Sulzer Ag · SIX:SUN

Sulzer — FY2004 Earnings Presentation

39 slides from Sulzer's earnings presentation, Mar 3, 2005

  1. Slide 1: Continuity and Drive for Operational Excellence Paying Off

    Annual Results Presentation 2004 Continuity and Drive for Operational Excellence Paying Off March 3, 2005 E_AnnualResults2004_050303 | slide 1

  2. Slide 2: Agenda

    Agenda Year-in-Review 2004 Ulf Berg Financial Results 2004 Bruno Allmendinger Outlook and Goals Ulf Berg Corporate Governance / AGM 2005 Ulf Berg E_AnnualResults2004_050303 | slide 2

  3. Slide 3: Sulzer Management Principles

    Sulzer Management Principles External growth Organic growth Operational excellence E_AnnualResults2004_050303 | slide 3

  4. Slide 4: Sulzer Today

    Sulzer Today „ ~9,000 employees „ CHF ~2 billion sales „ 4 core businesses – 4 main markets „ 1 venture business Sulzer Sulzer Sulzer Turbo Sulzer Metco Pumps Chemtech Services Oil and Gas (incl. HPI, API, etc.) „ „ „ „ Pulp and Paper „ „ „ „ Turbines and Power „ „ „ „ Automotive „ E_AnnualResults20

  5. Slide 5: Key Figures 2004

    Key Figures 2004 in million CHF 2004 2003 „ Strong growth in volume „ Orders received 2 198 1 908 „ For orders: +14.1% (organic, local „ For sales: +12.3% currency) „ Sales 2 067 1 826 „ Small acquisitory impact 1) „ EBITA core divisions 130 84 „ Strong growth in earnings (+56%) „ ROS2) core divisio

  6. Slide 6: Improved 2004 Results Driven by Core Divisions

    Improved 2004 Results Driven by Core Divisions in million CHF „ EBITA 2004 4 „ Other 139 Î +56% 23 „ EBITA „ Core divisions 2003 23 improvement 89 „ Pump restructuring 2003 2004 E_AnnualResults2004_050303 | slide 6

  7. Slide 7: Core Divisions: ROCE – Return on Capital

    Core Divisions: ROCE – Return on Capital1) in % 12% 11.1% 10% 9.1% 8.2% „ Return on capital is our focus 8% „ Steady improvement since 2002 6% 4% 2% 0% 2) 2002 2003 2004 1) Return on capital employed = EBITA/capital employed incl. historical goodwill 2) Before restructuring cost Sulzer Pumps CHF 23

  8. Slide 8: Strong Performance in Operating Net Cash Flow

    Strong Performance in Operating Net Cash Flow1) in million CHF 240 38 160 Operational 24 155 Excellence 70 132 at work 80 59 0 2002 2003 2004 Core divisions Venture division and Other 1) EBITA + depreciation +/– change in net current assets (excl. acquisitions) E_AnnualResults2004_050303 | slide 8

  9. Slide 9: Market – Supporting Our Organic Growth

    Market – Supporting Our Organic Growth Good Refining/CPI Automotive Oil & Gas Average Pulp & Paper Other Aerospace Weak Power 2001 2002 2003 2004 2005 2005 H1 H2 E_AnnualResults2004_050303 | slide 9

  10. Slide 10: Organic Growth in Order Intake 2004 and 2001–2004

    Organic Growth in Order Intake 2004 and 2001–2004 Organic Growth Ø Organic Growth Ø Nominal Growth in 2004 2001–2004 2001–2004 p.a. „ Sulzer Pumps 12% 8% 6% „ Sulzer Metco 16% 2% 11% „ Sulzer Chemtech 14% 10% 6% „ Sulzer Turbo Services 20% 6% 17% „Core Divisions 14% 7% 8% E_AnnualResults2004_050303

  11. Slide 11: Three Acquisitions With Annual Sales of CHF ~170 Million

    Three Acquisitions With Annual Sales of CHF ~170 Million External Sales in million CHF Annualized „ Sulzer Pumps „ Johnson, Crown, Paco pump lines, USA, China ~120 – Improve position in power and water segments and in service „ Sulzer Metco „ Canadian company Ambeon – Customized nickel-based materia

  12. Slide 12: Market Leadership Driving Value

    Market Leadership Î Driving Value Leader in pump technology, hydraulics No.1 in pulp and paper Sulzer Pumps No.2 in oil and gas No.4 in power Technology leader in coatings No.1 in coating equipment Sulzer Metco No.1 in coating materials No.3 in coating services Leader in separation technology Sulzer

  13. Slide 13: Sulzer Pumps: Pumping Solutions and Services

    Sulzer Pumps Pumping Solutions and Services E_AnnualResults2004_050303 | slide 13

  14. Slide 14: Sulzer Pumps: Operational Excellence and Restructuring Deliver Results

    Sulzer Pumps: Operational Excellence and Restructuring Deliver Results in million CHF 2004 2003 „ Order intake 1 073 951 Focused programs being executed „ Factory network optimization „ Order backlog1) 508 429 „ Capacity increase in China, Mexico, India; capacity reductions in Finland „ Net sales 1

  15. Slide 15: Sulzer Metco: Surface Technology Solutions and Services

    Sulzer Metco Surface Technology Solutions and Services E_AnnualResults2004_050303 | slide 15

  16. Slide 16: Sulzer Metco: More Drive for Operational Excellence Needed

    Sulzer Metco: More Drive for Operational Excellence Needed in million CHF 2004 2003 „ Order intake 534 423 „ High order intake growth „ Order backlog1) 66 54 „ Good development in thin-film technology and coating services „ Net sales 521 424 „ EBITDA 47 43 „ Negative influence from aerospace, gas tu

  17. Slide 17: Sulzer Chemtech: Components and Services for Separation Columns

    Sulzer Chemtech Components and Services for Separation Columns and Static Mixing E_AnnualResults2004_050303 | slide 17

  18. Slide 18: Sulzer Chemtech: Disciplined Operational Improvements Pay Off

    Sulzer Chemtech: Disciplined Operational Improvements Pay Off in million CHF 2004 2003 „ Order intake 346 312 „ Manufacturing capacity optimized „ Order backlog1) 147 119 „ Operating cost reduced „ Flat organization „ Net sales 313 307 „ Simplified processes „ EBITDA 40 34 „ Strong regional presence

  19. Slide 19: Sulzer Turbo Services: Service and Repair of Thermal Turbomachinery

    Sulzer Turbo Services Service and Repair of Thermal Turbomachinery E_AnnualResults2004_050303 | slide 19

  20. Slide 20: Sulzer Turbo Services: Acceptable Performance in Difficult Environment

    Sulzer Turbo Services: Acceptable Performance in Difficult Environment in million CHF 2004 2003 „ Order intake 226 197 „ Performance affected by fierce „ Order backlog1) 74 65 competition, regional turmoil and „ Net sales 213 200 weak US dollar „ EBITDA 25 26 „ Own spare parts production „ EBITA 17

  21. Slide 21: Sulzer Hexis: Fuel Cell Systems for Residential Applications

    Sulzer Hexis Fuel Cell Systems for Residential Applications E_AnnualResults2004_050303 | slide 21

  22. Slide 22: Sulzer Hexis: Major Technological and Product Breakthrough

    Sulzer Hexis: Major Technological and Product Breakthrough in million CHF 2004 2003 „ Systems installed and „ Breakthrough development of 101 92 operating (cum.) “Galileo”: „ Lowered cost by 50% „ EBIT –16 –16 „ Improved efficiency „ Cash disbursements –20 –19 „ Over 100 units “HXS1000 „ Net operati

  23. Slide 23: In Summary: Status of the Core Divisions

    In Summary: Status of the Core Divisions Sulzer Sulzer Sulzer Sulzer Pumps Metco Chemtech Turbo Services External growth Organic growth Operational excellence E_AnnualResults2004_050303 | slide 23

  24. Slide 24: Agenda

    Agenda Year-in-Review 2004 Ulf Berg Financial Results 2004 Bruno Allmendinger Outlook and Goals Ulf Berg Corporate Governance / AGM 2005 Ulf Berg E_AnnualResults2004_050303 | slide 24

  25. Slide 25: Core Divisions: Increased Contribution to Results

    Core Divisions: Increased Contribution to Results Composition EBITA in million CHF 180 Last three years: 150 67 25 „ Steady improvement 120 21 130 of the core divisions 107 90 97 „ Reflection of focus on operational excellence 60 in Sulzer Pumps and Sulzer Chemtech 30 0 „ Sulzer Metco and Sulzer –15

  26. Slide 26: Other – Overall Good Contribution

    Other – Overall Good Contribution Operating income CHF 25 million (CHF 21 million in 2003) Positive and negative developments largely offsetting each other: „ Real Estate: „ Total EBIT CHF 48 million (CHF 38 million in 2003) – lower gains on disposals – special gain of over CHF 20 million from insur

  27. Slide 27: From Operating Income to Net Income

    From Operating Income to Net Income in million CHF 2004 2003 „ EBIT core divisions 102 57 „ EBIT venture division (Sulzer Hexis) –16 –16 „ EBIT others 25 21 „ EBIT 111 62 „ Financial Income –2 –4 „ Income taxes –34 –16 – in % income before tax (EBT) 31% 28% „ Net income before minority interest 75 4

  28. Slide 28: Strong Cash Flow Generation

    Strong Cash Flow Generation in million CHF 2004 2003 U Cash flow generation by core divisions – Operating income (EBITA) 130 107 1) 23 – Depreciation 70 71 –1 „ EBITDA 200 178 1) 22 – Change net current assets/provisions 14 17 –3 – Capex net2) –59 –64 5 „ Net operating cash flow (core divisions) 155

  29. Slide 29: Further Expansion of Financing Capacity

    Further Expansion of Financing Capacity in million CHF 31 Dec. 31 Dec. 31 Dec. 2004 2003 2001 „ Cash and marketable securities 444 385 288 „ Borrowings (short and long-term) –232 –247 –389 „ Net cash 212 138 –101 „ Total assets 2 495 2 419 2 802 „ Shareholder’s equity incl. 1 325 1 283 1 201 minorit

  30. Slide 30: Agenda

    Agenda Year-in-Review 2004 Ulf Berg Financial Results 2004 Bruno Allmendinger Outlook and Goals Ulf Berg Corporate Governance / AGM 2005 Ulf Berg E_AnnualResults2004_050303 | slide 30

  31. Slide 31: Midrange Margin and Growth Targets 2006

    Midrange Margin and Growth Targets 2006 as communicated in March 2004 EBITA Organic ROCE1) Margin Growth p.a. „ Sulzer 8% 16%+ 4–6% Pumps „ Sulzer 11–12% 13–14% 7–9% Metco „ Sulzer 7–8% 16%+ 4–6% Chemtech „ Sulzer 12% 14% 7–9% Turbo Service Core ~9% 13–15% 5–7% Divisions 1) Return on capital employe

  32. Slide 32: Midrange Margin and Growth Targets – Status 2004

    Midrange Margin and Growth Targets – Status 2004 EBITA Organic ROCE1) Margin Growth p.a. „ Sulzer Pumps 6.4% 17.2% 14.6% „ Sulzer Metco 3.6% 4.1% 14.4% „ Sulzer Chemtech 9.6% 22.9% 5.1% „ Sulzer Turbo Service 8.0% 8.8% 10.9% Core Divisions 6.3% 11.1% 12.5% 1) Return on capital employed E_AnnualResul

  33. Slide 33: Priorities Going Forward

    Priorities Going Forward External Disciplined approach growth Stick to adjacencies Organic Sales force effectiveness pays off Æ but more to be done growth Innovation to be strengthened Our main focus Operational Æ will not spare expenses to unlock potential, but strive to absorb improvement cost wit

  34. Slide 34: Agenda

    Agenda Year-in-Review 2004 Ulf Berg Financial Results 2004 Bruno Allmendinger Outlook and Goals Ulf Berg Corporate Governance / AGM 2005 Ulf Berg E_AnnualResults2004_050303 | slide 34

  35. Slide 35: Upcoming Annual General Meeting 2005: Dividend

    Upcoming Annual General Meeting 2005: Dividend CHF „ Friday, April 15, 2005, 10 at 10.00h in Winterthur, Eulachhalle 9 8 +50% „ Dividend proposal: 6 6 6 CHF 9.– per share (prior year: CHF 6.–) 4 2 „ Dividend yield: ~2% 0 2002 2003 2004 E_AnnualResults2004_050303 | slide 35

  36. Slide 36: Upcoming Annual General Meeting 2005: Board

    Upcoming Annual General Meeting 2005: Board „ Up for reelection: Dr. Leonardo Vannotti Thor Håkstad E_AnnualResults2004_050303 | slide 36

  37. Slide 37: Sulzer Management Principles

    Sulzer Management Principles External growth Organic growth Operational excellence E_AnnualResults2004_050303 | slide 37

  38. Slide 38: E_AnnualResults2004_050303 | slide 38

    E_AnnualResults2004_050303 | slide 38

  39. Slide 39: Safe Harbor Statement

    THE SAFE HARBOR STATEMENT UNDER THE US PRIVATE SECURITIES LITIGATION REFORM ACT 1995 This presentation contains forward-looking statements, including but not limited to, projections of future performance of materials and products, containing risks and uncertainties. These statements are subject to c

Sulzer — FY2004 Earnings Presentation on 6ix