Sulzer Ag · SIX:SUN
Sulzer — Stifel Virtual Swiss Equity Conference (June 2021)
27 slides from Sulzer's conference presentation, Jun 3, 2021
Slide 1: Stifel Virtual Swiss Equity Conference
Stifel Virtual Swiss Equity Conference Greg Poux-Guillaume, CEO | Jill Lee, CFO | June 3, 2021
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements, including but not limited to, projections of financial developments, market activities, future performance of products and solutions or planned transactions, containing risks and uncertainties. These forward- looking statements are su
Slide 3: Business performance Q1
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Slide 4: ESG at Sulzer
ESG at Sulzer Green Leadership Contributing to Global Goals ESG Rating of Sulzer We at Sulzer are a responsible corporate citizen and aim to create value and improve our economic, social and environmental impact by: • developing innovative, efficient and eco- AA friendly solutions for our customers
Slide 5: Q1 2021 highlights
Q1 2021 highlights Orders: Q1 above expectations at 874m • Sequentially +9.2% (+7.1% org.1) vs. Q4 ’20 (trough in Q3 ‘20) • YoY –9.6% (–12.1% organic) vs. record (highest in 5 years!) Q1 2020 • March highest order month in over a year • Pumps: +2.0% org. QoQ, Water largest segment (40% of orders) •
Slide 6: Pumps Equipment (PE)
Pumps Equipment (PE) Water largest segment with 40% of division orders Order intake (in CHF millions) Highlights Q1 21 Q1 20 YOY adj.1 org.2 • Orders +2.0% org. QoQ4 (+8.2% incl. Nordic Water) in 302 382 –21.0% –19.2% –23.4% line with expectations. Acceleration expected in H2 21 • Order mix: Water 4
Slide 7: PE – Water segment
PE – Water segment Water now largest segment after acquisition of Nordic Water Nordic Water transaction rationale Nordic Water products at every step of waste water plant process • Leading provider of screening, sedimentation and filtration solutions for municipal and industrial water Treatment step
Slide 8: Rotating Equipment Services (RES)
Rotating Equipment Services (RES) Pick-up in H1 ‘21 expected to accelerate in H2 ‘21 Order intake (in CHF millions) Highlights Q1 21 Q1 20 YOY adj.1 org.2 • Orders up 10.4% org. QoQ4 despite continued customer 275 332 –17.0% –13.4% –13.4% site access restrictions and winter storm Uri in the US • H1
Slide 9: RES – in situ services
RES – in situ services Sulzer refurbishes 4 x 20 MW propulsion motors on cruise ships during pandemic • Modern cruise ships are powered by highly efficient electric propulsion systems • If one of a pair of motors develops a serious fault, vessel to remain at next port until repairs completed • Motor
Slide 10: Chemtech (CT)
Chemtech (CT) Renewable Technologies and China driving growth Order intake (in CHF millions) Highlights Q1 21 Q1 20 YOY adj.1 org.2 • Orders up 7.0% org. QoQ4 173 166 4.1% 6.5% 6.5% • Renewables (biopolymers) strong start into the year • APAC significantly up YoY and QoQ on sustained China investmen
Slide 11: CT – Renewable Technologies
CT – Renewable Technologies Leader in biopolymers processes – converting sugar into bioplastics Bioplastics from polylactic acid (PLA) B&F PLA plant, first integrated sugar-to-PLA plant in China • Our proprietary separation technology for lactide production selected for Chinese B&F PLA in Bengbu, fi
Slide 12: Applicator Systems (APS)
Applicator Systems (APS) Orders already above pre-pandemic level Order intake (in CHF millions) Highlights Q1 21 Q1 20 YOY adj.1 org.2 • Orders up 12.6% org. QoQ4, up in all segments 124 114 8.4% 9.9% 1.7% • YoY orders up driven by strong Industry (adhesives) on buoyant electronics market; Beauty st
Slide 13: APS – Medical segment
APS – Medical segment Acquisition of Haselmeier boosts growth targets for medical segment Haselmeier transaction rationale Attractive and versatile product portfolio (own IP) • Designs and produces injection pens for subcutaneous application, e.g. fertility, growth hormones, diabetes, rare diseases
Slide 14: Spin-off of APS as medmix
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Slide 15: Spin-off of APS as medmix
Spin-off of APS as • APS is a leader in high-precision delivery devices, well positioned to succeed and grow as an independent entity • Sulzer has significantly diversified its core flow control portfolio (PE/RES/CT), shifting away from energy towards water, chemicals and biopolymers, and a unique p
Slide 16: Transaction rationale
Transaction rationale Two focused leaders for attractive end-markets Flow control specialist for water, chemical, industry and energy Innovative, high-precision delivery devices • A global leader in industrial flow control • Leading positions in dental, pharma, adhesives and beauty • Continuous shif
Slide 17: medmix snapshot
snapshot Innovative, high-precision delivery devices serving attractive markets Healthcare Consumer and Industrial Drug Dental Surgery Industry Beauty delivery Gold standard in Award winning, Pioneer in bone Leader in industrial Leading dental mixing proprietary injection cement mixing mixing and di
Slide 18: Mid-term targets
financial highlights Attractive financial profile with substantial revenue growth and highly resilient margins 2021E sales CHF 450m ~25% adj. EBITDA margin Mid-term targets High single digit Healthcare share EBITDA margin target sales growth >50% ~30% Expected leverage post capital increase (net deb
Slide 19: Vision for medmix
Vision for Diversified exposure to growing end-markets, with healthcare segments growing fastest ✓ • Attractive and resilient B2B niche markets Niche leader • Exciting underlying macro growth trends • Fragmented competitive landscape ✓ • High entry barriers, e.g. regulation Highly • High IP protecti
Slide 20: Vision for Sulzer
Vision for Sulzer Accelerate repositioning towards sustainable applications and push aftermarket > 50% ✓ Capitalize on leadership in high-barrier-to-entry markets through Sulzer’s technology, service capabilities and proven digital advance ✓ Focus on sustainable sectors for mid-term growth, e.g. Wat
Slide 21: Indicative transaction timetable
Indicative transaction timetable 15-Jun-2021 2021 Capital Markets Day 22-Jul-2021 Publication of H1 2021 results Late Q3 2021 Extraordinary Shareholder Meeting H2 2021 Spin-off and capital increase / first trading day of medmix at SIX 21
Slide 22: Outlook
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Slide 23: Financial guidance 2021
Financial guidance 2021 As of May 27, 2021, adjusted for FX, including acquisitions already closed Sales (CHF) Operational Profitability % ~3bn ~9% opEBITA margin ~25% adj. EBITDA margin ~450m (equivalent to ~19% opEBITA margin) 23
Slide 24: Leverage and capital increase considerations
Leverage and capital increase considerations Leverage ratio of ~1.4-1.6x for Sulzer and ~1-2x for medmix post Transaction Net debt1 (CHFbn) and leverage ratio (x) – illustrative as per H1 2021E Considerations Deleveraging of Sulzer * 2.1x ~2.0-2.2x ~1.4-1.6x ~1-2x ▪ Capital increase of CHF200-300m c
Slide 25: Highlights on credit profile post Transaction
Highlights on credit profile post Transaction Sulzer and medmix expected to substantially benefit from the split and concurrent capital increase (the "Transaction") Post Transaction, both Sulzer and medmix will have lower leverage levels compared to Sulzer Group today Capital increase of CHF200-300m
Slide 26: Key takeaways
Key takeaways • Solid orders in Q1, with organic sequential growth in all divisions • Pumps largest segment is now Water. Energy focus remains on margin • Service back to sequential growth, acceleration expected in H2 ‘21 • Chemtech growth driven by Renewables (biopolymers) and China • Applicator Sy
Slide 27: Your Investor Relations contact
Your Investor Relations contact Christoph Ladner Head of Investor Relations Sulzer Management Ltd Phone: +41 52 262 30 22 Neuwiesenstrasse 15 Mobile: +41 79 326 69 70 8401 Winterthur E-mail: christoph.ladner@sulzer.com Switzerland www.sulzer.com
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