Wärtsilä’s Financial Statements Bulletin January–December 2024

Wärtsilä’s Financial Statements Bulletin January–December 2024

This release is a summary of Wärtsilä’s Financial Statements Bulletin January–December 2024. The complete report is attached to this release as a pdf file. It is also available on the company website at www.wartsila.com.

A YEAR OF ALL-TIME HIGHS: ORDER INTAKE, ABSOLUTE OPERATING RESULT AND CASH FLOW

Highlights from October–December 2024

• Order intake increased by 34% to EUR 2,491 million (1,856), while the organic growth, which excludes FX impact and the impact of acquisitions and divestments, was 35%
• Service order intake increased by 15% to EUR 1,007 million (876)
• Net sales increased by 13% to EUR 1,854 million (1,644), while organic growth was 13%
• Book-to-bill amounted to 1.34 (1.13)
• The comparable operating result increased by 18% to EUR 209 million (177), which represents 11.3% of net sales (10.8)
• The operating result increased by 80% to EUR 229 million (128), which represents 12.4% of net sales (7.8)
• Earnings per share increased to 0.27 euro (0.16)
• Cash flow from operating activities increased to EUR 437 million (389)

Highlights from January–December 2024

• Order intake increased by 14% to EUR 8,072 million (7,070), while organic growth was 17%
• Service order intake increased by 8% to EUR 3,812 million (3,519)
• The order book at the end of the period increased by 25% to EUR 8,366 million (6,694)
• Net sales increased by 7% to EUR 6,449 million (6,015), while organic growth was 9%
• Book-to-bill amounted to 1.25 (1.18)
• The comparable operating result increased by 39% to EUR 694 million (497), which represents 10.8% of net sales (8.3)
• The operating result increased by 78% to EUR 716 million (402), which represents 11.1% of net sales (6.7)
• Earnings per share increased to 0.85 euro (0.44)
• Cash flow from operating activities increased to EUR 1,208 million (822)
• Dividend proposal 0.44 euro per share (0.32)

WÄRTSILÄ'S PROSPECTS

Marine

Wärtsilä expects the demand environment for the next 12 months (Q1/2025-Q4/2025) to be better than that of the comparison period.

Energy

Wärtsilä expects the demand environment for the next 12 months (Q1/2025-Q4/2025) to be better than that of the comparison period.

However, Wärtsilä underlines that the current high external uncertainties make forward looking statements challenging.

HÅKAN AGNEVALL, PRESIDENT & CEO: FIRM STEPS TOWARDS OUR PROFITABILITY TARGET

“In 2024 Wärtsilä took firm steps towards our targets, and we continued to develop positively in many ways. We achieved all-time highs in order intake, absolute operating result and cash flow from operating activities. During 2024, we also significantly enhanced the profitability of all businesses. Furthermore, our order book is at an all-time high, positioning us well for future success as we move into 2025. Our strategy, the Wärtsilä Way, is yielding results.

The market environment for our businesses remained relatively stable throughout 2024. However, as the year progressed, geopolitical tensions clearly increased, introducing uncertainty to the macroeconomic outlook due to heightened risks of protectionism and trade policy uncertainty. Despite these challenges, our customers in the marine and energy industries remained increasingly focused on decarbonisation.

In the energy market, the transition towards renewables continued to advance. Wind and solar are expected to post record installations in 2024 and 2025, driven not only by climate concerns but also by affordability. The demand for balancing technologies is closely linked to the increasing share of intermittent renewables in the energy system. Renewable-led power systems require flexibility in various forms: balancing power plants, alongside battery energy storage, are critical to reaching global climate goals. In 2024 both thermal balancing and battery energy storage experienced their highest levels of market activity to date.

In the marine market, the growth in global trade volumes combined with a shift in trade flows resulted in a significant boost to demand for ship capacity in 2024. This, coupled with a growing pressure to decarbonise operations, supported the demand for both newbuilds and service. Investments in new ships were clearly above the levels seen in 2023, and we saw a healthy pickup in interest towards alternative fuels, which now accounted for 49% of the capacity of contracted vessels. Despite the efforts to increase shipyard capacity and output especially in China but also in South Korea, shipyard capacity utilisation rates remain high and shipyard orderbooks remain long, indicating that a shortage of yard capacity still exists.

In both the marine and energy markets, Wärtsilä made significant progress in capturing the opportunities offered by the decarbonisation transition and we strengthened our position as a leader in innovation with a number of world firsts. These included our launch of the first ever large-scale, 100% hydrogen-ready engine power plant, representing a breakthrough on the path towards net-zero power systems of the future. We also announced a deal to supply our pioneering engine technology for what is due to become the world’s first ammonia-fuelled in-service supply vessel, a landmark in the marine industry’s transition to sustainable fuels. In 2024, service represented 53% of our net sales and continued to be a major driver for customer satisfaction and profitable growth. We saw good success in moving our customers up the service value ladder. The renewal rate of our service agreements is more than 90%, which is a proof point of the value that our lifecycle agreements are creating for our customers.

In 2024 Wärtsilä’s order intake increased organically by 17%. Service order intake increased, driven primarily by growth in Marine. Equipment order intake increased supported by higher activity in all businesses. Net sales increased organically by 9%, with clear growth in both service and equipment.

The comparable operating result increased by 39% to EUR 694 million, which represents 10.8% of net sales. Comparable operating result increased in all businesses. Cash flow from operating activities ended strong and totalled EUR 1,208 million in 2024, supported by the better result and improved working capital. It is important to note that the current negative working capital levels are unusual for our business, and we expect them to normalise going forward. Still, our active work on all elements of working capital has continued and has supported us in keeping working capital at a clearly lower level than the long-term historical average.

In 2024 we actively managed our business portfolio with the goal of becoming a more focused and profitable company. In December, we advanced further towards this goal by announcing the agreement to divest our Automation, Navigation and Control System (ANCS) business. Subject to approvals, the transaction is expected to be completed in the second quarter of 2025.

In late 2023, we announced a strategic review of Energy Storage & Optimisation to accelerate its profitable growth in a way that benefits customers, employees, and value creation for Wärtsilä shareholders. This review is still ongoing. We continue to develop and invest in the Energy Storage & Optimisation business during the strategic review, and we remain fully committed to serving our customers.

While the outlook for both of our end markets remains positive going into 2025, the current geopolitical tensions and trade policy uncertainty may especially impact our Energy business. We expect the demand environment for the coming 12 months to be better than the comparison period in both Marine and Energy, but we also underline that the current high external uncertainties make forward looking statements more challenging.

In 2024 we celebrated Wärtsilä’s 190-year anniversary. From our humble beginnings as a village sawmill in eastern Finland, we are now making an important contribution to the world’s decarbonisation transformation. During these two centuries our company has repeatedly transformed itself and shaped the industries we have operated in, underpinned at all times by two elements: our focus on innovation and our commitment to our customers. Our progress today shows that these principles are still very much thriving.

Wärtsilä can make a difference to the world and we can secure our financial performance and deliver attractive long-term shareholder value. I would like to extend my sincere gratitude to our customers and partners, our engaged and committed Wärtsilä team, and our shareholders for your trust in Wärtsilä’s future success. I look forward to continuing on this exciting journey together.”

KEY FIGURES

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.

BOARD OF DIRECTORS’ DIVIDEND PROPOSAL

The Board of Directors proposes that a dividend of EUR 0.44 per share shall be paid for the financial year 2024. The parent company’s distributable funds total EUR 1,249,416,973.27, which includes EUR 363,279,404.71 in net profit for the year. There are 589,080,815 shares with dividend rights. The dividend shall be paid in two instalments.

The first instalment of EUR 0.22 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 17 March 2025. The payment day proposed by the Board for this instalment is 24 March 2025.

The second instalment of EUR 0.22 per share shall be paid in September 2025. The dividend record day of the second instalment shall be 17 September 2025, and the second instalment of the dividend shall be paid to shareholders who are registered in the list of shareholders maintained by Euroclear Finland Oy on such day. The Board proposes the second instalment is paid on 24 September 2025.

ANALYST AND PRESS CONFERENCE

A virtual analyst and press conference will be held as a webinar today, Wednesday 5 February 2025, at 10.00 a.m. Finnish time (8.00 a.m. UK time).

Participating via the web

Register and login to the web interface via the web address below. When you register, you are prompted to participate as a listener or as an active Q&A participant. Once the event starts, the event page will switch to the presentation mode automatically.

wartsila.videosync.fi/q4-2024

If you are participating via the web, you can enter the Q&A que by clicking the raise hand button on the bottom-right corner of the video/audio player. Once the event host announces your name, please open your microphone from the bottom-left corner of the video/audio player to be able to be heard.

Participating via the teleconference

Please use the teleconference dial-in option only if you experience issues with the web participation or your organisations firewalls set limitations for the web participation.

You can access the teleconference by registering on the link below. After the registration you will receive an email with the dial-in numbers and your personal PIN code to access the conference.

palvelu.flik.fi/teleconference/?id=50048994

If you are participating via the dial-in teleconference, you can enter the que by clicking *5 (star-five) in the telephone keypad, and if you want to withdraw your question, click *6 (star-six) respectively.

A recording of the webcast will be available on the company website as soon as possible after the event.

For further information, please contact:

Arjen Berends
Executive Vice President & CFO
Tel. +358 10 709 5444
arjen.berends@wartsila.com

Hanna-Maria Heikkinen
Vice President, Investor Relations
Tel. +358 10 709 1461
hanna-maria.heikkinen@wartsila.com  

For press information, please contact:

Anne Alarotu
Head of External Communications
Tel. +358 50 487 1308
anne.alarotu@wartsila.com

Wärtsilä in brief

Wärtsilä is a global leader in innovative technologies and lifecycle solutions for the marine and energy markets. We emphasise innovation in sustainable technology and services to help our customers continuously improve environmental and economic performance. Our dedicated and passionate team of 18,300 professionals in more than 230 locations in 77 countries shape the decarbonisation transformation of our industries across the globe. In 2024, Wärtsilä’s net sales totalled EUR 6.4 billion. Wärtsilä is listed on Nasdaq Helsinki. www.wartsila.com

Wärtsilä Financial Statements Bulletin 2024