Highlights from January–March 2025
WÄRTSILÄ’S PROSPECTS
Marine
Wärtsilä expects the demand environment for the next 12 months (/2026) to be better than in the comparison period.
Energy
Wärtsilä expects the demand environment for the next 12 months (/2026) to be better than in the comparison period.
However, 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.
HÅKAN AGNEVALL, PRESIDENT & CEO: Continued growth and improved performance amid increased uncertainty
“Wärtsilä had a solid first quarter of 2025, achieving an improved operating result and significant growth in net sales. However, towards the end of the quarter, uncertainty in the global economic outlook increased. Higher and broader trade barriers, along with policy uncertainty, are expected to limit global economic growth.
In the energy market, the continued growth in electricity demand is anticipated to drive demand for new power generation. This growth will primarily be met by renewables, with wind and solar expected to achieve record-high capacity additions in 2025. The increasing share of intermittent renewables in power systems worldwide also creates demand for balancing technologies, where Wärtsilä has a strong offering. However, the current trade policy uncertainty presents challenges to global energy-technology supply chains.
In the marine market, the growth rate for ship capacity demand has moderated from the 15-year high seen in 2024. While the market remains positive overall, uncertainty in global trade has led to mixed sentiments across various vessel segments. Investments in new ships during the quarter were below the levels seen in the same period last year. Wärtsilä’s key customer segments – cruise, ferry, and offshore – have performed better than the general market. There was also a healthy pickup in alternative fuels, which accounted for 65% of the capacity of contracted vessels in the first quarter.
In both end markets, we continued to support our customers with comprehensive technology and service offerings. For instance, we signed a Lifecycle Agreement with CMA Ships, a subsidiary of the leading French shipping company CMA CGM during the first quarter. This agreement covers 14 large LNG-fuelled container ships, for which Wärtsilä will provide a full-service package ensuring reliable operations at a fixed and minimized cost. This package utilises Wärtsilä’s unique Expert Insight service, which leverages AI technology for predictive maintenance, enhancing asset efficiency and reducing operating costs. Another highlight of our technology development is the launch of our next generation 46TS engine during the quarter. The Wärtsilä 46TS engine is designed to balance intermittent renewable energy output, provide highly efficient baseload power, and can run on sustainable fuels in the future. We have already announced the first order for the 46TS engines with Kazakhstan Caspian Offshore Industries.
Wärtsilä’s order book was at an all-time high at the end of the first quarter of 2025 even though order intake in the first quarter decreased organically by 2%. Equipment order intake decreased, primarily due to lower orders in Energy Storage and Optimisation, while equipment order intake in Engine Power Plants increased by 35%. Service order intake increased, supported by higher activity in Marine and Energy. Net sales increased organically by 18%, mainly supported by growing equipment sales in Marine and Energy.
The comparable operating result increased by 29% to EUR 171 million, representing 11.0 % of net sales. The result was supported by increases in Marine, Energy and Portfolio Business. Cash flow from operating activities was solid at EUR 190 million in the first quarter. As stated earlier, the current negative working capital level is very favourable for our business, and we expect it to normalise going forward. Our active efforts on all aspects of working capital will continue in order to maintain a working capital level clearly below the long-term historical average.
During the quarter, we announced the closure of the strategic review of Energy Storage and Optimisation. As a result, Energy was separated into two independent reporting 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. Separating Energy Storage into an independent reporting segment drives further focus on this business in a rapidly evolving industry. Wärtsilä remains fully committed to developing Energy Storage that will continue to focus on profitable growth, leveraging its project delivery and execution excellence, and growing its recurring revenue. 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.
As a result of solid profitability improvement in Marine and Energy and to better reflect the new organisational structure, we also introduced new financial targets. 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. We will continue our firm strategy execution and have a clear path to reach the updated targets.
As we look into the future, we expect the demand environment for the coming 12 months to be better than in the comparison period in both Marine and Energy. However, as we underlined in the previous quarter, the current high external uncertainties make forward-looking statements challenging.
Despite the uncertain macroeconomic outlook, our customers in the marine and energy industries remain focused on affordable energy and decarbonisation. Wärtsilä will continue to provide flexible and future-proof solutions that help our customers reaching their goals in a way that is both environmentally sustainable and financially viable. We have established ourselves as a technology leader in both of our industries, and our strong balance sheet, global footprint, and resilient service business give us a strong foundation to weather the challenges ahead.”
Wärtsilä presents certain alternative performance measures in accordance with the guidance issued by the European Securities and Markets Authority (ESMA). The definitions of these alternative performance measures are presented in the Calculations of financial ratios section.
Source: Wärtsilä
