractor TRIF) is expressed as the total

recordable contractor injuries per million working hours. Working hours are actual paid working hours. Contractor

hours are collected by local subsidiaries or by project organisation in Energy projects. The contractor TRIF is

reviewed on a yearly basis and is based on the previous year's results.

Contractors are defined as any company or individual not employed by Wärtsilä, who performs work at Wärtsilä

premises or under Wärtsilä supervision at customer locations. This includes production and service workers at

factories, workshops, and warehouses, as well as external personnel engaged in maintenance, engineering, finance,

and project management. Contractors may be hired through labour-hire agencies or provided by Wärtsilä’s

suppliers, and the work agreements can be short-term or long-term.

No measurements of the metrics are validated by an external body other than the assurance provider.


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Five years in figures

Wärtsilä provides certain financial performance measures, which are accounting measures that are not defined by IFRS

Accounting Standards. These alternative performance measures, such as comparable operating result, EBITDA, cash flow

from operating activities, and gearing, are followed and used by management to measure the Group's performance and

financial position. In addition, Wärtsilä's targets of financial performance are linked to, for example, comparable operating

result and gearing. Thus, these alternative performance measures provide useful information to the capital markets. The

alternative performance measures should not be evaluated in isolation from the corresponding Accounting Standards

measures. The alternative performance measure calculation definitions are disclosed in Calculations of financial ratios.


MEUR		2025	2024	2023	2022	2021
Net sales		6,914	6,449	6,015	5,842	4,778
of which outside Finland	%	98.4	98.4	98.3	99.2	98.5
Exports from Finland		2,956	2,466	2,060	1,975	1,845
Personnel on average		18,295	18,110	17,666	17,482	17,461
of which in Finland		4,421	4,187	3,957	3,808	3,687
Order book		8,248	8,366	6,694	5,906	5,859
From the consolidated statement of income
Depreciation, amortisation and impairment		211	131	193	263	162
Share of result of associates and joint ventures		17	12	9	6	3
Comparable operating result		829	694	497	325	357
as a percentage of net sales	%	12.0	10.8	8.3	5.6	7.5
Operating result		833	716	402	-26	314
as a percentage of net sales	%	12.1	11.1	6.7	-0.4	6.6
Operating result before depreciation, amortisation and impairment (EBITDA)		1,045	847	595	237	475
as a percentage of net sales	%	15.1	13.1	9.9	4.1	10.0
Financial income and expenses		-5	-29	-37	-6	-18
Result before taxes		828	687	364	-32	296
as a percentage of net sales	%	12.0	10.7	6.1	-0.5	6.2
Result for the financial period		630	507	269	-58	193
as a percentage of net sales	%	9.1	7.9	4.5	-1.0	4.0


From the consolidated statement of financial position
Non-current assets		2,447	2,581	2,551	2,558	2,539
Current assets		5,823	4,928	4,247	3,997	3,982
Assets held for sale		205	184	5	54	2
Total equity attributable to equity holders of the parent company		2,877	2,525	2,225	2,136	2,315
Non-controlling interests		6	6	8	12	8
Interest-bearing debt		581	766	858	949	973
Non-interest-bearing liabilities		4,606	4,264	3,713	3,489	3,227
Liabilities directly attributable to assets held for sale		403	132		22
Total equity and liabilities		8,474	7,694	6,803	6,608	6,523
From the consolidated statement of cash flows
Cash flow from operating activities		1,598	1,208	822	-62	731
Cash flow from investing activities		-51	-149	-138	-151	-128
Cash flow from financing activities		-494	-323	-308	-289	-580
Gross capital expenditure		150	170	149	161	143
as a percentage of net sales	%	2.2	2.6	2.5	2.8	3.0
Research and development expenditure*		329	296	258	241	196
as a percentage of net sales*	%	4.8	4.6	4.3	4.1	4.1
Dividends paid**		624	259	188	153	142
of which extraordinary dividends**		306	–	–	–	–
Financial ratios
Earnings per share (EPS), basic and diluted	EUR	1.06	0.85	0.44	-0.11	0.33
Dividend per share**	EUR	1.06	0.44	0.32	0.26	0.24
Dividend per earnings**	%	99.7	51.5	73.2	-234.9	73.2
Interest coverage		15.4	12.3	9.2	7.3	15.0
Return on investment (ROI)	%	26.2	23.7	13.9	0.1	9.7
Return on equity (ROE)	%	23.3	21.3	12.3	-2.6	8.6
Return on capital employed (ROCE)	%	65.4	37.1	17.1	-1.1	13.1
Solvency ratio	%	40.5	37.4	37.0	35.3	38.6
Gearing		-0.70	-0.31	0.02	0.23	0.00
Equity per share	EUR	4.89	4.29	3.78	3.62	3.92
Working capital (WCAP)	MEUR	-1,263	-787	-169	179	-100

The financial ratios include assets and liabilities pertaining to assets held for sale.

* Figure in the comparison period 2021 has been restated to reflect a change in the definition of R&D expenditure.

** Based on the dividend proposal of the Board of Directors for 2025.


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Quarterly figures


	10–12/	7–9/	4–6/	1–3/	10–12/	7–9/	4–6/	1–3/	10–12/
MEUR	2025	2025	2025	2025	2024	2024	2024	2024	2023
Order intake
Marine	988	970	1,031	937	918	902	901	916	844
Energy*									868
Energy	758	644	913	625	727	500	473	538
Energy Storage	364	11	50	31	608	53	232	236
Portfolio Business	110	165	196	309	239	348	248	234	144
Total	2,220	1,790	2,190	1,902	2,491	1,803	1,854	1,924	1,856

Order book at the end of the financial period
Marine	3,725	3,660	3,586	3,489	3,409	3,289	3,155	3,008	2,808
Energy*									2,693
Energy	3,009	2,977	2,729	2,454	2,296	2,049	2,143	2,077
Energy Storage	719	573	800	904	1,117	755	977	956
Portfolio Business	796	1,427	1,648	1,686	1,544	1,491	1,332	1,252	1,192
Total	8,248	8,637	8,764	8,533	8,366	7,583	7,607	7,294	6,694

Net sales
Marine	935	870	862	827	847	739	759	708	759
Energy*									720
Energy	723	382	529	415	560	543	404	390
Energy Storage	207	235	125	128	257	261	213	62
Portfolio Business	138	146	204	190	190	175	179	162	165
Total	2,002	1,632	1,719	1,560	1,854	1,718	1,556	1,321	1,644

Share of result of associates and joint ventures	3	5	4	5	3	4	3	2	2
Operating result before depreciation, amortisation and impairment (EBITDA)	314	273	251	207	250	230	205	162	173
as a percentage of net sales	15.7	16.7	14.6	13.3	13.5	13.4	13.2	12.3	10.5
Depreciation, amortisation and impairment	-63	-42	-65	-41	-21	-38	-37	-35	-45


Purchase price allocation amortisation	-3	-3	-4	-5	-5	-5	-5	-5	-5
Comparable operating result	256	195	207	171	209	177	176	132	177
as a percentage of net sales	12.8	11.9	12.0	11.0	11.3	10.3	11.3	10.0	10.8
Items affecting comparability, total	-5	35	-20	-5	20	15	-8	-5	-49
Operating result	251	230	186	165	229	192	168	127	128
as a percentage of net sales	12.5	14.1	10.8	10.6	12.4	11.2	10.8	9.6	7.8
Financial income and expenses		-3		-2	-11	-2	-8	-9	-8
Result before taxes	251	227	186	164	219	190	160	118	120
Income taxes	-63	-45	-49	-41	-58	-47	-43	-32	-24
Result for the financial period	187	182	138	123	161	144	117	86	96
Earnings per share (EPS), basic and diluted, EUR	0.32	0.31	0.23	0.21	0.27	0.24	0.20	0.14	0.16
Gross capital expenditure	40	39	37	34	59	37	39	36	51
Investments in securities and acquisitions									1
Cash flow from operating activities	652	340	416	190	437	296	216	258	389
Working capital (WCAP) at the end of the financial period	-1,263	-1,091	-924	-770	-787	-501	-420	-329	-169

Personnel at the end of the financial period
Marine	11,252	11,188	11,070	10,887	10,794	10,702	10,817	10,657	10,602
Energy*									5,430
Energy	5,227	5,182	5,107	5,115	5,126	5,103	5,088	5,022
Energy Storage	588	599	589	571	543	536	484	438
Portfolio Business	812	1,194	1,986	1,918	1,875	1,830	1,835	1,792	1,774
Total	17,879	18,163	18,753	18,490	18,338	18,171	18,224	17,909	17,807

As of 1 April 2025, reportable segment Energy is separated into reportable segments Energy and Energy Storage. The

segment-related comparison figures for 1–3/2025 and 2024 have been restated to reflect the current organisational

structure.

* Energy-related comparison figures for 2023 have not been restated accordingly, they represent the organisational

structure as it was on 31 March 2025.


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Calculations of financial ratios


Operating result
Net sales + other operating income – expenses +/– result from net position hedges – depreciation, amortisation and impairment +/– share of result of associates and joint ventures

Operating result before depreciation, amortisation and impairment (EBITDA)
Operating result + depreciation, amortisation and impairment

Earnings per share (EPS), basic
Result for the financial period attributable to equity holders of the parent company
Number of shares outstanding, average over the financial period

Earnings per share (EPS), diluted
Result for the financial period attributable to equity holders of the parent company
Number of shares outstanding, average over the financial period + number of potential ordinary shares with dilutive effect

Items affecting comparability
Certain income and expenses are presented as items affecting comparability when they have significant impact on the consolidated statement of income. Items affecting comparability consist of income and expenses, which result from restructuring activities aiming to adjust the capacity of Wärtsilä’s operations. They may also include other income and expenses incurred outside Wärtsilä’s normal course of business, such as impairment charges, acquisition related costs, settlements recorded as a result of legal proceedings with third parties or unforeseen obligations from earlier discontinued businesses.

Comparable operating result
Operating result – items affecting comparability

Gross capital expenditure
Investments in securities and acquisitions + investments in intangible assets and property, plant and equipment

Net interest-bearing debt
Non-current and current lease liabilities + non-current and current other interest-bearing debt – interest-bearing receivables – cash and cash equivalents


Equity per share
Equity attributable to equity holders of the parent company
Number of shares outstanding at the end of the financial period

Solvency ratio
Total equity		x 100
Total equity and liabilities – advances received

Gearing
Interest-bearing liabilities – cash and cash equivalents
Total equity

Order intake
Total amount of orders received during the financial period to be delivered either during the current financial period or thereafter.

Order book
The presentation in value of orders that are placed by customers but not yet delivered. For service agreements, only the expected net sales for the next 24 months are included in the order book.

Working capital (WCAP)
(Inventories + trade receivables + current tax receivables + other non-interest-bearing receivables) – (trade payables + advances received + pension obligations + provisions + current tax liabilities + other non-interest- bearing liabilities – dividend payable)

Return on investment (ROI)
Result before taxes + interest and other financial expenses, 12 months rolling		x 100
Total equity and liabilities - non-interest-bearing liabilities - provisions, average of end of the financial period and end of the corresponding period previous year

Return on equity (ROE)
Result for the financial period, 12 months rolling		x 100
Total equity, average of end of the financial period and end of the corresponding period previous year

Capital employed (CE)
Intangible assets + property, plant and equipment + right-of-use assets + investments in associates and joint ventures + other investments + working capital (WCAP) – current tax receivables + current tax liabilities


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Return on capital employed (ROCE)
Operating result, 12 months rolling		x 100
Capital employed (CE), average of end of the financial period and end of the corresponding period previous year

Interest coverage
Result before taxes + depreciation, amortisation and impairment + interest and other financial expenses
Interest and other financial expenses

Dividend per share
Dividends paid for the financial period
Number of shares outstanding at the end of the financial period

Dividend per earnings
Dividend per share		x 100
Earnings per share (EPS), basic

Effective dividend yield
Dividend per share		x 100
Adjusted share price at the end of the financial period

Price/earnings (P/E)
Adjusted share price at the end of the financial period
Earnings per share (EPS), basic

Price/carrying amount per share (P/BV)
Adjusted share price at the end of the financial period
Equity per share



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Financial

statements


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Consolidated financial statements

Consolidated statement of income


MEUR	2025	2024	Note
Net sales	6,914	6,449	2.1., 2.2.
Other operating income	118	75	2.3.

Materials and services	-3,689	-3,474	2.4.
Employee benefit expenses	-1,620	-1,493	2.5.
Result from net position hedges	-14
Depreciation, amortisation and impairment	-211	-131	3.5.
Other operating expenses	-681	-720	2.3.
Share of result of associates and joint ventures	17	12	6.5.

Operating result	833	716
as a percentage of net sales	12.1	11.1

Financial income	67	44	5.1.
Financial expenses	-72	-73	5.1.

Result before taxes	828	687

Income taxes	-198	-180	2.6.
Result for the financial period	630	507

Attributable to:
equity holders of the parent company	626	503
non-controlling interests	4	4
	630	507

Earnings per share attributable to equity holders of the parent company:
Earnings per share (EPS), basic and diluted, EUR	1.06	0.85	2.7.

The notes are an integral part of these consolidated financial statements.

Consolidated statement of comprehensive income


MEUR	2025	2024	Note
Result for the financial period	630	507

Other comprehensive income:

Items that will not be reclassified to the statement of income
Remeasurements of defined benefit liabilities	11	-9	4.7.
Tax on items that will not be reclassified to the statement of income	-2	2
Total items that will not be reclassified to the statement of income	9	-7

Items that may be reclassified subsequently to the statement of income
Exchange rate differences on translating foreign operations
for equity holders of the parent company	-91	31
transferred to the statement of income	2
for non-controlling interests	-1
Associates and joint ventures, share of other comprehensive income	-3	1
Cash flow hedges
measured at fair value	96	-80	5.5.
transferred to the statement of income	-11	17
Tax on items that may be reclassified to the statement of income
Cash flow hedges
measured at fair value	-16	12
transferred to the statement of income	2	-3
Total items that may be reclassified to the statement of income	-22	-22

Other comprehensive income for the financial period, net of taxes	-14	-29

Total comprehensive income for the financial period	616	478

Total comprehensive income attributable to:
equity holders of the parent company	614	474
non-controlling interests	3	3
	616	478

The notes are an integral part of these consolidated financial statements.


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Consolidated statement of financial position


MEUR	31.12.2025	31.12.2024	Note
Assets
Non-current assets
Goodwill	1,214	1,299	3.1.
Other intangible assets	413	446	3.2.
Property, plant and equipment	338	306	3.3.
Right-of-use assets	220	251	3.4.
Investments in associates and joint ventures	45	41	6.5.
Other investments	13	17	5.2.
Deferred tax assets	156	175	4.6.
Trade receivables	3	6	4.2., 5.2.
Other receivables	45	39	4.3.
Total non-current assets	2,447	2,581

Current assets
Inventories	1,440	1,483	4.1.
Trade receivables	985	1,018	4.2., 5.2.
Current tax receivables	43	32
Contract assets	532	571	4.2.
Other receivables	233	269	4.3.
Cash and cash equivalents	2,590	1,554	5.3., 5.4.
Total current assets	5,823	4,928

Assets held for sale	205	184	6.4.

Total assets	8,474	7,694

Equity and liabilities
Equity
Share capital	336	336	5.5.
Share premium	61	61	5.5.
Translation differences	-248	-156	5.5.
Fair value reserve	48	-23	5.5.
Remeasurements of defined benefit liabilities	-14	-29	4.7.
Retained earnings	2,695	2,337


Total equity attributable to equity holders of the parent company	2,877	2,525
Non-controlling interests	6	6
Total equity	2,884	2,531

Liabilities
Non-current liabilities
Lease liabilities	188	215	3.4., 5.4.
Other interest-bearing debt	315	409	5.2., 5.4., 5.6.
Deferred tax liabilities	63	57	4.6.
Pension obligations	76	82	4.7.
Provisions	141	144	4.5.
Contract liabilities	177	121	4.2.
Other liabilities	26	12	3.4., 4.4.
Total non-current liabilities	985	1,041

Current liabilities
Lease liabilities	41	43	3.4., 5.4.
Other interest-bearing debt	38	99	5.2., 5.4., 5.6.
Provisions	187	207	4.5.
Trade payables	666	793	4.4., 5.2., 5.6.
Current tax liabilities	111	84
Contract liabilities	2,112	1,825	4.2.
Other liabilities	1,048	938	3.4., 4.4.
Total current liabilities	4,202	3,990

Total liabilities	5,187	5,030

Liabilities directly attributable to assets held for sale	403	132	6.4.

Total equity and liabilities	8,474	7,694

The notes are an integral part of these consolidated financial statements.


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Consolidated statement of cash flows


MEUR	2025	2024	Note
Cash flows from operating activities:
Result for the financial period	630	507
Adjustments for:
Depreciation, amortisation and impairment	211	131	3.5.
Financial income and expenses	5	29	5.1.
Gains and losses on sale of intangible assets and property, plant and equipment and other changes	-48	5
Share of result of associates and joint ventures	-17	-12	6.5.
Income taxes	198	180	2.6.
Other non-cash adjustments	11	15
Cash flows before changes in working capital	991	856

Changes in working capital:
Receivables, non-interest-bearing, increase (-) / decrease (+)	-154	19
Inventories, increase (-) / decrease (+)	-120	-71	4.1.
Liabilities, non-interest-bearing, increase (+) / decrease (-)	1,038	552
Changes in working capital	763	501

Cash flows from operating activities before financial items and taxes	1,754	1,357

Financial items and taxes:
Interest income	38	33
Interest expenses	-22	-29
Other financial income and expenses	-7	-25
Income taxes paid	-164	-128
Financial items and paid taxes	-156	-149

Cash flows from operating activities	1,598	1,208

Cash flows from investing activities:
Investments in property, plant and equipment and intangible assets	-150	-170	3.2., 3.3.
Proceeds from sale of property, plant and equipment and intangible assets	4	11	3.2., 3.3.
Proceeds from sale of shares in subsidiaries	93		6.3.


Proceeds from sale of other investments		6
Loan receivables, increase (-) / decrease (+), and other changes		4
Dividends received	1
Cash flows from investing activities	-51	-149

Cash flows after investing activities	1,547	1,059

Cash flows from financing activities:
Repurchase of own shares	-16
Proceeds from non-current debt	61
Repayments and other changes in non-current debt	-274	-124	5.4., 5.6.
Loan receivables, increase (-) / decrease (+)	2	-4
Current loans, increase (+) / decrease (-)	-5	-1
Dividends paid	-263	-194
Cash flows from financing activities	-494	-323

Change in cash and cash equivalents, increase (+) / decrease (-)	1,053	736

Cash and cash equivalents at the beginning of the financial period*	1,557	819
Exchange rate changes	-20	2
Cash and cash equivalents at the end of the financial period*	2,590	1,557

* Cash and cash equivalents include the cash and cash equivalents pertaining to assets held for sale.

The notes are an integral part of these consolidated financial statements.


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Consolidated statement of changes in equity


	Total equity attributable to equity holders of the parent company							Non-controlling interests	Total equity
MEUR	Share capital	Share premium	Translation differences	Fair value reserve	Remeasurements of defined benefit liabilities	Retained earnings	Total
Equity on 1 January 2025	336	61	-156	-23	-29	2,337	2,525	6	2,531
Result for the financial period						626	626	4	630
Other comprehensive income
Translation differences			-94				-94	-1	-95
Translation differences transferred to the statement of income			2				2		2
Cash flow hedges
net change in fair value, net of taxes				80			80		80
transferred to the statement of income, net of taxes				-9			-9		-9
Defined benefit plans					9		9		9
Other changes					6	-6
Other comprehensive income, total			-92	71	15	-6	-12	-1	-14
Total comprehensive income for the financial period			-92	71	15	620	614	3	616
Transactions with equity holders of the parent company and non-controlling interests
Dividends paid						-259	-259	-2	-262
Repurchase of own shares						-16	-16		-16
Share-based payments						15	15		15
Equity on 31 December 2025	336	61	-248	48	-14	2,695	2,877	6	2,884


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	Total equity attributable to equity holders of the parent company							Non-controlling interests	Total equity
MEUR	Share capital	Share premium	Translation differences	Fair value reserve	Remeasurements of defined benefit liabilities	Retained earnings	Total
Equity on 1 January 2024	336	61	-188	31	-4	1,989	2,225	8	2,232
Result for the financial period						503	503	4	507
Other comprehensive income
Translation differences			32				32		32
Cash flow hedges
net change in fair value, net of taxes				-67			-67		-67
transferred to the statement of income, net of taxes				13			13		13
Defined benefit plans					-7		-7		-7
Other changes					-18	18
Other comprehensive income, total			32	-54	-25	18	-29		-29
Total comprehensive income for the financial period			32	-54	-25	521	474	3	478
Transactions with equity holders of the parent company and non-controlling interests
Dividends paid						-188	-188	-6	-194
Share-based payments						15	15		15
Equity on 31 December 2024	336	61	-156	-23	-29	2,337	2,525	6	2,531

Additional information on share capital, share premium, translation differences and fair value reserve is presented in Note 5.5. Equity.

The notes are an integral part of these consolidated financial statements.


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Notes to the consolidated

financial statements

1. Accounting principles and other disclosure requirements

Content in this section:

1.1. Entity information

1.2. Basis of preparation

1.3. New and amended IFRS accounting standards

1.4. Management judgement and use of estimates

Majority of the accounting principles applied to the consolidated financial statements, as well as the most significant

judgements, estimates, and assumptions made by the management, are presented in the relevant notes to provide readers

a better understanding of the financial statements.

1.1. Entity information

Wärtsilä Corporation is a Finnish listed company organised under the laws of Finland and domiciled in Helsinki. The address

of its registered office is Hiililaiturinkuja 2, 00180 Helsinki. Wärtsilä Corporation is the ultimate parent company in the

Wärtsilä Group.

Wärtsilä is a global leader in innovative technologies and lifecycle solutions for the marine and energy markets. By

emphasising sustainable innovation, total efficiency and data analytics, Wärtsilä maximises the environmental and

economic performance of the vessels and power plants of its customers.

In 2025, Wärtsilä’s net sales totalled EUR 6.9 billion with 17,879 employees. The company has operations in over 199

locations in 78 countries around the world. Wärtsilä is listed on Nasdaq Helsinki.

These consolidated financial statements were authorised for release by the Board of Directors of Wärtsilä Corporation on 3

February 2026, after which, in accordance with the Finnish Corporate Act, the shareholders have a right to approve or reject

the financial statements in the Annual General Meeting. The Annual General Meeting also has the possibility to decide upon

changes to the financial statements.


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1.2. Basis of preparation

The consolidated financial statements are prepared in accordance with international accounting standards, which were in

force on 31 December 2025. International accounting standards are defined in EU regulation (EC) No. 1606/2002 and

embodied in Finnish accounting legislation. They refer to IFRS® Accounting Standards, IAS® Standards, SIC®

Interpretations and IFRIC® Interpretations developed by International Accounting Standards Board (IASB). The

consolidated financial statements also comply with the Finnish corporate legislation.

All intragroup transactions, dividend distributions, receivables and liabilities, as well as unrealised margins, are eliminated

in the consolidated financial statements. In the consolidated statements of income and comprehensive income, non-

controlling interests have been separated from the result and the total comprehensive income for the financial period. In

the consolidated statement of financial position, non- controlling interests are shown as a separate item under equity.

Reporting is based on the historical cost convention. Exceptions are the financial assets and liabilities at fair value through

the statement of income, the assets and liabilities arising from pension plans, hedged items under fair value hedging, the

cash- and share-settled share-based payment transactions measured at fair value, and assets held for sale measured at the

lower of the carrying amount and the fair value less costs to sell. The figures are in millions of euros except Note 7.2.

Related party disclosures, which is presented in thousands of euros.

1.3. New and amended IFRS accounting standards

In 2025, the Group has adopted the following amended Accounting Standards issued by IASB.

Lack of Exchangeability amends IAS 21 The Effects of Changes in Foreign Exchange Rates (effective for financial periods

beginning on or after 1 January 2025). The amendment specifies how an entity should assess whether a currency is

exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. If a currency is not

exchangeable into another currency, an entity is required to estimate the spot exchange rate at the measurement date. The

amendments have no impact on the consolidated financial statements.

Other new or amended Accounting Standards already effective do not have a significant impact on the consolidated

financial statements or other disclosures.

In 2026 or later, the Group will adopt the following new or amended Accounting Standards issued by IASB.

Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures (effective for financial periods

beginning on or after 1 January 2026) clarify that a financial asset or liability is recognised or derecognised on the

settlement date, and introduce an option to derecognise financial liabilities settled through electronic payment system at an

earlier date if certain criteria is met. The amendments also clarify how to assess the contractual cash flow characteristics of

certain financial assets, such as ESG-related, and affect disclosure requirements. The amendments are not expected to have

a significant impact on the consolidated financial statements.

New Accounting Standard IFRS 18 Presentation and Disclosure in Financial Statements* (effective for financial periods

beginning on or after 1 January 2027) improves the quality of financial reporting by requiring defined subtotals in the

statement of income and disclosure about management-defined performance measures, as well as adding new principles

for aggregation and disaggregation of information. The standard requires that all income and expenses are classified into

five categories in the statement of income: operating, investing, financing, income taxes, and discontinued operations. In

addition, it is required to use the operating profit subtotal as a starting point for statement of cash flows. The standard

changes the presentation of disclosed information and increases the amount of disclosed information and it has no impact

on recognition or measurement.

The Group is currently assessing the impact of IFRS 18 as it is expected that the standard will have a significant impact on

the presentation of the statement of income. The primary identified areas of changes are the following:

▪ The share of profit from joint ventures and associates will be presented in the investing category instead of the operating

category.

▪ Foreign exchange differences, and income and expenses related to cash and cash equivalents will be presented in the

investing category instead of the financing category.

▪ Foreign exchange rate differences on intragroup loans and cash pooling arrangements are currently presented in the

financing category. The presentation under IFRS 18 is currently being further discussed by the IFRIC, and the

presentation will depend on its final decision.

▪ Foreign exchange rate differences from external derivates will be presented in the operating category, whereas currently

financing-related portion of derivates is included in the financial items and the rest in the operating result.

The assessment may require judgements around aggregation and disaggregation of certain balances, as well as additional

disclosures relating to management-defined performance measures.

Other new or amended Accounting Standards not yet effective are not expected to have a significant impact on the

consolidated financial statements or other disclosures.

* Not yet endorsed for adoption by the European Commission as of 31 December 2025.

1.4. Management judgement and use of estimates

Preparation of the financial statements in accordance with the IFRS Accounting Standards requires management to make

judgements, estimates, and assumptions that affect the valuation of the reported assets and liabilities, as well as other

information, such as contingent assets and liabilities and the recognition of income and expenses in the statement of

income. Although these continuously evaluated judgements,estimates, and assumptions are based on management’s past

experience and best knowledge of current events and actions, as well as expectations of future events, actual results may

differ from the estimates.

For Wärtsilä, the most significant judgements, estimates, and assumptions made by the management relate to the items

listed below, more information can be found in the corresponding note:


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▪ revenue recognition, especially project estimates for long-term projects and agreements (Note 2.2.Revenue

recognition),

▪ uncertain tax positions (Note 2.6. Income taxes),

▪ allocation of goodwill between cash generating units and impairment testing (Note 3.1. Goodwill),

▪ estimating useful lives and assessing indication of impairment (Notes 3.2. Other intangible assets and 3.3. Property,

plant and equipment),

▪ determining the length of lease terms (Note 3.4. Leases),

▪ valuation of inventories (Note 4.1. Inventories),

▪ valuation of trade receivables (Note 4.2. Trade receivables and contract assets and liabilities),

▪ measurement of warranty provisions and recognition of provisions for legal cases (Note 4.5. Provisions),

▪ expected results on tax audits and deferred tax assets from tax losses (Note 4.6. Deferred taxes),

▪ defined pension benefit obligations (Note 4.7. Pension obligations),

▪ accounting for business combinations (Note 6.2. Acquisitions), and

▪ valuation of assets held for sale (Note 6.4. Assets held for sale).


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2. Group financial performance

Content in this section:

2.1. Segment information

2.2. Revenue recognition

2.3. Other operating income and expenses

2.4. Material and services

2.5. Employee benefit expenses

2.6. Income taxes

2.7. Earnings per share

2.1. Segment information

Wärtsilä’s reportable segments are Wärtsilä Marine, Wärtsilä Energy and Wärtsilä Energy Storage. Furthermore, Wärtsilä

reports Wärtsilä Portfolio Business as other business activities. The segments and other business activities cover both

equipment sales and services for the respective business. In Wärtsilä, the operating segments are also reportable

segments.

Until 31 March 2025, Wärtsilä was organised into two operating segments, which were Marine and Energy. As of 1 April

2025, the reporting segment Energy has been separated into two independent operating and reportable segments: Energy,

focusing on the power plants business and related lifecycle business, and Energy Storage, focusing on the battery storage

business and related lifecycle business. The segment-related comparison figures for 2024 and 1‒3/2025 have been restated

to reflect the current organisational structure.

Wärtsilä's highest operative decision maker (CODM, Chief Operating Decision Maker) is the President and CEO, with the

support of the Board of Management, and in some cases the Board of Directors.

Marine, Energy, Energy Storage and Portfolio Business are each led by their President. Discrete financial information on

each business is provided to the CODM to support decision-making. The segment information presented by Wärtsilä

reflects internal management reporting. Segment information is reported to the level of operating result, as items below

operating result are not allocated to the businesses.

Internal sales between segments and other business activities are not reported in management reporting, but revenue and

costs of sales are booked directly to the respective customer projects and orders. In the beginning of 2025, management

has reviewed allocation principles of indirect and administration costs to the segments and other business activities. Order

intake has been included in the allocation principles, so as of 1 January 2025, the main factors affecting the allocation of

indirect and administration costs to the segments and other business activities are net sales, order intake, and the number

of personnel. The change in the allocation principles does not have a significant impact on segment reporting. Management


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considers these allocation principles to be the most suitable means for reflecting the costs carried by each segment and

other business activities. The allocation principles are reviewed regularly.

Wärtsilä Marine

Wärtsilä’s marine customer base covers all the main vessel segments, including traditional merchant vessels, gas carriers,

cruise & ferry, navy, and special vessels. In the oil & gas industry, Wärtsilä is active in serving offshore installations and

related industry vessels, as well as land-based gas installations. Wärtsilä’s customers comprise ship owners, shipyards, and

ship management companies.

Marine has seven business units: Power Supply, Propulsion, Parts and Field Service, Performance Services, Voyage Services,

Project Services and Shaft Line Solutions. The Marine setup has been specifically designed to support its customers

throughout the entire lifecycle of their vessels: from designing, developing, and delivering high quality products and

solutions that ensure superior performance and that are capable of meeting evolving environmental requirements, to

assisting customers with a wide service network supplying spare parts, competent field service personnel, and product and

solution upgrades, as well as reducing operational risk.

Marine focuses on Wärtsilä’s comprehensive range of engine and propulsion solutions. Its offering, which includes engines,

generating sets, gearboxes, propulsion equipment, as well as LNG fuel handling, power management, and NOx reduction

technologies, positions Marine as a leading partner for its customers in the decarbonisation of the maritime industry,

particularly through fuel flexibility and hybrid solutions.

Wärtsilä Energy

Wärtsilä Energy is at the forefront of the transition towards a 100% renewable energy future. Wärtsilä helps customers and

the power sector to accelerate their decarbonisation journeys through companies market-leading technologies and power

system expertise. Wärtsilä’s solutions include flexible engine power plants and services for the whole lifecycle of

installations. Wärtsilä´s engines are future-proof and can run on sustainable fuels.

Wärtsilä Energy’s main customer segments are utilities, independent power producers, data centers, and industrial

customers. Solutions are used for a wide variety of applications: balancing engine power plants to support greater

integration of intermittent renewables, such as wind and solar, as well as baseload power generation.

Wärtsilä Energy Storage

Wärtsilä Energy Storage is driving the transition to a 100% renewable energy future. Wärtsilä´s comprehensive solutions

include advanced energy storage hardware, intelligent controls and optimisation software, and end-to-end lifecycle

services. With deep expertise in power systems, Wärtsilä is helping customers and the broader energy sector accelerate

global decarbonisation efforts.

Wärtsilä Energy Storage delivers flexible solutions tailored to customer needs—from modular, high-density systems for

precise capacity to scalable, grid-scale deployments supporting critical energy infrastructure. Advanced software responds

in real time to grid fluctuations and market dynamics, driving intelligent control and performance at every level. Seamlessly

integrated with critical energy systems, Wärtsilä’s technologies enhance visibility, optimise assets, and deliver proven

reliability, flexibility, and safety worldwide.

Wärtsilä Portfolio Business

Wärtsilä reports Portfolio Business as other business activities. Portfolio Business consists of Gas Solutions and Water &

Waste, and both business units have been classified as assets held for sale since the last quarter of 2025. The business units

are run independently to accelerate performance improvement and unlock value through divestments or other strategic

alternatives.

Portfolio Business also included business units Automation, Navigation and Control Systems until it was divested on 1 July

2025 and Marine Electrical Systems until it was divested on 31 October 2025.

2025


MEUR	Marine	Energy	Energy Storage	Portfolio Business	Total
Net sales	3,494	2,048	694	677	6,914
Depreciation and amortisation	-108	-32	-16	-8	-163
Impairment	-12	-4	-2	-30	-48
Share of result of associates and joint ventures	17				17
Operating result	449	315	23	46	833
as a percentage of net sales (%)	12.9	15.4	3.3	6.8	12.1
Items affecting comparability	6		-1	-1	4
Comparable operating result	443	315	24	47	829
as a percentage of net sales (%)	12.7	15.4	3.4	6.9	12.0

2024


MEUR	Marine	Energy	Energy Storage	Portfolio Business	Total
Net sales	3,053	1,897	794	706	6,449
Depreciation and amortisation	-101	-29	-8	-14	-151
Impairment	-1			20	19
Share of result of associates and joint ventures	12				12
Operating result	364	267	33	52	716
as a percentage of net sales (%)	11.9	14.1	4.1	7.4	11.1
Items affecting comparability	4	-1		20	23


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Comparable operating result	360	269	33	32	694
as a percentage of net sales (%)	11.8	14.2	4.2	4.5	10.8

Alternative performance measures

Wärtsilä provides certain financial performance measures, which are not defined by Accounting Standards. These

alternative performance measures are followed and used by management to measure the Group's performance and

financial position, and also to provide useful information to the capital markets. The alternative performance measures

should not be evaluated in isolation from the corresponding Accounting Standards measures. The alternative performance

measure calculation definitions are disclosed in Calculations of financial ratios.

Wärtsilä discloses certain comparable performance measures to enhance comparability between periods. Certain income

and expenses are presented as items affecting comparability when they have significant impact on the consolidated

statement of income. Items affecting comparability consist of income and expenses, which result from restructuring

activities aiming to adjust the capacity of Wärtsilä’s operations. They may also include other income and expenses incurred

outside Wärtsilä’s normal course of business, such as impairment charges, acquisition related costs, settlements recognised

as a result of legal proceedings with third parties or unforeseen obligations from earlier discontinued businesses.

The reconciliation of the comparable operating result to the operating result is presented in the following table.

Measures of profit and items affecting comparability


MEUR	2025	2024
Comparable operating result	829	694

Items affecting comparability:
Social plan costs	-3	35
Impairment and write-downs	-35	19
Gains and losses on disposal of assets	46	2
Other costs	-5	-35
Items affecting comparability, total	4	23

Operating result	833	716

Items affecting comparability include EUR 31 million of capital gains related to the divestment of business unit Automation,

Navigation and Control Systems, EUR 20 million of impairment related to classifying business unit Gas Solutions as assets

held for sale, and EUR 10 million of impairment related to the divestment of business unit Marine Electrical Systems.

Related to the restructuring of engine manufacturing in Europe, items affecting comparability include EUR 15 million of

capital gains, EUR 11 million of other costs, and EUR 4 million of impairment.

In addition, items affecting comparability include EUR 4 million of other income and other costs.

Entity wide information

In addition to segment information, Wärtsilä reports the service net sales for all segments and for other business activities.

Wärtsilä continues to report information on the geographical areas Finland, other European countries, Asia, the Americas,

and other. In the geographical information provided, net sales are split by customer destination and non-current assets by

origin. Non-current assets consist of goodwill, intangible assets, property, plant and equipment, right-of-use assets, and

investments in associates and joint ventures.

Geographical information

During the financial period 1 January - 31 December 2025 and 1 January - 31 December 2024 Wärtsilä did not have any

individual significant customers. Of the total net sales, sales to the USA represented 17% (19) and sales to China 12% (9).


MEUR	2025	2024
Net sales
Finland	113	100
Other European countries	1,807	1,998
Asia	2,086	1,698
The Americas	1,798	1,835
Other	1,110	818
Total	6,914	6,449

Non-current assets
Finland	670	641
Other European countries	1,186	1,302
Asia	112	119
The Americas	257	277
Other	5	4
Total	2,230	2,343


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Service net sales


MEUR	2025	2024
Net sales
Marine, service	2,222	2,050
Energy, service	1,188	1,158
Energy Storage, service	23	15
Portfolio Business, service	142	198
Total	3,575	3,422

2.2. Revenue recognition

ⓘ Accounting principles

Principles of revenue recognition

Revenue is recognised when control of the goods or services is transferred to the customer at an amount that

reflects the consideration to which the Group expects to be entitled in exchange for those goods and services. The

Group recognises revenue when it satisfies an identified performance obligation by transferring promised goods

and services to the customer. The control is transferred either at a point in time or over time. Revenue recognised

by the end of the reporting period corresponds to the benefit of the service provided by Wärtsilä to the customer.

Revenue is presented net of indirect sales taxes, liquidated damages, and discounts.

Methods of revenue recognition

Revenue can be recognised over time or at a point in time, depending on the nature of the contractual

arrangement. For contracts where revenue is recognised over time, the input method is generally used, measuring

progress based on costs incurred when the outcome of the contract can be reliably estimated. If the outcome

cannot be reliably measured, costs are expensed as incurred, and revenue is recognised only to the extent that

corresponds the actual costs. Any losses associated with the contract are expensed immediately. For contracts

where revenue is recognised at a point in time, the recognition typically occurs when control is transferred to the

customer, which is generally aligned with the transfer of risks and rewards as specified by the delivery terms.

Performance obligations

A performance obligation is a distinct promise within a contract to transfer goods or services to a customer. The

Group reviews each contract to identify all performance obligations. Typically, most contracts contain a single

performance obligation, such as the delivery of a specified product or service. However, if a contract includes

several units of delivery or installations, multiple performance obligations may be identified. Each performance

obligation is accounted for separately and revenue is allocated accordingly, ensuring that the timing and amount of

revenue recognised reflects the transfer of control over each promised good or service.

Variable consideration and transaction price

Transaction prices may include variable considerations such as liquidated damages, performance bonuses, and

discounts. Long-term agreements often feature variable fees based on operational metrics, such as power plant

running hours or megawatts produced in Energy or vessel running hours in Marine. These estimated fees are based

on customer future load plans or other parameters such as historical demand trends and are included in revenue

only if it is highly probable that they will not be reversed. Transaction price including variable components are

reassessed at the end of each reporting period.

Payment terms

Specific payment terms can vary depending on the nature of the contract, project size, and region. Wärtsilä often

requires advance payments or issues invoices based on milestones which may be structured around key project

milestones. Most common payment terms for invoices may vary between 20 days to 90 days from the invoice date,

unless otherwise specified in the contract. Advances received or contract assets do not include a financing

component, as payment schedules align with the satisfaction of the performance obligations.

Revenue streams

Wärtsilä operates in marine and energy markets, deriving revenue from contracts with customers from four

revenue types: products, goods and services, projects, and long-term agreements. All revenue types are

represented across the Group’s reportable segments and other business activities: Marine, Energy, Energy Storage,

and Portfolio Business.

▪ Product sales: Revenue from spare parts and standard equipment is recognised at a point in time when the

control of the product has transferred to the customer, typically upon delivery.

▪ Goods and services: Revenue from short-term field service jobs, including combined service and equipment

delivery, is recognised when the service is rendered and costs are reliably measured.

▪ Projects: Depending on contract terms and duration, revenue is recognised either at a point in time or over

time.

Revenue from tailor-made equipment delivery projects is recognised at a point in time when the control of the

equipment is transferred, in general upon delivery. Tailor-made equipment sales are mainly in Marine, for

example, engine, propulsion and scrubber system sales.

Long-term projects are typically large-scale projects, such as energy power plants in Energy, energy storages or

gas solution construction contracts in Portfolio Business, or equipment which requires engineering. The revenue

is recognised over time as the asset produced does not have alternative use and the Group has an enforceable

right to payment. The progress is measured by using the cost-to-cost method, where sales and profits are

recognised after considering the ratio of accumulated costs to estimated total costs to complete the

performance obligation.

Service-related projects, such as modernisation and upgrade projects, are recognised over time as the customer

typically controls the enhanced asset.


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▪ Long-term agreements: Long-term operating and maintenance agreements are recognised over time as the

customer simultaneously receives and consumes the service. Progress is measured by the proportion of actual

service costs to total estimated costs.

Warranties

Contracts with customers often include warranties in line with Wärtsilä´s General terms and conditions, which are

considered as part of the promise to the customer. Typically, the standard warranty period is one year to three

years from the delivery onwards.

Contract costs

The Group applies the IFRS 15.94 practical expedient, expensing incremental contract acquisition costs when the

amortisation period is one year or less. Wärtsilä has not incurred any costs for obtaining a contract to be recognised

as an asset.

Information on contract assets and liabilities is available in Note 4.2. Trade receivables and contract assets and

liabilities.

ⓘ Accounting estimates and judgements

Revenue from certain projects and long-term agreements is recognised over time according to the input method

when the profit on the project or agreement can be reliably determined. The progress and the profitability are

based on management’s estimates, which require significant judgement concerning the stage of completion, the

cost to complete, and the time of completion. These estimates are reviewed regularly. Revenue and costs

recognised are adjusted during the project when assumptions concerning the outcome of the entire project are

updated. Changes in assumptions relate to changes in the project’s or agreement’s schedule, the scope of supply,

technology, costs, and any other relevant factors.

Establishing whether distinct goods or services are considered as separate performance obligations requires

judgement and might impact the timing and amount of revenue recognition.

Project business contracts usually involve elements of variable consideration. At the end of each reporting period,

management reassesses the transaction price, which requires significant judgement as it affects the timing of the

revenue recognition. The valuation of accounts receivables also includes estimates mainly concerning the

recoverability of receivables.

Determining whether different contracts with the same customer are accounted for as one contract involves the use

of judgement, as it requires an assessment of whether the contracts are negotiated together or linked in any other

way. The timing and amount of revenue recognition can vary depending on whether two contracts are accounted

for separately, or as one single arrangement.

Net sales by revenue type and timing of satisfying performance obligations

2025


MEUR	Marine	Energy	Energy Storage	Portfolio Business	Total
At a point in time
Products	1,056	519	3	84	1,662
Goods and services	561	130		57	748
Projects	1,439	682	1	75	2,196
Total	3,056	1,330	4	217	4,607

Over time
Projects	95	302	671	454	1,522
Long-term agreements	343	416	19	6	785
Total	438	718	690	460	2,307

Total	3,494	2,048	694	677	6,914

2024


MEUR	Marine	Energy	Energy Storage	Portfolio Business	Total
At a point in time
Products	1,005	489	1	122	1,616
Goods and services	528	109		92	730
Projects	1,171	485	6	100	1,762
Total	2,703	1,083	7	314	4,107

Over time
Projects	63	380	773	380	1,597
Long-term agreements	286	433	13	11	744
Total	349	814	787	391	2,341

Total	3,053	1,897	794	706	6,449

The segment related comparison figures for 2024 have been restated to reflect the current organisational structure.


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2.3. Other operating income and expenses

ⓘ Accounting principles

Other operating income and expenses do not directly relate to the operating activities.

Other operating income includes, for example, gains from the sale of assets and regular incomes, such as rental

income, and gains relating to business combinations, which have not been derived from primary activities. Other

operating income includes also grants. Governmental and other grants are recognised in the statement of income

on a systematic basis in the same periods in which the expenses are incurred.

Other operating expenses include, for example, travel costs, legal and consultancy costs, rental costs, voluntary

personnel related costs, and administrative costs. Also, expenses related to short-term lease contracts and lease

contracts of low-value assets are recognised in other operating expenses. In addition, losses related to the sale of

assets, as well as losses arising from modifications and terminations of lease agreements, are recognised in other

operating expenses.

Other operating income


MEUR	2025	2024
Capital gains	48	7
Government grants	17	20
Sale of scrapped material	1	2
Sale of by-products	1	2
Rental income	2	2
Insurance indemnities	3	3
Gains on derivatives not included in hedge accounting and ineffective hedging*	23	11
Other**	22	28
Total	118	75

* The portion of ineffective hedging is EUR 1 million (2).

** In 2025 and 2024, other does not include any significant single items.

Other operating expenses


MEUR	2025	2024
Travel costs	192	180
Rental costs	37	45
Legal and consultancy costs	98	109
Information technology costs	102	87
Other personnel related costs	73	73


Administrative costs	44	43
Temporary labour	38	43
Losses on derivatives not included in hedge accounting and ineffective hedging*	15	17
Other**	82	123
Total	681	720

* The portion of ineffective hedging is EUR 2 million (2).

** In 2024, other included loss on sales of fixed assets of EUR 12 million.

2.4. Materials and services

ⓘ Accounting principles

Materials and services expenses relate to purchases of goods and consumables from suppliers for manufacturing

less discounts and tax refunds related to purchases. Exchange gains or losses on accounts payable are included.


MEUR	2025	2024
Purchases during the financial period	-2,539	-2,215
Change in inventories	41	-46
Change in inventories of finished goods & work in progress	33	17
Work performed by the Group and capitalised	41	27
External services	-1,265	-1,257
Total	-3,689	-3,474

2.5. Employee benefit expenses

ⓘ Accounting principles

Employee benefits are all forms of consideration given in exchange for services rendered by employees or for the

termination of employment. In addition, the Group has personnel expenses related to share-based payments and

other personnel expenses.

The measurement of the share-based long-term incentive schemes is dependent on the terms of the respective

scheme. Incentive rights, which are settled in company’s shares, are measured at fair value on grant date. Incentive

rights, which are settled in cash, are measured at fair value at the end of each reporting period, and the change is

recognised in the statement of income.

Fair value on grant date is determined based on Wärtsilä’s share price on grant date, reduced by the discounted

value of expected dividends during the vesting period according to the consensus estimates available at the time.


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After the grant date, fair values of equity-settled rights are not remeasured, whereas fair value of the liability for

cash-settled payments is remeasured at the end of each reporting period and at the date of payment.

Market based vesting conditions, such as share price development, are considered when determining the fair value

of the incentive right. Non-market vesting conditions, such as Economic Value Added, or service time required are

considered when estimating the number of shares to vest. Estimates of the number of shares to vest are revised at

the end of each reporting period and the change is recognised through the statement of income.

Cost of the share-based long-term incentive schemes is recognised in the statement of income as employee benefit

expenses over the service period required in the scheme. For incentive rights settled in company’s shares, the

expense is recognised against equity, and for incentive rights settled in cash, the expense is recognised against

liabilities.

When company is obliged to withhold and settle in cash employee’s tax obligation associated with the shares vested

to tax authority, the portion is accounted in the same manner as the portion which is settled in shares.

The Group companies have various pension and other post-employment benefit plans in accordance with local

conditions and practices worldwide. These plans are classified either as defined contribution plans or defined

benefit plans.

In defined contribution plans, the Group pays fixed contributions into a separate entity, such as an insurance

company. The Group has no legal or constructive obligation to pay further contributions if the fund does not hold

sufficient assets to pay employee benefits. The contributions are recognised in the statement of income as

employee benefit expenses in the period to which they relate.

Accounting principles for defined benefit plans are presented in Note 4.7. Pension obligations.


MEUR	2025	2024
Wages and salaries	1,343	1,271
Pension costs
Defined benefit plans	9	9
Defined contribution plans	107	97
Other compulsory personnel costs	161	116
Total	1,620	1,493

Management remuneration is specified in Note 7.2. Related party disclosures.

Long-term incentive schemes

Wages and salaries include EUR 25 million (20) in expenses arising from share-based long-term incentive schemes. At the

end of 2025, Wärtsilä had five active long-term incentive schemes.

The long-term incentive scheme for period 2023-2025 is a performance share plan. The participants are granted company

shares if the pre-determined minimum level in company’s Economic Value Added (85% weight) and sustainability targets

(15% weight) are reached, as well as employment requirement for the period is met. The number of shares depends on the

level of achievement and is capped to 175% of the target level. There is also a cap set to the pay-out in relation to

individuals’ base pay at grant date. On target level, the scheme would entitle the participants to a total reward of 1,560,615

shares. In certain countries the equivalent reward would be settled in cash due to local legislation. The fair value of the

share determined at grant date for accounting of the scheme is EUR 7.82.

The long-term incentive scheme for period 2024-2026 is a performance share plan. The participants are granted company

shares if the pre-determined minimum level in company’s Economic Value Added (85% weight) and sustainability targets

(15% weight) are reached, as well as employment requirement for the period is met. The number of shares depends on the

level of achievement and is capped to 175% of the target level. There is also a cap set to the pay-out in relation to

individuals’ base pay at grant date. On target level, the scheme would entitle the participants to a total reward of 1,081,855

shares. In certain countries the equivalent reward would be settled in cash due to local legislation. The fair value of the

share determined at grant date for accounting of the scheme is EUR 13.31.

The long-term incentive scheme for period 2025-2027 is a performance share plan. The participants are granted company

shares if the pre-determined minimum level in company’s Economic Value Added (80% weight) and sustainability targets

(20% weight) are reached, as well as employment requirement for the period is met. The number of shares depends on the

level of achievement and is capped to 175% of the target level. There is also a cap set to the pay-out in relation to

individuals’ base pay at grant date. On target level, the scheme would entitle the participants to a total reward of 972,719

shares. In certain countries the equivalent reward would be settled in cash due to local legislation. The fair value of the

share determined at grant date for accounting of the scheme is EUR 14.86.

Wärtsilä has also two restricted share plans for retention of individually selected key employees in specific situations. The

restricted share plan 2023-2025 entitles participants to a total reward of 607,018 shares. The reward will be payable after

the retention period of three years. If the individual’s employment with Wärtsilä terminates before the payment of the

reward, the individual is not entitled to any reward based on the respective plan. In certain countries the equivalent reward

would be settled in cash due to local legislation. The fair value of the share determined at grant date for accounting of the

plan is EUR 9.32.

The restricted share plan 2024-2026 entitles participants to a total reward of 14,500 shares. The reward will be payable after

the retention period of three years. If the individual’s employment with Wärtsilä terminates before the payment of the

reward, the individual is not entitled to any reward based on the respective plan. In certain countries the equivalent reward

would be settled in cash due to local legislation. The fair value of the share determined at grant date for accounting of the

plan is EUR 14.05.


	2025	2024
Personnel on average, full-time equivalent	18,295	18,110
Personnel at the end of the financial period, full-time equivalent	17,879	18,338


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2.6. Income taxes

ⓘ Accounting principles

The statement of income includes taxes payable based on the Group’s consolidated taxable income for the financial

period in accordance with local tax regulations, tax adjustments for previous financial periods, and changes in

deferred taxes. Tax effects related to transactions recognised through the statement of income and other events

are recognised in the statement of income. Tax effects related to transactions or other events to be presented as

components of other comprehensive income or directly in equity are also recognised, respectively, in other

comprehensive income or directly in equity.

The current income tax charge is calculated according to tax laws enacted, or substantively enacted, at the end of

the reporting period in the countries where the company and its subsidiaries operate and generate taxable income.

ⓘ Accounting estimates and judgements

The Group is subject to income taxes in several jurisdictions and the computation of the Group´s income tax

expense and income tax liabilities require judgement and estimation. Income tax positions are regularly evaluated

by management to identify situations when there might be uncertainty due to tax regulation being subject to

interpretation. Provisions for these uncertain tax positions are recognised when it is considered more likely than not

that the positions will be challenged by the tax authorities. The provision recognised is based on the estimation of

the amount of the final taxes to be paid to the tax authorities.


MEUR	2025	2024
Income taxes
for the financial period	-162	-128
for prior financial periods	-22	-13
Change in deferred tax
origination and reversal of temporary differences	-15	-38
changes in tax rates	-2	-2
Total	-198	-180

Reconciliation of effective tax rate:

Result before taxes	828	687

Tax calculated at the domestic corporate tax rate 20.0%	-166	-137
Effect of changed tax rates	-2	-2
Effect of different tax rates in foreign subsidiaries	-12	-10
Effect of income not subject to tax and non-deductible expenses	6	-5
Effect of share of result of associates and joint ventures	3	2


Utilisation of previously unrecognised tax losses carried forward	7	3
Unrecognised taxes on losses carried forward	-6	-4
Other taxes*	-12	-9
Other temporary differences	4	-5
Income taxes for prior financial periods	-22	-13
Tax charge in the consolidated statement of income	-198	-180

Effective tax rate (%)	23.9	26.2

* Other taxes consist mainly of withholding taxes not utilised and taxes not directly based on taxable income.

Income taxes related to other comprehensive income are presented in Consolidated statement of comprehensive income.

Changes in deferred tax assets and liabilities are presented in Note 4.6. Deferred taxes.

In some countries Wärtsilä is subject to tax audits, which can result in tax reassessment decisions and obligations to pay

additional taxes and related payments.

Wärtsilä is within the scope of the OECD Pillar Two Model Rules since 1 January 2024. Wärtsilä has applied the mandatory

exception to recognising and disclosing information about deferred tax assets and liabilities arising from Pillar Two income

taxes. Wärtsilä has assessed its tax exposure considering Pillar Two Model Rules in jurisdictions where the Group operates.

The Group´s effective tax rate is above 15% in all major locations except for subsidiaries located in United Arab Emirates,

Cyprus, Switzerland and Pakistan. According to the Group, the amount of top-up taxes is not significant and has no

significant current tax impact for year 2025.

2.7. Earnings per share

Earnings per share (EPS) is calculated by dividing the result for the financial period attributable to equity holders of the

parent company by the weighted average number of shares outstanding during the period.

Equity-settled share-based payments

Wärtsilä has long-term incentive schemes, which can be settled in company shares. These contingently issuable ordinary

shares and unvested shares are issuable when certain pre-defined conditions in the incentive programmes are met during

a timeframe set in the incentive programmes’ conditions. If the settlement were to happen at the reporting date, it would

result in issuing 3,367,549 shares (1,883,981). These shares are considered as potential ordinary shares causing dilutive

effect on the EPS.


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MEUR	2025	2024
Result for the financial period attributable to equity holders of the parent company	626	503

Weighted average number of shares outstanding during the period	588,708,902	589,071,715
Weighted average number of dilutive potential ordinary shares during the period
Contingently issuable ordinary shares	2,836,196	1,453,789
Unvested shares	531,353	430,191
Weighted average number of shares outstanding during the period to be used in the calculation of diluted EPS	592,076,451	590,955,696

Earnings per share attributable to equity holders of the parent company:
Earnings per share (EPS), basic and diluted, EUR	1.06	0.85

Additional information on the number of shares is presented in Note 5.5. Equity.


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3. Intangible and tangible assets

Content in this section:

3.1. Goodwill

3.2. Other intangible assets

3.3. Property, plant and equipment

3.4. Leases

3.5. Depreciation, amortisation and impairment

3.1. Goodwill

ⓘ Accounting principles

Goodwill is the difference between the aggregate of the acquisition-date fair value of the consideration transferred,

and the acquirer’s share of the company’s net identifiable assets and liabilities measured at fair value on the

acquisition date. The consideration is measured at fair value, including also the acquirer’s previously held equity

interest.

Goodwill allocation

Goodwill arising from business acquisitions has been allocated to the operating segments and other business

activities, which are also the Group’s cash generating units (CGU) in impairment testing of goodwill. These are

Marine, Energy, Energy Storage, and multiple individually smaller CGUs, which are aggregated to Portfolio Business

for disclosure purposes.

Impairment of goodwill

The carrying amount of goodwill allocated to cash generating units is reviewed annually for signs of possible

impairment, or more frequently should any indication of impairment arise. If any such indication exists, the

recoverable amount of the goodwill is estimated. In order to define a possible impairment, the Group’s assets are

divided into the smallest possible cash generating units, which are mainly independent of other units, and the cash

flows of which are separately identifiable and to a large extent independent of the cash flows of other similar units.

An impairment loss is recognised when the carrying amount of an asset is greater than its recoverable amount. The

recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. The value in use for

goodwill is based on the expected discounted future net cash flows resulting from the asset or cash generating unit.

A pre-tax rate, which reflects the markets’ position on the time value of money and asset-specific risks, is used as

the discount rate.


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An impairment loss is recognised immediately in the statement of income as depreciation, amortisation and

impairment. An impairment loss recognised for goodwill is not reversed under any circumstances.

ⓘ Accounting estimates and judgements

The recoverable amounts of goodwill are determined for all cash generating units annually, or more often if there is

an indication of an impairment, where its value in use is determined. The value in use is determined using estimates

of future cash flows, which are impacted by future market development, such as growth and profitability, as well as

other significant factors. The most important factors underlying such estimates are the net sales growth in the

market area, the operating margin, the useful life of the assets, future investment needs, and the discount rate.

Changes in these assumptions can significantly affect the expected future cash flows.

In 2025, the goodwill allocation between the two new CGUs, Energy and Energy Storage, required an estimation of

the relative fair value of these CGUs. The models, assumptions and other inputs for this estimate were consistent

with those used for the annual goodwill impairment testing.

Goodwill 2025


MEUR	2025
Wärtsilä Group
Wärtsilä on 1 January	1,299
Changes in exchange rates	-36
Reclassification to assets held for sale and impairment	-8
Wärtsilä on 30 June	1,255
Changes in exchange rates	-7
Reclassification to assets held for sale and impairment	-33
Wärtsilä on 31 December	1,214

Goodwill allocation and intermediate impairment testing of goodwill during the second quarter

of 2025

As of 1 April 2025, the reportable segment Energy has been separated into two independent operating and reportable

segments: Energy, focusing on the power plants business and related lifecycle business, and Energy Storage, focusing on

the battery storage business and related lifecycle business.

Due to the new organisational structure, Wärtsilä performed an intermediate impairment testing of goodwill during the

second quarter of 2025 for CGUs Energy and Energy Storage. As a result of the impairment test, no impairment loss was

recognised for the CGUs for the reporting period ended 30 June 2025.

During the second quarter of 2025, goodwill relating to CGU Energy was allocated to CGUs Energy and Energy Storage. The

reallocation of goodwill has been performed using a relative value approach, in which the goodwill is allocated to

businesses based on the fair values of the businesses at the reallocation date.

Reclassification to assets held for sale and impairment performed during the second quarter of 2025 relate to business unit

Marine Electrical Systems, which was divested on 31 October 2025. Reclassification to assets held for sale and impairment

performed during the fourth quarter of 2025 relate to business units Gas Solutions and Water & Waste. All business units

belonged to Portfolio Business.

The total impact of the divestments on the result for the financial period is presented in Note 6.3. Disposals. The total

impact of the reclassification to assets held for sale and testing the disposal group for impairment on the result for the

financial period is presented in Note 6.4. Assets held for sale.


MEUR	Marine	Energy	Energy Storage	Portfolio Business	Total
Wärtsilä on 31 December 2024	735	522		43	1,299
Wärtsilä on 30 June 2025	714	492	15	33	1,255
Wärtsilä on 31 December 2025	710	489	15		1,214

Annual impairment testing of goodwill

The Group performed its annual impairment testing of goodwill during the third quarter of the year. Wärtsilä compared the

recoverable amount of each CGU against its carrying amount to define whether there were any indications of goodwill

impairment.

For Marine, Energy and Energy Storage, the recoverable amounts were defined based on the discounted cash flow method,

derived from the order book and five-year cash flow projections from strategic plans. The estimated cash flows of the CGUs

were based on the utilisation of existing property, plant and equipment in their current condition with normal maintenance

capital expenditure, excluding any potential future acquisitions. Cash flows beyond the five-year period were calculated

using the terminal value method.

Also, for CGUs under Portfolio Business, the recoverable amounts were defined based on the discounted cash flow method.

Cash flows beyond the five-year period were calculated using the terminal value method. The terminal growth rate used in

projections is based on management’s assessment on conservative long-term growth. The terminal growth rate used in the

calculations were:


Terminal growth rate, %	2025
Marine	1.5
Energy	1.5
Energy Storage	2.5
Portfolio Business (average for CGUs)	1.0

The key driver for the valuation is growth in the global economy, and in particular, the development of the global power

market, the global shipbuilding industry, and the demand for any related services. The projected development of total costs


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in the market affects the profitability, whereas no single cost item is considered to have a material impact. The valuation

driver for new equipment sales is growth in the global economy, whereas for after sales the drivers also include the

demand for related services and the projected development in labour costs.

The applied discount rates are the weighted average pre-tax cost of capital (WACC) for each CGU as defined by Wärtsilä. The

components of the WACC rates are risk-free rate, market risk premium, industry specific beta, cost of debt, and debt to

equity ratio. Wärtsilä has used the following WACC rates for each CGU:


WACC rate, %	2025
Marine	9.7
Energy	10.6
Energy Storage	11.4
Portfolio Business (average for CGUs)	14.0

As a result of the impairment test, no impairment loss for the CGUs was recognised for the financial period. The recoverable

amounts of all CGUs exceeded their respective carrying amounts substantially.

Sensitivity analysis

Management has assessed that no reasonable possible changes in the key assumptions (i.e. Terminal growth rate, WACC

rate, change in profitability) for any of the CGUs would cause the carrying amount of any CGU to exceed its recoverable

amount.

In the testing Wärtsilä compared the recoverable amount of each CGU against its carrying amount. Carrying amount equals

total fixed assets plus working capital. Currently Wärtsilä working capital is negative. In Energy Storage and in CGUs under

Portfolio Business the carrying amount of the CGUs were close to zero or even negative. When carrying amount is negative

the recoverable amount will exceed the carrying amount if the estimated cash flows are positive. Any future negative

changes in these factors would have an adverse impact on the valuation of the business. In Energy Storage, CGU’s working

capital would need to increase approximately by EUR 200 million from the time of testing for the recoverable amount to

equal carrying amount, if other assumptions would remain the same. In addition, when CGUs included in Portfolio Business

are classified as assets held for sale in the future, the possible impairment is dependent on the selling price on cash-free

debt-free basis.

Classifying CGUs Gas Solutions and Water & Waste as assets held for sale after annual

impairment test

Since the last quarter of 2025, Wärtsilä has classified business units Gas Solutions and Water & Waste as assets held for

sale. From the date of the classification, non-current assets held for sale are measured at the lower of the carrying amount

and the fair value less costs to sell, and the recognition of depreciation and amortisation is discontinued.

Classifying business unit Gas Solutions as assets held for sale has an impact of EUR -20 million on the result for the financial

period 2025, which has been recognised in the statement of income as depreciation, amortisation and impairment, and it is

considered as an item affecting comparability. In the consolidated statement of financial position, EUR -9 million has been

recognised as asset write-downs, rest as additional provisions and accruals.

There are no other indications of impairment of goodwill after the annual impairment testing.

Goodwill 2024


MEUR	2024
Wärtsilä Group
Wärtsilä on 1 January	1,273
Changes in exchange rates	5
Wärtsilä on 31 March	1,277
Changes in exchange rates	22
Wärtsilä on 31 December	1,299

Goodwill allocation and intermediate impairment testing of goodwill during the first quarter of

2024

As of 1 January 2024, business units Exhaust Treatment and Shaft Line Solutions were transferred from Wärtsilä Marine

Systems to Wärtsilä Marine Power, and business unit Gas Solutions was transferred from Marine Systems to Wärtsilä

Portfolio Business. Consequently, Wärtsilä Marine Systems no longer constituted an organisational unit or a reporting

segment, and the name of Marine Power was changed to Marine.

Due to the new organisational structure, Wärtsilä performed an intermediate impairment testing of goodwill during the

first quarter of 2024 for cash generating unit Marine Systems. As a result of the impairment test, no impairment loss for the

CGU was recognised for the reporting period ended 31 March 2024.

During the first quarter of 2024, goodwill relating to CGU Marine Systems was allocated to CGUs Marine and Gas Solutions

(latter included in Portfolio Business). The reallocation of goodwill has been performed using a relative value approach, in

which the goodwill is allocated to businesses based on the fair values of the businesses at the reallocation date.


MEUR	Marine	Marine Power	Marine Systems	Energy	Portfolio Business	Total
Wärtsilä on 31 December 2023		588	160	511	13	1,273
Wärtsilä on 31 March 2024	723			513	42	1,277
Wärtsilä on 31 December 2024	735			522	43	1,299


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Annual impairment testing of goodwill

The Group performed its annual impairment testing of goodwill during the third quarter of the year. Wärtsilä compared the

recoverable amount of each CGU against its carrying amount to define whether there were any indications of goodwill

impairment.

For Marine and Energy, the recoverable amounts were defined based on the discounted cash flow method, derived from

the order book and five-year cash flow projections from strategic plans. The estimated cash flows of the CGUs were based

on the utilisation of existing property, plant and equipment in their current condition with normal maintenance capital

expenditure, excluding any potential future acquisitions. Cash flows beyond the five-year period were calculated using the

terminal value method.

Also, for CGUs under Portfolio Business, the recoverable amounts were defined based on the discounted cash flow method.

Cash flows beyond the five-year period were calculated using the terminal value method. The terminal growth rate used in

projections is based on management’s assessment on conservative long-term growth. The terminal growth rate used in the

calculations were:


Terminal growth rate, %	2024
Marine	1.5
Energy	2.0
Portfolio Business (average for CGUs)	1.3

The key driver for the valuation is growth in the global economy, and in particular, the development of the global power

market, the global shipbuilding industry, and the demand for any related services. The projected development of total costs

in the market affects the profitability, whereas no single cost item is considered to have a material impact. The valuation

driver for new equipment sales is growth in the global economy, whereas for after sales the drivers also include the

demand for related services and the projected development in labour costs.

The applied discount rates are the weighted average pre-tax cost of capital (WACC) for each CGU as defined by Wärtsilä. The

components of the WACC rates are risk-free rate, market risk premium, industry specific beta, cost of debt, and debt equity

ratio. Wärtsilä has used the following WACC rates for each CGU:


WACC rate, %	2024
Marine	11.0
Energy	10.4
Portfolio Business (average for CGUs)	11.2

As a result of the impairment test, no impairment loss for the CGUs was recognised for the financial period. The recoverable

amounts of CGUs Marine and Energy exceeded their respective carrying amounts substantially. Also, the recoverable

amounts of CGUs included in Portfolio Business exceeded their respective carrying amounts. There are no indications of

impairment of goodwill after the annual impairment testing.

Sensitivity analysis

Management has assessed that no reasonable possible changes in the key assumptions for CGUs Marine or for Energy

would cause the carrying amount of any CGU to exceed its recoverable amount.

A sensitivity analysis has been carried out for Portfolio Business for the valuation of the recoverable amount of each CGU by

changing the assumptions used in the calculation. A change in an assumption that would cause the recoverable amount to

equal the carrying amount in the CGU, which is closest to the break-even point is presented in the following table.


	Change
Portfolio Business
Pre-tax discount rate	increase more than 15 percentage points
Terminal growth rate	decrease more than 19 percentage points
Profitability	decrease more than 53 percentage

The defined recoverable amounts of CGUs within Portfolio Business also exceeded the carrying amounts of the units in the

annual impairment test.

The key assumptions for CGUs within Portfolio Business relate to terminal growth rate of each unit, and to profitability used

for terminal value of each unit. Key assumptions used in the testing for terminal values are the average terminal growth

rate of 1.3% and that the average terminal value profitability of CGUs, that iscomparable operating result as a percentage of

net sales, would amount to 4.6% on average. Any future negative changes in these assumptions would have an adverse

impact on the valuation of the business. In addition, when CGUs included in Portfolio Business would be classified as assets

held for sale in the future, the possible impairment would be dependent on the selling price on cash-free debt-free basis.

In management’s opinion, the changes in the basic assumptions shall not be seen as an indication that these factors are

likely to materialise. The sensitivity analyses are hypothetical and should therefore be treated with caution.

3.2. Other intangible assets

ⓘ Accounting principles

Research and development costs

Research costs are expensed in the reporting period during which they occur. Development costs are capitalised

when it is probable that the development project will generate future economic benefits for the Group and when

the related criteria, including commercial and technological feasibility, have been met. These projects involve the

development of new or significantly improved products or production processes. Earlier expensed development

costs are not capitalised.


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Capitalised development costs are measured at cost less accumulated amortisations and impairment. Capitalised

development costs are amortised and the cost of machinery and equipment for development depreciated on a

straight-line basis over their expected useful lives of 5-10 years. Amortisations are started when the asset is

completed and can be taken into use. Before that, the asset is tested annually for impairment. Grants received for

research and development are reported as other operating income. Grants related to capitalised development costs

are netted with the costs incurred before the capitalisation.

Other intangible assets

Other intangible assets are recognised at cost if the cost is reliably measurable and the future economic benefits for

the Group are probable. Wärtsilä’s other intangible assets include patents, license rights, IT software, intangible

assets recognised in business combinations, such as technologies and customer relations, and other intellectual

property rights that can be transferred to a third party. These are measured at cost, except for intangible assets

identified in connection with acquisitions, which are measured at the fair value at the acquisition date. The cost of

intangible assets comprises the purchase price and all costs that can be directly attributed to preparing an asset for

its intended use.

Other intangible assets are amortised on a straight-line basis over their estimated useful lives. Intangible assets, for

which the time limit for the right of use is agreed, are amortised over the life of the contract. Intangible assets

identified in connection with acquisitions are amortised over their delivery times or estimated useful lives.

The general guidelines for scheduled amortisation are:

▪ Software 3-7 years

▪ Development expenses 5-10 years

▪ Other intangible assets 5-20 years

The amortisation of intangible assets is discontinued when an item is classified as held for sale

A gain or loss arising from the sale of intangible assets is recognised as other operating income or other operating

expenses in the statement of income.

Impairment of assets

The carrying amounts of assets are reviewed annually for signs of possible impairment or more frequently should

any indication of impairment arise. If any such indication exists, the recoverable amount of the asset is estimated

and compared to the carrying amount of the asset. An impairment loss is recognised when the carrying amount of

an asset is greater than its recoverable amount. The recoverable amount is the higher of an asset’s fair value less

costs to sell and its value in use.

An impairment loss is recognised immediately as depreciation, amortisation and impairment in the statement of

income. In connection with the recognition of the impairment loss, the useful life of the amortisable asset is

reassessed. An earlier impairment loss recognised for an asset is reversed if the estimates used to determine the

recoverable amount change. However, any reversal of impairment shall not exceed the asset’s carrying amount if

no impairment loss would have been recognised.

ⓘ Accounting estimates and judgements

Assessing the probability of expected future economic benefits and the useful lives of intangible assets require

management judgement. The estimated useful lives and the residual values are reviewed at least at the end of each

reporting period, and if they differ significantly from previous estimates, the amortisation periods are adjusted

accordingly. Also, assessing any indication of impairment requires management judgement.

2025


MEUR	Development expenses	Construction in progress and advances paid	Other intangible assets	Total
Cost on 1 January 2025	349	201	808	1,359
Changes in exchange rates	-3	-4	-14	-21
Disposals	-18	-13	-10	-42
Additions	9	68	12	89
Decreases and other changes	3	11	-125	-110
Reclassification to assets held for sale	-12			-12
Other reclassifications	98	-132	-10	-44
Cost on 31 December 2025	426	131	661	1,218

Accumulated amortisation and impairment on 1 January 2025	-185	-10	-718	-913
Changes in exchange rates	1		12	12
Disposals	4	1	2	7
Reclassification to assets held for sale	6			6
Accumulated amortisation on decreases and other changes	9	-1	150	158
Amortisation during the financial period	-41		-25	-67
Impairment	-9		-1	-10
Accumulated amortisation and impairment on 31 December 2025	-215	-10	-580	-806

Carrying amount on 31 December 2025	211	121	81	413


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Development costs for internally generated assets capitalised during the financial period amounted to EUR 71 million (79).

The related depreciation amounted to EUR 41 million (26), and the carrying amount was EUR 328 million (318). Internally

generated assets are included in development expenses, as well as in construction in progress as part of them.

Purchase price allocation amortisation amounted to EUR 16 million (19) and the related carrying amount was EUR 25 million (49).

Related to other intangible assets, decreases and other changes includes EUR -52 million, and accumulated amortisation on

decreases and other changes includes EUR 52 million arising from derecognising fully depreciated intangible assets

recognised in business combinations.

During 2025, leasehold improvements have been reclassified from other intangible assets to other tangible assets. As the

result, other reclassifications includes EUR -42 million, and accumulated amortisation on decreases and other changes

includes EUR 23 million. The comparison figures have not been restated accordingly.

2024


MEUR	Development expenses	Construction in progress and advances paid	Other intangible assets	Total
Cost on 1 January 2024	282	209	796	1,287
Changes in exchange rates		1	7	8
Additions	9	92	6	106
Decreases and other changes	-4		-8	-12
Reclassification to assets held for sale	-17	-11	-3	-30
Other reclassifications	78	-90	11
Cost on 31 December 2024	349	201	808	1,359

Accumulated amortisation and impairment on 1 January 2024	-175	-15	-695	-885
Changes in exchange rates			-6	-6
Reclassification to assets held for sale	3	1	1	5
Accumulated amortisation on decreases and other changes	4		7	11
Amortisation during the financial period	-26		-27	-54
Impairment	10	3	1	14
Accumulated amortisation and impairment on 31 December 2024	-185	-10	-718	-913

Carrying amount on 31 December 2024	165	191	91	446

In 2024, an impairment of EUR 17 million was reversed related to other intangible assets in Portfolio Business.

3.3. Property, plant and equipment

ⓘ Accounting principles

Property, plant and equipment acquired by the Group are measured at cost less accumulated depreciation and

impairment losses. The cost of an asset includes costs directly attributed to preparing the asset for its intended use.

Grants received are reported as a reduction in costs. The property, plant and equipment of acquired subsidiaries are

measured at their fair value at the acquisition date. The borrowing costs that are directly attributable to the asset

acquisition, construction or production, and to the completion of the asset for its intended use or sale requiring

necessarily a considerable length of time, will be capitalised in the statement of financial position as part of the cost

of the asset. Other than directly attributable borrowing, costs are expensed in the period in which they are incurred.

Subsequent expenditure is included in the cost of an asset only if the future economic benefits are probable and the

costs are reliably measurable. Expenditure related to regular, extensive inspections and maintenance is treated as

an investment, capitalised and depreciated during its separately estimated useful life. All other expenditure, such as

ordinary maintenance and repairs, is recognised in the statement of income as an expense as incurred.

Depreciation is based on the following estimated useful lives:

▪ Buildings 10-40 years

▪ Machinery and equipment 5-20 years

▪ Other tangible assets 3-10 years

Depreciation is expensed on a straight-line basis over the estimated useful lives of the assets. Land is not

depreciated, as its useful life is considered as infinite. The estimated useful lives and the residual values are

reviewed at least at the end of each reporting period, and if they differ significantly from previous estimates, the

depreciation periods are adjusted accordingly. Depreciation of property, plant and equipment is discontinued when

an item is classified as held for sale.

A gain or loss arising from the sale of property, plant and equipment is recognised as other operating income or

other operating expenses in the statement of income.

Impairment of assets

The carrying amounts of assets are reviewed annually for signs of possible impairment, or more frequently should

any indication of impairment arise. If any such indication exists, the recoverable amount of the asset is estimated

and compared to the carrying amount of the asset. An impairment loss is recognised when the carrying amount of

an asset is greater than its recoverable amount. The recoverable amount is the higher of an asset’s fair value less

costs to sell and its value in use.

An impairment loss is recognised immediately as depreciation, amortisation and impairment in the statement of

income. In connection with the recognition of the impairment loss, the useful life of the depreciable asset is


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reassessed. An earlier impairment loss recognised for an asset is reversed if the estimates used to determine the

recoverable amount change. However, any reversal of impairment shall not exceed the asset’s carrying amount if

no impairment loss would have been recognised.

ⓘ Accounting estimates and judgements

Assessing the probability of expected future economic benefits and useful lives of property, plant and equipment

require management judgement. The estimated useful lives and residual values are reviewed at least at the end of

each reporting period, and if they differ significantly from previous estimates, the depreciation periods are adjusted

accordingly. Also, assessing any indication of impairment requires management judgement.

2025


MEUR	Land and water	Buildings and structures	Machinery and equipment	Construction in progress and advances paid	Other tangible assets	Total
Cost on 1 January 2025	20	193	691	54	32	991
Changes in exchange rates		-3	-10			-13
Acquisitions and disposals		-3	-9			-13
Additions	25	1	18	30	2	76
Decreases		-20	-32		-3	-54
Reclassification to assets held for sale			-1			-1
Other reclassifications		3	31	-29	45	50
Cost on 31 December 2025	44	171	689	55	76	1,036

Accumulated depreciation and impairment on 1 January 2025	-1	-146	-511		-27	-685
Changes in exchange rates		2	8			10
Accumulated depreciation on decreases and disposals		20	36		2	59
Depreciation during the financial period		-7	-39		-3	-49
Impairment		-2	-3			-5
Reclassification to assets held for sale			1			1
Other reclassifications			-4		-24	-28
Accumulated depreciation and impairment on 31 December 2025	-1	-133	-513		-51	-698

Carrying amount on 31 December 2025	44	38	176	55	25	338

During 2025, leasehold improvements have been reclassified from other intangible assets to other tangible assets. As a

result, other reclassifications (cost side) includes EUR 42 million, and other reclassifications (accumulated depreciation and

impairment side) includes EUR -23 million. The comparison figures have not been restated accordingly.

2024


MEUR	Land and water	Buildings and structures	Machinery and equipment	Construction in progress and advances paid	Other tangible assets	Total
Cost on 1 January 2024	22	256	810	57	33	1,177
Changes in exchange rates		1	-1			-1
Additions		2	30	30	2	64
Decreases	-2	-66	-178		-2	-247
Reclassification to assets held for sale		-1	-5			-6
Other reclassifications		2	35	-32		5
Cost on 31 December 2024	20	193	691	54	32	991

Accumulated depreciation and impairment on 1 January 2024	-1	-198	-644		-27	-870
Changes in exchange rates			1			1
Accumulated depreciation on decreases and disposals		56	164		1	221
Depreciation during the financial period		-7	-37		-2	-47
Impairment		3	2			5
Reclassification to assets held for sale			3			4
Other reclassifications					1
Accumulated depreciation and impairment on 31 December 2024	-1	-146	-511		-27	-685

Carrying amount on 31 December 2024	20	47	180	54	5	306

In 2024, an impairment of EUR 3 million was reversed related to property, plant and equipment in Portfolio Business. In

addition, an impairment of EUR 3 million was reversed related to the restructuring of engine manufacturing in Europe.


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3.4. Leases

ⓘ Accounting principles

The Group's capitalised lease agreements consist mainly of land, buildings used as office premises, factories,

workshops, vehicles, and production machinery and equipment. The average lease period for buildings is

approximately eight years, and for machinery and equipment approximately four years. The Group recognises a

right-of-use (ROU) asset and a lease liability at the commencement of the lease. Whether a contract contains a lease

is determined based on whether Wärtsilä has the right to control the use of an identified asset for a period of time.

At the commencement date, a right-of-use asset as defined by IFRS 16 is measured at cost. The cost of the right-of-

use asset shall comprise the amount of the initial measurement of the lease liability, any lease payments made at or

before the commencement date (less any lease incentives received), any initial direct costs incurred by the lessee

and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring

the site on which it is located or restoring the underlying asset to the condition required by the terms and

conditions of the lease, unless those costs are incurred to produce inventories.

The nominal lease liability is initially measured at the present value of the lease payments over the lease term. The

lease payments include fixed payments, amounts to be expected to be paid under residual value guarantees, the

exercise price of reasonably certain extension options, and payments of penalties for terminating a lease in case

this reflects the lease term. The lease payments are discounted using the interest rate implicit in the lease if this rate

can be readily determined. Otherwise, the lessee´s incremental borrowing rate is used. The incremental borrowing

rates used are the sum of relevant interbank rates and the average margin of the Group loan portfolio and are

currency specific.

The initial measurement of the lease payments does not include possible variable elements. Variable lease

payments not included in the initial measurement of the lease liability are recognised directly in the statement of

income as other operating expenses.

The lease term is the non-cancellable period of the lease together with the period covered by an option to extend or

terminate if the lessee is reasonably certain to exercise the option.

Subsequently, the right-of-use assets are measured at initial measurement less accumulated depreciation and

impairment losses. The right-of-use assets are depreciated and interest on lease liabilities recognised in interest

expenses in the statement of income over the lease term. The lease liabilities are subsequently measured at initial

recognition less occurring lease payments that are allocated to the principal.

Lease payments are presented as repayments of liabilities and related interest expenses. The lease payments are

presented in the cash flow from financing activities, and the interest related to leases are presented in the cash flow

from operating activities. Lease payments related to short-term leases, low-value assets, and variable payments are

presented in the cash flow from operating activities.

Contracts may combine different kinds of obligations to the supplier, which might be a combination of lease

components or a combination of lease and non-lease components. These lease and non-lease components are

accounted for separately and the consideration is allocated between the components based on relative stand-alone

selling prices. The selection of separating the non-lease component or not from the lease, is applied to the whole

asset class, buildings, and machinery and equipment.

Modifications to lease agreements may result in adjustments to existing right-of-use assets and lease liabilities. A

gain or loss arising from a modification or a termination of a lease agreement is recognised as other operating

income or other operating expenses in the statement of income.

In a sale-and-leaseback transaction, the seller-lessee sells the asset to the buyer-lessor and leases that asset back.

The underlying asset is derecognised, and the right-of-use asset retained is measured through the leaseback of the

item as a proportion of its carrying amount. Only the amount of gain or loss related to the rights transferred are

recognised in the statement of income in such a transaction. The same accounting policies described above apply to

the lease liabilities recognised in a sale-and-leaseback situation, as well as to subsequent modifications of these.

The Group applies the two available exemptions, which relate to either short-term contracts, in which the lease term

is less than 12 months, or low-value assets, which are expensed to other operating expenses.

ⓘ Accounting estimates and judgements

Management is required to consider the duration of the lease term if there is an option for extension, early

termination or purchase, as well as determine the lease term for agreements with indefinite lease term. When

evaluating the probability of the option being exercised and, therefore, the duration of the lease term, management

considers all known facts and circumstances, for example, businesses’ short- and long-term strategies that create a

financial incentive to exercise, or not to exercise the option.


MEUR	2025	2024
Land and buildings, right-of-use assets
Carrying amount on 1 January	240	246
Changes in exchange rates	-4
Acquisitions and disposals	-20
Additions	37	58
Depreciation and impairment	-42	-44
Decreases and reclassifications	-3	-21
Carrying amount on 31 December	208	240


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Machinery and equipment, right-of-use assets
Carrying amount on 1 January	11	9
Acquisitions and disposals	-2
Additions	9	9
Depreciation and impairment	-6	-6
Decreases and reclassifications		-1
Carrying amount on 31 December	12	11

Lease liabilities
Carrying amount on 1 January	258	268
Changes in exchange rates	-5
Acquisitions and disposals	-22
Additions	46	62
Payments	-49	-49
Other adjustments	4	-8
Reclassification to assets held for sale	-4	-15
Carrying amount on 31 December	228	258

Total lease liabilities
Non-current	188	215
Current	41	43


MEUR	2025	2024
Amounts recognised in statement of income
Depreciation	-48	-50
Interest expenses	-8	-10
Expense - short-term leases	-22	-28
Expense - leases of low-value assets	-5	-6
Expense - variable lease payments	-8	-8

The lease for the Sustainable Technology Hub in Vaasa contains a floating interest rate, and therefore the related lease

liability is remeasured at the end of each interest period. The floating interest rate is partially hedged.

The residual value guarantees related to the Sustainable Technology Hub that are not considered in capitalised lease

payments are disclosed in Note 7.1. Collateral, contingent liabilities, and other commitments.

3.5. Depreciation, amortisation and impairment


MEUR	2025	2024
Development expenses	41	26
Purchase price allocation amortisation	16	19
Other intangible assets	10	9
Buildings and structures	7	7
Land and buildings, right-of-use assets	42	45
Machinery and equipment	39	37
Machinery and equipment, right-of-use assets	6	6
Other tangible assets	3	2
Impairment	48	-20
Total	211	131

In 2025, impairment includes EUR 20 million related to classifying business unit Gas Solutions as assets held for sale and

EUR 10 million related to the divestment of business unit Marine Electrical Systems.


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4. Working capital and other balance sheet items

Content in this section:

4.1. Inventories

4.2. Trade receivables and contract assets and liabilities

4.3. Other receivables

4.4. Trade payables and other liabilities

4.5. Provisions

4.6. Deferred taxes

4.7. Pension obligations

4.1. Inventories

ⓘ Accounting principles

Inventories are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling

price in the ordinary course of business, less the estimated costs of completion and costs necessary to make the

sale.

Materials and consumables are valued at weighted average cost or at moving average price. Finished products are

valued at direct purchasing and manufacturing costs plus allocated purchasing and manufacturing overhead costs.

Work in progress includes costs for direct labour and material costs, and allocated overhead costs related to

manufacturing and purchasing when control has not yet been transferred to the customer. Project specific items

are valued at individual cost whereas other items at moving average price.

Inventories are presented net of provision for obsolete inventories.

ⓘ Accounting estimates and judgements

Valuation of inventory, mainly concerning obsolete stock and future selling price of stock items, requires

management judgement. Writing down inventories to net realisable value due to obsolete and excess stock, is

performed based on management’s best estimate at the end of the reporting period taking into consideration the

business and market specific circumstances and outlook. A systematic and continuous evaluation of inventory

ageing, turn-over, and composition compared to anticipated future use, is the basis for the estimates.


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MEUR	2025	2024
Materials and consumables	674	665
Work in progress	650	673
Finished products	41	42
Advances paid	74	102
Total	1,440	1,483

In 2025, EUR 19 million (4) impairment for obsolete inventories has been recognised in the statement of income. In 2025,

the total value of inventories related to assets held for sale amounted to EUR 82 million (77).

4.2. Trade receivables and contract assets and liabilities

ⓘ Accounting principles

Trade receivables are recognised when the right to consideration becomes unconditional. The Group’s trade

receivables are measured at amortised cost, which is the original invoiced amount less an estimated valuation

allowance for impairment. The Group assesses any possible increase in the credit risk for trade receivables and

contract assets measured at amortised cost at the end of each reporting period individually. The methodology

applied depends on whether there has been a significant increase in credit risk. If there has been a significant

increase in credit risk, the loss allowance is estimated at an amount equal to lifetime expected credit losses at the

end of the reporting period.

For trade receivables and contract assets, a simplified approach is used, and the loss allowance is measured at the

estimate of the lifetime expected credit losses. The Group uses a provision matrix for estimating the expected credit

loss where receivables are segregated depending on the ageing category and the origin of the receivable. The

Group has an effective collection process in place which decreases the possible risk of credit losses. Also, to mitigate

the credit risk, advance payments and payment guarantees are in use. In calculating the expected credit loss rates,

the Group considers historical loss rates for each category, and adjusts for forward looking macroeconomic data.

Based on the analysis, for trade receivables not due, or a maximum of 359 days overdue, as well as contract assets,

an impairment of 0.1%-2.0% is made. In addition to that, trade receivables more than 360 days old are assessed

individually for impairment. Examples of events giving rise to impairment include debtor’s serious financial

problems, and a debtor’s probable bankruptcy or other financial arrangement.

Trade receivables are permanently written off when there is no reasonable expectation of recovery.

The Group may sell undivided interests in trade receivables on an ongoing and one-time basis to lending

institutions. Financial assets sold under these arrangements are excluded from trade receivables in the statement

of financial position at the time of payment from the acquirer, providing that substantially all risks and rewards have

been transferred. If the acquirer has not settled payment to the extent that the ownership, risk, and control over the

receivable have been substantially transferred, then such financial assets sold are re-recognised in the statement of

financial position at the end of the reporting period.

Contract assets and liabilities are related to contracts with customers.

When control over goods or services is transferred to a customer before the customer pays the consideration, the

receivable is recognised as a contract asset. The contract asset represents the right to a future consideration.

Contract assets primarily relate to the Group’s right to consideration for transferred goods or services, but which

are not yet invoiced at the end of the reporting period. The contract assets are transferred to trade receivables

when the rights become unconditional.

Contract liabilities include advances received (payments received in advance) and deferred revenue (invoicing in

excess of revenue recognised). Contract liabilities are recognised as revenue when the Group performs under the

contract.

ⓘ Accounting estimates and judgements

Estimated expected credit loss provisions are based on management’s best judgement. Management judgement

includes past years’ experience and a forward-looking understanding of the client’s payment behaviour and

economic situation. In addition, assessing whether it is probable that the consideration from contracts with

customers will be collected requires judgement, and might impact the timing and amount of revenue recognition.

Contract assets and liabilities


MEUR	2025	2024
Trade receivables	988	1,025
Contract assets	532	571
Contract liabilities
Advances received	1,347	898
Deferred income	942	1,048

Trade receivables and contract assets
Non-current	3	6
Current	1,516	1,590

Contract liabilities
Non-current	177	121
Current	2,112	1,825

Revenue recognised in the financial period that was included in the contract liability on 1 January	1,825	1,534


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Unsatisfied performance obligations, all revenue types	10,624	10,365
of which remaining performance obligations from projects and contracts under execution	5,621	5,440

The contract assets and liabilities arise i.a., from long-term agreements and projects recognised over time, such as gas

solutions construction contracts, integrated solutions projects, and energy solutions turnkey contracts.

EUR 4,991 million (5,075) of unsatisfied performance obligations is expected to be recognised during next year, and the

remaining later.

Ageing of trade receivables


		2025		2024
MEUR	Trade receivables	of which impaired	Trade receivables	of which impaired
Not past due	750		783	1
Past due 1–30 days	113		123
Past due 31–180 days	106	4	113	9
Past due 181–360 days	30	5	18	5
Past due 1 year	46	46	54	51
Total	1,044	56	1,091	66

In 2025, the result impact of write-offs was EUR -9 million (-2).

Impairment


MEUR	2025	2024
Impairment on 1 January	66	57
Money received	-7	-8
Increase in loss allowance recognised	19	19
Receivables written off during the financial perios as uncollectible	-9	-2
Disposals	-11
Other	-2
Impairment on 31 December	56	66

The Group also sells trade receivables. The total amount of sold receivables at the end of the financial period is EUR 37

million (45). The funded amount has been derecognised in the statement of financial position.

4.3. Other receivables

ⓘ Accounting principles

Other receivables are recognised at amortised cost with the exception for derivatives and defined benefit plan

assets. Accounting principles for derivatives are presented in Note 5.2. Financial assets and liabilities by

measurement category, and for defined benefit plan receivables in Note 4.7. Pension obligations.


MEUR	2025	2024
Derivatives	24	15
Interest and other financial items	9	3
Insurance receivables	4	3
Rental accruals	2	2
Prepaid expenses	12	3
Other accruals	44	42
Loan receivables	1	1
Defined benefit plans	20	14
VAT receivables	96	156
Other*	66	68
Total	278	308

Non-current	45	39
Current	233	269

* Other includes payroll related tax receivables of EUR 7 million (7) in Brazil, which are not likely to be utilised within a year.

4.4. Trade payables and other liabilities

ⓘ Accounting principles

Trade payables are initially recognised at fair value and subsequently measured at amortised cost.

Accounting principles for derivatives are presented in Note 5.2. Financial assets and liabilities by measurement

category. Other liabilities are initially recognised at fair value and subsequently measured at amortised cost.


MEUR	2025	2024
Trade payables	666	793
Accrued expenses	523	410
Personnel costs	282	263
Derivatives	34	72
Interest and other financial items	6	8


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Other accruals	64	59
VAT liabilities	65	49
Other	99	89
Total	1,740	1,743

Non-current	26	12
Current	1,714	1,731

Wärtsilä has several supplier finance arrangements with its banks under which the banks acquire rights to trade receivables

from suppliers. Suppliers choosing to participate in the supplier finance arrangements can benefit from accelerated

payment by discounting receivables, which they have assigned to the bank. Wärtsilä pays the receivables to the banks by

their original payment due dates. Wärtsilä’s payment terms for trade payables related to supplier finance arrangements are

not impacted by the suppliers’ decisions to sell receivables under the arrangements. Wärtsilä is not a party to the receivable

purchase agreements between the banks and the suppliers and therefore has no visibility of financing terms nor control

over the occurrence of payments from the banks to the suppliers.

Carrying amounts of payables under supplier finance arrangements are recognised as part of trade payables, and they are

not reclassified after initial recognition.


	31.12.2025	31.12.2024
Carrying amount of trade payables under supplier finance arrangements, MEUR	271	350
Range of payment term dates, in days
Trade payables under supplier finance arrangements	90‒180	90‒180
Comparable trade payables not under supplier finance arrangement	0‒150	0‒150

Wärtsilä sees very limited liquidity risk associated with the supplier finance arrangements provided by its long-term

relationship banks. Additional information on liquidity risk related to supplier finance arrangements is presented in Note

5.8. Financial risks.

4.5. Provisions

ⓘ Accounting principles

Provisions are recognised in the statement of financial position when the Group has a present legal or constructive

obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to

settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions can arise, for

example, from warranties, environmental risks, litigation, foreseeable losses on projects, and restructuring costs.

The amount to be recognised as provisions corresponds to management’s best estimate of the expenses that will be

necessary to meet the existing obligation at the end of the reporting period.

Warranty provisions include estimated future warranty costs relating to products delivered, and they are recognised

when goods and services have been rendered to the customer. Typically, the standard warranty period is 1-3 years

from the delivery onwards.

Onerous contracts are contracts in which the unavoidable costs of meeting the obligations exceed the economic

benefits expected. The present obligation under the contract is measured and a provision is recognised to reflect

the expected loss.

Provisions for restructuring costs are made once the restructuring plan has been approved and the implementation

started, or the personnel concerned have been informed of the terms. The plan must indicate which activities and

personnel will be affected, as well as the timing and cost of implementation.

The Group is a defendant in a number of legal cases which arise out of, or are incidental to, the ordinary course of

its business. These lawsuits concern mainly issues, such as contractual and other liability, labour relations, property

damage and regulatory matters. The Group receives from time to time claims of different amounts and with varying

degrees of substantiation. It is the Group’s policy to provide for amounts related to the claims, as well as for the

litigation and arbitration matters when an unfavourable outcome is probable and the amount of loss can be

reasonably estimated.

ⓘ Accounting estimates and judgements

Provisions are accounted for based on management’s best estimate of the future outcome concerning the expected

expenses in a specific situation. Management uses judgement and relies on estimates based on accumulated

historical experience, situation specific circumstances, estimated risks, uncertainties, and future events, such as

changes in the law or development of a technology.

Warranty provisions are based on management’s best estimate of future warranty costs. These estimates rely on

accumulated historical experience of warranty cost occurrence concerning similar deliveries. Products can contain

new and complex technology that can affect warranty estimates, with the result that earlier recognised provisions

might not be sufficient. Warranty provisions for new products are estimated according to the same process as for

other products, although these individual provisions are adjusted for additional risk related to new products. These

provisions and estimates are then subsequently adjusted based on accumulated experience.

Management judgement is also required in estimating provisions for legal cases. A provision for a court case is

recognised when an unfavourable result is probable, and the loss can be determined with reasonable certainty. The

Group is a defendant in a number of legal cases arising from its business operations. The final result from these

cases can differ from these estimates.


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2025


MEUR	Litigation	Warranties	Onerous contracts	Restruc- turing	Other provisions	Total
Provisions on 1 January 2025	7	149	85	2	109	352
Changes in exchange rates		-1	-1		-2	-5
Disposals	-2	-8	-1		-1	-11
Additions	2	82	47	3	20	153
Used provisions	-1	-68	-29	-3	-17	-117
Released provisions			-7		-7	-15
Other adjustments		7	1			8
Reclassification to assets held for sale		-14	-23		-2	-38
Provisions on 31 December 2025	6	147	72	2	101	328

Non-current						141
Current						187

There is currently one unusually sizeable claim, but it is highly unlikely that the outcome of it will be unfavourable.

2024


MEUR	Litigation	Warranties	Onerous contracts	Restruc- turing	Other provisions	Total
Provisions on 1 January 2024	5	144	66	62	96	373
Changes in exchange rates					1
Additions	4	81	62	2	33	182
Used provisions	-1	-69	-40	-15	-15	-140
Released provisions			-2	-46	-5	-54
Reclassification to assets held for sale		-7	-1			-8
Provisions on 31 December 2024	7	149	85	2	109	352

Non-current						144
Current						207

4.6. Deferred taxes

ⓘ Accounting principles

Deferred tax liabilities and assets are calculated on temporary differences arising from the difference between the

tax basis of assets and liabilities, and the carrying values using the enacted or substantially enacted tax rates at the

end of the reporting period. The statement of financial position includes deferred tax liabilities in their entirety and

deferred tax assets at their estimated probable amount.

Deferred tax assets and liabilities are offset when the deferred tax assets and liabilities relate to income taxes levied

by the same taxation authority on either the same taxable entity, or different taxable entities which intend to settle

the balances on a net basis.

ⓘ Accounting estimates and judgements

Estimates of tax liabilities and receivables relate mainly to the expected results of ongoing tax audits, and to the

recognition of deferred tax receivables from tax losses. Deferred tax assets on unutilised tax losses and other

temporary differences are recognised to the extent it is highly probable that taxable profit is available. No deferred

tax assets are recognised from tax losses when there is uncertainty of their utilisation.

Changes in deferred taxes during 2025


MEUR	1 January 2025	Recog- nised in the con- solidated statement of income	Recog- nised in the con- solidated statement of compre- hensive income	Recog- nised in the con- solidated statement of financial position	Transla- tion dif- ferences	Acquisi- tions and disposals	31 December 2025
Deferred tax assets
Tax loss carry-forwards	20	2			-1		21
Pension obligations	17	1	-1			-4	13
Provisions	43	-4			-1	-1	37
Elimination of intragroup margin in inventories	10	1					11
Fair value reserve	3		4				6
Lease liabilities	60	-9		5	-1	-6	49
Other temporary differences	83	13			-4	-1	91
Reclassification to assets held for sale	-3			-22			-25
Set-off of deferred tax assets related to lease liabilities	-57			11			-46
Total	175	4	3	-7	-7	-13	156


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Deferred tax liabilities
Intangible assets and property, plant and equipment	30	-3				-8	18
Fair value reserve			17				17
Right-of-use assets	59	-9		5	-1	-7	47
Other temporary differences	33	32	1		-1	-18	49
Reclassification to assets held for sale	-7			-15			-23
Set-off of deferred tax liabilities related to right- of-use assets	-57			11			-46
Total	57	20	18	1	-2	-32	63

Net deferred tax assets/ liabilities	118	-16	-16	-8	-5	19	93

On 31 December 2025, the Group had unrecognised deferred taxes on temporary differences totaling EUR 93 million (96),

as it is uncertain if they will be realised. Most of the unrecognised deferred tax assets are related to cumulative tax losses.

Of these, EUR 12 million (11) will expire within the next five years and the rest will expire later or never. Most of the

cumulative tax losses on which deferred tax assets have been booked will never expire.

Changes in deferred taxes during 2024


MEUR	1 January 2024	Recog- nised in the con- solidated statement of income	Recog- nised in the con- solidated statement of compre- hensive income	Recog- nised in the con- solidated statement of financial position	Transla- tion dif- ferences	Acquisi- tions and disposals	31 December 2024
Deferred tax assets
Tax loss carry-forwards	41	-20					20
Pension obligations	17	-2	2				17
Provisions	49	-6			-1		43
Elimination of intragroup margin in inventories	9	1					10
Fair value reserve	1		2				3
Lease liabilities	59	-1		1			60


Other temporary differences	92	-10			1	83
Reclassification to assets held for sale						-3
Set-off of deferred tax assets related to lease liabilities	-56					-57
Total	212	-37	3	1		175

Deferred tax liabilities
Intangible assets and property, plant and equipment	32	-2				30
Fair value reserve	7		-7
Right-of-use assets	56			1		59
Other temporary differences	30	4				33
Reclassification to assets held for sale						-7
Set-off of deferred tax liabilities related to right- of-use assets	-56					-57
Total	69	3	-7	1		57

Net deferred tax assets/ liabilities	143	-40	10			118

4.7. Pension obligations

ⓘ Accounting principles

Group companies in different countries have various pension plans in accordance with local conditions and

practices. These pension plans are classified either as defined contribution or defined benefit plans.

Defined benefit plans are funded through contributions to pension funds or pension insurance companies. Defined

benefit plans may be unfunded or wholly or partly funded. The present value of the obligation arising from the

defined benefit plans is determined per each plan using actuarial techniques, the projected unit credit method. The

Group recognises the defined benefit obligation, net of fair value of the plan assets, at the end of the financial

period.


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Actuarial gains and losses and other re-measurements of the net defined benefit obligation are recognised

immediately in the statement of other comprehensive income. Current service cost is the present value of the post-

employment benefit, which is earned by the employees during the year. The Group determines the net interest

expense on the net defined benefit plan by applying the discount rate used to measure the defined benefit

obligation. Service cost is recognised in employee benefit expenses and the net interest in financial expenses. The

defined benefit plans are calculated by qualified actuaries.

In addition to defined benefit plans, Wärtsilä has other long-term employee benefits, which are presented

separately from the defined benefit plans. As with the accounting for a defined benefit plan, for any other long-term

benefit the Group recognises a liability for the obligation, net of the fair value of the plan assets, if any. Changes in

other long-term employee benefits are recognised in the statement of income.

Accounting principles for defined contribution plans are presented in Note 2.5. Employee benefit expenses.

ⓘ Accounting estimates and judgements

Estimates of pension obligations regarding each defined benefit plan are based on actuarial estimates of factors,

including future salary increases, discount rates, and return on plan assets. Changes in these assumptions can

significantly affect the Group’s pension obligations and pension costs.


MEUR	2025	2024
Net defined benefit assets on 31 December	20	14
Net defined benefit liabilities on 31 December	76	82
Liability for other long-term employee benefits on 31 December	38	46

Wärtsilä has defined benefit plans for its employees mainly in Europe and Asia. The major plans are located in Switzerland,

Germany, United Kingdom and Sweden. The Swiss defined benefit plan accounts for 44% of the Group's total defined

benefit obligations and 68% of the plans' assets. Most of the plans provide a lifetime pension to the members at the normal

retirement age, but there are also plans that provide a lump sum payment at the retirement date. Most of these defined

benefit pension plans are managed by pension funds. Their assets are not included in the Group's assets. The plans' assets

are typically invested according to the investment strategies approved by the funds' Board of Trustees, or in some cases are

completely administered by insurance companies. Wärtsilä Group companies make their payments to pension funds in

accordance with local legislation and practice. Authorised actuaries in each country have performed the actuarial

calculations required for the defined benefit plans.

The Swiss plan

Wärtsilä operates a defined benefit plan in Switzerland in accordance with the local pension laws and regulations. The plan

provides benefits to the members in the form of a pension payable after retirement. The level of benefits provided depends

on the accrued retirement savings capital, which is a result of contributions paid up to retirement plus respective interest.

The plan is run as a pension fund by the Board of Trustees separately from the company.

Contributions to the plan are paid both by the employees, as well as by the employers based on a percentage of the insured

salary as defined in the pension fund regulations. Contributions by the employers vary depending on the age of the

employee, and cover on average two thirds of the total contributions.

The investment strategy for a pension fund's asset is the responsibility of the Board of Trustees. Assets are invested in

accordance with the strategy and the corridors for different investment categories as defined by local laws. Other risks of

the plan are the longevity of plan members, as well as the death or disability of employees before their retirement. The

pension plan is reinsured for the risk of death and disability until 31 December 2025. Inflationary increases for pensions in

payment are at the discretion of the Board of Trustees when benefits paid by the plan are exceeding the minimum level

required by law.

The German plans

Wärtsilä operates defined benefit plans in Germany in accordance with local pension laws and regulations. The plans

provide benefits to the members in the form of a pension payable after retirement. The level of benefits provided depends

on the accrued retirement savings capital, which is a result of contributions paid up to retirement plus respective interest.

The plans vary from unfunded plans to a plan run as a pension fund.

In some of the plans, contributions are paid to the plan, both by the employees and the employers based on a percentage

of the insured salary as defined in the pension fund regulations. However, in some plans only the employer is obliged to

make the payments. Contributions by the employers vary depending on the age of the employee, the duration of the

employment, and also on the position of the employee.

The main risks of the plans are the longevity of plan members, and the death or disability of employees before their

retirement. In a funded plan, the investment strategy chosen also includes certain risk. Inflationary increases for pensions

in payment are valuated on a yearly basis.


MEUR	2025	2024
Present value of unfunded defined benefit obligations	64	71
Present value of funded defined benefit obligations	155	153
Fair value of plan assets	-163	-157
Net liability in the statement of financial position	56	67


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		2025		2024
%	Present value of defined benefit obligations	Fair value of plan assets	Present value of defined benefit obligations	Fair value of plan assets
Switzerland	44	68	41	65
Germany	15		16
Other Europe	25	18	29	20
Asia	14	14	13	15
Other	2
Total	100	100	100	100


MEUR	Present value of defined benefit obligation	Fair value of plan assets	Net defined benefit liability
Balance on 1 January 2024	220	-151	66
Changes in exchange rates	-1	1
Other adjustments	-3		-3
Recognised in the statement of income:
Current service cost	8		8
Gains (-) / losses (+) on curtailments and settlements	1		1
Interest cost (+) / interest income (-)	7	-4	3
Remeasurements recognised in other comprehensive income:
Return on plan assets, excluding interest income		-5	-5
Experience adjustments	1		1
Changes in financial assumptions	12		12
Contribution paid by the plan members	2	-2
Contribution paid by the employer		-6	-6
Benefits paid	-15	9	-6
Reclassification to assets held for sale	-4		-4
Balance on 31 December 2024	228	-158	67

Balance on 1 January 2025	228	-158	67
Changes in exchange rates	-3	3
Acquisitions and disposals	-6		-6


Recognised in the statement of income:
Current service cost	9		8
Past service cost (- credit)		1	1
Gains (-) / losses (+) on curtailments and settlements	1		1
Interest cost (+) / interest income (-)	7	-4	3
Remeasurements recognised in other comprehensive income:
Return on plan assets, excluding interest income		-5	-5
Changes in demographic assumptions	-3		-3
Changes in financial assumptions	-1		-1
Contribution paid by the plan members	2	-2
Contribution paid by the employer		-5	-5
Benefits paid	-12	7	-5
Reclassification to assets held for sale	-1		-1
Balance on 31 December 2025	220	-164	56

Plan assets invested in:


%	2025	2024
Shares and other equity instruments	17	17
Bonds and other debt instruments	37	43
Property	22	20
Other assets	24	20

The main actuarial assumptions at the end of the financial period are (expressed as weighted

averages):


%	2025	2024
Discount rate	2.76	2.88
Future salary growth	2.08	2.22
Future pension growth	0.91	0.98

On 31 December 2025, the weighted average duration of the defined benefit obligation was 10 years (8). The Group expects

to contribute EUR 3 million (3) to the plans during the next financial period.

Assumptions regarding future mortality are set based on actuarial advice in accordance with the published statistics and

experience in each country. These assumptions translate into a weighted average life expectancy in years for a pensioner at

the retirement age as follows:


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	2025	2024
Plan participants retiring at the end of the financial period:
Male	17.4	17.2
Female	19.1	19.2
Plan participants retiring 20 years after the end of the financial period:
Male	17.0	16.1
Female	18.5	18.5

The following table presents a sensitivity analysis for each significant actuarial assumption showing how the defined benefit

obligation would have been affected by changes in the relevant actuarial assumption that were reasonably possible at the

end of the financial period. This sensitivity analysis applies to the defined benefit obligation only and not to the net defined

benefit pension liability in its entirety.


		Effect to defined benefit obligation, MEUR
	Change in assumption	2025	2024
Discount rate	increase 1%	-21	-25
Discount rate	decrease 1%	26	24
Future salary growth	increase 1%	5	7
Future salary growth	decrease 1%	-4	-6
Future pension growth	increase 1%	17	18
Future pension growth	decrease 1%	-8	-8


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$7V2A9781bb.jpg$

5. Capital structure and financial items

Content in this section:

5.1. Financial income and expenses

5.2. Financial assets and liabilities by measurement category

5.3. Cash and cash equivalents

5.4. Net debt reconciliation

5.5. Equity

5.6. Maturity analysis of financial liabilities

5.7. Derivative financial instruments

5.8. Financial risks

5.1. Financial income and expenses

ⓘ Accounting principles

The net interest related to pension obligations is recognised in the financial statement as financial expenses. Also,

gains and losses from fair valuation and disposal and impairments of other shares are included in financial income

and expenses.

Changes in the fair value of interest rate hedges against Wärtsilä Group’s loan portfolio are immediately recognised

in financial income or expenses in the statement of income. The fair value of interest rate swaps is calculated by

discounting the future cash flows.

Exchange rate differences related to financial assets and financial liabilities are reported as financial items in the

statement of income, except exchange rate differences related to non-current debt that is part of the Group's net

investment in a subsidiary.


MEUR	2025	2024
Dividend income on other investments	1
Interest income on loans and receivables	1	1
Interest income on financial assets at fair value through the statement of income	19	14
Interest income on investments at amortised cost	37	33
Changes in fair values of financial assets/liabilities at fair value through the statement of income	-2	-5


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Exchange rate differences*	9
Other financial income	3	1
Total financial income	67	44

Interest expenses on financial liabilities recognised at amortised cost	-12	-17
Interest expenses on lease liabilities recognised at amortised cost	-8	-10
Interest expenses on financial liabilities at fair value through the statement of income	-41	-33
Net interest from defined benefit plans	-3	-3
Changes in fair values of financial assets/liabilities at fair value through the statement of income		-1
Exchange rate differences*		-2
Fee expenses	-2	-1
Other financial expenses	-6	-4
Total financial expenses	-72	-73

Total	-5	-29

* In 2025, exchange rate differences from unhedged internal loans, EUR -3 million (-2), were included in exchange rate

differences.

5.2. Financial assets and liabilities by measurement category

ⓘ Accounting principles

Financial instruments

Financial instruments are initially recognised at fair value. Subsequently, financial assets are classified and

measured at amortised cost or at fair value through statement of income. The classification of financial assets is

defined by the business model and the cash flow characteristics of the asset. Financial liabilities are subsequently

classified and measured at amortised cost or at fair value through statement of income.

Financial instruments are classified as current financial instruments unless the maturity of the financial instrument

exceeds 12 months from the end of the reporting period. Financial instruments are derecognised only when the

financial instrument is extinguished, or when the contractually specified right or obligation is discharged, cancelled,

or when it expires. The status of financial instruments is evaluated at the end of each reporting period.

Financial instruments at amortised cost

Financial assets

Financial assets measured at amortised cost include cash and cash equivalents, investments in debt instruments,

commercial papers, trade receivables and other receivables. The assets are initially recognised at fair value less the

transaction costs, and are subsequently measured at amortised cost by using the effective interest rate method.

These assets are held for collecting contractual cash flows, which are solely payments of principal and interest.

Interest income is recognised as financial income in the statement of income.

The expected credit losses associated with investments in debt instruments and commercial papers carried at

amortised cost are assessed on a forward-looking basis based on investment maturity dates and counterparty

credit risk on a quarterly basis.

The Group applies the simplified method in IFRS 9 for the expected credit losses from its trade receivables. This

requires expected lifetime credit losses to be recognised from the initial recognition of the receivables, as defined in

Note 4.2. Trade receivables and contract assets and liabilities.

Financial Liabilities

Financial liabilities measured at amortised cost include trade and other payables, loans, and borrowings. These

liabilities are initially recognised at fair value less the transaction costs related to the acquisition of these liabilities.

The liabilities are subsequently classified and measured using the effective interest rate method by amortising the

discounted interest payments over the maturity of the liabilities. Interest expense is recognised in the financial

expense in the statement of income.

Financial instruments at fair value through the statement of income

Financial assets

Financial assets measured at fair value through the statement of income include other financial investments, other

short-term cash investments and derivatives. These financial investments include Wärtsilä’s investments in other

companies (both listed and unlisted shares).

Changes in fair value and gains and losses at derecognition of these financial assets are recognised in the statement

of income.

Gains and losses from fair valuation and the disposal of shares that are attributable to operating activities are

included in operating income, while gains and losses from fair valuation and the disposal of other shares are

included in financial income and expenses.

Financial liabilities

Financial liabilities recognised at fair value through the statement of income include derivatives that are not eligible

for hedge accounting.

Changes in fair value and gains and losses at derecognition of these financial assets are recognised in the statement

of income.

Information on measurement categories of derivatives and financial instruments in hedge accounting are

presented in Note 5.7. Derivative financial instruments.


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2025


MEUR	Measured at amortised cost	At fair value through other compre- hensive income	Carrying amounts of the statement of financial position items	Fair value
Non-current financial assets
Trade receivables	3		3	3
Derivatives, included in hedge accounting		10	10	10
Derivatives, no hedge accounting		1	1	1
Other investments		13	13	13
Other receivables	1		1	1

Current financial assets
Trade receivables	985		985	985
Trade receivables for sale		1	1	1
Derivatives, included in hedge accounting		7	7	7
Derivatives, no hedge accounting		6	6	6
Other financial receivables	9		9	9
Cash and cash equivalents	2,582	8	2,590	2,590

Carrying amount by measurement category	3,580	46	3,626	3,626

Non-current financial liabilities
Interest-bearing debt	503		503	503
Derivatives, no hedge accounting		25	25	25

Current financial liabilities
Interest-bearing debt	78		78	78
Trade payables	666		666	666
Derivatives, included in hedge accounting		5	5	5
Derivatives, no hedge accounting		4	4	4
Other financial liabilities	6		6	6

Carrying amount by measurement category	1,253	34	1,287	1,287

2024


MEUR	Measured at amortised cost	At fair value through other compre- hensive income	Carrying amounts of the statement of financial position items	Fair value
Non-current financial assets
Trade receivables	6		6	6
Derivatives, included in hedge accounting		10	10	10
Derivatives, no hedge accounting		2	2	2
Other investments		17	17	17
Other receivables	1		1	1

Current financial assets
Trade receivables	1,018		1,018	1,018
Trade receivables for sale		1	1	1
Derivatives, included in hedge accounting		1	1	1
Derivatives, no hedge accounting		2	2	2
Other financial receivables	3		3	3
Cash and cash equivalents	1,538	16	1,554	1,554

Carrying amount by measurement category	2,566	49	2,616	2,616

Non-current financial liabilities
Interest-bearing debt	624		624	621
Derivatives, no hedge accounting		8	8	8

Current financial liabilities
Interest-bearing debt	142		142	142
Trade payables	793		793	793
Derivatives, included in hedge accounting		36	36	36
Derivatives, no hedge accounting		28	28	28
Other financial liabilities	8		8	8

Carrying amount by measurement category	1,567	72	1,639	1,636


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In 2024, the Group had also cash and cash equivalents measured at amortised cost of EUR 4 million related to assets held

for sale.

Fair value hierarchy

ⓘ Accounting principles

Wärtsilä uses the following categorisation for determining and disclosing the fair value of financial instruments by

valuation technique:

▪ Level 1: The quoted prices for the financial instruments are directly and regularly available on active publicly

traded markets or other publicly available sources.

▪ Level 2: The prices for the financial instruments are determined by using a valuation method for which the input

data is directly or indirectly available on a publicly traded markets or other publicly available sources.

▪ Level 3: The financial instruments are categorised into level 3 fair value if the prices for the inputs of the

valuation method are not publicly available, and when the financial instruments are measured using an

independent valuation method.

Specific valuation methodologies employed for financial instruments include:

▪ determining the fair value of forward foreign exchange contracts using forward rates as of the reporting period's end

▪ calculating the fair value of interest rate swaps by discounting the projected future cash flows utilising observable

yield curves

▪ employing quoted market prices or dealer quotations for comparable instruments.


		2025		2024
MEUR	Level 2	Level 3	Level 2	Level 3
Financial assets
Other investments		13		17
Other receivables, non-current	1		1
Derivatives	24		15

Financial liabilities
Interest-bearing debt, non-current*	503		621
Derivatives	34		72

* Measured at amortised cost in the statement of financial position.

Additional information on financial liabilities is presented in Note 5.6. Maturity analysis of financial liabilities.

Other investments

Other investments consist of unlisted shares measured at fair value. These valuations employ specific discounted cash flow

(DCF) models, with key assumptions including the weighted average cost of capital (WACC) and projected future dividend-

related cash flows. Given the substantial variation across various scenarios, management has concluded that valuation at

amortised cost provides the most reliable estimate of fair value.


MEUR	2025	2024
Carrying amount on 1 January	17	19
Disposal of shares		-1
Impairment	-4
Carrying amount on 31 December	13	17

In 2025, the cost for other unlisted shares (level 3) was EUR 13 million (17), and the market value of them was EUR 13 million

(17).

5.3. Cash and cash equivalents

ⓘ Accounting principles

Cash and cash equivalents comprise cash in hand, deposits held at call with banks, and other short-term cash

investments. Other short-term cash investments are highly liquid investments that are subject to only minor

fluctuations in value, and which have a maturity of up to three months on the date of acquisition. Cash in hand and

deposits held at call are presented at amortised cost. Other cash investments are mainly measured at fair value,

except for commercial paper investments that are presented at amortised cost. Credit accounts related to Group

cash pool accounts are included in current financial liabilities.


MEUR	2025	2024
Cash and bank balances*	2,582	1,538
Cash equivalents	8	16
Total	2,590	1,554

* EUR 221 million (196) of cash and bank balances relate to funds in countries where repatriation is restricted by local

regulations. As a result, these funds are not immediately accessible to the parent company. However, there are no

limitations on the use of these cash and bank balances locally within the respective jurisdictions.

On 31 December 2025, EUR 306 million of the total cash and cash equivalents relate to intragroup cash pool receivables

from the parent company of the entities classified as assets held for sale. In the consolidated statement of financial

position, these are presented as cash and cash equivalents of the Group.

In 2024, the Group also had cash and cash equivalents of EUR 4 million related to assets held for sale.


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5.4. Net debt reconciliation

Net interest-bearing debt


MEUR	2025	2024
Lease liabilities, non-current	188	215
Other interest-bearing debt, non-current	315	409
Lease liabilities, current	41	43
Other interest-bearing debt, current	38	99
Interest-bearing liabilities pertaining to assets held for sale	4	15
Total interest-bearing liabilities	585	781

Cash and cash equivalents	-2,590	-1,554
Cash and cash equivalents pertaining to assets held for sale		-4
Total interest-bearing assets	-2,591	-1,558

Total net interest-bearing debt	-2,006	-777

Net debt reconciliation

2025


MEUR	Carrying amount on 1 January 2025	Cash flows	Changes in exchange rates	Other non-cash move- ments	Acquisi- tions and disposals	Carrying amount on 31 December 2025
Lease liabilities*	273	-57	-5	43	-22	232
Other interest-bearing debt, non- current	409	-77	-17			315
Other interest-bearing debt, current	99	-62				38
Cash and cash equivalents*	-1,557	-1,155	20		102	-2,590
Net debt	-777	-1,351	-2	43	81	-2,006

* On 31 December 2025, lease liabilities include EUR 4 million pertaining to assets held for sale. There is no cash and cash

equivalents pertaining to assets held for sale.

2024


MEUR	Carrying amount on 1 January 2024	Cash flows	Changes in exchange rates	Other non-cash move- ments	Acquisi- tions and disposals	Carrying amount on 31 December 2024
Lease liabilities*	268	-60	1	65		273
Other interest-bearing debt, non- current	515	-99	-7			409
Other interest-bearing debt, current	76	23	-1			99
Interest-bearing receivables	-4	4
Cash and cash equivalents*	-819	-736	-2			-1,557
Net debt	35	-868	-9	65		-777

* On 31 December 2024, lease liabilities included EUR 15 million and cash and cash equivalents EUR 4 million pertaining to

assets held for sale.

5.5. Equity

Equity consists of share capital, share premium, translation differences, fair value reserve, remeasurements of defined

benefit liabilities and retained earnings.

Share capital and number of shares

At the beginning of 2025, the total amount of own shares held by the Company was 2,642,575. The shares are to be used

for pay-outs under the share-based incentive programmes of Wärtsilä Corporation. During the year, 356,145 own shares

were used to settle share-based payments, and 1,000,000 own shares were repurchased, resulting in the total amount of

3,286,430 at the end of the financial period.


MEUR
Share capital	Share capital	Share premium	Total
1 January 2024	336	61	397
31 December 2024	336	61	397
31 December 2025	336	61	397


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Number of shares and votes
Number of shares outstanding on 1 January 2025			589,080,815
Share-based payments settled in company shares			356,145
Repurchase of own shares on 28 April 2025			-150,000
Repurchase of own shares on 29 April 2025			-150,000
Repurchase of own shares on 30 April 2025			-140,000
Repurchase of own shares on 2 May 2025			-140,000
Repurchase of own shares on 5 May 2025			-140,000
Repurchase of own shares on 6 May 2025			-150,000
Repurchase of own shares on 7 May 2025			-130,000
Number of shares outstanding on 31 December 2025			588,436,960

Weighted average number of shares outstanding during the period			588,708,902

Wärtsilä's share does not have a nominal value. Wärtsilä has one series of shares. Each share is assigned one vote in the

Annual General Meeting and has an equal right to dividend.

Share Capital

The subscription price of a share received by the company in connection with share issues is credited to the share capital,

unless it is provided in the share issue decision that a part of the subscription price is to be recorded in the fund for

invested non-restricted equity.

Share Premium

Share premium is restricted equity. It may be reduced in accordance with the rules applying to decreasing share capital in

accordance with the Finnish Limited Liability Companies Act. It can also be used to increase the share capital.

Translation differences

Translating foreign subsidiaries' financial statements by using different exchange rates in the statement of comprehensive

income and in the statement of financial position causes translation differences, which are recognised in equity. Translation

differences of foreign subsidiaries’ acquisition cost eliminations and postacquisition gains and losses are also presented

in equity. Also, translation differences arising from subsidiary net investments and non-current subsidiary loans without

agreed settlement dates are presented in equity. The change in translation differences is recognised in other

comprehensive income.

Fair value reserve

The fair value reserve includes changes in the fair value of derivative financial instruments when hedging is effective,

eligible for hedge accounting, and the hedge relationship continues. These changes are recognised in other comprehensive

income.


MEUR	Foreign exchange hedges	Interest rate hedges	Total cash flow hedges
Fair value reserve on 1 January 2024, gross	23	14	37
Taxes related to fair value adjustments	-3	-3	-6
Fair value reserve on 1 January 2024, net	20	11	31
Transferred to the statement of income or financial position as basis adjustments, net of taxes	14		14
Fair value adjustments	-77	-3	-80
Taxes related to fair value adjustments	12	1	13
Fair value reserve on 31 December 2024, net	-31	8	-23
Transferred to the statement of income or financial position as basis adjustments, net of taxes	-9		-9
Fair value adjustments	96		97
Taxes related to fair value adjustments	-16		-16
Fair value reserve on 31 December 2025, net	39	9	48

Parent company's distributable funds

ⓘ Accounting principles

The dividend proposed by the Board of Directors is deducted from distributable equity when approved by the

company’s Annual General Meeting. Unpaid dividends are presented as liability in the consolidated financial

statements.

After the balance sheet date, the Board of Directors proposed that a dividend of EUR 1.06 per share be paid for the financial

period 2025, the total dividend payable being EUR 624 million based on shares outstanding on 31 December 2025. The

remaining part of the retained profits will be carried further in the unrestricted equity. For the result for the financial period

2024, a dividend of EUR 0.44 per share was distributed, totalling EUR 259 million, and the rest of the retained profits were

carried further in the unrestricted equity.

Additional information on equity is presented in Notes to the parent company financial statements, in Note 10.

Shareholders' equity.


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5.6. Maturity analysis of financial liabilities

2025


	Current	Non-current
MEUR	< 1 year	1–3 years	3–5 years	> 5 years	Total
Loans from other financial institutions*	38	186	95	35	353
Lease liabilities	48	75	51	89	264
Trade payables	666				666
Interest rate derivatives, payable	6	112	63		181
Interest rate derivatives, receivable	-5	-98	-62		-165
Foreign exchange forwards, payable	2,715				2,715
Foreign exchange forwards, receivable	-2,714				-2,714
Other liabilities	6				6
Total	760	276	147	124	1,307

* Estimated interest expenses, total	8	11	4	1	23
Estimated contractual cash flows	768	286	151	124	1,330

2024


	Current	Non-current
MEUR	< 1 year	1–3 years	3–5 years	> 5 years	Total
Loans from other financial institutions*	99	201	156	52	508
Lease liabilities	55	85	59	121	320
Trade payables	793				793
Interest rate derivatives, payable	81	108	2		192
Interest rate derivatives, receivable	-66	-102	-6		-174
Foreign exchange forwards, payable	2,418				2,418
Foreign exchange forwards, receivable	-2,368				-2,368
Other liabilities	8				8
Total	1,020	292	211	173	1,696

* Estimated interest expenses, total	12	16	7	1	35
Estimated contractual cash flows	1,032	307	218	174	1,731

* Interest expenses for long-term loans are calculated by using the average interest rate prevailing at the end of the

financial period.

Fair values of financial liabilities, as well as information on measurement categories of financial liabilities, are presented in

Note 5.2. Financial assets and liabilities by measurement category.

5.7. Derivative financial instruments

ⓘ Accounting principles

Derivatives and hedge accounting

Derivatives including embedded derivatives are initially recognised on the statement of financial position at fair

value and are subsequently classified and measured at their fair value at the end of each reporting period. Gains

and losses from the fair value measurement are recognised in the statement of income.

Wärtsilä has a guideline in place to identify embedded derivatives.

Hedge accounting

Wärtsilä hedges in net position its sales and purchases in foreign currencies with foreign exchange forwards or

currency options, and Wärtsilä applies hedge accounting according to IFRS 9 to the majority of these foreign

exchange forwards. Forward points are excluded from the hedge relationship and they are booked directly in the

statement of income as financial income or expenses. In case of a hedge being fully or partially discontinued, the

discontinued portion is immediately recognised in the statement of income as other operating income or expenses.

The Group documents the relationship between each hedging instrument and the hedged item upon entering into

a hedging arrangement, along with the risk management objective and the strategy applied. Through this process,

the hedging instrument is linked to the relevant assets and liabilities, projected business transactions, or binding

contracts.

Wärtsilä designates its hedge relationships of foreign exchange hedges as either hedges of highly probable forecast

transactions or firm commitments. Hedge accounting relationships are designated up to the point of recognition of

the related receivable or payable.

The Group uses a hedge designation for foreign exchange hedging, where critical terms, currency and amount,

match or are closely aligned between the hedging instrument and the hedged item. Additionally, hedge designation

documentation includes the time period when forecasted transactions are expected to affect the statement of

income. The hedge ratio is typically 100%. Since underlying risks match, hedging instruments are considered to

offset any changes related to the hedged transactions. However, Wärtsilä applies a roll-forward strategy where

derivatives are roll-forwarded or terminated early to match these underlying transactions. Hedge effectiveness

requirements are assessed in accordance with IFRS 9 requirements, including requirements for economic

relationship, credit risk and hedge ratio.

As external hedges are typically made for short maturities (up to 1 year) and only high credit quality (A-minimum

rating requirement) counterparties are utilised, counterparty credit risk is expected to have minimal effect on hedge

valuations. Due to some underlying hedged cash flows having longer maturities than related hedges, the changes


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in present value of the hedge and the underlying cash flow do not always fully offset each other during the lifetime

of a hedge. This source of ineffectiveness is calculated on a quarterly basis and recognised in the statement of

income as other operating income or expenses on Group level.

Additionally hedge accounting may be applied to interest rate hedges. In these cases, critical terms, floating rate

reference rate, and amortisation schedule, are matched so the hedge is expected to be highly effective. As only high

credit quality counterparties under ISDA Master Agreements are utilised, counterparty credit risk is expected to

have minimal effect on hedge valuations.

Cash flow hedge

Changes in the fair value of derivative contracts designated and qualifying as cash flow hedges are recognised in

other comprehensive income and presented in the fair value reserve in equity, provided that the hedging is

effective. In the case of foreign exchange forwards, the spot element is included for the hedging relationship

whereas forward points have been excluded from the hedge designation. Any gain or loss in the fair value reserve

related to derivatives accumulated through other comprehensive income is reported in the statement of income in

the same period as any transactions relating to the hedged obligations or estimates. Result from net position

hedges is reported on a separate line in the statement of income. Basis adjustments related to derivatives are

reported in contract assets, contract liabilities, and inventories, according to the hedged item. The ineffective

portion is immediately recognised in the statement of income as other operating income or expenses. Changes in

fair value of foreign exchange derivatives due to interest rate differentials (impact of forward points) are recognised

in the statement of income as financial income or expenses.

Cash flow hedge against a variable interest rate in a lease contract is included in the statement of income as other

operating income and financial income and expenses.

More information on fair value adjustments related to cash flow hedges is presented in Note 5.5. Equity, and more

information on the ineffective portion of cash flow hedges is presented in Note 5.1. Financial income and expenses.

The Group applies hedge accounting to the majority of its foreign currency forward contracts.

The open operative currency positions including financing are hedged by using derivative financial instruments according

to the table below.

Nominal amounts for hedged foreign exchange items and hedging instruments


			2025			2024
MEUR	Against hedge accounting	Against net loans	Against other items	Against hedge accounting	Against net loans	Against other items
Currency forwards, nominal amount (both legs)
EUR*	1,834	326	493	1,578	478	290
USD	1,158	140	98	963	201
NOK	154	11	287	222		209
GBP	69	34	25	75	76	12
CHF	158	107	1	180	187
CNY	12	7	1	2	8
AUD	105		6	5
MXN	47	15		51
SGD	3			13	6
SEK	6	11	22	11	1	21
CAD	22			25
Other currencies**	105		172	69		102
Total amount of currency derivatives (single leg)	1,836	326	553	1,598	478	317

* EUR is not considered to be a currency risk for the parent company.

** Other currencies do not include any material single currencies.

Net loans include non-euro intragroup loans and deposits given by the parent company.

Hedge accounting has been applied to EUR 1,836 million (1,598) in currency forwards, with no options used for hedging in

2025 and 2024. A 5% change in the exchange rates would result in an approximately EUR 102 million (105) impact on equity

related from these forwards. Since all significant sales and purchase contracts are hedged, profit and loss sensitivity to

foreign exchange is minimal (excluding internal financing).

Currency forwards associated with cash flow hedging resulted in EUR 96 million (-77) being recognised in other

comprehensive income as cash flow hedges measured at fair value. In 2025, EUR -14 million has been recognised in the

statement of income as result from net position hedges. Additionally, EUR 9 million (-1) has been recognised in the

statement of financial position reflecting a change in contract liabilities. At year-end, currency forwards related to cash flow

hedging recognised in contract liabilities amounted to EUR 4 million (-5).

In 2025, a net of EUR -1 million was recognised in the statement of income as other operating income or expenses due to

discontinued cash flow hedges.


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			2025			2024
MEUR	Hedged cash flows, net amount	Hedges, net amount	Hedges, gross amount	Hedged cash flows, net amount	Hedges, net amount	Hedges, gross amount
Nominal amounts
EUR	661	656	1,834	536	567	1,578
USD	870	871	1,158	959	957	963
NOK	123	124	154	192	192	222
GBP	12	9	69	77	75	75
MXN	46	47	47	55	51	51
DKK	39	38	42	40	40	43
SEK	1	2	6	15	11	11
CNY	12	12	12	1	2	2
AUD	102	102	105	2	5	5
SGD		3	3	17	13	13
CHF	105	108	158	146	146	180
CAD	19	19	22	23	25	25
Other currencies	45	44	63	30	22	26
Total	2,036	2,034	3,672	2,092	2,107	3,195


MEUR	2025	2024
External currency forwards under hedge accounting by year
2025	–	1,598
2026	1,836
Hedged highly probable forecasted cash flows by year
2025	–	2,899
2026	3,240	626
2027	816	184
2028	302	57
2029	15
2030–	6

Derivatives


MEUR	2025	of which closed	2024	of which closed
Nominal values of derivative financial instruments (level 2)
Interest rate swaps, included in hedge accounting	115		118
Interest rate swaps, no hedge accounting	80		50
Cross currency swaps	136		153
Non-deliverable forwards, included in hedge accounting	5		4
Currency forwards, included in hedge accounting	1,831	1,097	1,594	949
Currency forwards, no hedge accounting	878	131	795	207
Total	3,045	1,229	2,714	1,156

Fair values of derivative financial instruments (level 2)
Interest rate swaps, included in hedge accounting	10		10
Interest rate swaps, no hedge accounting	1		2
Cross currency swaps	-25		-22
Currency forwards, included in hedge accounting	2		-35
Currency forwards, no hedge accounting	1		-12
Total	-10		-57

In 2024, the Group had also copper swaps amounting to 1,665, valued at EUR 14 million.

Foreign currency forward contracts with maturities currently within the next 11 months (12) hedge transactional risks. A

contract is considered closed when offsetting cash flows occur in the same currency on the same value date. Interest rate

swaps, all in euros, have an average maturity of 45 months (62), while cross currency swaps average 37 months (24).

Changes in the market value of interest rate derivatives are typically recognised immediately in the statement of income as

financial income or expenses. However, cash flow hedge accounting in accordance with IFRS 9 has been applied to a EUR

115 million (118) amortising interest rate swap maturing in 2031. This interest rate hedge converts variable interest

payments on a significant lease agreement to fixed interest payments. As there is a perfect match between the critical

terms of the hedge and the underlying cash flow, the hedge ratio is 1:1, and the hedge is expected to be highly effective. In

2025, a fair value adjustment of EUR 11 million (10) related to the cash flow hedge was recognised in other comprehensive

income. Realised and accrued interest of EUR 2 million (3) was recognised in the statement of income as other operating

income, and in 2024, EUR 1 million was recognised in the statement of income as financial income or expenses.

In 2025 and 2024, no embedded derivatives were identified.

Normally all of the Groups' derivatives are carried out according to International Swaps and Derivatives Association's

Master Agreements (ISDA). In case of an event of default under these agreements, the non-defaulting party may request


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early termination and set-off of all outstanding transactions. These agreements do not meet the criteria for offsetting in the

statement of financial position. The following table sets out the carrying amounts of recognised financial instruments that

are subject to the above agreements.


MEUR	2025	2024
Gross fair values of derivative financial instruments subject to ISDAs

Assets
Interest rate swaps	11	12
Currency forwards	12	3
Total	23	15

Liabilities
Cross currency swaps	-25	-22
Currency forwards	-9	-49
Copper swaps		-1
Total	-34	-72

Net fair values of derivative financial instruments subject to ISDAs
Assets	15	7
Liabilities	-25	-64
Total	-11	-57

5.8. Financial risks

General

Wärtsilä maintains a centralised Corporate Treasury with two primary objectives: first, to secure sufficient funding for the

Group’s operations on competitive terms; and second, to identify, assess, and manage the Group’s financial risks, including

implementing appropriate hedging for the Group companies.

The purpose is to mitigate adverse market movements and reduce the effects of foreign exchange, interest rate, credit, and

liquidity risks to the Group.

The Financial Risk Policy is approved by the Board of Directors. The Corporate Treasury employs only such instruments

whose market value and risk profile it can reliably monitor.

Foreign exchange risk

Foreign exchange exposures are monitored on business level, while hedging is made on a subsidiary level against the

Corporate Treasury, and then netted and covered externally on Group level by the Corporate Treasury. As principle, all

material sales and purchase contracts with fixed foreign currency amounts, including both future cash flows and related

accounts receivable and payable, are hedged. The estimated future commercial exposures (such as risks associated with

offers) are evaluated by the Businesses, and the level of hedging is decided in accordance with the appilcable policies.

Hedge accounting in accordance with IFRS 9 is applied to most of the hedges of foreign exchange risk exposures. The

hedges cover such time periods that both the sales prices and purchase costs can be adjusted to new relevant exchange

rates. These periods vary among Group companies mainly from one month to two years. The Group also hedges its position

of the statement of financial position, which includes cash balances, loans/deposits, as well as other receivables and

payables denominated in foreign currencies.

As field service work is typically invoiced in local currencies, there is some foreign exchange change related volatility in the

consolidated net sales. However, the effect on the profitability is limited as the related costs are in the same currency. Spare

part sales are based on a euro price list and related purchases in non-euro currencies are hedged, so the effect from

foreign currency rate changes on spare part sales is minimal. As project/hardware sales/purchases, as well as estimated

currency exposures from long-term agreements, are hedged, the Group does not expect significant gains/losses from

foreign exchange rate changes in 2025 related to its operations, excluding internal financing.

The instruments, and their nominal values, used to hedge the Group’s foreign exchange exposures are listed in Note 5.7.

Derivative financial instruments.

Since Wärtsilä has subsidiaries and joint ventures outside the euro zone, the Group’s equity, goodwill and purchase price

allocations are sensitive to exchange rate fluctuations. At the end of 2025, the net assets of Wärtsilä’s foreign subsidiaries

and joint ventures outside the euro zone totalled EUR 1,220 million (1,261). In addition, goodwill and purchase price

allocations from acquisitions nominated in foreign currencies amounted to EUR 743 million (805). In 2025, the translation

differences recognised in other comprehensive income mainly come from changes in the GBP exchange rate.

Approximately 57% (54) of sales and 54% (53) of operating costs were denominated in euros, and approximately 29% (32) of

sales and 19% (23) of operating costs were denominated in US dollars. The remainder were split between several

currencies. The Group’s profits and competitiveness are also indirectly affected by the home currencies of its main

competitors.

As Wärtsilä's operations are global, they often involve currency risks. The largest operative currency positions (excluding

financing) open as of 31 December 2025 by currency pair are listed below.


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2025


	Statement of financial position		Estimated cash flows
MEUR	Base currency received	Base currency paid	Base currency received	Base currency paid	Net
EUR/USD	247	278	203	1,277	1,104
EUR/NOK	53	46	327	1	332
USD/NOK	20	5	438		454
EUR/CNY	27	19	126	18	115
EUR/GBP	27	24	68	8	63
EUR/AUD	8	7	12	148	135
EUR/CHF	31	6	44		69
USD/HKD	4	9	37		32
EUR/SGD	21	17	42		46
EUR/HKD	19	14		53	49
EUR/JPY	16	11	31	3	33
EUR/AED	29	12	25		41

2024


	Statement of financial position		Estimated cash flows
MEUR	Base currency received	Base currency paid	Base currency received	Base currency paid	Net
EUR/USD	173	250	225	1,425	1,276
EUR/NOK	75	42	344	1	376
USD/NOK	28	10	422		440
EUR/CNY	26	23	124		127
EUR/GBP	28	33	64	22	37
EUR/CHF	17	6	97		108
EUR/DKK	6	9	94		91
USD/HKD	6	12	88		82
EUR/SGD	16	17	41		41
EUR/HKD	11	10	39	1	39
EUR/JPY	11	7	35	7	32


USD/MXN	5	2	50		53
EUR/CAD	4	9	6	34	33
EUR/AED	14	9	26		31
USD/CNY	3	1	24	19	7
USD/JPY	3	2	37		38

Base currency received:

▪ if functional currency is EUR, payable is in USD

▪ if functional currency is USD, receivable is in EUR

Base currency paid:

▪ if functional currency is EUR, receivable is in USD

▪ if functional currency is USD, payable is in EUR

As the main funding currency for the Group, including the Corporate Treasury, is the euro (or converted into euro) and

since the subsidiaries are normally funded in their home currencies by the Corporate Treasury, the Corporate Treasury had

the following related open currency positions as of 31 December 2025.


			2025			2024
MEUR	Loans	Deposits	Net	Loans	Deposits	Net
Intragroup loans/deposits
USD	49	189	140	27	242	216
GBP	74	40	34	102	27	76
CHF	107		107	188		188
MXN	25		25	8	5	3
AUD					1	1
SGD	4	7	3		9	9
CNY		7	7		11	11
NOK	11		11
SEK	12	1	11		1	1
CAD		3	3		9	8
External loans/deposits
JPY*	136			153		160
Total	418	247	341	478	304	672

* External JPY loans are fully hedged with cross currency swaps.


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Some Group companies in countries whose currencies are not fully convertible, such as Brazil, Philippines, and South Korea,

have unhedged, intercompany loans nominated either in EUR or USD, which may result in some foreign exchange

differences. The total amount of these loans is EUR 70 million (61).

Wärtsilä does not hedge translation risk. The most significant currencies for Wärtsilä are presented in Note 6.6. Exchange

rates.

Interest rate risk

Wärtsilä’s interest rate risk arises mainly from changes in the market value of its net debt portfolio (price risk), variations in

interest rates upon refinancing or re‑fixing, and fluctuations in the interest income earned on cash and cash equivalents.

The company manages this risk by constantly monitoring the market value of its financial instruments and by conducting

sensitivity analyses.

At the end of 2025, interest-bearing loan capital amounted to EUR 353 million (508). The average interest rate was 2.4% (2.6)

and the average re-fixing period was 4 months (5).

Wärtsilä manages its interest rate risk by diversifying its exposure between fixed and floating rate loans, and by employing

interest rate derivatives. The proportion of fixed‑rate debt, including derivatives, may range between 30% and 70% of the

total debt portfolio. To hedge its loan portfolio, Wärtsilä may use a range of derivative instruments, such as interest rate

swaps, futures, and options. At the end of 2025, there was EUR 141 million (127) interest rate swaps.


MEUR	2025	2024
Fixed rate loans		100
Floating rate loans	353	408
Derivatives	141	127

Share of fixed rate loans of total loans (including derivatives), %	40	45

At the end of 2025, a parallel shift of one percentage point in the Euribor curve, either an increase or a decrease, would

result in an annual change of EUR 2 million (3) in the interest expenses of the floating‑rate loan portfolio. This analysis is

based on the floating‑rate portion of the debt portfolio as of 31 December 2025.

The main funding currency of the Group is euro. Funding in any other currency is converted or swapped into euro.

Additional information related to loans can be found in Note 5.2. Financial assets and liabilities by measurement category

and Note 5.6. Maturity analysis of financial liabilities. Information on interest rate derivatives is presented in Note 5.7.

Derivative financial instruments.

Liquidity and refinancing risk

Wärtsilä ensures sufficient liquidity at all times by efficient cash management and by maintaining sufficient available committed

and uncommitted credit lines. Refinancing risk is managed by having a balanced and sufficiently long loan portfolio.

The existing loan facilities include:

▪ Committed Revolving Credit Facilities totalling EUR 636 million (642).

▪ Finnish Commercial Paper programmes totalling EUR 850 million (850).

The average maturity of the non-current debt is 34 months (30) and the average maturity of the confirmed credit lines is 30

months (32). Additional information in Note 5.6. Maturity analysis of financial liabilities.

Wärtsilä does not have significant concentration of liquidity risk associated with the supplier finance arrangements

provided by its longterm relationship banks. All are reputable and creditworthy banks that have operated and/or

participated as investors to the supplier finance arrangements as their customary and continuous offering, and there is no

reason to assume that the banks would become unwilling or unable to provide these arrangements in the future. In case of

an unexpected withdrawal or reduction by a bank, Wärtsilä can opt to organise supplier finance arrangement to its

suppliers through its other banks.

At year-end, the Group had cash and cash equivalents totalling EUR 2,590 million (1,554). The Group also had EUR 636

million (642) of non-utilised committed credit facilities, and in 2024, cash and cash equivalents of EUR 4 million related to

assets held for sale. Commercial Paper Programmes were not utilised on 31 December 2025 nor on 31 December 2024.

Committed Revolving Credit Facilities, as well as the parent company's long-term loans, include a financial covenant

(solvency ratio). The solvency ratio is expected to remain clearly over the covenant level for the foreseeable future.

Revolving credit facilities


MEUR		2025		2024
Year	Maturing	Available (end of period)	Maturing	Available (end of period)
2024	–	–		642
2025		636	100	542
2026	96	540	102	440
2027	140	400	140	300
2028	120	280	120	180
2029	150	130	150	30
2030	130		30


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Credit risk

Responsibility for managing the credit risks associated with ordinary commercial activities lies with the Businesses and the

Group companies. Major trade and project finance credit risks are mitigated when applicable by transferring risks to banks,

insurance companies, and export credit organisations.

Credit risks associated with the placement of liquid funds and trading in financial instruments are mitigated by establishing

explicit counterparty limits and engaging exclusively with highly reputable domestic and international banks and financial

institutions. Derivative financial instruments are transacted solely with counterparties holding at least an A- credit rating,

and all transactions entered into by Corporate Treasury are governed by ISDA Master Agreements. As a result, credit losses

from these instruments are not expected.

When permitted by local laws and central bank regulations, the Group companies place and deposit as much of their liquid

financial assets as possible with the centralised Corporate Treasury. The Group may place its funds in instruments that offer

sufficient liquidity, such as current bank deposits or Finnish Commercial Papers, and maintains a minimum rating standard

of single-A or other instruments, all approved by the Group’s CFO. The Corporate Treasury closely monitors these

investments, and Wärtsilä does not expect any future defaults from them.

The expected credit losses associated with investments carried at amortised cost are assessed on a forward-looking basis

based on investment maturity dates, and counterparty credit risk on a quarterly basis. 31 December 2025, the expected

credit loss was not material. The expected credit losses are presented in Note 4.2. Trade receivables and contract assets and

liabilities.

Equity price risk

Wärtsilä has equity investments totalling EUR 8 million (12) in power plant companies, most of which are located in

developing countries and performing well according to expectations. Additional information is given in Note 5.2. Financial

assets and liabilities by measurement category.

Capital risk management

Wärtsilä’s policy is to secure a strong capital base, both to maintain the confidence of investors and creditors and for the

future development of the business. The capital is defined as total equity, including non-controlling interests and net

interest-bearing debt. The target for Wärtsilä is to maintain gearing below 0.50 and to pay a dividend of at least 50% of

earnings over the cycle.


MEUR	2025	2024
Total interest-bearing liabilities	585	781
Total interest-bearing assets	-2,591	-1,558
Total net interest-bearing debt	-2,006	-777

Total equity	2,884	2,531
Gearing	-0.70	-0.31

In the capital management Wärtsilä also follows the gearing development:

Total equity and liabilities	8,474	7,694
Advances received	-1,357	-923
	7,117	6,770

Solvency ratio, %	40.5	37.4

The figures in the above table include assets and liabilities pertaining to assets held for sale.

More information on net interest-bearing debt is available in Note 5.4. Net debt reconciliation.


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6. Group structure

Content in this section:

6.1. Subsidiaries

6.2. Acquisitions

6.3. Disposals

6.4. Assets held for sale

6.5. Investments in associates and joint ventures

6.6. Exchange rates

6.1. Subsidiaries

ⓘ Accounting principles

The consolidated financial statements include the parent company Wärtsilä Corporation and all subsidiaries over

which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable

returns from its involvement with the entity and has the ability to affect those returns through its power to direct

the activities of the entity. When the Group has less than a majority of voting or similar rights in an entity, the Group

considers all relevant facts and circumstances in assessing whether it has power over an entity, including the

contractual arrangements, voting rights, and potential voting rights. The Group reassesses whether it controls an

entity if facts and circumstances indicate that there are changes to the elements of control.

The financial information from subsidiaries in countries with hyperinflation are adjusted according to IAS 29, when

the impact of the hyperinflation is considered significant for the consolidated financial statements.


Geogra- phical area	Company name	Location	Activities	Share %
Europe
	Wärtsilä Cyprus Limited	Cyprus	Sales and services	100.0
	Wärtsilä Danmark A/S	Denmark	Sales and services	100.0
	Wärtsilä BLRT Estonia Oü	Estonia	Sales and services	51.7
	Wärtsilä Energy Storage Finland Oy	Finland	Sales and services	100.0
	Wärtsilä Finland Oy	Finland	Production, sales and services	100.0
	Wärtsilä Projects Oy	Finland	Sales and services	100.0
	Wärtsilä Solutions Oy	Finland	Sales and services	100.0


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Wärtsilä Technology Oy Ab	Finland	Holding	100.0
Wärtsilä Voyage Oy	Finland	Sales and services	100.0
Wärtsilä France S.A.S.	France	Sales and services	100.0
Wärtsilä Voyage Mediterranean SAS	France	Sales and services	100.0
Wärtsilä Deutschland GmbH	Germany	Sales and services	100.0
Wärtsilä Serck Como GmbH	Germany	Sales and services	100.0
Wärtsilä Voyage Germany GmbH	Germany	Sales and services	100.0
Wartsila Defence Solutions Ltd	the United Kingdom	Sales and services	100.0
Wartsila Energy Storage UK Limited	the United Kingdom	Sales and services	100.0
Wärtsilä UK Limited	the United Kingdom	Production, sales and services	100.0
Wärtsilä Voyage UK Limited	the United Kingdom	Sales and services	100.0
Wärtsilä Water Systems Ltd	the United Kingdom	Sales and services	100.0
Wärtsilä Greece S.A.	Greece	Sales and services	100.0
Wärtsilä Hungary Kft.	Hungary	Sales and services	100.0
Wärtsilä Voyage Limited	Ireland	Sales and services	100.0
Wärtsilä Italia S.p.A.	Italy	Sales and services	100.0
Trident Italia Srl	Italy	Sales and services	100.0
Wärtsilä Moss AS	Norway	Production, sales and services	100.0
Wärtsilä Norway AS	Norway	Production, sales and services	100.0
Wärtsilä Gas Solutions Norway AS	Norway	Sales and services	100.0
Wärtsilä Polska Sp. z o.o	Poland	Sales and services	100.0
Wärtsilä Portugal, S.A.	Portugal	Sales and services	100.0
Wartsila Voyage doo Beograd	Serbia	Sales and services	100.0
Wärtsilä Ibérica S.A.	Spain	Production, sales and services	100.0
Burriel Navarro, S.L.	Spain	Sales and services	100.0
Wärtsilä Underwater Services Spain, S.L.	Spain	Sales and services	100.0
Wärtsilä Gas Solutions Sweden AB	Sweden	Sales and services	100.0
Wärtsilä Sweden AB	Sweden	Production, sales and services	100.0
Wärtsilä Voyage Sweden AB	Sweden	Sales and services	100.0
Wärtsilä Services Switzerland AG	Switzerland	Sales and services	100.0


	Quantiparts B.V.	The Netherlands	Sales and services	100.0
	Wärtsilä Netherlands B.V.	The Netherlands	Production, sales and services	100.0
	Trident B.V.	The Netherlands	Sales and services	100.0
The Americas
	Wärtsilä Argentina S.A.	Argentina	Sales and services	100.0
	Wartsila Brasil Ltda.	Brazil	Production, sales and services	100.0
	Altyn Consulting Inc.	Canada	Sales and services	100.0
	Wärtsilä Canada Inc.	Canada	Sales and services	100.0
	Wärtsilä Chile Ltda.	Chile	Sales and services	100.0
	Wärtsilä Colombia S.A.	Colombia	Sales and services	100.0
	Wärtsilä Dominicana, S.R.L.	Dominican Republic	Sales and services	100.0
	Wärtsilä Ecuador S.A.	Ecuador	Sales and services	100.0
	Wärtsilä El Salvador, S.A. De C.V.	Guatemala	Sales and services	100.0
	Wärtsilä Operations Guyana Inc.	Guyana	Sales and services	100.0
	Wärtsilä de Mexico S.A. de C.V.	Mexico	Sales and services	100.0
	Wärtsilä Panama Services, S.A.	Panama	Sales and services	100.0
	Wärtsilä Peru S.A.	Peru	Sales and services	100.0
	Wärtsilä Caribbean, Inc.	Puerto Rico	Sales and services	100.0
	Wärtsilä Uruguay S.A.	Uruguay	Sales and services	100.0
	Defense Maritime Solutions, Inc.	USA	Sales and services	100.0
	Guidance Marine LLC	USA	Sales and services	100.0
	LOCK-N-STITCH Inc.	USA	Sales and services	100.0
	Wartsila Energy Storage, Inc.	USA	Sales and services	100.0
	Wartsila Voyage Americas Inc	USA	Sales and services	100.0
	Wärtsilä North America, Inc.	USA	Sales and services	100.0
Asia
	PT. Wärtsilä Indonesia	Indonesia	Sales and services	100.0
	Wärtsilä Azerbaijan LLC	Azerbaijan	Sales and services	100.0
	Wärtsilä Bangladesh Limited	Bangladesh	Sales and services	100.0
	Wärtsilä Management (Shanghai) Co., Ltd.	China	Sales and services	100.0
	Wärtsilä Propulsion (Wuxi) Company Limited	China	Production, sales and services	100.0
	Wärtsilä Services (Shanghai) Co. Ltd.	China	Sales and services	100.0
	Wärtsilä Suzhou Limited	China	Production, sales and services	100.0


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	Wärtsilä Voyage Shanghai Co., Ltd.	China	Sales and services	100.0
	Wärtsilä China Ltd.	Hong Kong	Sales and services	100.0
	Wärtsilä India Private Limited	India	Production, sales and services	100.0
	Wärtsilä Japan Ltd.	Japan	Production, sales and services	100.0
	Wärtsilä Malaysia Sdn. Bhd.	Malaysia	Sales and services	100.0
	Wärtsilä Myanmar Company Ltd.	Myanmar	Sales and services	100.0
	Wärtsilä Pakistan (Private) Limited	Pakistan	Sales and services	100.0
	Wärtsilä Philippines Inc.	Philippines	Sales and services	100.0
	Wärtsilä Doha L.L.C.*	Qatar	Sales and services	49.0
	Wärtsilä Power Contracting Company Ltd.	Saudi Arabia	Sales and services	60.0
	Wärtsilä Singapore Pte Ltd	Singapore	Sales and services	100.0
	Wärtsilä Voyage Pacific Pte Ltd	Singapore	Sales and services	100.0
	Wärtsilä Korea Ltd.	South Korea	Sales and services	100.0
	Wärtsilä Lanka (Pvt) Limited	Sri Lanka	Sales and services	100.0
	Wärtsilä Taiwan Ltd.	Taiwan	Sales and services	100.0
	Wärtsilä - ENPA A.S.	Turkey	Sales and services	51.0
	Wärtsilä Gulf FZE	United Arab Emirates	Sales and services	100.0
	Wärtsilä Hamworthy Middle East (FZE)	United Arab Emirates	Sales and services	100.0
	Wartsila LLC	United Arab Emirates	Sales and services	100.0
	Wartsila Ships Repairing & Maintenance LLC	United Arab Emirates	Sales and services	100.0
	Wartsila Voyage Middle East DMCEST	United Arab Emirates	Sales and services	100.0
	Wartsila Samarkand Energy LLC	Uzbekistan	Sales and services	100.0
	Wärtsilä Vietnam Company Limited	Vietnam	Sales and services	100.0
Other
	Wärtsilä Australia Pty Ltd.	Australia	Sales and services	100.0
	Wartsila Energy Storage Australia Pty Ltd	Australia	Sales and services	100.0
	Wärtsilä Burkina Faso	Burkina Faso	Sales and services	100.0
	Wärtsilä Central Africa Plc	Cameroon	Sales and services	100.0
	Wartsila Installations and Constructions	Egypt	Sales and services	100.0
	Wärtsilä Central Africa Gabon	Gabon	Sales and services	100.0
	Wärtsilä West Africa Guinea S.A.	Guinea	Sales and services	100.0
	Wärtsilä Eastern Africa Limited	Kenya	Sales and services	100.0


Wärtsilä Energy Mauritanie SAU	Mauritania	Sales and services	100.0
Wärtsilä Mauritanie SA	Mauritania	Sales and services	100.0
Wärtsilä Mocambique Limitada	Mozambique	Sales and services	100.0
Wärtsilä Muscat S.P.C	Oman	Sales and services	100.0
Wärtsilä New Zealand Ltd	New Zealand	Sales and services	100.0
Wärtsilä Marine & Power Services Nigeria Limited	Nigeria	Sales and services	100.0
Wärtsilä PNG Limited	Papua New Guinea	Sales and services	100.0
Wärtsilä West Africa S.A.	Senegal	Sales and services	100.0
Wartsila Southern Africa Proprietary Ltd	South Africa	Sales and services	100.0
Wärtsilä South Africa Pty Ltd*	South Africa	Sales and services	75.0
Wärtsilä Tanzania Limited	Tanzania	Sales and services	100.0

* Despite share percentage being less than 100, the subsidiary is considered to be fully controlled by the Group.

Non-controlling interests are not significant in the Group's activities and cash flows in individual subsidiaries.

The list excludes subsidiaries, which do not have a significant impact on the result or assets of the Group. A complete list of

shares and securities in accordance with the Finnish Accounting Ordinance is included in the official financial statements of

the parent company prepared in accordance with the Finnish Accounting Standards (FAS).

6.2. Acquisitions

ⓘ Accounting principles

Acquired and established companies are accounted for using the acquisition method. Accordingly, the purchase

price and the acquired company’s identifiable assets, liabilities, and contingent liabilities are measured at fair value

on the date of acquisition. In the acquisition of additional interest, where the Group already has control, the non-

controlling interest is measured either at fair value or at the non-controlling interests’ proportionate share of the

identifiable net assets. The difference between the purchase price, possible equity attributable to the non-

controlling interests, and the acquired company’s net identifiable assets, liabilities and contingent liabilities

measured at fair value, is goodwill. The purchase price includes the consideration paid, measured at fair value. The

consideration does not include transaction costs, which are recognised in the statement of income. The transaction

costs are expensed in the same reporting period in which they occur, except those costs resulting from issued debt

or equity instruments.

In significant business combinations, the Group has used external advisors when estimating the fair values of

property, plant and equipment and intangible assets. For property, plant and equipment, comparisons have been

made of the market prices of similar assets, and the depreciation of the acquired assets due to ageing, wear, and

other similar factors has been estimated. The fair value measurement of intangible assets is based on estimates of

the future cash flows associated with the assets. The acquired identifiable intangible assets typically include

technology, customer relationships, and trademarks.


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Any contingent consideration (additional purchase price) related to the combination of businesses is measured at

fair value on the date of acquisition. It is classified either as a liability or equity. Contingent consideration classified

as a liability is measured at fair value on the last day of each reporting period, and the resulting loss or gain is

recognised through the statement of income. Contingent consideration classified as equity is not re-measured.

The acquired subsidiaries are included in the consolidated financial statements from the day the Group has control.

ⓘ Accounting estimates and judgements

Accounting for the business combinations may require estimates of the fair value of acquired assets and the

expected amount of realised contingent consideration.

2025

In 2025, there were no acquisitions.

2024

In 2024, there were no acquisitions.

6.3. Disposals

ⓘ Accounting principles

The disposed subsidiaries are included in the consolidated financial statements until control is lost.

ⓘ Accounting estimates and judgements

Accounting may require estimates determining the level of post-closing indemnities.

2025

On 1 July 2025, Wärtsilä divested business unit Automation, Navigation and Control Systems (ANCS) to Solix Group AB. The

divestment was announced in December 2024. In 2025, the net sales of ANCS was EUR 127 million until disposed (227).

The impact of the divestment on the result for the financial period 2025 is EUR 31 million. It has been recognised in the

statement of income as other operating income, and is considered as an item affecting comparability. Business unit ANCS

belonged to Portfolio Business.

On 31 October 2025, Wärtsilä divested business unit Marine Electrical Systems (MES) to VINCI Energies. The divestment was

announced in July 2025. In 2025, the net sales of MES was EUR 92 million until disposed (105).

The impact of the divestment on the result for the financial period 2025 is EUR -10 million. It has been recognised in the

statement of income as depreciation, amortisation and impairment, and is considered as an item affecting comparability.

Business unit MES belonged to Portfolio Business.

Values of the assets and liabilities at the time of disposals


MEUR
Assets
Non-current assets
Other intangible assets	29
Property, plant and equipment	5
Right-of-use assets	22
Deferred tax assets	7
Other receivables	1
Total non-current assets	63

Current assets
Inventories	116
Trade receivables	47
Contract assets	40
Other receivables	54
Cash and cash equivalents	102
Total current assets	359

Liabilities
Non-current liabilities
Lease liabilities	17
Deferred tax liabilities	24
Pension obligations	6
Provisions	2
Total non-current liabilities	49

Current liabilities
Lease liabilities	5
Provisions	9
Trade payables	28
Current tax liabilities	3


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Contract liabilities	152
Other liabilities	44
Total current liabilities	241

Net assets	133

Preliminary consideration


MEUR
Considerations received in cash	196
Total considerations received	196

Preliminary cash flow from the disposals


MEUR
Considerations received in cash	196
Cash and cash equivalents of the divested companies	-102
Total cash flow from the disposals	93

2024

In 2024, there were no disposals.

6.4. Assets held for sale

ⓘ Accounting principles

The external assets and liabilities relating to non-current assets held for sale and discontinued operations are

presented separately in the statement of financial position if their carrying amounts are expected to be recovered

primarily through sale rather than through continuing use. Classification as held for sale requires that the asset (or

disposal group) must be available for immediate sale in its present condition subject only to terms that are usual

and customary for sales of such assets (or disposal groups) and its sale must be highly probable.

Prior to classification as held for sale, the assets or assets and liabilities related to a disposal group in question are

measured according to the respective Accounting Standards. From the date of classification, non-current assets

held for sale are measured at the lower of the carrying amount and the fair value less costs to sell, and the

recognition of depreciation and amortisation is discontinued.

Non-current assets held for sale are presented in the statement of financial position separately from other items.

The comparison figures for the statement of financial position are not restated.

2025

Wärtsilä has classified business units Gas Solutions and Water & Waste as assets held for sale since the last quarter of 2025.

In December 2025, Wärtsilä announced the divestment of business unit Gas Solutions to the German private equity investor

Mutares SE & Co. KGaA. In 2025, the net sales of Gas Solutions was EUR 394 million (301).

Classifying business unit Gas Solutions as assets held for sale has an impact of EUR -20 million on the result for the financial

period 2025, which has been recognised in the statement of income as depreciation, amortisation and impairment, and it is

considered as an item affecting comparability. In the consolidated statement of financial position, EUR -9 million has been

recognised as asset write-downs, rest as additional provisions and accruals. Subject to approvals, the transaction is

expected to be completed in the second quarter of 2026. Gas Solutions belongs to Portfolio Business.

Wärtsilä has also classified business unit Water & Waste as assets held for sale. Water & Waste belongs to Portfolio

Business.

All assets held for sale are valued at the lower of book value or fair value.

2024

Wärtsilä has classified business unit Automation, Navigation and Control System (ANCS) as assets held for sale.

In December 2024, Wärtsilä announced the divestment of business unit ANCS to the Swedish investment company Solix

Group AB.

ANCS is a global leader in innovative hardware and software technologies for marine navigation and automation, with

solutions including integrated navigation and automation systems, advanced sensors enhancing safety and situational

awareness, and dynamic positioning systems enabling precise vessel station keeping. Wärtsilä acquired ANCS in 2015 as

part of Marine Systems International. In 2024, the net sales of ANCS was close to EUR 230 million.

During the second quarter of 2023, Wärtsilä performed an intermediate impairment testing of goodwill for CGU Portfolio

Business due to the new organisational structure. As a result of the impairment test, an impairment of EUR 45 million was

recognised, of which EUR 15 million related to goodwill and the rest to other non-current assets.

During the fourth quarter of 2024, Wärtsilä assessed if there has been a change in the estimates used to determine the

asset’s recoverable amount. As a result of the assessment, Wärtsilä recognised a reversal of an impairment loss related to

other non-current assets amounting to EUR 20 million. The reversal is recognised in the statement of income as reduction

of depreciation, amortisation and impairment, and considered as an item affecting comparability.

Subject to approvals, the transaction is expected to be completed in the second quarter of 2025. ANCS belongs to Portfolio

Business.


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All assets held for sale are valued at the lower of book value or fair value.

Items in the statement of financial position


MEUR	31.12.2025	31.12.2024
Assets
Non-current assets
Goodwill	33
Other intangible assets	7	25
Property, plant and equipment		2
Right-of-use assets	4	14
Deferred tax assets	25	3
Total non-current assets	69	45

Current assets
Inventories	82	77
Trade receivables	35	44
Current tax receivables	1	1
Contract assets	21	9
Other receivables	5	5
Cash and cash equivalents		4
Total current assets	145	139

Assets held for sale	214	184
Write-down of assets	-9
Net for assets held for sale	205	184

Liabilities
Non-current liabilities
Lease liabilities	3	12
Deferred tax liabilities	22	7
Pension obligations	1	4
Provisions	6
Total non-current liabilities	32	24

Current liabilities
Lease liabilities	1	3
Provisions	32	8
Trade payables	63	18


Current tax liabilities	1	1
Contract liabilities	251	53
Other liabilities	23	26
Total current liabilities	372	109

Liabilities directly attributable to assets held for sale	403	132

Net assets	-199	52

On 31 December 2025, the Group’s cash and cash equivalents amounted to EUR 2,590 million. Of this, EUR 306 million

relate to intragroup cash pool receivables from the parent company of the entities classified as assets held for sale. In the

consolidated statement of financial position, these are presented as cash and cash equivalents of the Group.

6.5. Investments in associates and joint ventures

ⓘ Accounting principles

Associated companies are all entities over which the Group has significant influence but not control or joint control.

This is generally the case where the Group holds between 20% and 50% of the voting rights.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to

the net assets of the joint venture. Joint control is established by contractual agreement.

Associated companies and joint ventures are included in the consolidated financial statements using the equity

method from the date the Group’s significant influence or joint control commences until the date it ceases.

Investments in associates are initially recognised at cost, and the carrying amount is increased or decreased

according to the Group´s share of changes in the net assets of the associate after the date of the acquisition. The

Group’s share of the associated company’s or joint venture’s result for the reporting period is shown as a separate

item before the Group’s operating result, on the line Share of result of associates and joint ventures. The Group’s

share of the associated company’s or joint venture’s changes recognised in other comprehensive income is

recognised in the Group’s other comprehensive income. Wärtsilä’s proportion of the associated company’s or joint

venture’s post-acquisition accumulated equity is included in the Group’s equity. If the Group’s share of the

associated company's or joint venture's losses exceeds its interest in the company, the carrying amount is written

down to zero. After this, losses are only recognised if the Group has incurred obligations from the associated

company or joint venture.

The accumulated exchange rate differences arising from the consolidation of associated companies and joint

ventures, which are recognised in equity, are recognised in the statement of income as part of the gain or loss when

change in ownership occurs.


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MEUR	2025	2024
Carrying amount on 1 January	41	33
Share of result	17	12
Dividends	-10	-4
Translation differences	-3	1
Carrying amount on 31 December	45	41

Summary of financial information (100%):

2025


MEUR		Hold- ing %	Non- current assets	Current assets	Equity	Non- current liabilities	Current liabilities	Net sales	Result for the financial period
Joint ventures
Wärtsilä Qiyao Diesel Company Ltd.	China	50.0	6	102	33		75	112	14
CSSC Wärtsilä Electrical & Automation Co., Ltd.	China	49.0		39	5		34	54	2
CSSC Wärtsilä Engine (Shanghai) Co., Ltd.	China	49.0	59	461	52	28	440	249	18
Repropel Sociedad de reparacao de helices	Portugal	50.0		2	1		1	2

CSSC Wärtsilä Engine (Shanghai) Co., Ltd. manufactures medium and large bore medium speed diesel and dual-fuel engines

at its factory in Lingang, Shanghai, China. Wärtsilä Qiyao Diesel Company Ltd. manufactures marine auxiliary engines in

Shanghai, China. CSSC Wärtsilä Electrical & Automation Co., Ltd. manufactures advanced electronical and automation

solutions for the cruise industry.

2024


MEUR		Hold- ing %	Non- current assets	Current assets	Equity	Non- current liabilities	Current liabilities	Net sales	Result for the financial period
Joint ventures
Wärtsilä Qiyao Diesel Company Ltd.	China	50.0	6	86	30		63	83	10
CSSC Wärtsilä Electrical & Automation Co., Ltd.	China	49.0		29	4		25	23	1
CSSC Wärtsilä Engine (Shanghai) Co., Ltd.	China	49.0	64	388	49	31	371	189	13
Repropel Sociedad de reparacao de helices	Portugal	50.0		1	1		1	1

6.6. Exchange rates

ⓘ Accounting principles

Translating the transaction in foreign currencies

The items included in the financial statements are initially recognised in the functional currency, which is defined for

each Group company based on its primary economic environment. The presentation currency of the consolidated

financial statements is the euro, which is also the functional and presentation currency of Wärtsilä Corporation.

Foreign subsidiaries

The income and expenses for statements of income and statements of comprehensive income of foreign

subsidiaries are translated into euros at the quarterly average exchange rates. Statements of financial position are

translated into euros at the exchange rates prevailing at the end of the reporting period. The translation of the

result for the reporting period and other comprehensive income using different exchange rates in the statement of

comprehensive income and the statement of financial position causes translation differences, which are recognised

in equity and in other comprehensive income as change. Translation differences of foreign subsidiaries’ acquisition

cost eliminations and post-acquisition profits and losses are recognised in other comprehensive income and are

presented as a separate item in equity. The goodwill generated in the acquisition of foreign entities and their fair

value adjustments of assets and liabilities are considered as assets and liabilities of foreign entities, which are

translated into euros using the exchange rates prevailing at the end of the reporting period. When a foreign

subsidiary is sold, the accumulated exchange rate differences recognised in the equity related to the subsidiary are

recognised in the statement of income as a part of the gain or loss on sale.


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Transaction and balances in foreign currencies

Transactions denominated in a foreign currency are translated into the functional currency using the exchange

rates prevailing at the dates of the transactions. Receivables and liabilities are translated at the exchange rates

prevailing at the end of the reporting period. Exchange rate gains and losses related to trade receivables and

liabilities are reported on the applicable line in the statement of income and are included in the operating result.

Exchange rate differences related to financial assets and financial liabilities are reported as financial items in the

statement of income, except exchange rate differences related to noncurrent debt that is part of the Group's net

investment in a subsidiary. Those are recognised in other comprehensive income and reported as translation

differences in equity.

In the consolidated financial statements, there are approximately 60 currencies consolidated. The most significant

currencies are presented here.


		Closing rates		Average rates
		31 December 2025	31 December 2024	2025	2024
AED	UAE Dirham	4.31472	3.81546	4.14769	3.97399
AUD	Australian Dollar	1.75810	1.67720	1.75136	1.63995
BRL	Brazilian Real	6.43640	6.42530	6.30554	5.82679
CHF	Swiss Franc	0.93140	0.94120	0.93711	0.95261
CNY	Yuan Renminbi	8.22620	7.58330	8.11495	7.78626
DKK	Danish Krone	7.46890	7.45780	7.46338	7.45888
GBP	Pound Sterling	0.87260	0.82918	0.85662	0.84659
IDR	Indonesian Rupiah	19.64083	16,820.88000	18.61573	17,154.13000
INR	Indian Rupee	105.59650	88.93350	98.46465	90.53074
JPY	Yen	184.09000	163.06000	168.94570	163.81736
NOK	Norwegian Krone	11.84300	11.79500	11.71802	11.62684
RUB	Russian Ruble	92.77110	113.85000	94.34820	100.20892
SAR	Saudi Riyal	4.40707	3.89899	4.23624	4.05991
SEK	Swedish Krona	10.82150	11.45900	11.06470	11.43090
SGD	Singapore Dollar	1.51050	1.41640	1.47516	1.44567
USD	US Dollar	1.17500	1.03890	1.12934	1.08205


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7. Other notes

Content in this section:

7.1. Collateral, contingent liabilities, and other commitments

7.2. Related party disclosures

7.3. Auditors’ fees and services

7.1. Collateral, contingent liabilities, and other commitments

ⓘ Accounting principles

Contingent liabilities are possible obligations resulting from previous events, the existence of which will only be

ascertained once the uncertain event that is beyond the Group’s control materialises. Existing obligations that are

not likely to require the fulfillment of a payment obligation, or the amount of which cannot be reliably determined,

are also considered contingent liabilities.


		2025		2024
MEUR	Debt in the statement of financial position	Collateral	Debt in the statement of financial position	Collateral
Mortgages given as collateral for liabilities and commitments
Other commitments		8	20	10
Total		8	20	10

Chattel mortgages and other pledges and securities given as collateral for liabilities and commitments
Other commitments		31		32
Total		31		32


MEUR	2025	2024
Guarantees and contingent liabilities
on behalf of Group companies	1,628	1,237
Total	1,628	1,237


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Nominal amounts of lease liabilities
Low-value lease liabilities	5	13
Short-term lease liabilities	3	3
Leases not yet commenced, but to which Wärtsilä is committed	17	14
Residual value guarantee	104	104
Total	129	134

7.2. Related party disclosures

Related parties comprise the parent company, subsidiaries, the associated companies, and joint ventures. Related parties

also include the Board of Directors, the President and CEO, the Board of Management, their family members, and entities

controlled directly or indirectly by them.

Management remuneration


TEUR	2025	2024
President and CEO
Salaries and other short-term benefits	1,083	1,056
Short-term incentive schemes	822	687
Share based bonuses	1,290	172
Statutory pension costs	500	299
Voluntary pension costs	315	315
Other members of the Board of Management
Salaries and other short-term benefits	3,192	2,645
Short-term incentive schemes	1,446	1,070
Share based bonuses	1,999	212
Statutory pension costs	908	554
Voluntary pension costs	576	509
Total	12,131	7,520

Board of Directors on 31 December 2025
Tom Johnstone, Chair of the Board	245	243
Mika Vehviläinen, Deputy Chair of the Board	132	129
Karen Bomba, member	118	114
Henrik Ehrnrooth, member	91
Morten H. Engelstoft, member	113	109
Karin Falk, member	106	104
Johan Forssell, member	95	93


Tiina Tuomela, member	123	121
Board of Directors, until 13 March 2025
Mats Rahmström, member		91
Total	1,023	1,006

Management remuneration, total	13,154	8,526

In 2025, an accrual of EUR 3,699 thousand (2,267) has been recognised in the statement of income as employee benefit

expenses related to the short-term incentive schemes for the management.

Additionally, EUR 4,871 thousand (3,478) has been recognised as employee benefit expenses in the statement of income

related to management’s long-term incentive schemes, of which EUR 1,794 thousand (1,187) relates to long-term incentive

scheme ending 31 December 2025.

Remuneration of the President and CEO consists of fixed pay (a monthly base salary, pension and benefits) and variable pay

(short- and long-term incentives). Benefits include a mobile phone benefit, a car benefit, and various insurance policies.

The holdings of Wärtsilä shares of the President and CEO, and the members of the Board of Directors and Board of

Management were 496,848 shares (395,709) at year-end, dividends totalling EUR 212 thousand (124).

The President and CEO is entitled to retire on reaching 63 years of age. The members of the Board of Management are

entitled to retire on reaching the statutory retirement age. One member of the Board of Management is entitled to retire

earlier, on reaching 60 years of age. The Group has no loan receivables from the executive management or the Board of

Directors. No pledges or other commitments have been given on behalf of management or shareholders.

Business transactions with the associated companies and joint ventures


MEUR	2025	2024
Sales to the associates and joint ventures	81	76
Purchases from the associates and joint ventures	104	25
Receivables from the associates and joint ventures	8	16
Advances paid to the associates and joint ventures	27	37
Payables to the associates and joint ventures	8	21

Detailed financial information on the associated companies and joint ventures is presented in Note 6.5. Investments in

associates and joint ventures.


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7.3. Auditors’ fees and services

The following remuneration was paid to auditors and accounting firms for audits based on applicable legislation and for

other services.

In 2025, the AGM appointed the audit firm PricewaterhouseCoopers Oy as Wärtsilä Corporation's auditor.

PricewaterhouseCoopers Oy has provided non-audit services totalling EUR 0.2 million (0.2) to entities of Wärtsilä Group.

These services include tax services of EUR 0.1 million and a minor amount related to other services.


		2025		2024
MEUR	PwC	Others	PwC	Others
Audit	4.2	1.9	4.8	1.7
Audit related services	0.4	0.0	0.3	0.0
Tax advisory	0.1	0.2	0.1	0.3
Other services	0.2	1.2	0.1	0.0
Total	4.8	3.3	5.3	2.0

Audit related services include services, which are provided by the auditors under the Finnish Auditing Act chapter 1, section

1, paragraph 1, point 2.


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Parent company financial

statements (FAS)

Parent company income statement


MEUR	2025	2024	Note

Net Sales	103	119

Other operating income	29	24	1

Personnel expenses	-68	-57	2
Depreciation, amortisation and impairment	-4	-3	3
Other operating expenses	-111	-133	4

Operating result	-51	-51

Financial income and expenses	8	283	5

Result before appropriations and taxes	-43	233

Appropriations	211	135

Result before taxes	168	368

Income taxes	-36	-4	6

Result for the financial period	132	363

Parent company balance sheet


MEUR	2025	2024	Note
ASSETS

Fixed assets			7

Intangible assets
Other long-term expenditure	48	7
Intangible assets and construction in progress	4	36
	52	43

Tangible assets
Land and water	2	2
Machinery, equipment and other tangible assets	2	1
Construction in progress	1	1
	6	5

Financial assets
Shares in Group companies	1,450	1,450
Other shares and securities	2	2
	1,452	1,452

Total fixed assets	1,510	1,500

Non-current receivables
Other long-term receivables	13	13
	13	14

Current receivables
Trade receivables	1
Receivables from Group companies	1,262	1,927	8
Prepaid expenses and accrued income	24	13	9
	1,286	1,940

Cash and bank balances	1,531	1,304


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Total current assets	2,817	3,244

Assets	4,341	4,758

EQUITY AND LIABILITIES

Equity			10

Share capital	336	336
Share premium reserve	61	61
Reserve for own shares	-41	-28
Retained earnings	1,018	914
Result for the financial period	132	363
Total equity	1,507	1,646

Accumulated appropriations
Depreciation difference	3

Provisions	16	21

Liabilities			11

Non-current
Loans from credit institutions	315	409
Other long-term liabilities	27	9
	342	418
Current
Loans from credit institutions	38	99
Trade payables	18	14
Liabilities to Group companies	2,357	2,463	13
Other current liabilities	16	3
Accrued expenses and deferred income	44	94	12
	2,472	2,672

Total liabilities	2,814	3,090

Equity and liabilities	4,341	4,758

Parent company cash flow statement


MEUR	2025	2024

Cash flow from operating activities:

Result before appropriations and taxes	-43	233
Adjustments for:
Depreciation and amortisation	4	3
Financial income and expenses	-7	-283
Other adjustments	1	1
Cash flow before changes in working capital	-45	-47

Changes in working capital:
Assets, non-interest-bearing, increase (-) / decrease (+)	81	-31
Liabilities, non-interest-bearing, increase (+) / decrease (-)	-45	66
	36	35

Cash flow from operating activities before financial items and taxes	-9	-12

Interest and other financial expenses	-154	-164
Dividends received from operating activities		252
Interest and other financial income from operating activities	162	181
Income taxes paid	-30	-3
	-22	266

Cash flow from operating activities	-31	254

Cash flow from investing activities:
Investments in tangible and intangible assets	-14	-23
Investments in subsidiaries		-500
Loan receivables, increase	-32	-18
Loan receivables, decrease	652	408
Cash flow from investing activities	606	-133

Cash flow after investing activities	576	121


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Cash flow from financing activities:
Current loans, increase (+) / decrease (-)	-52	843
Proceeds from non-current borrowing	61
Repayments and other changes of non-current loans	-218	-75
Purchase of own shares	-16
Group contributions	135	21
Dividends paid	-259	-189
Cash flow from financing activities	-349	600


Change in cash and bank balances, increase (+) / decrease (-)	227	721

Cash and bank at beginning of period	1,304	583
Cash and bank at end of period	1,531	1,304

Accounting principles for the parent company

The financial statements of the parent company, Wärtsilä Corporation, have been prepared in accordance with the

provisions of the Finnish Accounting Standards (FAS).

The preparation of the financial statements requires management, in compliance with the regulations in force and good

accounting practice, to make estimates and assumptions that affect the measurement and timing of the reported

information. Actual results may differ from these estimates.

Transactions denominated in foreign currencies and derivatives

Business transactions in foreign currencies are recorded at the rates of exchange prevailing on the transaction date.

Receivables and payables on the balance sheet date are valued at the exchange rates prevailing on that date. Exchange

gains and losses related to business operations are treated as adjustments to other operating income and operating

expenses. Exchange gains and losses related to financing operations are entered under financial income and expenses.

Derivatives are measured at fair value. Open currency derivatives, including interest components, are valued at the balance

sheet date. The fair value of interest rate swaps is calculated by discounting the future cash flows. Derivative changes in fair

value are immediately recognised in financial income or expenses in the statement of income.

Research and development costs

Research and development costs are expensed in the financial period in which they occur.

Receivables

Receivables are valued to acquisition cost or to a lower probable value.

Revenue recognition

Net sales consist of service charges to Group companies. Wärtsilä Corporation’s service charges include management

service fee and information management service fee. Revenue is recognised for the period during which the service is

performed.

Fixed assets and depreciation and amortisation

Fixed assets are valued in the balance sheet at their direct acquisition cost less accumulated depreciation and

amortisastion. Certain land areas also include revaluations. Fixed assets are amortised on a systematic basis over their

estimated useful life.

Depreciation and amortisation is based on the following useful lives:

▪ Other long-term expenditure 3-10 years

▪ Buildings 20-40 years

▪ Machinery and equipment 5-20 years

Leasing

Lease payments are treated as rentals.

Provisions

Provisions in the balance sheet comprise those items which the company is committed to covering either through

agreements or otherwise, but which are not yet realised. Changes to provisions are included in the income statement.

Income taxes

Income taxes in the income statement include taxes calculated for the financial year based on Finnish tax provisions, as well

as adjustments to taxes in prior years. Income taxes also include parent company state top-up taxes in accordance with the

income calculation rule (IIR).

Dividends

Dividends proposed by the Board of Directors are not recorded in the financial statements until they have been approved

by the Annual General Meeting.


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Notes to the parent company financial statements

1. Other operating income


MEUR	2025	2024
Rental income		3
Re-invoicing to Group companies	25	20
Other	4	2
Total	29	24

2. Personnel expenses


MEUR	2025	2024
Wages and salaries	-58	-46
Pension costs	-9	-8
Other compulsory personnel costs	-1	-4
Total	-68	-57

Salaries and remunerations paid to senior management

Salaries and remunerations paid to the President and CEO and members of the Board of Directors was EUR 5 million (3).

The President and CEO has the right to retire at the age of 63 years. The members of the Board of Management are entitled

to retire on reaching the statutory retirement age. One member of the Board of Management is entitled to retire earlier, on

reaching 60 years of age.

The company's Board of Directors decides the remunerations of the President and CEO and his immediate subordinates.

Additional information on Management remuneration can be found in Consolidated Financial Statements Note 7.2. Related

party disclosures.

Personnel on average during the year was 422 (402).

3. Depreciation and amortisation


MEUR	2025	2024
Depreciation and amortisation according to plan
Other long-term expenditure	-4	-2
Machinery and equipment		-1
Total depreciation according to plan	-4	-3
Tax depreciations	-3
Total	-7	-3

4. Other operating expenses


MEUR	2025	2024
Information technology costs	-51	-41
Rental costs	-5	-5
Legal and consultancy costs	-32	-36
Services from Group Companies	-9	-34
Other administrative costs	-15	-16
Total	-111	-133

5. Financial income and expenses


MEUR	2025	2024
Dividend income
From Group companies		252
Total		252

Other interest income
From Group companies	53	105
From other companies	35	31
Total	88	136

Other financial income
From Group companies	54	38
From other companies	20	9
Total	74	46


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Exchange gains and losses	6	-2

Interest expenses
To Group companies	-73	-75
To other companies	-10	-14
Total	-83	-89

Other financial expenses
To Group companies	-34	-23
To other companies	-44	-36
Total	-78	-59

Financial income and expenses, total	8	283

6. Income taxes


MEUR	2025	2024
Income taxes
For the previous periods	-3	1
For the financial period	-33	-5
Total	-36	-4

Income taxes for the financial period include top-up taxes of EUR 0 million (1) in accordance with OECD Pillar Two rules.

7. Fixed assets

Intangible assets


MEUR	Other long- term expenditures	Intangible assets and construction in progress	2025	2024
Acquisition cost on 1 January	100	36	137	130
Additions	11	2	13	22
Decreases	-66		-66	-16
Reclassifications	34	-34
Acquisition cost on 31 December	79	4	84	137


Accumulated amortisation on 1 January	-93		-93	-107
Accumulated amortisation on decreases and other changes	66		66	16
Amortisation during the financial period	-4		-4	-2
Accumulated amortisation on 31 December	-31		-31	-93

Carrying amount on 31 December 2025	48	4	53
Carrying amount on 31 December 2024	7	36		43

Tangible assets


MEUR	Land and water	Buildings and structures	Machinery, equipment and other tangible assets	2025	2024
Acquisition cost on 1 January	2	1	11	15	12
Additions			1	1	1
Decreases					-1
Acquisition cost on 31 December	2	1	13	16	12

Accumulated amortisation on 1 January		-1	-9	-10	-10
Amortisation during the financial period				-1	-1
Accumulated depreciation on 31 December		-1	-10	-11	-10

Carrying amount on 31 December 2025	2		3	6
Carrying amount on 31 December 2024	2		2		5


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Shares and securities


MEUR	Shares in Group companies	Shares in other companies	2025	2024
Acquisition cost on 1 January	1,450	2	1,452	952
Additions				500
Acquisition cost on 31 December	1,450	2	1,452	1,452

Carrying amount on 31 December 2025	1,450	2	1,452
Carrying amount on 31 December 2024	1,450	2		1,452

In 2024, Wärtsilä Corporation made an additional investment of EUR 500 million in the equity of its fully owned subsidiary

Wärtsilä Technology Oy Ab.

8. Current receivables from Group companies


MEUR	2025	2024
Trade receivables	36	54
Loan receivables	982	1,634
Derivatives	23	80
Other receivables	214	141
Prepaid expenses and accrued income	8	18
Total	1,262	1,927

9. Prepaid expenses and accrued income


MEUR	2025	2024
Derivatives	12	3
Other	11	10
Total	24	13

10. Shareholders’ equity


MEUR	2025	2024
Share capital
Share capital on 1 January	336	336
Share capital on 31 December	336	336



Share premium reserve
Share premium reserve on 1 January	61	61
Share premium reserve on 31 December	61	61

Reserve for own shares
Reserve for own shares on 1 January	-28	-28
Reserve for own shares on 31 December	-41	-28

Retained earnings
Retained earnings on 1 January	1,278	1,103
Dividends paid	-259	-188
Result for the financial period	132	363
Retained earnings on 31 December	1,151	1,278

Total shareholders' equity	1,507	1,646

Distributable equity	1,110	1,249

On 31 December 2025 , the number of own shares held by Wärtsilä Corporation was 3,286,430 (2,642,575) and the book

value of these shares was EUR 41 million (28).

11. Liabilities


MEUR	2025	2024
Non-current
Interest-bearing	315	409
Non-interest-bearing	27	9
Total	342	418

Current
Interest-bearing	2,341	2,486
Non-interest-bearing	131	185
Total	2,472	2,672


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Debt with maturity profile


MEUR	2025	2024
Loans from financial institutions:	353	508

Current
<1 year	38	99
Long-term
1-5 years	281	357
>5 years	35	52
Total	353	508

12. Accrued expenses and deferred income


MEUR	2025	2024
Derivatives	9	64
Personnel costs	22	17
Interest and other financial items	3	4
Other	10	8
Total	44	94

13. Liabilities to Group companies


MEUR	2025	2024
Trade payables	4	22
Other current liabilities	2,303	2,387
Derivatives	45	48
Accrued expenses and deferred income	4	6
Total	2,357	2,463

14. Financial assets and liabilities by measurement category

2025


MEUR	Measured at amortised cost	At fair value through the statement of income	Carrying amounts of the statement of financial position items	Fair value
Non-current financial assets
Derivatives		11	11	11
Derivatives from Group companies		7	7	7
Current financial assets
Interest-bearing receivables from Group companies	982		982	982
Trade receivables from Group companies	36		36	36
Derivatives		12	12	12
Derivatives from Group companies		16	16	16
Other receivables from Group companies	220		220	220
Cash and bank	1,531		1,531	1,531
Carrying amount by category	2,768	46	2,814	2,814

Non-current financial liabilities
Interest-bearing debt	315		315	315
Derivatives		25	25	25
Derivatives from Group companies		11	11	11
Current financial liabilities
Interest-bearing debt	38		38	38
Interest-bearing debt to Group companies	2,303		2,303	2,303
Trade payables	18		18	18
Trade payables to Group companies	4		4	4
Derivatives		9	9	9
Derivatives to Group companies		23	23	23
Other liabilities	4		4	4
Carrying amount by category	2,682	69	2,751	2,751


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2024


MEUR	Measured at amortised cost	At fair value through the statement of income	Carrying amounts of the statement of financial position items	Fair value
Non-current financial assets
Derivatives		12	12	12
Derivatives from Group companies		26	26	26
Current financial assets
Interest-bearing receivables from Group companies	1,634		1,634	1,634
Trade receivables from Group companies	54		54	54
Derivatives		3	3	3
Derivatives from Group companies		54	54	54
Other receivables from Group companies	158		158	158
Cash and bank	1,304		1,304	1,304
Carrying amount by category	3,151	95	3,246	3,246

Non-current financial liabilities
Interest-bearing debt	409		409	406
Derivatives		15	15	15
Derivatives from Group companies		19	19	19
Current financial liabilities
Interest-bearing debt	99		99	99
Interest-bearing debt to Group companies	2,387		2,387	2,387
Trade payables	14		14	14
Trade payables to Group companies	22		22	22
Derivatives		57	57	57
Derivatives to Group companies		28	28	28
Other liabilities	6		6	6
Carrying amount by category	2,937	119	3,057	3,054

Information on the fair value hierarchy and valuation principle can be found in Consolidated Financial Statements Note 5.2.

Financial assets and liabilities by measurement category.

15. Derivative financial instruments

2025


MEUR	With external financial institutions	With Group companies	2025
Nominal values of derivative financial instruments
Non-Deliverable Forward	5		5
Currency forwards, transaction risk	2,655	4,379	7,034
Interest rate swaps	195	118	313
Cross currency swaps	136		136
Total			7,488

Fair values of derivative financial instruments (level 2)
Currency forwards, transaction risk	3	-12	-9
Interest rate swaps	11	-11
Cross currency swaps	-25		-25
Total			-33

2024


MEUR	With external financial institutions	With Group companies	2024
Nominal values of derivative financial instruments
Non-Deliverable Forward	4		4
Currency forwards, transaction risk	2,370	3,766	6,136
Interest rate swaps	168	121	290
Cross currency swaps	153		153
Total			6,580

Fair values of derivative financial instruments (level 2)
Currency forwards, transaction risk	-46	43	-4
Interest rate swaps	12	-10	2
Cross currency swaps	-22		-22
Total			-25


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Foreign currency forward contracts are against transactional risks and are matched against the hedged cashflows. Interest

rate swaps are denominated in euros and the average interest-bearing period for external contracts is 45 months (62) and

71 months (83) for intragroup contracts. The average maturity for cross currency swaps is 37 months (24).

16. Financial risks

General

Wärtsilä has a centralised Group Treasury with two main objectives: 1) to arrange adequate funding for the Group’s

underlying operations on competitive terms and 2) to identify and evaluate the financial risks within the Group and

implement the hedges for the Group companies. The Group Treasury is organisationally within the parent company.

The details about the management of the Group's financial risks are in Note 5.8. of the Consolidated Financial statements.

As the Group's liquidity and interest rate risks are managed at the parent company level, the Group reporting applies fully

to the parent company.

Foreign exchange risk

Operative foreign currency risks are followed and hedged at the subsidiary level. The Group Treasury acts as a counterparty

to these hedges, if that is allowed by local regulations. To enable netting of intragroup currency flows and to reduce the

amount of external transactions the Group Treasury is allowed to have minor unhedged exposures in different currencies.

Any gains/losses from the Group Treasury's operations are booked directly into the financial items and we do not expect

any material foreign exchange gains/losses from the Group Treasury's operations.

17. Collateral, contingent liabilities, and other commitments


MEUR	2025	2024
Guarantees and contingent liabilities
On behalf of Group companies	7,103	6,965
Total	7,103	6,965

Future nominal lease payments
Payable within one year	3	3
Payable after one year	12	8
Total	15	12

18. Related party loans and other commitments

There are no loans receivables from senior management and the members of the Board of Directors. No pledges or other

commitments were given on behalf of senior management or shareholders. In Note 7.2. in Consolidated Financial

Statements, related party disclosures are specified. Related parties comprise the Board of Directors, the President and CEO,

the Board of Management, as well as the associated companies and joint ventures. In Notes 8 and 13 in parent company

financial statements, receivables and liabilities from Group companies are specified.

19. Auditors’ fees and services

In 2025, the AGM appointed the audit firm PricewaterhouseCoopers Oy as Wärtsilä Corporation's auditor.

The following fees were paid to auditors and accounting firms for audits and other services.

Auditors' fees


TEUR	2025	2024
Audit	1,467	1,649
Audit related services	385	225
Tax advisory	1	22
Other services	47	43
Total	1,900	1,939


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Proposal of the board

The parent company’s distributable funds total EUR 1,110,118,876.54, which includes EUR 132,492,704.34 in result for the

financial period. There are 588,436,960 shares with dividend rights.

The Board of Directors proposes to the Annual General Meeting that the company’s distributable funds be disposed of in

the following way:


EUR
Dividend of EUR 1.06 per share be paid, amounting to	623,743,177.60
Retained in shareholders’ equity	486,375,698.94
Total distributable funds	1,110,118,876.54

The Board of Directors proposes to the Annual General Meeting that a base dividend of EUR 0.54 per share and an

extraordinary dividend of EUR 0.52 per share, totalling EUR 1.06 per share, shall be paid for the financial period 2025. The

dividend shall be paid in two instalments.

The first instalment, including a base dividend of EUR 0.27 per share and an extraordinary dividend of EUR 0.52 per share,

totalling EUR 0.79 per share, shall be paid to the shareholders who are registered in the list of shareholders maintained by

Euroclear Finland Oy on the dividend record date of 16 March 2026. The payment date proposed by the Board for this

instalment is 23 March 2026. The second instalment of EUR 0.27 per share shall be paid to the shareholders who are

registered in the list of shareholders maintained by Euroclear Finland Oy on the dividend record date of 16 September 2026.

The payment date proposed by the Board for this installment is 23 September 2026.

No significant changes have taken place in the company’s financial position since the end of the financial period. The

company’s liquidity is good and in the opinion of the Board of Directors, the proposed dividend will not put the company’s

solvency at risk.

Financial statements are prepared in accordance with the IFRS accounting standards (Group) and Finnish Accounting

Standards FAS (Parent Company), and it gives a true and fair view of the assets, liabilities, financial position, and profit or

loss of the company and the entities included in its consolidated financial statements;

the annual report includes an accurate description of the development and result of the business activities of both the

company and the entities included in its consolidated financial statements;

as well as a description of the most significant risks and uncertainties and other matters concerning the company; and the

sustainability report included in the annual report has been prepared in accordance with the reporting standards referred

to in chapter 7 and article 8 of the taxonomy regulation.

Helsinki, Finland, 3 February 2026

Tom JohnstoneMika Vehviläinen

Karen BombaHenrik Ehrnrooth

Morten H. EngelstoftKarin Falk

Johan ForssellTiina Tuomela

Håkan Agnevall,

President and CEO


				138

Auditor’s Report (Translation of the Finnish Original)

To the Annual General Meeting of Wärtsilä Corporation

Report on the Audit of the Financial Statements

Opinion

In our opinion

• the consolidated financial statements give a true and fair view of the group’s financial

position, financial performance and cash flows in accordance with IFRS Accounting

Standards as adopted by the EU

• the financial statements give a true and fair view of the parent company’s financial

performance and financial position in accordance with the laws and regulations governing

the preparation of financial statements in Finland and comply with statutory

requirements.

Our opinion is consistent with the additional report to the Audit Committee.

What we have audited

We have audited the financial statements of Wärtsilä Corporation (business identity code

0128631-1) for the year ended 31 December 2025. The financial statements comprise:

• the consolidated statement of financial position, statement of income, statement of

comprehensive income, statement of changes in equity, statement of cash flows and notes,

which include material accounting policy information and other explanatory information

• the parent company’s balance sheet, income statement, cash flow statement and notes.

Basis for Opinion

We conducted our audit in accordance with good auditing practice in Finland. Our

responsibilities under good auditing practice are further described in the Auditor’s

Responsibilities for the Audit of the Financial Statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our opinion.

Independence

We are independent of the parent company and of the group companies in accordance with

the ethical requirements that are applicable in Finland and are relevant to our audit, and we

have fulfilled our other ethical responsibilities in accordance with these requirements.

To the best of our knowledge and belief, the non-audit services that we have provided to the

parent company and group companies are in accordance with the applicable law and

regulations in Finland and we have not provided non-audit services that are prohibited under

Article 5(1) of Regulation (EU) No 537/2014. The non-audit services that we have provided

are disclosed in note 7.3 to the Financial Statements.


				139

Our Audit Approach

Overview



	• Overall group materiality: €28 million

	• We performed audit procedures at 24 reporting components in 14 countries based on our overall risk assessment and materiality.

	• Revenue recognition of long-term contracts • Valuation of goodwill

As part of designing our audit, we determined materiality and assessed the risks of material

misstatement in the financial statements. In particular, we considered where management

made subjective judgements; for example, in respect of significant accounting estimates that

involved making assumptions and considering future events that are inherently uncertain.

Materiality

The scope of our audit was influenced by our application of materiality. An audit is designed

to obtain reasonable assurance whether the financial statements are free from material

misstatement. Misstatements may arise due to fraud or error. They are considered material if

individually or in aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of the financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for

materiality, including the overall group materiality for the consolidated financial statements

as set out in the table below. These, together with qualitative considerations, helped us to

determine the scope of our audit and the nature, timing and extent of our audit procedures

and to evaluate the effect of misstatements on the financial statements as a whole.



Overall group materiality	€ 28 million (previous year € 25 million)

How we determined it	Result before taxes

Rationale for the materiality benchmark applied	We chose result before taxes as benchmarks because, in our view, it is the benchmark against which the performance of the group is commonly measured by users of the financial statements.

How we tailored our group audit scope

We tailored the scope of our audit, taking into account the structure of the Wärtsilä Group,

the accounting processes and controls, and the industry in which the group operates. Using

this criteria we selected group companies and accounts into our audit scope and at the same

time ensured that we get sufficient coverage to our audit, in order to issue an audit opinion

for the consolidated financial statements.


				140

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most

significance in our audit of the financial statements of the current period. These matters were

addressed in the context of our audit of the financial statements as a whole, and in forming

our opinion thereon, and we do not provide a separate opinion on these matters.

As in all of our audits, we also addressed the risk of management override of internal

controls, including among other matters consideration of whether there was evidence of bias

that represented a risk of material misstatement due to fraud.



Key audit matter in the audit of the group	How our audit addressed the key audit matter

Revenue recognition of long-term contracts
Refer to the consolidated financial statements note 2.2. The group has significant revenue from construction contracts and long-term operating and maintenance agreements. These long-term contracts are often complex customised solutions and meet the definition for revenue recognition over time in accordance with IFRS 15. Revenue related to these construction contracts and long-term operating and maintenance agreements is recognised using the percentage of completion method, where progress is determined by comparing actual costs incurred to date, with the total	Our revenue testing included both testing of the company’s controls, as well as substantive audit procedures targeted at selected major long-term projects. Our substantive testing focused on estimates applied by management in the accounting. Our procedures included, among other things, the following: • Ensured that the revenue recognition method applied was appropriate based on the terms of the arrangement; • Agreed the total project revenue estimates to sales agreements, including


estimated costs of the project. Revenue recognition for long-term contracts includes management judgment in the form of estimates, which are subject to management experience and expectations of future events. The most important judgment relates to the estimated total costs of the project. Revenue recognition of long-term contracts is a key audit matter in the audit due to the high level of management judgement involved in the project estimates.	amendments as appropriate; • We obtained an understanding of the processes and tested relevant controls, which impact the revenue recognition; • We assessed the reliability of management’s estimates by comparing the actual results of delivered projects to previous estimates; • We challenged the management estimates and assumptions in projects, which were considered to include specific risk factors; • Recalculated the revenue based on the stage of completion of the projects. Ensured that the stage of completion is correct by comparing actual costs per the company’s accounting records to the estimated total costs of the projects; and • In addition, we assessed the appropriateness of disclosures related to revenue recognition.

Valuation of goodwill
Refer to the consolidated financial statements note 3.1. Goodwill is one of the most significant consolidated balance sheet items. The determination and whether an impairment charge is required involves significant	Our audit focused on assessing the reasonableness of the determination of cash generating units, which forms the basis for the goodwill impairment testing and assessing the appropriateness of management’s judgments and estimates


				141



management judgement, including identifying on which cash generating unit level the goodwill is tested and estimating the future performance of the business and the discount rate applied to these future cash flows. Valuation of goodwill is a key audit matter in the audit due to the size of the goodwill balance and the level of management judgement involved in the impairment testing.	used in the goodwill impairment analysis. Our procedures relating to the impairment analysis included the following: • We tested the methodology applied in the goodwill impairment analysis as compared to the requirements of IAS 36, Impairment of Assets; • We evaluated the process by which the future cash flow forecasts were drawn up, including comparing them to the latest Board approved targets and long-term plans; • We tested the key underlying assumptions for the cash flow forecasts, including sales and profitability forecasts, discount rate used and the implied growth rates beyond the forecasted period; • We compared the current year actual results included in the prior year impairment model to consider whether forecasts included assumptions that, with hindsight, had been reasonable; • We considered whether the sensitivity analysis performed by the management around key assumptions of the cash flow forecast was appropriate by considering the likelihood of the movements of these key assumptions; and


	•
	•In addition, we assessed the appropriateness of disclosures related to goodwill.

We have no key audit matters to report with respect to our audit of the parent company financial statements. There are no significant risks of material misstatement referred to in Article 10(2c) of Regulation (EU) No 537/2014 with respect to the consolidated financial statements or the parent company financial statements.

Responsibilities of the Board of Directors and the Managing

Director for the Financial Statements

The Board of Directors and the Managing Director are responsible for the preparation of

consolidated financial statements that give a true and fair view in accordance with IFRS

Accounting Standards as adopted by the EU, and of financial statements that give a true and

fair view in accordance with the laws and regulations governing the preparation of financial

statements in Finland and comply with statutory requirements. The Board of Directors and

the Managing Director are also responsible for such internal control as they determine is

necessary to enable the preparation of financial statements that are free from material

misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors and the Managing Director are

responsible for assessing the parent company’s and the group’s ability to continue as a going

concern, disclosing, as applicable, matters relating to going concern and using the going

concern basis of accounting. The financial statements are prepared using the going concern


				142

basis of accounting unless there is an intention to liquidate the parent company or the group

or to cease operations, or there is no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a

whole are free from material misstatement, whether due to fraud or error, and to issue an

auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,

but is not a guarantee that an audit conducted in accordance with good auditing practice will

always detect a material misstatement when it exists. Misstatements can arise from fraud or

error and are considered material if, individually or in the aggregate, they could reasonably

be expected to influence the economic decisions of users taken on the basis of these financial

statements.

As part of an audit in accordance with good auditing practice, we exercise professional

judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether

due to fraud or error, design and perform audit procedures responsive to those risks, and

obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.

The risk of not detecting a material misstatement resulting from fraud is higher than for

one resulting from error, as fraud may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the parent company’s or the group’s internal

control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s

use of the going concern basis of accounting and based on the audit evidence obtained,

whether a material uncertainty exists related to events or conditions that may cast

significant doubt on the parent company’s or the group’s ability to continue as a going

concern. If we conclude that a material uncertainty exists, we are required to draw

attention in our auditor’s report to the related disclosures in the financial statements or, if

such disclosures are inadequate, to modify our opinion. Our conclusions are based on the

audit evidence obtained up to the date of our auditor’s report. However, future events or

conditions may cause the parent company or the group to cease to continue as a going

concern.

• Evaluate the overall presentation, structure and content of the financial statements,

including the disclosures, and whether the financial statements represent the underlying

transactions and events so that the financial statements give a true and fair view.


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• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding

the financial information of the entities or business units within the group as a basis for

forming an opinion on the group financial statements. We are responsible for the

direction, supervision and review of the audit work performed for purposes of the group

audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the

planned scope and timing of the audit and significant audit findings, including any significant

deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with

relevant ethical requirements regarding independence, and communicate with them all

relationships and other matters that may reasonably be thought to bear on our independence,

and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those

matters that were of most significance in the audit of the financial statements of the current

period and are therefore the key audit matters. We describe these matters in our auditor’s

report unless law or regulation precludes public disclosure about the matter or when, in

extremely rare circumstances, we determine that a matter should not be communicated in

our report because the adverse consequences of doing so would reasonably be expected to

outweigh the public interest benefits of such communication.

Other Reporting Requirements

Appointment

We were first appointed as auditors by the annual general meeting on 2 March 2017. Our

appointment represents a total period of uninterrupted engagement of nine years.

Other Information

The Board of Directors and the Managing Director are responsible for the other information.

The other information comprises the report of the Board of Directors and the information

included in the Annual Report but does not include the financial statements and our auditor’s

report thereon.

Our opinion on the financial statements does not cover the other information.

In connection with our audit of the financial statements, our responsibility is to read the

other information and, in doing so, consider whether the other information is materially

inconsistent with the financial statements or our knowledge obtained in the audit, or

otherwise appears to be materially misstated. With respect to the report of the Board of

Directors, our responsibility also includes considering whether the report of the Board of

Directors has been prepared in compliance with the applicable provisions, excluding the

sustainability report information on which there are provisions in Chapter 7 of the

Accounting Act and in the sustainability reporting standards.

In our opinion, the information in the report of the Board of Directors is consistent with the

information in the financial statements and the report of the Board of Directors has been


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prepared in compliance with the applicable provisions. Our opinion does not cover the

sustainability report information on which there are provisions in Chapter 7 of the

Accounting Act and in the sustainability reporting standards.

If, based on the work we have performed, we conclude that there is a material misstatement

of the other information, we are required to report that fact. We have nothing to report in this

regard.

Other Statements based on Law

Registration of the Income Tax Report

Our responsibility is to, based on our audit, express an opinion on the registration and

publication of the income tax report required in Chapter 7 b of the Accounting Act.

The Board of Directors and the Managing Director are responsible for the registration and

the publication of the income tax report.

In our opinion, the company has not been obliged to register and publish an income tax

report referred to in Chapter 7 b of the Accounting Act for the financial year immediately

preceding the financial year.

Other Statements

We support that the financial statements should be adopted. The proposal by the Board of

Directors regarding the use of the profit shown in the balance sheet is in compliance with the

Limited Liability Companies Act. We support that the Members of the Board of Directors and

the President and CEO should be discharged from liability for the financial period audited by

us.

Helsinki, 11 February 2026

PricewaterhouseCoopers Oy

Authorised Public Accountants

Lauri Kallaskari

Authorised Public Accountant (KHT)


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Independent auditor's report on the ESEF financial

statements of Wärtsilä Corporation (Translation of the

Finnish Original)

To the Board of Directors of Wärtsilä Corporation

We have performed a reasonable assurance engagement on the financial statements

743700G7A9J1PHM3X223-2025-12-31-fi.xbri of Wärtsilä Corporation (business identity

code 0128631-1) that have been prepared in accordance with the Commission's regulatory

technical standard for the financial year 1 January-31 December 2025.

Responsibilities of the Board of Directors and the Managing

Director

The Board of Directors and the Managing Director are responsible for the preparation of the

company's report of the Board of Directors and financial statements (the ESEF financial

statements) in such a way that they comply with the requirements of the Commission's

regulatory technical standard. This responsibility includes:

• preparing the ESEF financial statements in XHTML format in accordance with Article 3 of

the Commission's regulatory technical standard

• tagging the primary financial statements, notes and company's identification data in the

consolidated financial statements that are included in the ESEF financial statements with

iXBRL tags in accordance with Article 4 of the Commission's regulatory technical standard

and

• ensuring the consistency between the ESEF financial statements and the audited financial

statements.

The Board of Directors and the Managing Director are also responsible for such internal

control as they determine is necessary to enable the preparation of ESEF financial statements

in accordance with the requirements of the Commission's regulatory technical standard.

Auditor’s independence and quality management

We are independent of the company in accordance with the ethical requirements that are

applicable in Finland and are relevant to the engagement we have performed, and we have

fulfilled our other ethical responsibilities in accordance with these requirements.

The auditor applies International Standard on Quality Management (ISQM) 1, which requires

the firm to design, implement and operate a system of quality management including policies

or procedures regarding compliance with ethical requirements, professional standards and

applicable legal and regulatory requirements.

Auditor’s responsibilities

Our responsibility is to, in accordance with Chapter 7, Section 8 of the Securities Markets Act,

provide assurance on the financial statements that have been prepared in accordance with

the Commission's regulatory technical standard. We express an opinion on whether the

consolidated financial statements that are included in the ESEF financial statements have


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been tagged, in all material respects, in accordance with the requirements of Article 4 of the

Commission's regulatory technical standard.

Our responsibility is to indicate in our opinion to what extent the assurance has been

provided. We conducted a reasonable assurance engagement in accordance with

International Standard on Assurance Engagements (ISAE) 3000.

The engagement includes procedures to obtain evidence on:

• whether the primary financial statements in the consolidated financial statements that are

included in the ESEF financial statements have been tagged, in all material respects, with

iXBRL tags in accordance with the requirements of Article 4 of the Commission's

regulatory technical standard and

• whether the notes and company's identification data in the consolidated financial

statements that are included in the ESEF financial statements have been tagged, in all

material respects, with iXBRL tags in accordance with the requirements of Article 4 of the

Commission's regulatory technical standard and

• whether there is consistency between the ESEF financial statements and the audited

financial statements.

The nature, timing and extent of the selected procedures depend on the auditor’s judgment.

This includes an assessment of the risk of a material deviation due to fraud or error from the

requirements of the Commission's regulatory technical standard.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis

for our opinion.

Opinion

Our opinion pursuant to Chapter 7, Section 8 of the Securities Markets Act is that the primary

financial statements, notes and company's identification data in the consolidated financial

statements that are included in the ESEF financial statements of Wärtsilä Corporation

743700G7A9J1PHM3X223-2025-12-31-fi.xbri for the financial year 1 January-31 December

2025 have been tagged, in all material respects, in accordance with the requirements of the

Commission's regulatory technical standard.

Our opinion on the audit of the consolidated financial statements of Wärtsilä Corporation for

the financial year 1 January-31 December 2025 has been expressed in our auditor's report

dated 11 February 2026. With this report we do not express an opinion on the audit of the

consolidated financial statements nor express another assurance conclusion.


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Helsinki, 11 February 2026

PricewaterhouseCoopers Oy

Authorised Public Accountants

Lauri Kallaskari

Authorised Public Accountant (KHT)


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Assurance Report on the Sustainability Report

(Translation of the Finnish Original)

To the Annual General Meeting of Wärtsilä Corporation

We have performed a limited assurance engagement on the group sustainability report of

Wärtsilä Corporation (business identity code 0128631-1) that is referred to in Chapter 7 of the

Accounting Act and that is included in the report of the Board of Directors for the reporting

period 1.1–31.12.2025.

Opinion

Based on the procedures we have performed and the evidence we have obtained, nothing has

come to our attention that causes us to believe that the group sustainability report does not

comply, in all material respects, with

1) the requirements laid down in Chapter 7 of the Accounting Act and the sustainability

reporting standards (ESRS), and

2) the requirements laid down in Article 8 of the Regulation (EU) 2020/852 of the European

Parliament and of the Council on the establishment of a framework to facilitate

sustainable investment, and amending Regulation (EU) 2019/2088 (EU Taxonomy).

Point 1 above also contains the process in which Wärtsilä Corporation has identified the

information for reporting in accordance with the sustainability reporting standards (double

materiality assessment).

Our opinion does not cover the tagging of the group sustainability report with digital XBRL

sustainability tags in accordance with Chapter 7, Section 22, Subsection 1(2), of the

Accounting Act, because sustainability reporting companies have not had the possibility to

comply with that requirement in the absence of requirements for the tagging of sustainability

information in the ESEF regulation or other European Union legislation.

Basis for Opinion

We performed the assurance of the group sustainability report as a limited assurance

engagement in compliance with good assurance practice in Finland and with the

International Standard on Assurance Engagements (ISAE) 3000 (Revised) Assurance

Engagements Other than Audits or Reviews of Historical Financial Information.

Our responsibilities under this standard are further described in the Responsibilities of the

Authorised Group Sustainability Auditor section of our report.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis

for our opinion.


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Authorised Group Sustainability Auditor's Independence and

Quality Management

We are independent of the parent company and of the group companies in accordance with

the ethical requirements that are applicable in Finland and are relevant to our engagement,

and we have fulfilled our other ethical responsibilities in accordance with these requirements.

The authorised group sustainability auditor applies International Standard on Quality

Management ISQM 1, which requires the authorised sustainability audit firm to design,

implement and operate a system of quality management including policies or procedures

regarding compliance with ethical requirements, professional standards and applicable legal

and regulatory requirements.

Responsibilities of the Board of Directors and the Managing

Director

The Board of Directors and the Managing Director of Wärtsilä Corporation are responsible

for:

• the group sustainability report and for its preparation and presentation in accordance with

the provisions of Chapter 7 of the Accounting Act, including the process that has been

defined in the sustainability reporting standards and in which the information for

reporting in accordance with the sustainability reporting standards has been identified,

• the compliance of the group sustainability report with the requirements laid down in

Article 8 of the Regulation (EU) 2020/852 of the European Parliament and of the Council

on the establishment of a framework to facilitate sustainable investment, and amending

Regulation (EU) 2019/2088, and for

• such internal control as the Board of Directors and the Managing Director determine is

necessary to enable the preparation of a group sustainability report that is free from

material misstatement, whether due to fraud or error.

Inherent Limitations in the Preparation of a Sustainability Report

In reporting forward-looking information in accordance with ESRS, management of the

Company is required to prepare the forward-looking information on the basis of assumptions

that have been disclosed in the sustainability statement about events that may occur in the

future and possible future actions by the Group. Actual out-comes are likely to be different

since anticipated events frequently do not occur as expected.

Responsibilities of the Authorised Group Sustainability Auditor

Our responsibility is to perform an assurance engagement to obtain limited assurance about

whether the group sustainability report is free from material misstatement, whether due to

fraud or error, and to issue a limited assurance report that includes our opinion.

Misstatements can arise from fraud or error and are considered material if, individually or in

the aggregate, they could reasonably be expected to influence the decisions of users taken on

the basis of the group sustainability report.


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Compliance with the International Standard on Assurance Engagements (ISAE) 3000

(Revised) requires that we exercise professional judgment and maintain professional

skepticism throughout the engagement. We also:

• Identify and assess the risks of material misstatement of the group sustainability report,

whether due to fraud or error, and obtain an understanding of internal control relevant to

the engagement in order to design assurance procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the

parent company’s or the group’s internal control.

• Design and perform assurance procedures responsive to those risks to obtain evidence

that is sufficient and appropriate to provide a basis for our opinion. The risk of not

detecting a material misstatement resulting from fraud is higher than for one resulting

from error, as fraud may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal control.

Description of the Procedures That Have Been Performed

The procedures performed in a limited assurance engagement vary in nature and timing

from, and are less in extent than for, a reasonable assurance engagement. The nature, timing

and extent of assurance procedures selected depend on professional judgment, including the

assessment of risks of material misstatement, whether due to fraud or error. Consequently,

the level of assurance obtained in a limited assurance engagement is substantially lower than

the assurance that would have been obtained had a reasonable assurance engagement been

performed.

Our procedures included for example the following:

• We interviewed the company's management and the individuals responsible for collecting

and reporting the information contained in the group sustainability report at the group

level to gain an understanding of the sustainability reporting process and the related

internal controls and information systems.

• We familiarised ourselves with the background documentation and records prepared by

the company where applicable, and assessed whether they support the information

contained in the group sustainability report.

• We assessed the company's double materiality assessment process in relation to the

requirements of the ESRS standards, as well as whether the information provided about

the assessment process complies with the ESRS standards.

• We assessed whether the sustainability information contained in the group sustainability

report complies with the ESRS standards.

• Regarding the EU taxonomy information, we gained an understanding of the process by

which the company has identified the group's taxonomy-eligible and taxonomy-aligned

economic activities, and we assessed the compliance of the information provided with the

regulations.