INTERIM REPORT JANUARY-SEPTEMBER 2008

Wärtsilä Corporation INTERIM REPORT 24 October 2008 at 8.30 local
time

ORDER INTAKE CONTINUED ON HIGH LEVEL - ORDER BOOK STILL GROWING

THIRD QUARTER JULY-SEPTEMBER 2008 HIGHLIGHTS
- Order intake fell 9% to EUR 1,382 million (1,514)
- Net sales grew 22% to EUR 1,140 million (933)
- Operating income (EBIT) grew 28% to EUR 123 million, or 10.8% of
net sales (EUR 96 million and 10.3%)
- Earnings per share amounted to EUR 0.97 (0.71)

HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-SEPTEMBER 2008
- Order intake EUR 4,750 million (4,039), growth 18%
- Order book total EUR 7,762 million (6,162), growth 26%
- Net sales EUR 3,082 million (2,491), growth 24%
- Operating result EUR 327 million (233), growth 40%
- Profitability 10.6% (9.3)
- Earnings per share amounted to EUR 2.42 (1.69)
- Cash flow from operating activities EUR 255 million (299)

OLE JOHANSSON, PRESIDENT AND CEO:
"The accelerating financial crisis has changed the economic landscape
dramatically. The implications for Wärtsilä have, however, been
rather limited. For the first nine months of this year our order
intake grew 18% and the order book is 26% higher than a year ago. We
see activity continuing high in Power Plants and the funding of many
future projects in the pipeline appears to be secure. For Ship Power,
however, the third quarter confirmed our earlier expectation that the
demand is slowing down as the uncertainty regarding future shipping
rates and conditions increase. The effects of possible cancellations,
due to the uncertainty on the shipbuilding markets, are expected to
be approximately 10% of Wärtsilä's total order book value. We
reiterate our prospects for 2008 and the record high order book gives
a good basis also for the 2009 activities".

WÄRTSILÄ'S PROSPECTS FOR 2008 REITERATED
Based on the strong order book, Wärtsilä's net sales are expected to
grow by about 25% in 2008. Wärtsilä's profitability varies
considerably from one quarter to another. The full-year operating
margin will exceed 11%.

ANALYST AND PRESS CONFERENCE
An analyst and press conference will be held on Friday 24 October
2008, at 10.45 a.m. Finnish time (8.45 a.m. UK time), at the Wärtsilä
headquarters in Helsinki, Finland. The combined web- and
teleconference can be viewed on the internet at the following
address:


http://194.100.179.139:80/wip/directlink.do?newbrowser=1&pid=2474459.
To participate in the teleconference please call: [phone]
5566 and enter the Conference ID: 812353. If you want to ask
questions during the teleconference, press the number 1 on your phone
to register for a question and the # -key to withdraw a question. The
event title for the call is: Wärtsilä Results Q3, please be ready to
state your details and the name of the conference to the operator. If
problems occur, please press the 0-button. We would recommend that
you would register to the conference in advance at the following
address:
https://eventreg1.conferencing.com/webportal3/reg.html?Acc=085460&Conf=161506.
An on-demand version of the webcast will be available on the company
website later the same day.

Wärtsilä Corporation in brief
Wärtsilä enhances the business of its customers by providing them
with complete lifecycle power solutions. When creating better and
environmentally compatible technologies, Wärtsilä focuses on the
marine and energy markets with products and solutions as well as
services. Through innovative products and services, Wärtsilä sets out
to be the most valued business partner of all its customers. This is
achieved by the dedication of over 18,000 professionals manning 160
locations in close to 70 countries around the world.









INTERIM REPORT JANUARY-SEPTEMBER 2008

The figures in this interim report are unaudited.


THIRD QUARTER 7-9/2008 IN BRIEF


MEUR                7-9/2008 7-9/2007 Change
Order intake           1 382    1 514    -9%
Net sales              1 140      933    22%
Operating result         123       96    28%
% of net sales         10.8%    10.3%
Profit before taxes      127       95    35%
Earnings/share, EUR     0.97     0.71



REVIEW PERIOD JANUARY-SEPTEMBER 2008 IN BRIEF


MEUR                                1-9/2008 1-9/2007 Change  2007
Order intake                           4 750    4 039    18% 5 633
Order book at the end of the period    7 762    6 162    26% 6 308
Net sales                              3 082    2 491    24% 3 763
Operating result                         327      233    40%   379
% of net sales                         10.6%     9.3%        10.1%
Profit before taxes                      333      227    47%   372
Earnings/share, EUR                     2.42     1.69         2.74
Cash flow from operating activities      255      299          431
Interest-bearing net debt
at the end of the period                 361       61          -27
Gross capital expenditure                272      172          231



MARKET DEVELOPMENT

SHIP POWER
Measured in number of new vessels, new ship ordering has fallen
almost 50% during 2008 from the high levels of last year.
Historically the levels are still high and ordering has thus far
resisted well the general turmoil of the financial markets.
Shipbuilding markets have experienced some cancellations, although so
far they have been mostly in the previously overheated bulker
markets. In addition to slowdown in orders, the very recent financial
crisis is undoubtedly going to result in more cancellations and other
rearrangements since some yards and owners are likely to experience
difficulties in raising financing due to tightened lending. Another
likelihood to be faced in the future is the slippage of the delivery
schedules at shipyards. Many yards are falling back from their
original timetables which inevitably impacts the schedules of the
whole supply chain.

Measured in number of vessels, China still has the number one
position with a 39% market share while Korean yards have signed 37%
of the new vessels ordered in 2008. Japan's share has grown to 14%
whereas Europe and other areas total 9% of the market. Measured in
tonnage Korea still has the biggest share with 45%, China following
with 37%, Japan with 12% and Europe with just 2% of the market.

Ship Power market shares
Wärtsilä's share of market in medium speed main engines has slightly
increased from 32 to 34% thanks to Wärtsilä's strong presence in the
Offshore and Special vessel segments. Market share in low speed
engines decreased to 13% (16% at the end of the previous quarter). In
the auxiliary engines market the share increased slightly to 9% (8)
due to continued good development in the Chinese market.

POWER PLANTS
The market situation remained good and demand in the power plant
market remained high in all segments relevant to Wärtsilä. The
offering activity remained at all time high levels. To date the Power
Plants markets appear not to have been affected by the financial
crisis.

Power Plants market shares
According to statistics compiled by the Diesel and Gas Turbine
magazine, the total global market for oil and gas power plants in
Wärtsilä's power range between June 2007 and May 2008 grew to 20,980
MW (14,065). The market for gas power plants, including both
reciprocating engines and gas turbines, grew strongly to 15,630 MW
(10,900), Wärtsilä's share of the market being 8% (12). Wärtsilä's
market share of heavy fuel oil plants increased to 49% (38) due to
strong order intake in markets such as Brazil and Pakistan. In light
fuel oil power plants, Wärtsilä's market share was 20% (24).

SERVICES
High energy prices, together with new and more stringent
environmental legislation, are driving machinery development towards
more complex technologies and advanced control systems. Maintaining,
tuning or upgrading this equipment for optimal efficiency and
emission compliance requires highly skilled specialists that aren't
always available to the market. The lack of skilled resources in the
marine, oil & gas as well as energy industries, is resulting in
increased demand for services provided by equipment suppliers. The
Services market remained active during the review period.

ORDER INTAKE AND ORDER BOOK
The order intake for the third quarter continued at a good level,
totalling EUR 1,382 million (1,514). Order intake for Wärtsilä Ship
Power decreased from the very high level of the corresponding period
last year and totalled EUR 450 million (766). The slowdown was most
apparent in the Merchant vessel segment where the share of total
orders during the quarter was 35%. The Offshore segment remained
quite strong and, with 36% of the total, was the biggest segment in
orders. Cruise&Ferry and Special vessels represented 10% and 9%
respectively, whereas the Navy segment represented 10% of total
orders.
For the review period January-September 2008, Ship Power's order
intake was EUR 1,674 million (1,960).

The order intake for the Power Plants business continued to be very
strong during the third quarter totalling EUR 498 million (420), 19%
higher than during the corresponding period last year. During the
third quarter the largest oil-fired power plant orders were received
from Pakistan and Brazil. The latest order from Pakistan follows
another power plant order from Nishat Power Ltd earlier this year.
The latest order from Brazil follows three others for Brazil signed
earlier this year. The largest gas power plant orders were received
from Portugal and Turkey.
For the review period January-September 2008, the Power Plants order
intake totalled EUR 1,620 million (958), a 69% growth compared to the
corresponding period last year.

In the third quarter Services received a significant operation &
management contract with Attock Gen in Pakistan. Order intake for the
Services business totalled EUR 434 million (326) during the third
quarter. Services' order intake for the review period
January-September 2008 totalled EUR 1,448 million (1,118), a 29%
growth over the corresponding period in 2007.

For the review period January-September 2008, Wärtsilä's total order
intake amounted to EUR 4,750 million (4,039), a growth of 18%. At the
end of the review period Wärtsilä's total order book stood at a new
record level of EUR 7,762 million (6,162), a growth of 26%. At the
end of the review period the Ship Power order book stood at EUR 5,010
million (4,183), a growth of 20%. The Power Plants order book grew by
45% compared to the corresponding date last year and amounted to
2,243 million (1,548). The Services order book totalled EUR 505
million (429) at the end of the review period, a growth of 18%.
Customer advances related to the order book, amounted to EUR 1,375
million (921) or on average 18% of order book total.


Third quarter order intake by business
MEUR                          7-9/2008 7-9/2007 Change
Ship Power                         450      766   -41%
Services                           434      326    33%
Power Plants                       498      420    19%
Order intake, total            1 382      1 514    -9%



Order intake Power Plants
MW                        7-9/2008 7-9/2007 Change
Oil                            680      495    37%
Gas                            157      402   -61%
Renewable fuels                 35       87   -60%



Order intake for the review period by business
MEUR                                  1-9/2008 1-9/2007 Change  2007
Ship Power                               1 674    1 960   -15% 2 600
Services                                 1 448    1 118    29% 1 607
Power Plants                             1 620      958    69% 1 421
Order intake, total                      4 750    4 039    18% 5 633



Order intake Power Plants
MW                        1-9/2008 1-9/2007 Change  2007
Oil                          1 739      939    85% 1 358
Gas                          1 033      761    36% 1 005
Renewable fuels                 80      404   -80%   483



Order book by business
MEUR                   30 Sept. 2008 30 Sept. 2007 Change  2007
Ship Power                     5 010         4 183    20% 4 292
Services                         505           429    18%   405
Power Plants                   2 243         1 548    45% 1 608
Order book, total              7 762         6 162    26% 6 308


NET SALES
During the third quarter Wärtsilä's net sales increased by 22% to EUR
1,140 million (933) compared to the corresponding period last year.
Net sales for Ship Power totalled EUR 344 million (310), a growth of
11% over the corresponding period last year. Power Plants' net sales
for the third quarter totalled 349 million (228), which is 53% higher
than in the corresponding quarter last year. The third quarter net
sales for Services amounted to EUR 452 million (394), a growth of
15%, out of which 14% was organic growth.

Wärtsilä's net sales for January-September 2008 totalled EUR 3,082
million (2,491), a growth of 24%. Ship Power net sales grew by 9% and
totalled EUR 952 million (871). Net sales for Power Plants developed
very strongly during the review period and totalled 797 million
(491), which represents a growth of 62% compared to the corresponding
period last year. Net sales from the Services business increased to
EUR 1,335 million (1,119), a growth of 19%. Organic growth
represented 18% of Services' net sales growth. For the review period
January-September 2008, Ship Power net sales accounted for 31%,
Services net sales for 43%, and Power Plants for 26% of the total net
sales.


Third quarter net sales by business
MEUR                                7-9/2008 7-9/2007 Change
Ship Power                               344      310    11%
Services                                 452      394    15%
Power Plants                             349      228    53%
Net sales, total                       1 140      933    22%



Net sales for the review period by business
MEUR                               1-9/2008 1-9/2007 Change  2007
Ship Power                              952      871     9% 1 320
Services                              1 335    1 119    19% 1 550
Power Plants                            797      491    62%   882
Net sales, total                      3 082    2 491    24% 3 763



FINANCIAL RESULTS
The operating result for the third quarter amounted to EUR 123
million (96) or 10.8% (10.3) of net sales. The operating result for
the review period January-September 2008 rose to EUR 327 million
(233), which is 10.6% of net sales (9.3). Financial items amounted to
EUR 6 million (-6). Net interest totalled EUR -10 million (-7).
Dividends received totalled EUR 6 million (7). Other financial items
developed positively due to the favourable development of derivative
interest differentials. Profit before taxes amounted to EUR 333
million (227). Taxes in the review period amounted to EUR 91 million
(64). Earnings per share were EUR 2.42 (1.69).

BALANCE SHEET, FINANCING AND CASH FLOW
Cash flow from operating activities for January-September 2008 was
strong and totalled EUR 255 million (299). Liquid reserves at the end
of the period amounted to EUR 166 million (202). Net interest-bearing
loan capital amounted EUR 361 million (61). In addition to the strong
cash flow Wärtsilä's financial room to manoeuvre is secured by
long-term finance agreements. Advance payments at the end of the
period totalled EUR 1,375 million (921). The solvency ratio was 34.7%
(46.1) and gearing was 0.34 (0.08).

HOLDINGS
Wärtsilä owns 7,270,350 B shares in Assa Abloy, or 2.0% of the total.
This holding has been booked in the balance sheet at its market value
at the end of the reporting period, EUR 61 million.

CAPITAL EXPENDITURE
Gross capital expenditure in the review period totalled EUR 272
million (172), which comprised EUR 162 million (59) in acquisitions
and investments in securities, and EUR 110 million (113) in
production and information technology investments. Depreciation for
the review period amounted to EUR 68 million (56).

Due to strong volume growth, the total capital expenditure excluding
acquisitions for 2008 is expected to be approx. EUR 200 million.

STRATEGIC ACQUISITIONS, JOINT-VENTURES AND EXPANSION OF THE NETWORK
In March, Wärtsilä signed an agreement to acquire the Norwegian
company Maritime Service AS, which specializes in ship service, and
mechanical and reconditioning services. Maritime Service has its
operations in Ã…lesund, on the west coast of Norway. The annual net
sales of Maritime Service were NOK 26 million (EUR 3.2 million) in
2007.

In April, Wärtsilä acquired the Danish company International
Combustion Engineering A/S (I.C.E.) that specializes in project
engineering and the service and repair of steam boilers and ancillary
burner systems. The company's annual net sales amounted to DKK 46.8
million (EUR 6.3 million) in 2007. This acquisition expands
Wärtsilä's service offering into the new category of boiler services,
which in turn further improves Wärtsilä's competitiveness as a
leading total services provider. Wärtsilä continued to expand its
boiler services capability in June with the acquisition of the boiler
services business of I.C.E.'s former subsidiary in Dubai.

In June Wärtsilä acquired the German company Claus D. Christophel
Mess- und Regeltechnik GmbH (CDC), which specializes in the design,
delivery and service of automation systems for ship owners and yards.
CDC's annual net sales were EUR 2.1 million in 2007.

In July, Wärtsilä signed an agreement to acquire the global ship
design group Vik-Sandvik, a leading independent group providing
design and engineering services to ship owners and the ship building
industry worldwide. This acquisition was a major step in Wärtsilä's
strategy to strengthen its position as a total solutions provider and
to be the most valued partner for its customers. By combining ship
design capability with its existing offerings in propulsion systems
and automation, Wärtsilä will be able to provide more added value to
its customers, with further growth potential in new lifecycle
services. Wärtsilä's goal is to become the leading provider of ship
design services in various segments. The value of the acquisition was
EUR 132 million, with an additional maximum sum of EUR 38 million to
be paid based on the performance of the business over the next three
years. In 2007, Vik-Sandvik's net sales were EUR 55 million and the
profitability is at a very good level. The number of employees is
410. Vik-Sandvik has been included in the consolidation since August
1, 2008.

In September, Wärtsilä acquired Navelec SAS, a French company
specializing in marine navigation and communication systems,
electrical marine services, and control and automation services.
Through this acquisition Wärtsilä is able to broaden its service
offering and technological knowledge in the areas of navigation and
communication. It also strengthens Wärtsilä's position as the leading
service provider within electrical marine and automation services.
Navelec's annual net sales were EUR 7 million in 2007. The company
employs 45 people.

The total costs of the acquisitions above were EUR 181 million, and
EUR 101 million was reported as goodwill. The goodwill of Vik-Sandvik
was EUR 95 million.

In September Wärtsilä continued to expand within the field of ship
design with the signing of an agreement to acquire Conan Wu &
Associates Pte Ltd (CWA), a leading naval architecture and ship
design company, headquartered in Singapore. The deal also includes
partnership agreements regarding CWA's businesses in Malaysia and
China. The price of the deal is EUR 23 millions, to be paid in cash,
and an additional amount to be paid based on the performance of the
business during the years 2008-2010. In 2007, CWA's net sales were
EUR 10.7 million and the profitability was at a very good level. CWA
has 66 employees in Singapore. The acquisition price will be paid and
the company will be consolidated during the fourth quarter.

In July, Wärtsilä Corporation and the Manara Consortium formed a
joint venture Manara Wartsila Power Ltd (MWP), which aims to become
the leading developer of decentralized independent power producer
(IPP) projects in Islamic countries. MWP is expected to have USD 200
million in equity and the equity commitment of Wärtsilä to the joint
venture, through its development and financing arm, Wärtsilä
Development & Financial Services (WDFS), will total USD 20 million.
MWP will develop and invest in power projects with a capacity of
between 50 and 200 MW, and sell electricity to electric utilities,
industrial zones and municipalities.

In September, Wärtsilä and Metso signed a contract to form a joint
venture combining Metso's Heat & Power business and Wärtsilä's
Biopower business. The new joint venture will be one of Europe's
leading providers of medium- and small-scale power and heating
plants, focusing on renewable fuel solutions. Metso will own 60
percent and Wärtsilä 40 percent of the joint venture. It is estimated
that in 2008 the consolidated annual pro forma net sales of the joint
venture will be approximately EUR 130 million and the number of
employees approximately 200. The closing of the transaction will
require the relevant regulatory approvals, which are expected during
the coming months.

During the review period Wärtsilä Services continued the expansion of
its network by opening and expanding offices and workshops in
Namibia, Chile, Brazil, Madagascar, Azerbaijan, China, Turkey and
Dubai. Geographical expansion continues to be part of Wärtsilä's
strategic focus, and acquisitions to this effect will continue.

OTHER STRATEGIC ISSUES
In May, Wärtsilä announced its intention to strengthen its
international customer service by centralizing its spare parts
logistics, and by building a new spare parts distribution centre in
the Netherlands. A large and modern central warehouse is planned near
the company's current service unit in the Netherlands. The intention
is to outsource logistics and warehousing operations.

Wärtsilä and Emerson Process Management announced the expansion of
their global offshore alliance in June. Under the expansion, the
companies can now deliver integrated energy and automation systems
for Floating Production Storage and Offloading vessels and for semi
submersible oil and gas drilling rigs. The collaboration between the
companies began in 2006 within an alliance covering at the time
mainly FPSO vessels.

The importance of Asia as a shipbuilding hub has increased during
recent years. In order to be closer to the main shipbuilding markets,
the senior management of Wärtsilä Ship Power has relocated to
Shanghai.

MANUFACTURING
During the third quarter, several important capacity extensions were
inaugurated. In Khopoli, India Wärtsilä inaugurated the extension of
its plant for auxiliary units for power plants. The extension of the
gear plant in Rubbestadneset, Norway was inaugurated in September.
This extension will strengthen Wärtsilä's position as a leading
provider of power solutions to marine customers globally. In Korea,
Wärtsilä-Hyundai Engine Company, the manufacturing centre of the
joint venture between Wärtsilä and Hyundai Heavy Industries, was
inaugurated. The 50/50 joint venture company manufactures Wärtsilä
50DF dual fuel engines for LNG carriers and other applications.

The investment programmes for enhancing productivity in Trieste,
Italy and extending propulsion capacity in Drunen, the Netherlands
and Zhenjiang, China are proceeding according to plan. These
additions are vital for the execution of the record high order book.

RESEARCH & DEVELOPMENT
Wärtsilä's fuel cell power plant at the Vaasa Housing Fair in Finland
was inaugurated during the third quarter. The fuel cell unit,
developed by Wärtsilä, is based on planar solid oxide fuel cell
(SOFC) technology, and is the first of its kind in the world. The
plant is fuelled by methane gas originating from a nearby landfill, a
gas that would otherwise be harmful to the environment. The fuel cell
power plant produces both electricity and heating for the residential
area's needs. In the next stage fuel cells will be tested for marine
applications.

Wärtsilä and Mitsubishi Heavy Industries Ltd have signed a joint
development agreement to design and develop new small, low-speed
marine diesel engines of less than 450 mm cylinder bore. The
development programme is proceeding according to plan.

On the 9th of October 2008, the International Maritime Organization
(IMO) approved amendments to the MARPOL Annex VI regulations on ship
emissions. The amended regulation on NOx emissions will be introduced
in two additional tiers; Tier 2 represents a global 20% NOx cut from
the present Tier 1 level and will come into force in 2011, and the
Tier 3 level in 2016 represents a massive 80% NOx reduction when
applied to specific designated NOx Emission Control Areas. The engine
concepts for meeting the Tier 2 NOx level are ready for the whole
Wärtsilä marine engine portfolio and some engines are already
pre-certified. For Tier 3 the "Selective Catalytic Reduction" (SCR
catalyst) represents a means by which the level can already be
achieved today. Wärtsilä has over 100 SCR equipped engines in
operation. Wärtsilä is currently investigating and developing other
measures to ensure cost efficient compliance with IMO Tier 3
regulations. The revised Annex VI also set limits on the fuel sulphur
content. Wärtsilä engines are designed for operation on any fuel
sulphur content.

PERSONNEL
Wärtsilä's personnel on average during the review period was 17.386
(15.040). At the end of September Wärtsilä had 18,268 (15,811)
employees, growth of 16%. The largest personnel increases took place
in the Services business where 10,623 (9,288) people were employed at
the end of September.

During the review period Wärtsilä launched a Top Graduates
professional programme for R&D. During the programme, attendees will
drive R&D projects throughout Wärtsilä's international organization.
A similar programme for finance graduates has been in action since
March 2007 and ended in September 2008.

CHANGES IN MANAGEMENT
Atte Palomäki (43) M.Sc. (pol.) started as Group Vice President,
Corporate Communications and a member of the Board of Management on
March 1, 2008.

SHARES AND SHAREHOLDERS
In March Wärtsilä's A and B-series shares were combined. Following
the combination all shares now carry one vote and equal rights. The
combination of the share series involved a free share issue directed
to the holders of Series A-shares so that holders of Series A-shares
received one share free of charge for each nine Series A-shares. In
the directed share issue 2,619,954 shares were given. Trading with
the new and combined shares started on 27th of March 2008.

SHARES ON HELSINKI EXCHANGES


30 September 2008               Number of  Number of Number of shares
                                   shares      votes  traded 1-9/2008
WRT1V                          98 620 565 98 620 565      104 852 891

1. Jan -30 Sept 2008                 High        Low Average 1) Close
WRT1V                               52.40      28.13      41.80 29.46
1) Trade-weighted average price
                                 30 Sept.   30 Sept.
                                     2008       2007
Market capitalization, EUR          2 905      4 616
million

                                 30 Sept.        30
                                     2008 Sept. 2007
Foreign shareholders                49.5%      32.8%


CHANGES IN OWNERSHIP
During the review period and in relation to the combination of the
share series and the directed free share issue, Wärtsilä was informed
of the following changes in ownership:

The Fiskars Group's share of Wärtsilä Corporation's votes decreased
to less than 1/5 (20%). Following the transaction Fiskars Corporation
holds 901,857 or 0.9% of Wärtsilä's share capital and votes, and the
Fiskars wholly owned subsidiary Avlis AB's holds 15,944,444 or 16.2%
of Wärtsilä's share capital and total votes. In total, Fiskars Group
holds 16,846,301 or 17.1% of Wärtsilä Corporation's share capital and
votes.

Varma Mutual Pension Insurance's share of Wärtsilä Corporation's
shares increased to more than 1/20 (5%) and the share of the votes
decreased to less than 1/10 (10%). Following the transaction Varma
holds 5,130,087 or 5.2% of Wärtsilä's share capital and total votes.

Svenska Litteratursällskapet i Finland r.f's share of Wärtsilä
Corporation's votes decreased to less than 1/20 (5%). Following the
transaction Svenska Litteratursällskapet holds 1,735,506 or 1.76% of
Wärtsilä's share capital and total votes.

The above-mentioned changes came into effect when the combined and
new shares were registered in the trade register on 26 March 2008.

OPTION SCHEMES
During the review period, Wärtsilä had one option scheme that ended
on 31 March 2008. All option rights of this 2002 option scheme were
exercised.

DECISIONS TAKEN BY THE ANNUAL GENERAL MEETING
Wärtsilä's Annual General Meeting on 19 March 2008 approved the
financial statements and discharged the members of the Board of
Directors and the company's President & CEO from liability for the
financial year 2007. The Meeting approved the Board of Directors'
proposal to pay a dividend of EUR 2.25 per share and an extra
dividend of EUR 2.00 per share for a total dividend of EUR 4.25 per
share.

The Annual General Meeting decided that the Board of Directors shall
have six members. The following were elected to the Board: Ms Maarit
Aarni-Sirviö, Mr Kaj-Gustaf Bergh, Mr Kari Kauniskangas, Mr Antti
Lagerroos, Mr Bertel Langenskiöld and Mr Matti Vuoria.

The firm of authorized public accountants KPMG Oy Ab was appointed to
be the company's auditors.

The Annual General Meeting approved the proposal of the Board of
Directors to amend the Articles of Association.

The Annual General Meeting approved the proposal of the Board of
Directors to direct a free share issue to holders of A shares and to
combine the Series A and Series B shares and the changes to the
Articles of Association.

ORGANIZATION OF THE BOARD OF DIRECTORS
The Board of Directors of Wärtsilä Corporation elected Antti
Lagerroos as its chairman and Matti Vuoria as the deputy chairman.
The Board decided to establish an Audit Committee, a Nomination
Committee and a Compensation Committee. The Board appointed from
among its members the following members to the Committees:

Audit Committee:
Chairman Antti Lagerroos, Maarit Aarni-Sirviö, Matti Vuoria

Nomination Committee:
Chairman Antti Lagerroos, Matti Vuoria, Kaj-Gustaf Bergh

Compensation Committee:
Chairman Antti Lagerroos, Matti Vuoria, Bertel Langenskiöld

RISKS AND BUSINESS UNCERTAINTIES
The global financial crisis has rapidly changed the economic
environment and the shipping market has become unpredictable. Most
especially in light of the downturn of the economy, fears of an
oversupply in some vessel types have become evident and looking ahead
it is anticipated that freight rates are going to fall. This is
already mirrored in container vessel ordering. As the banks are
tightening their lending and even freezing the shipping financing
completely, some owners are facing difficulties in taking delivery of
their orders and trading of orders is already taking place. Shipyards
are still trying to keep new building prices intact but it is
expected that the balance is gradually moving from a shipyard market
to a ship owners' market as orders become scarcer. This is expected
to have an impact on new building prices. Due to the stricter lending
conditions within the shipbuilding market, the risk of cancellations
of vessel orders has increased. The possibility of slippage in
shipyard delivery schedules is also a risk that affects Ship Power.

Though the fundamentals in the Power Plant business remain unchanged,
the current financial crisis could have an effect on the timing of
orders. To date this risk has not materialized, but the possible
impact from the financial crisis is still difficult to predict. The
offering activity remains at all time high levels. The funding of
many future projects in the pipeline appears to be secure,
particularly in cash rich economies such as countries with large oil
and mineral wealth. Municipally funded projects also seem to have
secured funding. Wärtsilä's main markets in the industrial self
generation segment, are in the mining and cement industries in the
developing world. So far activity around these projects remains
strong.

So far, Wärtsilä has seen only a few cancellations in Ship Power and
the orders have been reallocated. The effects of possible
cancellations, due to the uncertainty on the shipbuilding markets,
are expected to be approximately 10% of Wärtsilä's total order book
value.

In Services, the biggest risks continue to be the availability and
retention of new personnel. Wärtsilä's measures to ensure the
availability of these competencies are ongoing.

During the third quarter, the risk related to the uncertainty in the
global market for raw materials eased somewhat and raw material
prices, while remaining at a high level, became more balanced. The
raw material price risk is rather limited for Wärtsilä, and the main
risks related to manufacturing remain related to the capacity
constraints of some suppliers as a result of high global demand in
key components. The overall availability of key components has
however improved.

MARKET OUTLOOK
The slowdown in the shipbuilding market has hit the bigger tonnage
segments i.e. bulkers, container ships and tankers, the hardest. The
ordering activity in segments with more specialized tonnage has still
been relatively active but demand in these segments is also slowing
down. At the moment it is difficult to judge at what levels the
ordering of new vessels will end after the most acute crisis is over,
but it is clear that demand is going to slow down during the upcoming
quarters, thus impacting also Wärtsilä Ship Power's order intake.

The demand in the Power Plant market remains at a high level. The
need for a more efficient and CO2-friendly power generation mix
remains. The main drivers for continued growth in the power plant
market remain the quest for increased efficiency, and versatility in
power generation due to environmental concerns and fuel availability
issues. Flexible baseload, as well as industrial self-generation
applications, are forecasted to remain active market segments,
especially throughout the Middle East, Africa and the Americas.
Continued growth potential is seen in the grid stability services
market in North America as well as in other developed countries.
Wärtsilä's power plant solutions are ideally suited for today's
markets, which require high efficiency and operational flexibility as
well as environmental sustainability. For Wärtsilä Power Plants,
continued high ordering activity is expected.

Services, which during the review period constituted 43% of total net
sales, continues its solid growth.

The long order book and flexible manufacturing model, in combination
with the solid growth and global presence in Services, gives Wärtsilä
time to react to fluctuations in the market.

WÄRTSILÄ'S PROSPECTS FOR 2008 REITERATED
Based on the strong order book, Wärtsilä's net sales are expected to
grow by about 25% in 2008. Wärtsilä's profitability varies
considerably from one quarter to another. The full-year operating
margin will exceed 11%.

WÄRTSILÄ INTERIM REPORT JANUARY - SEPTEMBER 2008
This interim financial report is prepared in accordance with IAS 34
(Interim Financial Reporting) using the same accounting policies and
methods of computation as in the annual financial statements for
2007. All figures in the accounts have been rounded and consequently
the sum of individual figures can deviate from the presented sum
figure.

Use of estimates
The preparation of the financial statements in accordance with IFRS
requires management to make estimates and assumptions that affect the
valuation of the reported assets and liabilities and other
information, such as contingent liabilities and the recognition of
income and expenses in the income statement. Although the estimates
are based on the management's best knowledge of current events and
actions, actual results may differ from the estimates. Amended and
new International Financial Reporting Standards (IFRS) and
Interpretations as of 1 January 2008:

- IFRIC 11 IFRS 2 - Group Treasury Share Transaction
- IFRIC 12 Service Concession Agreements
- IFRIC 13 Customer Loyalty Programmes
- IFRIC 14 IAS 19 - The Limit on Defined Benefit Asset, Minimum
Funding Requirements and their Interaction

The adoption of the new and revised standards and interpretations
does not have any material effect on the interim financial report.

The figures in this interim report are unaudited.


CONDENSED INCOME STATEMENT
MEUR                                       1-9/2008   1-9/2007   2007
Net sales                                     3 082      2 491  3 763
Other income                                     16         11     21
Expenses                                     -2 703     -2 214 -3 328
Depreciation and impairment                     -68        -56    -78
Operating result                                327        233    379
Financial income and expenses                     6         -6     -8
Share of profit of associates                     1                 1
Profit before taxes                             333        227    372
Income taxes                                    -91        -64   -106
Profit for the financial period                 242        163    265

Attributable to:
Equity holders of the parent company            236        161    262
Minority interest                                 6          1      3
Total                                           242        163    265

Earnings per share attributable to equity holders of the
parent company:
Earnings per share, EUR                        2.42       1.69   2.74
Diluted earnings per share, EUR                2.42       1.68   2.73



CONDENSED BALANCE SHEET
MEUR                                 30 Sep. 2008   30 Sep.   31 Dec.
                                                       2007      2007
Non-current assets
Intangible assets                             794       647       646
Property, plant and equipment                 428       357       377
Equity in associates                           19        11        16
Investments available for sale                120       168       155
Deferred tax receivables                       73        72        70
Other receivables                              18        43        19
                                            1 453     1 297     1 283
Current assets
Equity in associates                                      1         1
Inventories                                 1 653     1 113     1 081
Other receivables                           1 282       980     1 088
Cash and cash equivalents                     166       202       296
                                            3 101     2 296     2 466

Assets                                      4 553     3 593     3 749


Shareholders' equity
Share capital                                 336       335       336
Other shareholders' equity                    753       889       979
Total equity attributable to equity
holders of the parent                       1 089     1 225     1 315

Minority interest                              14         8        10
Total shareholders' equity                  1 102     1 232     1 325

Non-current liabilities
Interest-bearing debt                         439       253       245
Deferred tax liabilities                       83        80        81
Other liabilities*                            611       562       466
                                            1 133       895       792
Current liabilities
Interest-bearing debt                         100        43        38
Other liabilities                           2 218     1 423     1 594
                                            2 318     1 465     1 632

Total liabilities                           3 451     2 360     2 424

Shareholders' equity and
liabilities                                 4 553     3 593     3 749

*In Q3/2007, the total amount of Advances received was presented in
Current liabilities.



CONDENSED CASH FLOW STATEMENT
MEUR                                          1-9/2008  1-9/2007 2007
Cash flow from operating activities:
Profit before taxes                                333       227  372
Depreciation and impairment                         68        56   78
Financial income and expenses                       -6         6    8
Selling profit and loss of fixed assets and
other adjustments                                   -2        -3   -7
Share of profit of associates                       -1             -1
Changes in working capital                         -62       126  135
Cash flow from operating activities before
financial items and taxes                          331       411  585
Net financial items and income taxes               -75      -112 -154
Cash flow from operating activities                255       299  431

Cash flow from investing activities:
Investments in shares and acquisitions            -131       -59  -65
Net investments in tangible and intangible
assets                                            -103      -110 -166
Proceeds from sale of shares                         9              7
Cash flow from other investing activities            7        11    9
Cash flow from investing activities               -219      -159 -214

Cash flow from financing activities:
Issuance of share capital                                      3    4
New long-term loans                                211        65   65
Amortization and other changes in long-term
loans                                              -55       -30  -33
Changes in short term loans and other
financing activities                                91        15   36
Dividends paid                                    -411      -168 -168
Cash flow from financing activities               -164      -115  -95

Change in liquid funds, increase (+) /
decrease (-)                                      -127        25  122


Cash and cash equivalents at beginning of
period                                             296       179  179
Fair value adjustments, investments                  1              1
Exchange rate changes                               -4        -4   -6
Cash and cash equivalents at end of period         166       202  296



STATEMENT OF CHANGES IN
SHAREHOLDERS' EQUITY
MEUR               Total equity attributable to equity holders   Minority  Total
                   of the parent
                                                                 interest equity
                                                   Fair
                             Share                value
                     Share   issue Translation      and Retained
                                                  other
                   capital premium differences reserves earnings
Shareholders'
equity on 31
December 2007          336      61           3      127      788       10  1 325
Translation
differences                                 -3                          1     -3
Available-for-sale
investments
   gain/loss from
fair valuation,
   net of taxes                                     -32                      -32
Cash flow hedges
after taxes                                         -20                      -20
Net income
recognized
directly in equity                          -3      -52                 1    -54
Profit for the
financial period                                             236        6    242
Total recognized
income an expense
for the period                              -3      -52      236        7    188
Dividends paid                                              -408       -3   -411
Shareholders'
equity on 30 Sep.
2008                   336      61           0       75      617       14  1 102

Shareholders'
equity on 31
December 2006          334      58           3      128      693       13  1 230
Translation
differences                                  1                                 2
Other changes                                                          -6     -6
Available-for-sale
investments
  gain/loss from
fair valuation,
   net of taxes                                      -9                       -9
Cash flow hedges
after taxes                                          18                       18
Net income
recognized
directly in equity                           1        9                -5      5
Profit for the
financial period                                             161        1    163
Total recognized income
and expense for the period                   1        9      161       -4    167
Options exercised        1       2                                             3
Dividends paid                                              -167       -1   -168
Shareholders'
equity on 30 Sep.
2007                   335      60           4      137      688        8  1 232



Geographical segments Europe  Asia Americas Other Group
MEUR
Net sales 1-9/2008     1 119 1 201      471   291 3 082
Net sales 1-9/2007     1 034   903      313   241 2 491



INTANGIBLE ASSETS AND PROPERTY, PLANT & EQUIPMENT
MEUR                                        1-9/2008  1-9/2007 2007
Intangible assets
Book value at 1 January                          646       602  602
Changes in exchange rates                         -3        -6   -6
Acquisitions                                     156        46   47
Additions                                         22        22   33
Depreciation and impairment                      -28       -22  -30
Disposals and intra-balance sheet transfer         1         5
Book value at end of period                      794       647  646

Property, plant and equipment
Book value at 1 January                          377       315  315
Changes in exchange rates                          2        -1    3
Acquisitions                                       9         1    1
Additions                                         88        91  133
Companies sold                                             -17  -17
Depreciation and impairment                      -40       -34  -48
Disposals and intra-balance sheet transfer        -7         2   -9
Book value at end of period                      428       357  377



GROSS CAPITAL EXPENDITURE
MEUR                               1-9/2008        1-9/2007      2007
Investments in securities
and acquisitions                        162              59        65
Intangible assets and
property, plant and
equipment                               110             113       166
Group                                   272             172       231

During the review period investment in the enlargement of propulsion
equipment manufacturing in the Netherlands and China amounted to EUR
4 million during the review period, and Wärtsilä had commitments
related to the enlargements amounting to EUR 11 million at the end of
the review period. Wärtsilä's part of the investments related to the
investment programme in the Korean joint venture Wärtsilä Hyundai
Engine Company Ltd. amounted to EUR 13 million and the part of the
commitments related to the investment programme were EUR 1 million at
the end of the review period. In addition, Wärtsilä centralizes
warehousing and logistics of spare parts by investing in a new
distribution centre in the Netherlands. The investments to the new
distribution centre amounted to EUR 3 million during the review
period and commitments related to the investment were EUR 8 million
at the end of the review period.



IMPACT OF ACQUISITIONS ON THE CONSOLIDATED BALANCE
SHEET
During the review period Wärtsilä has acquired a Norwegian company
Maritime Service AS, specializing in ship service, mechanical and
reconditioning services, a Danish company International Combustion
Engineering A/S, specializing in project engineering and the service
and repair of steam boilers and ancillary burner systems, the boiler
services business of International Combustion Engineering's (I.C.E.)
former subsidiary in Dubai and a German company Claus D. Christophel
Mess- und Regeltechnik GmbH (CDC) specializing in the design,
delivery and service of automation systems for ship owners and yards.
In addition, Wärtsilä has acquired a French company Navelec SAS
specializing in marine navigation and communication systems,
electrical marine services and control and automation services and a
global Norwegian ship design group Vik-Sandvik which provides ship
design and engineering services. The allocation of the acquisition
price is preliminary.



MEUR                                 1-9/2008
                                  Vik-Sandvik Other
Acquisition costs                         166    15
Acquired assets to fair value             -71   -10
Goodwill                                   95     6

Specification of acquired assets:
Intangible assets                          51     5
Property, plant and equipment               5     3
Investments available for sale              8
Inventories                                       4
Receivables                                34     5
Cash and cash equivalents                  24     2
Liabilities                                -4    -8
Deferred tax liabilities                  -47    -2
Total                                      71    10




INTEREST-BEARING LOAN CAPITAL
MEUR                           30 Sep. 2008 30 Sep. 2007 31 Dec. 2007
Long-term liabilities                   439          253          245
Current liabilities                     100           43           38
Loan receivables                        -12          -33          -14
Cash and bank balances                 -166         -202         -296
Net                                     361           61          -27


FINANCIAL RATIOS                   1-9/2008     1-9/2007         2007
Earnings per share, EUR                2.42         1.69         2.74
Diluted earnings per share,
EUR                                    2.42         1.68         2.73
Equity per share, EUR                 11.04        12.78        13.70
Solvency ratio, %                      34.7         46.1         45.9
Gearing                                0.34         0.08        -0.01


PERSONNEL
                                   1-9/2008     1-9/2007         2007
On average                           17 386       15 040       15 337
At end of period                     18 268       15 811       16 336


CONTINGENT LIABILITIES
MEUR                           30 Sep. 2008 30 Sep. 2007 31 Dec. 2007
Mortgages                                13           14           13
Chattel mortgages                         7            9            8
Total                                    21           23           22

Guarantees and contingent
liabilities
on behalf of Group companies            436          412          479
Nominal amount of rents
according
to leasing contracts                     74           52           69
Total                                   510          465          548



NOMINAL VALUES OF DERIVATIVE INSTRUMENTS
MEUR                               Total amount of which closed
Interest rate swaps                         140
Foreign exchange forward contracts        1 650             406
Currency options, purchased                 139



CONDENSED INCOME STATEMENT,
QUARTERLY
MEUR          7-9/2008 4-6/2008 1-3/2008 10-12/2007 7-9/2007 4-6/2007
Net sales        1 140    1 092      850      1 272      933      797
Other income         6        5        5         10        3        4
Expenses          -997     -953     -754     -1 114     -821     -710
Depreciation
and
impairment         -26      -22      -21        -22      -19      -18
Operating
result             123      122       81        146       96       73
Financial
income and
expenses             5        7       -7         -1       -2       -1
Share of
profit of
associates                    2                   1
Profit before
taxes              127      132       74        145       95       72
Income taxes       -30      -36      -25        -43      -26      -20
Profit for
the financial
period              97       96       49        103       68       52

Attributable
to:
Equity
holders of
the parent
company             95       94       47        101       68       52
Minority
interest             3        2        2          2        1        1
Total               97       96       49        103       68       52

Earnings per share attributable to
equity holders of the parent company:
Earnings per
share, EUR        0.97     0.96     0.49       1.05     0.71     0.54
Diluted
earnings per
share, EUR        0.97     0.96     0.49       1.05     0.70     0.54



CALCULATION OF FINANCIAL RATIOS

Earnings per share (EPS)
Profit before taxes - income taxes - minority interests
Adjusted number of shares over the financial year

Equity per share
Shareholders' equity
Adjusted number of shares at the end of the period

Solvency ratio
Shareholders' equity + minority interests         x 100
Balance sheet total - advances received

Gearing
Interest-bearing liabilities - cash and bank balances
Shareholders' equity + minority interests




23 October 2008

Wärtsilä Corporation
Board of Directors


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