Wärtsilä Oyj Abp

Q2 net sales were EUR 1.559 billion, essentially stable year over year; organic net sales increased 5%. Total order intake rose 33% to EUR 2.8 billion, with Energy up 82% and Marine up 12% on reported terms. Comparable operating result increased 7% to EUR 218 million, equal to 14% of net sales; reported operating result was EUR 209 million, or 13.4% of net sales. Cash flow came in at EUR 497 million, and ROCE was 73%. For the first half, order intake was up 23% to EUR 4.9 billion, order backlog was close to EUR 9 billion, and first-half comparable operating result rose 13% to EUR 399 million, or 13.3% of net sales. Guidance: for the next 12 months, Wartsila expects the demand environment in Marine and Energy to be similar to the comparison period, while noting Energy remains at a very solid level and capacity constraints may limit how much demand can be reflected in orders immediately.

Håkan Agnevall described Q2 as a strong quarter and emphasized repeated record-setting metrics: all-time high order intake, all-time high backlog, and improved profitability. He highlighted strong demand in data centers, balancing power, and marine decarbonization, and said Wartsila is seeing a more fragmented regulatory environment that favors fuel flexibility and fuel efficiency. His tone was confident and constructive, with repeated references to long-term growth, capacity expansion, and technology leadership in hydrogen and ammonia.

Arjen Berends focused on financial quality and balance-sheet strength. He pointed to Q2 cash flow of EUR 497 million, net interest-bearing debt moving further down, gearing at a deeply negative level, and working capital to sales of 3.8%, supported by about EUR 1.8 billion in advances; he also noted that excluding advances, working capital would be positive by about EUR 500 million. He highlighted that the portfolio business is now fully exited and said the new 50-50 storage joint venture is expected to have a EUR 40 million to EUR 50 million negative impact on 2026 operating results, split between associated-company results and items affecting comparability. He also noted the group is on a rolling 12-month operating margin of 14%, matching the financial target.

Analysts focused heavily on the disclosed 500-basis-point improvement in the Energy equipment order book margin and how to reconcile that with discussions around average selling price per kilowatt. Management said the improvement reflects a mix of pricing and execution, not just a shift away from EPC, and reiterated that EUR per kilowatt is not a useful KPI for judging backlog margin. Questions also probed demand sustainability in Energy, and management said the market is still very strong but that capacity is becoming the practical constraint, which is why Wartsila is expanding manufacturing. On data centers and engines versus turbines, management said market share is hard to measure because of confidentiality, but argued engines are increasingly being validated by customers on fundamentals such as fuel efficiency, no thermal derating, and no water consumption.