Sulzer Ag · SIX:SUN
Sulzer — H1 2022 Earnings Presentation
23 slides from Sulzer's earnings presentation, Jul 29, 2022
Slide 1: H1 2022 Results
H1 2022 Results Frédéric Lalanne | CEO Thomas Zickler | CFO
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements, including but not limited to, projections of financial developments, market activities or future performance of products and solutions, containing risks and uncertainties. These forward-looking statements are subject to change base
Slide 3: Business performance
Business performance Frédéric Lalanne | CEO
Slide 4: H1 2022 Highlights
H1 2022 Highlights ▪ Order intake continues to be strong +11% YOY in H1; +8% YOY in Q2, mainly driven by Chemtech and Flow Equipment ▪ Sales up +1% YOY in H1 driven by Chemtech and Services ▪ Operational profit margin +50bps to 9.0% ▪ Decision to exit the Russian market resulted in one-off write- do
Slide 5: H1 2022 orders split
H1 2022 orders split Strong New Equipment development in H1 Americas driven by US and Brazil Orders by region Orders by activity Asia Pacific 25% Other New 29% EMEA 39% Aftermarket 47% O&G New 12% Americas 36% Water New 12% July 29, 2022 H1 2022 Results 5
Slide 6: Flow Equipment
Flow Equipment Strong order growth, sales mainly held back by Energy Key figures | in CHF millions Highlights H1 22 H1 21 YOY Adj.1 Org.2 ▪ Orders +14% YOY in H1, +12% YOY in Q2 Order intake 709 627 13.1% 14.0% 13.1% ▪ Energy, Industry and Water all up double digit Sales 632 664 -4.8% -4.4% -5.1% ▪
Slide 7: Waste-to-fuel
Waste-to-fuel Sulzer enabling world’s first commercial-scale waste-to-fuel plant with zero carbon emissions ▪ Sulzer has supported Fulcrum BioEnergy to complete construction of the world’s first commercial-scale production plant that will convert municipal solid waste (MSW), or household waste, into
Slide 8: Services
Services APAC and Americas growing, EMEA held back by Russia exit Key figures | in CHF millions Highlights H1 22 H1 21 YOY Adj.1 Org.2 ▪ Order intake up 3% YOY in H1, -3% YOY in Q2 Order intake 588 571 3.0% 2.7% 2.4% ▪ Pumps Services orders up in H1 and Q2. Other Equipment Sales 543 526 3.3% 2.8% 2.
Slide 9: Pump retrofit
Pump retrofit Re-rating of largely oversized pump ▪ A customer in Norway operated a large pump made by a competitor for the last 30 years with an original duty of a throughput of 590m3/h ▪ Over the years the situation has changed and for today’s duty of a throughput of 150m3/h the pump was largely o
Slide 10: Chemtech
Chemtech Strong order intake, increasing sales and margin expansion Key figures | in CHF millions Highlights H1 22 H1 21 YOY Adj.1 Org.2 ▪ Order intake +21% YOY in H1 and +19% YOY in Q2 with all Order intake 437 354 23.5% 20.8% 20.9% segments showing growth Sales 342 306 11.9% 9.2% 9.8% ▪ Sales up 9
Slide 11: Plastics-to-Chemicals
Plastics-to-Chemicals Chemical plastic recycling contributes to circular economy ▪ Today plastic is mostly mechanically recycled by shredding it and melting it to get new plastic. Chemical recycling uses depolymerization processes to get again high-quality recyclables that can serve as a feedstock f
Slide 12: Sustainability report
Sustainability report Highlights ▪ Big step towards 30% CO2 reduction target by 2030: We reduced our CO2 equivalent emissions by 25% in 2021 despite higher sales volumes on company-wide initiative leading to a 34% decrease in fossil fuel consumption and a five-fold increase of non-fossil energy sour
Slide 13: Financials
Financials Thomas Zickler | CFO
Slide 14: Overview
Overview Improved operational profitability Key figures | in CHF millions Highlights YOY Adj.1 Org.2 H1 22 H1 21 ▪ Order growth of 11% driven by Chemtech and Flow Equipment Order intake 1’734 1’552 11.8% 11.4% 10.9% ▪ Order intake gross margin slightly down, with Flow Equipment Order intake gross ma
Slide 15: Operational profit to EBIT
Operational profit to EBIT Write-offs of Russian and Polish assets give 133m negative impact (in CHF millions ) 136 +10% 107 -20 -9 97 Flow Equipment -14 Flow Equipment -13 Services -3 Services -87 Chemtech -3 Chemtech -32 -133 -26 Operational Amortization Other non- Adjusted Write-offs EBIT EBIT Pr
Slide 16: EBIT to Net income
EBIT to Net income Russia impact partially mitigated by positive net financial income (in CHF millions ) Normalized tax rate of 23.6% 9 vs 24.4% in H1 21 -1 -26 -31 -49 EBIT Financial income (net) Share of gains / Income tax expenses Net income from H1 22 (losses) of associates continuing operations
Slide 17: Adjusted net income
Adjusted net income 119m impact on net income due to write-offs of Russian and Polish assets (in CHF millions ) +15% Impact on EBIT 70 70 133m -21 61 8 93 39 -49 1 Net income COGS OPEX Financial income Tax expense Adjusted Net income H1 21 Net income continuing H1 22 operations H1 21 1. includes imp
Slide 18: Free cash flow
Free cash flow Underlying change in net working capital masked by Russia write-offs (in CHF millions ) 70 -60 -1 -2 -54 -48 -31 -78 EBITDA Change in Change in Net interest Tax Cash flow Capex (net) Free cash flow adjusted net others paid from operating 1 working capital activities 1. Change in adjus
Slide 19: Net debt
Net debt Net debt impacted mainly by free cash flow and dividend payment (in CHF millions ) June 2021 Dec 2021 June 2022 1532 1296 299 1314 Net debt 557 67 2691 305 333 Net debt / EBITDA 1.3x 0.2x 1.0x1 1233 Tiwel Payable 991 981 Cash & Equivalents2 Highlights Debt ▪ Negative FCF of 78m ▪ Ordinary d
Slide 20: Outlook
Outlook Frédéric Lalanne | CEO
Slide 21: 2022 Guidance
2022 Guidance As of July 29, 2022 adjusted for FX Order Intake Sales Operational organic growth organic growth Profitability2 % up 2% – 4% up 3% – 5% excluding impact from close to 10.0% Russia exit Mid-term targets unchanged ▪ Sales growth1 of 4-5% ▪ operational profitability2 of 10-11% 1. Average
Slide 22: Takeaways
Takeaways ▪ Despite many unforeseen events, we managed H1 well: • Increase in orders of 11% YOY and order backlog by 10% YTD • Sales were up 1%, held back by Energy in Flow Equipment • Operational profitability up 50bps to 9.0% despite inflationary pressures ▪ Guidance confirmed excluding the impact
Slide 23: Your Investor Relations Contact
Christoph Ladner Sulzer Management Ltd Your Investor Head of Investor Relations Relations Contact P +41 52 262 30 22 Neuwiesenstrasse 15 M +41 79 326 69 70 8401 Winterthur E christoph.ladner@sulzer.com Switzerland sulzer.com July 29, 2022 H1 2022 Results 23