Hi all, and welcome to this news conference for Wärtsilä Q4 2025 results. My name is Hanna-Maria Heikkinen, and I'm in charge of Investor Relations.

Today, our CEO Håkan Agnevall will start with the group highlights, he will continue with the business performance, and after that, our CFO Arjen Berends will continue with key financials. After that, we will discuss the dividend proposal and also the outlook.

After the presentation, there is a good opportunity to ask questions. Time to start, Håkan.

Thank you, Hanna-Maria. Before you leave, congratulations.

You were voted to the most popular investor relations professional in Finland, so.

Thank you, Håkan. Thank you first of all to Håkan, Arjen, and all of Wärtsilä management, but also all of the analysts and investors who have been engaging in our dialogue and providing very inspiring questions.

Thank you.

Thank you. Thank you.

Q4 and 2025, I think this has been a great year and and we are on on on on a great journey, I would say. If I sum it up in one word: great.

You also need to look a little bit beyond, and I will come back to that. If we start with Q4, all-time high operating profit and cash flow, huh?

Look at the order intake, and if we focus on Energy and Marine, it's developing quite positively. Marine order intake increased by 8%, while the organic growth, which we when we exclude FX impact and impact of acquisition, was actually 11%, double-digit.

On the Energy side, the Energy order intake increased by 4%, while the organic was 13%, also there double-digit. Now, total order intake, and this is where it got gets a little bit complex, the total order intake for the group was down 11% to €2.2 billion due to two drivers.

Basically, a strong comparison period on energy storage. Energy storage had decent order intake in Q4 2025, but it was very strong in in in the year before.

In general, we continue to have a challenge on the order intake in energy storage. Then the second driver for the down 11% is the divestment in portfolio business, which is actually we are in a good trajectory, divesting the the the business units, but as we take them out, it has an impact of course on our overall order intake for the group.

Key message: yes, Marine and Energy double-digit organic growth. Now, we also continue to have a strong order book around €8.2 billion, and that is after the elimination of about €900 million related to the divestments.

Net sales increased by 8% to about €2 billion. Then we continue the journey of improving our operating profit.

Comparable operating result increased by 23% to €256 million, and that is 12.8% of net sales. Operating result increased by 10% to €251 million, and that is 12.5% of net sales.

Then on services, a lot of attention on services, the the 12-month rolling book-to-bill continues to be above 1. On on the Energy side, it was 1.1, and on the Marine side is 1.01.

Cash flow, and Arjen will talk more about that, strong cash flow from operating activities of of €652 million. Strong Q4, and if we look at the full year, we have all-time highs in in four key metrics: so in order intake, in net sales, in operating results, and in cash flow.

Very strong year. Now, I will talk through these numbers, and and I will do it rather quickly because because of these effects on on portfolio and and storage, we actually make an additional slide this time where we drill a little bit deeper.

If we if we start with the group level, order intake, you can clearly see it's down 11%, €2.2 billion. Net sales is is still up to with 8% to to €2 billion.

Book-to-bill, also on group level, 1.11, clearly above 1. Comparable operating result up 23% to 12.8%, operating result up 10% to 12.5% of net sales.

Then looking at the full year before we move on, order intake rather flat on group level, net sales up 7% to €6.9 billion, book-to-bill for the full year 1.17, comparable operating result up 20% to €829 million, which is 12% of net sales, and finally the operating result up 16% to €833 million at 12.1% net sales. That's a milestone, the 12.1%.

You remember our old financial targets for the whole group? We achieved them, and now we move on.

Now, this is a little bit breaking down into details because this is the underlying message. Let's look first, these are full-year numbers.

Let's look at Marine and Energy combined, and then energy storage. Here, you see a little bit different picture.

Order intake was actually up on full year 17% to €6.9 billion. If you even if you look at organic growth, it's even higher, it's 20%.

If if we look at service and equipment, it's it's flat on service, but we do have a FX effect here of about 4%. Equipment is up 43% to €3.3 billion.

Order book up 18% to €6.7 billion. Net sales up 12% to €5.5 billion, and organically it's even up 15%.

You look at the services, services actually up 6%, it's up 10% if you look organically. Equipment up 22%, and book-to-bill moving to 1.24.

Comparable operating result up 21% to €758 million, and and that is 13.7% of net sales. We are on a good path, solid path to to reach our targets of of 14% for Marine and Energy combined.

Now, that's all good, developing really well. We do have and continue to have a challenge on storage.

You can clearly see it here. Order intake has been a real challenge during during 2025.

Order intake is down 60% to €455 million. If you look at the order book, it's also down 36% to €719 million.

Net sales down 13% to €694 million, and and book-to-bill clearly above, sorry, clearly below 1 at 0.66. Comparable operating result also deteriorated to €24 million, 3.4% of of net sales.

Still within the 3% to 5% EBIT span that we've been talking about. The team is doing a good work in executing projects and delivering and doing that in a profitable way, but of course order intake is a major challenge.

Now, looking at our two industries, some some comments on on the the general industry development, starting with Marine. The key, I mean the sentiment for for our key segments remain on on on a good level.

Of course, overall contracting in 2025 decreased from the extraordinary activity levels we saw in 2024. The the number of vessels ordered in in the review period decreased to to 2,000 about from 2,400.

Now, one driving factor: the regulatory uncertainty, but also high newbuild prices and softer market conditions affected negatively the the newbuild investment in some segments. Ordering has been rather uneven across vessel segments, but the the appetite in our core segments, in Wärtsilä's core core segments, cruise, container ships, and LNG bunkering vessels, has been been rather good.

Contracting in our key segments are expected by Clarksons and by ourselves to remain clearly above the 10-year average level. Shipyard shipyard order books are at the highest level since 2009, and and shipbuilding capacity expansion is is primarily in China.

In in January to December, 366 orders for new alternative fuel capable ships were reported. That's about 37% of of of the the total, to say, which is down from 50% in the comparison period.

That is mainly mix driven because the last during the last time it it's been there's been a bigger share of of tankers and and and conventional bulk carriers, to say. The key thing here when we see at the graphs here is still the same message.

If you look on the overall demand, it's still below, the forecast from Clarksons is still above, sorry, the 10-year average. Focusing on on Wärtsilä core segments, it's clearly above the 10-year average.

Energy market: increased demand drives the energy transition and and in investments in the energy transition, and and it continues, the transition continues to move forward. Two key themes stood out in energy-related macroeconomic development in 2025: one was load growth and the other was tariff-related uncertainty.

The investment environment for for energy technologies has improved along with global macroeconomic conditions. In engine power plants, the market demand for equipment and services has been strong.

Demand for baseload engine power plants is expected to remain stable with further growth opportunities in data centers. The driver for engine balancing power plants continue to develop favorably.

In the battery energy storage, the demand is closely linked to the increasing share of intermittent renewables in the energy system, which continues to to to progress strongly. The US market is is still facing regulatory headwinds through though several drivers remain solid, with data centers also for storage as as a potential new opportunity going forward.

After significant growth driven by solar up to the mid-'20s, renewable capacity additions are expecting to decrease slightly in 2026. Growth prospects towards the end of the decade though remain solid, there is still definitely a positive trend.

Going through the numbers, looking at the graphs, and now we are back to to group level, organic order intake decreased by by 4%, order intake decreased by 11%, but as we talked about, Marine order intake increased by 8%, Energy order intake increased by 4%, energy storage though order intake decreased by 40%. If we look equipment overall, equipment order intake decreased by 15%, primarily driven by by storage, and service order intake decreased by 5%.

We have a strong order book, and rolling book rolling book-to-bill continues above 1, I think now for the 19th quarter, consecutive quarter. As we talked about, the order book decreased due to the elimination of about €900 million related to divestments in portfolio business.

Now, this is a a new slide that that we have added and and that we our intention is to keep this as a standard slide in our reporting going forward. We are really trying to describe how our order book will translate into sales going forward.

Because the existing order book will will generate sales that is distributed further into the future. Here you can see the distribution in time of the deliveries of the existing order backlogs for 2024, 2025, and 2026.

You clear you clearly see how it is stretching out. We have also given the numbers and the size of the order backlog to to help the analysis.

You can say there are two two driving factors here that you really need to look very carefully on. We are selling capacity further and further out in time, and that is of course a function of of a hot market, to say.

The other major driving factor, as in Energy, we are very much about equipment deliveries, and and much less on on EPC deliveries these days. It there are two different revenue recognition models.

Basically the EEQ, you could say the major revenue recognition, it's rather lumpy because it's actually when you deliver the engines, and that is different from the EPC way because the EPC way, you could say you gradually, continuously over the project recognize sales. These two factors really affects how we think about translating the timing, how we translate the order backlog into sales.

Very important going forward. Organic net sales increased by 16%, net sales increased by 8%, Marine net sales increased by 10%, and Energy net sales increased by 29%.

Energy storage though net sales decreased by 20%. Overall equipment net sales increased by 15%, and service net sales remained stable.

Profitability continued to improve. Net sales, we talked about that, increased by 8%.

Comparable operating result increased by 23%, and and the comparable operating margin 12-month rolling to to 12% from from previous 10.8%. Now, technology and partnership highlights, and and there is a lot of exciting things happening.

As as Wärtsilä, it's it's all about innovation and technology and services, and and there we we are really making progress. Data center orders.

We we continue to to break into the US and a global also data center market. We talked about it that that off-grid data centers really growing in in its market, to say, and and the power need is is in many installations right in our sweet spot.

This is the example from from end of of last year where we got an order for 507 MW power plant supplying data center in in the US. We continue to to grow, and and we will deliver 27 engines to provide continuous primary power for for a new data center in construction in the US.

We the the on-site power facility will operate with this 24 Wärtsilä 50SG engines with the power 507 MW. They will run on natural gas that can later be converted to run on sustainable fuels in the future.

The order was booked in in our order intake in Q4 2025. The equipment will be delivered in 2027.

Then moving to Marine, we had our second order for an ammonia engine on the Marine side, and and to to a Norwegian customer, Skarv Shipping cargo vessel. We will provide our advanced Wärtsilä 25 ammonia solution to power a new cargo vessel for for Skarv.

This vessel will be built at the Huanghai shipyard in China, and and will be the first newbuild to to benefit from the solution. This order was also booked in in our order intake in in the fourth quarter of 2025.

You have also seen the other press release that we have made this morning, and and it's about setting us up for for continued growth, further investments in our capacity. We will expand our production capacity in Vaasa in Finland.

We will expand the technical capacity with 35% to meet the global increase in demand in Energy and Marine. We will invest about €140 million to further expand our production capacity with 35% in our STH technology center, and also in in the associated global supply chain.

The vast majority of the investment is is in STH. This expansion will will increase our industrial capacity and strengthen the capacity of the associated global supply chain.

The new capacity will will be installed within the STH expansion that we announced in April 2025, and it's expected to be commissioned in the first quarter of 2028. A a major step for for STH in in Vaasa.

I think overall now the last few years we have invested about €400 million in in Vaasa facility. It's not only about Vaasa, we also continue to invest in our service business in a very concrete way in our in our global spare part distribution center in Kampen in the Netherlands, and that investment is also to continue to support the the the growth.

We will expand our main spare part distribution center in Kampen by 40% and consolidate nearby leased storage facility into Kampen. We will and this is a smaller investment, but very important one, we will invest about €14 million in expanding the facility, and and we expect to have it commissioned by by 2027.

Then expanding capacity is a lot about the supply chain, as we all know, and and I really wanted to highlight this partnership agreement that we have signed with one of our key suppliers, Simpelkamp foundry. We have formed a strategic partnership to secure the supply chain to support our our continued growth, and and we strengthen the supply chain by this strategic partnership with Simpelkamp in the supply and their supply to us of large cast components for for our engines.

As a result, we can in our turn support the growing demand from our customers and the markets in in sustainable technologies for for the marine and energy sectors. We are also continuing our work on streamlining Wärtsilä, becoming a more focused and profitable company.

We have made progress in our portfolio business divestments. This is nothing new, but we wanted to sum up some of the of the metrics here to help you with the analysis of of Wärtsilä.

As you remember, we we divested ANCS, Automation, Navigation and Control Systems, to Solix. In in the divestment was completed in the 1st of July last year.

Now, the annual revenue of this business was €127 million in 2025 and close to €230 million in in 2024. ANCS has also clearly been the most profitable unit of our portfolio business, representing about 80% of of the operating result during the the first half of of 2025.

That was ANCS. Then we had MES, the divestment of Marine Electrical Systems to to VINCI Energies that was completed on 31st of October last year.

Here, the annual revenue of the business was about €92 million in 2025 and €100 million in 2024. The group order book has now been adjusted with, in this case, €620 million.

It's one big part of the €900 million that I was talking about before. Finally, the the divestment of Gas Solutions to to Mutares is is expected to be completed.

We've signed and we expect to complete the transaction in the second quarter this year. The annual revenue of the business was €394 million in 2025, about €300 million in 2024.

After these divestments, we have one business unit left, and and that is Water & Waste. That is a a business unit with annual sales of about €50 million.

Of course our ambition is to to move ahead and and and also sign and close during this year. Work is ongoing.

Now, looking a little bit on on our businesses, how how have they developed? On the Marine side, growing order intake and net sales as well as improving our comparable operating results.

Order intake up 8%, we talked about that, net sales up 10%. If we look at at the the development continuous improvement of of of the profitability, on the positive side, we have higher service and equipment volumes providing better operating leverage.

We also have improved newbuild margins in what we have delivered, positively contributing. On the on the investment side or the cost side, we we we do run increased R&D, investing into our future.

Service continues with a book-to-bill about 1. We we see 9% CAGR on on on the net sales.

You see the different disciplines here. Then you notice if you see agreements, it looks like it's going down, it's the blue line there.

That is more periodization, because agreements they it's a little bit like project business and you can have it could be a bit lumpy based on periodization. You also see the retrofit business, that is really below 1 now, but also there it's project business and and we have a positive outlook going forward.

We will continue to grow in in in Marine services. Going over to to Energy: so growing order intake as well as significantly improved net sales and comparable operating results.

Order intake up 4%. You might think that was not so impressive growth, but I you look at the the newbuild side there, and look at the the orders we announced here just in the beginning of of of of the year where we, the other week we announced an additional 550 MW plus.

It's about periodization of order intake of of of big orders, to say. There is a strong underlying demand, and and and and we will come back that when we we give the demand guidance.

Net sales up 29%. Here, if we look at at the development of of the comparable operating result, continue to improve our our profitability.

Also here, the higher equipment volumes provides better operating leverage, and we have a better service margin mix. I I can also say that we are building the the margins in our order backlog, but that will be delivered late later, to say.

On on on the same side as as Marine, we are in continue to increase in in R&D. Also on the Energy side, we continue with a service book-to-bill about 1.

We have had 4% CAGR. Here, you see if we look to the right, on the Energy side, on the on the blue dotted line, we had good service agreement order intake at the very last weeks.

Periodization, here we were a little bit lucky, but but the overall trend is positive. Similar to Marine, you see retrofit here.

It's periodization, we see underlying growth going forward. Storage: so in storage, on the positive note, we had a revived order intake development after three slow quarters.

However, it it was clearly below the exceptionally high comparison period in in the fourth quarter 2024, and this is why you see the the order intake is down with with 40%. Now, we do have a challenge overall through through the 2025 on order intake, let's be very frank about that.

Net sales was down as a consequence of that with with 20%. If we look on profitability, which which has decreased, on the on the positive side, as I talked about, very solid execution of of the of the projects on I mean in the backlog by a strong team, but the lower volumes and also R&D, we continue to invest in R&D, is is affecting the profitability negatively.

Here's the bridge, Q4 Q-on-Q, to say, and how how the different businesses are developing. If from the group, we go from 11.3% to 12.8% comparable operating results.

Marine is up from 11.8% to 13.0%, Energy is also up from from 15.1% to 16.0%, and storage down then from from 6.9% to 4.3%. Portfolio is actually executing well, improving 3.7% to 7.4%.

Overall, the comparable operating results increased by 23%. Now, Arjen, over to you.

Thank you, Håkan. Very happy to talk about the key financials as they look all very, very good.

Very happy with that. If we start with operating cash flow, €652 million for the quarter and 1.6 for the full year.

Both on the quarter as well as the full year, it's an all-time high, as Håkan also mentioned earlier. The previous all-time high was actually also on the slide, it's €1.2 billion in 2024.

Great support from the profitability to the cash flow, let's say you can see it on the EBITDA line, which is clearly getting higher and that of course over time will convert into operating cash, as well as let's say the working capital. Working capital in fact is actually at an all-time low as well.

Big element in the working capital is of course the advances. It's about 1.3 and a little bit more.

If you exclude the advances from the working capital, still I would say it's a very good working capital level, it's about €80 million positive compared to let's say two years ago at the start of let's say 2024 it was €600 million. Working capital excluding advances being €600 million at that time, now about 80.

It's not just the advances that help us, but it's also all the good work that we are doing in other areas of working capital. Clear highlight on this slide is the ROCE, clearly going up.

It's okay, it's close to double, I would say, from previous year. Of course that is really driven by also good profitability development and in particular also a very good working capital development.

Solvency, I'm also very happy with. Let's say, I think it's a couple of years ago that we had a number above 40, now we are 40.5%, up from 37.4% last year.

Earnings per share, also here an all-time high at €1.06. I can only say that I'm super happy with these numbers.

If we look at the trend, and let's say all trends go in the right direction. Cash flow, clearly let's say the orange trend is up and the working capital trend is down.

Also good to remark here that let's say the five-year average working capital to net sales line, the dotted line on the right side graph, is now for the first time in a negative number, -0.6%. Just for reference, at the end of Q2, I think we had 2.4% if I remember right.

Really let's say going well on a long-term basis as well. If we then move to dividends, the board will propose to the AGM, or has proposed to the AGM basically, a base dividend of 54 cents, euro cents, to be paid in two installments, and then an extraordinary dividend of 52 cents, all together making up for 100% of EPS at €1.06.

Final slide from my side, solid progress towards the financial targets. If we start at the Marine & Energy Combined graph in the top left corner, first of all, very good growth, organically 15%, newbuild was 25% and service was 9%, really in both areas really good growth.

Also the orange line, 13.8% on the operating margin, really improving significantly, I would say, in Q4 on a rolling 12-month basis. Q3 was 13.2% and one year ago at the end of 2024 we had 12.8%, it's a 1 full percent up year on year, percent point.

On energy storage, as Håkan also explained already, we have been suffering from let's say low order intake that translates then of course also in lower sales and that has a consequence to let's say absolute profitability as well. Still, having said that, let's say the performance was on a acceptable level, 3.3%, which is within the range of the financial targets for energy storage, 3% to 5% operating margin.

Gearing, it further goes down. I don't need to comment too much about that, and I think the dividend distribution I just mentioned.

With these words, back to you, Håkan, on the outlook. Yes.

Let's look on the guidance. On the Marine side, we expect the demand environment in the coming 12 months to be similar to that of the comparison period.

Please note that the last 12 months have been very, very strong, the demand continue on a very good level driven by our core segments. On the Energy side, we expect the demand environment for the next 12 months to be better than the comparison period, and driven not only by data centers, but by balancing power, other baseload, better demand environment.

On energy storage, we expect the demand environment next 12 months to be better also, of course coming from a very low level. Particularly on the energy storage, we note that the current geopolitical uncertainty particularly impacts this business and may affect the growth.

Then we make the general comment that we underline that the current high external uncertainties make forward-looking statements challenging due to high geopolitical uncertainty, the changing landscape of global trade, and the lack of clarity related to tariffs. There are risks of postponement in investment decisions and of global economic activity slowing down.

Okay. That was the presentation.

Thank you, Håkan, and thank you, Arjen. Now we will continue with the Q&A, and I kindly ask all of the analysts to start with one question, and then we can continue with the follow-up questions after everybody has had the possibility to ask one question first.

Handing over to the operator, please. It's a very silent operator today.

Looks like so. Maybe it was crystal clear already.

Maybe while waiting, do you, Håkan, want to elaborate what do you consider as key achievements last year?

No, I think we talked about it, all-time high in a number of dimensions, but not only the financials. For the first time in Wärtsilä, we were recognized by Forbes as being in the top 1,000 employers in the world actually, based on a surveys that are made of our employees.

It's also shows that we are on a very positive development when it comes to the culture of Wärtsilä and the engagement of our people. We continuously score very high in our engagement surveys, which I find very, very positive.

I think, of course now we are in a positive role, that helps, but I think also we know a couple of years back it was tougher. I think the whole narrative on decarb and the focus on innovation and technology in services is really resonating with our people.

Very good development. Thank you.

Once again, handing over to the operator. If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue.

If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Daniela Costa from Goldman Sachs.

Please go ahead.

Hi. Good morning.

Thank you for taking my question and then the follow-up. I wanted to start on getting a little bit more color on the 35% capacity increase.

I guess a couple of items related to that. How much of that is already things that you have, let's say, on 1Q 2028, you will open up, how much of that is already covered by things that you have on the backlog?

Then, would we have sort of any margin impacts before 1Q 2028 because you're hiring people and how should we think about sort of any financial implications before you open? Starting with that and then I'll ask a follow-up.

I think now what we can say, well, we are starting to open up our backlog. I'm referring to the slide that we presented here.

I say it's a new standard slide going forward. I don't think it has reached 2028 yet, I think it's a little bit early to open up there.

I can say that, Of course we have orders for '28 already. We have orders for '28.

For certain parts of our engine types, as we have different engine types. If you want to order a new engine of that particular type, the delivery time is definitely in 2028.

Then we have other engine types where we can deliver at the end of this year, it's a mixed situation. I think that is as precise as we will go.

On the cost side, I think that will not affect our profitability in a major way going forward, to say.

Got it. Thank you.

Then just as a follow-up, can you talk a little bit about how prices per megawatt have evolved 2025 versus 2024 in the general trend you're seeing given the demand has been so strong particularly both for engines and turbines and everyone in this supply chain, to have an idea of how the mix is also maybe improving going forward?

No, as I briefly mentioned before, I think that the margins in our order backlog are going up. It is of course a very vibrant demand side, and so that leads to some pricing realization.

I don't want to go into the details, but it's developing, the margins are Positive, yeah.

Thank you. The next question comes from Akash Gupta from JPMorgan.

Please go ahead.

Hi. Good morning, Håkan, Arjen, and Hanna-Maria.

My question is on your announcement on increasing capacity by 35%. Again, when we look at the other power equipment makers, the decision is not surprising, but I think what is different is on other guys we have a lot of visibility from firm orders, backlog, and some slot reservations, while at Wärtsilä, based on what you have reported, we don't yet see that.

I wanted to ask what has changed in the last few months that led to this announcement of 35% increase in capacity? Is this more bottleneck on these 50SG engines that has been commonly used by data centers based on your order announcement, or anything that is in pipeline?

Any clarity that you can provide behind this capacity expansion, that would be great.

Yep. Please note that we communicate around our technical capacity.

Right now, and you see that in our Q&A document which we also posted, 2025, we have been operating around 75% of our technical capacity. 75% of the technical capacity.

Now, the expansion is to expand the technical capacity with 35%. Then you understand we are coming from one level and going to another level over a few years, huh?

That's one important element to look into. Now, why do we do this?

You could also say already in April last year we took one step. We announced the €50 million and where we started to expand, and now we continue.

The drivers, they are several. On the Energy side, yes, data center is clearly a driver, and it's certainly there.

We have several opportunities in various stages of maturity. You also saw we started the year in a very strong way.

It's not only about data centers. On the balancing power, the narrative is playing out still in the US, still in some other countries as well.

Then on the, you could say, the traditional baseload, we have strong demand in Southeast Asia, in Latin America. It's a strong underlying demand situation overall in Energy.

On the Marine side, we continue to operate, as we talked about, even though we guide similar, this is on a very high level for us and in a good level. We continue to see strength in cruise, we continue to see strength in offshore and special vessels, to a certain extent to containers as well.

It's more than data centers. The expansion, just also to clarify, it's not only for W50.

W50 is the standard energy engine, you're right from that perspective. This expansion is not for W50 only, clearly.

STH is very flexible, you can swap slots quite easily. Thank you for clarifying.

STH is very flexible, you can run different engine models in production. Correct, yeah.

This 75% of technical capacity, that is on total engines, including Marine and Energy both together, or is it just only Energy?

Total. Total.

Both Marine and Energy. Thank you.

The next question comes from Uma Samlin from Bank of America. Please go ahead.

Hi. Good morning, everyone.

Thank you very much for taking my question. I just have one on the service opportunities for your data center orders.

Far it seems like most of orders you've booked are more on the OE side, and how should we think about the service opportunities there? I presume that a lot of the data center developers are not keen to do service themselves, and how should we think about that, how the timing of those opportunities and the pricing power you have there?

Thank you.

I think there will be a strong service business, first of all because these plants will operate 24/7 with high requirements on uptime and reliability. That is a strong base for a good service business.

Within the data center customers, some want to go to full O&M where we do the operation and maintenance, some want to do a little bit more themselves. There is not one solution fits all, we will adapt.

If you sum it all up, there is strong potential for service business there. Now, and that has not started to accumulate in order intake yet.

It's a baseload opportunity, baseload is good. The more running hours, the more service.

When can we expect to see that coming into your order soon?

As we said, I say a little bit similar on the newbuild side, that we are in negotiation with customers on service agreements. These negotiations are in various stages of maturity, and there will certainly some of this will materialize this year.

Thank you very much. Appreciate it.

The next question comes from Vladimir Sergievski from Barclays. Please go ahead.

Yes, good morning and thank you very much for taking my question. Could I ask about the Marine service business?

The order intake growth rate slowed a bit from obviously very impressive levels historically. What's your outlook there?

What's driving this slowdown? Perhaps what would be potential impact from the reopening of the Red Sea on the service opportunity that you have?

Thank you very much.

If you look, and you're right, Vlad, that, if you look Q-on-Q, we are down. I think there are a couple of drivers.

One is that in Q4 2024, we had a big order from Royal. That creates this effect.

Then there is also some periodization. I mentioned that earlier on the agreement side, things moving from one quarter to the other.

Similar also on the retrofit side, a bit of periodization from one quarter to the other. There is also a little bit of FX, clearly, it's mainly US dollar exposure.

Those are combined, but our underlying message, and I'm reiterating it, we are above 1 and we have a positive outlook on the growth of the service business also in Marine. Yes.

Super. Very helpful.

Anything you can comment on potential impact of Red Sea reopening? Is it meaningful for your business?

Is it not at all? What will happen and what I hear now that there are some of the major liners they are kind of testing.

Of course, everybody is very much focused on the safety side. It's pretty obvious that right now, people have been running longer hauls south of Africa.

If you go back to the Red Sea, that will reduce the route that you travel. However, first of all, that has not been, the whole Red Sea has not been a major driver for our service growth.

I would say there's been some addition, but it's not a major driver. There are some other elements because some people are also saying that the operators, they will go slower to try to compensate,

they will try to keep some of the fleet, they will not just scrap out vessels. Let's see how I think the dynamic is a little bit hard to predict what will happen.

It will have some impact on our service business, but not the major impact. Not majorly, and also good to remind here that the majority of the vessels that sail through the Suez Canal is two-stroke main engine, and that's the main engine running.

We have of course a lot of auxiliary engines on merchant fleet, but typically let's say they don't run less or more typically on a journey. There is not a lot of cruise vessels going through Suez.

No. No, definitely not now.

That's very helpful context. Thanks, gentlemen.

The next question comes from John Kim from Deutsche Bank. Please go ahead.

Hi, good morning.

Congrats on the results. Thanks for the opportunity.

If we could go back to slide 5 where we talk about where you're indexed in the contracting trends. It looks like you're addressing about 25% of the overall market just kind of correlating the two graphs, up at the one on top, one on bottom.

On that kind of better indexation over the next three years, is it fair to assume that there's production slots on these vessel classes already, i.e. within the contracting numbers, the mix is skewing to your favor over the next three years?

Or am I reading too much into this? If I understand your question right, let's say is on these upper lines on the '26, '27, '28, do we have already contracts to be part of that?

I would say the answer is yes,

because let's say our order books, as you could also see from the other slide, are getting longer and longer, also in Marine. Clearly, let's say we have orders for '27, '28.

They're part of those lines.

Sorry, Arjen, my question was actually more on the production slots in the yards, the yard capacity is still an issue. Okay.

Then can you repeat the question, because then I misunderstood it most likely. Sure.

Within those orders or that pipeline, do you have visibility on production slots? Are the yard constraints still valid, or are these already planned in the yards for the next three years?

I would say it's a mix. It depends what type of vessel you're ordering.

If you take on cruise for instance, I think the slots are pulling out longer and longer in time,

whereas on certain bulkers or tankers, there are shorter lead times. To Arjen's point, when we talk about Wärtsilä supporting or delivering to the shipyards, if you look at '26, '27, we clearly have in our order backlog deliveries for yard slots in '26, '27.

And '28 as well. Yep.

Okay. Thank you.

The next question comes from Sven Weier from UBS. Please go ahead.

Yes, good morning. Thanks for taking my questions.

The first one is just following up on the announced capacity expansion. There I was just wondering, if you say we raise capacity, technical capacity, by 35%, should we assume that this is also raising the revenue potential by at least 35% given where the prices per megawatt are heading?

I was also wondering why is the expansion only completed in Q1 2028 because I think it's probably a bit more of a brownfield, why is this taking two years? That's the first one, thank you.

Yeah. Of course, over time, if you expand a certain capacity, it will translate to revenues.

From that perspective, but then, and I know you know this, Sven, but there is also, we have our production schedule, which is the factory related, and then we have our project schedule, which relates to when we deliver to customers and the projects. There is not a perfect correlation, year by year.

The fundamentals, you're right. As we expand capacity, revenues will go up as well.

Then of course with the twist, which is positive maybe from a revenue perspective, if we have EPC, then it's engine plus. Now, we are not changing our strategy.

Our focus is still having a majority of EEQ and less EPC, but we will still have EPC. That will of course, then you get a leverage on the engine capacity that you have.

Sorry, your second question, Sven? That was on the capacity, why only in early '28.

That's what I'm asking my team as well. Let's go faster.

On a more serious note, I think there is lead time for equipment that we need, for instance, in our testing facilities. These are big power equipment.

There are certain lead time. Though the concrete needs to dry before you put certain things in.

Also, the team is doing a great job in trying to do a lot of things and squeeze it in, but there is a limit what you can do in one space, to say. Believe me, we have really tried to accelerate it, clearly.

To add, let's say the supply chain needs to follow, right? Very important.

I think the supply chain, as we all know, is critical. However, I would say, and the partnership that we announced with Simpelkamp, and we wanted to make that point to show to the It's one example.

that we are working very actively with our supply chain. That's just one example.

We have very good dialogue with our core suppliers and we have long-term relationship, it's a major work. We should not diminish the importance.

Step by step, we are on a good roll here to be able to go live in beginning of 2028.

If you have a nice factory with capacity, but you miss some parts, then you can still not make engines. We need to make sure that the supply chain can follow.

That makes sense. Just maybe on the Energy margin itself, obviously impressive outcome here, but when you look at GEV and Siemens Energy, they have obviously given new long-term margin outlooks for the divisions that obviously looked quite nice.

Was just wondering, are you planning kind of a capital markets day for this year where you also intend to give us revised, new, longer-term margin targets at least for the Energy business? I think this is a very relevant question.

We fully understand it. We will have to come back and answer it.

I don't have the answer today, but clearly we understand the logic for the question. Okay.

Thank you.

The next question comes from Max Yates from Morgan Stanley. Please go ahead.

Hi, and good morning. Sorry to come back on this capacity expansion.

You talked about the fact that this was in addition to the announcement that you announced kind of last year. I guess if we just look at kind of the base in terms of what you're delivering today, it looks like kind of 1.2 GW in terms of deliveries when I back it out of your revenues.

Just thinking about what is the total technical capacity increase when we include this latest round, but also what went before? I guess I'm trying to tie it back to this year in terms of sort of megawatts, it looks like your orders are roughly around 2.3 billion.

Is that the kind of end technical capacity that we should be thinking for in terms of what you can deliver when we look out to 2028?

Here we will not be so explicit. For instance, we will not give out the megawatts.

I know some of our competition is doing that. We are very happy because we make a lot of analysis of those data.

We don't want to give out those data, so that's why we are talking about where we are moving in relationship to our technical capacity. As I said, 2025 full year 0.75% of technical, and then beginning of 2028, once we have commissioned this, we will have a technical capacity that is 1.35, to say.

You see where we are going from and where we are going.

It's about 80% up then from the operating level. Correct, yeah.

Hm. We shouldn't assume that you had a given capacity, you increased it last year, and then this 35% comes on top.

35% is the total, all in?

No. Okay.

That I can be very clear. The April announcement, €50 million, you could say that is also coming online in connection with this additional 140.

It's not on top. You could say, we are going from 0.75 2025 to 1.35 in beginning of 2028, and that is including all the investments that we have announced.

Sorry, maybe one quick clarification. When we look at your orders this quarter in Energy in new equipment, you did 520 MW and it looks like it was almost entirely that data center order that you booked.

Yet, the value per megawatt on the orders is only about 0.7 million per megawatt. I guess I'm just trying to square the fact that kind of we're talking about pricing on these data center orders being very good.

We're seeing huge numbers in terms of dollars per kilowatt coming out of the gas turbines guys, yet when I very simply look at your Q4 number, which I know is mostly the data centers, I don't see that kind of uplift. Maybe if you can help us understand, it doesn't look like we're getting a huge price uplift to these data center customers based on what you booked this quarter.

I can say, and I restate it, we have definitely improving our order backlog, and we are on a good journey there. I would rather say it shows that we are very competitive.

What does that mean? Sorry, that means you're pricing aggressively versus the other?

No, that we can improve our profitability and be very competitive with the gas turbine competition. Also with other engine manufacturers.

Understood. Thank you very much.

Just for clarity, I understand your analysis, but I should also say it so we are fully clear, there was more than data center orders, but the data center was a major chunk of the order intake. From that perspective, you're right.

The next question comes from Panu Laitinmäki from Danske Bank. Please go ahead.

Thanks for taking my question. I actually wanted to ask about the same topic.

It seems that in Q4, majority of the Energy equipment orders were this single data center order. It's just a bit surprised, why didn't you get more of the other orders?

Was it just timing, or was it tariff-related delays, or did you increase pricing so much that there were delays, or what caused this? No, first, Energy is a project business.

Power plants, whether they go for data centers, balancing power, you negotiate, and sometimes you don't close the deal in the end of December or the 20th of December, you close it in the 15th of January instead. That's why I underline, look at how we started the year with 550 MW.

One is clearly the biggest one there is for a utility that the demand is driven by data center. The smaller one, I would say traditionally can say it's a balancing, borderline baseload.

I think that's the answer to your question. It's about periodization.

Thanks. It is a follow-up.

Sorry?

No, go ahead, yeah. Yeah.

If I can ask about a follow-up, what does your pipeline in Energy equipment orders look like? If you directionally comment if things go as you plan in first half or full year this year, will it be half of orders coming from data centers, half balancing or any comments, how does it look like?

No, we don't go into those details. The only thing I can point to is the guidance: it's going to be better.

It looks good, otherwise we would not extend capacity either. Yeah.

I think that's really, look at how we expand capacity, look at how we communicate, we increase the guidance, we give an extra dividend. We are on the roll.

Thanks. I'm afraid that we are running out of time.

We still have one additional slide. It's regarding our data center theme call which is taking place next week, it's an excellent opportunity to continue the discussion what are Wärtsilä's opportunities in growing data center market.

Besides Håkan and Arjen, I'm very happy that also Anders Lindberg, president of our Energy business, will join the call. Hopefully you can also be there, and our Q1 report will be published on April 28.

Thank you. Thank you for today, and warm welcome to our data center call.

Looking forward to that. Thank you.