Sulzer Ag · SIX:SUN
Sulzer — FY2021 Earnings Presentation
27 slides from Sulzer's earnings presentation, Feb 18, 2022
Slide 1: Annual Results 2021
Annual Results 2021 Greg Poux-Guillaume | CEO Frédéric Lalanne | CEO designate Jill Lee | 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 Greg Poux-Guillaume | CEO
Slide 4: FY 2021 Highlights
FY 2021 Highlights ▪ All financial targets achieved or beaten • Orders up 3.6% @ CHF 3’168m1 • Sales up 6.0%@ CHF 3’155m1 • Operational profitability at 9.3%1 • FCF strong @ CHF 211m1, 6.7% of sales ▪ Refocused on Flow Control with APS spin-off ▪ Renamed divisions to reflect change in scope ▪ Water
Slide 5: Sulzer post split: new names for new ambitions
Sulzer post split: Pure play flow control company with new names for new ambitions attractive technology portfolio in growth markets driven by sustainability Flow Equipment Services Chemtech Changed from Pumps Equipment, because we Changed from Rotating Equipment Services. Unchanged at this point, b
Slide 6: 2021 orders split
2021 orders split Strong Aftermarket, rising Water New and declining O&G New exposure Orders by region Orders by activity Asia Pacific 26% Other New 27% EMEA 41% Aftermarket 49% O&G New 12% Americas 33% Water New 12% February 18, 2022 Annual Results 2021 6
Slide 7: Flow Equipment
Flow Equipment Water largest segment in Flow with orders up 11% organic YOY Key figures | in CHF millions Highlights 2021 2020 YOY Adj.1 Org.2 ▪ FY21 organic orders driven by Water +11%, Industry +7%. Order intake 1’325 1’298 2.1% 1.8% –3.9% Energy -23% on soft markets in H1 and continued selectivit
Slide 8: Wastewater treatment
Wastewater treatment Sulzer technology enables energy neutrality by producing biogas from sludge ▪ Sulzer supplied equipment (pumps, agitators, turbocompressors, diffusers and a flow booster) and knowhow to an innovative bio-power scheme in the Energie Fabriek West, Sleeuwijk, The Netherlands ▪ The
Slide 9: Services
Services EMEA and Americas dynamic, APAC still to rebound Key figures | in CHF millions Highlights 2021 2020 YOY Adj.1 Org.2 ▪ FY21 orders up 2% with EMEA +5%, Americas +4% and Order intake 1’163 1’131 2.9% 2.8% 2.0% APAC -12% Sales 1’118 1’078 3.7% 3.5% 2.7% ▪ Q4 orders up 13% YOY org. driven by Am
Slide 10: Generator repair and refurbishment
Generator repair Sulzer maximizing efficiency of and refurbishment ageing equipment ▪ The Dinas hydropower station features a single 13.5 MW generator to produce electricity ▪ This power station is part of the Rheidol hydropower plant in Wales, UK, which is the largest power plant of its kind in the
Slide 11: Chemtech
Chemtech Renewables nearly doubled at 14% of Chemtech, driving growth Key figures | in CHF millions Highlights 2021 2020 YOY Adj.1 Org.2 ▪ FY21 orders up 9% mainly driven by Renewables (+95%) and Order intake 680 621 9.5% 8.8% 8.8% Water (+51%) Sales 649 593 9.4% 8.4% 8.4% ▪ Renewables now 14% of to
Slide 12: Bioplastic
Bioplastic Enabling the drive towards bioplastics with market-leading PLA technology ▪ Sulzer is delivering customized state-of-the-art production technology to NatureWorks’ latest biopolymer manufacturing facility at the Nakhon Sawan Biocomplex, Thailand ▪ NatureWorks is the world’s leading manufac
Slide 13: Financials
Financials Jill Lee | CFO SULZER
Slide 14: Overview
Overview APS spin-off completed 20 Sept, reported as discontinued operations in income statement Key figures | in CHF millions Highlights 2021 2020 YOY Adj.1 Org.2 ▪ Q4 orders up 16% FX adjusted (+13% organic), with Flow and Order intake 3’168 3’049 3.9% 3.6% 0.9% Services strongly up, Chemtech slig
Slide 15: Operational profit
Operational profit Operational profitability at 9.3%, record level for current scope Operational profitability 8.6% 9.3% (in CHF millions ) 40 -41 293 4 8 3 -6 255 30 2020 Volume Margin/Mix Structural OPEX Others Acquisition FX 2021 savings reversal (e.g. supply chain) Febraury 18, 2022 Annual resul
Slide 16: Op. profit to EBIT
Op. profit to EBIT Lower restructuring expenses (in CHF millions ) 293 -50 -10 -4 -8 222 PE -38 RES -5 CT -7 PE -8 Other -1 RES -1 CT -1 Operational Amortization Restructuring Impairment of assets Other non- EBIT Profit operational items 2021 2021 Febraury 18, 2022 Annual results 2021 16
Slide 17: EBIT to Net income
EBIT to Net income Excluding exceptional gain from APS spin-off, net income nearly doubled from previous year (in CHF millions ) Discontinued operations 1419 222 -22 1255 -2 -57 141 23 Effective Unchanged tax rate 28.9% vs 2020 on continuing business EBIT Financial income net Share in Taxes Net inco
Slide 18: Free Cash Flow
Free Cash Flow Post APS split, continuing strong FCF, reached 6.7% of sales in 2021 FCF in CHF millions and FCF as % of sales EBITDA to FCF (excluding discontinued operations) 300 9% EBITDA 357 8% 250 Disc. 7% Change in Net Working Capital1 -13 Ops 200 6% Capex -64 5% 150 Change in Others 25 4% 100
Slide 19: Balance sheet
Balance sheet Balance sheet stronger than before split, continues to support acquisitions (in CHF millions ) Dec 2020 Dec 2021 1532 1428 261 299 Net debt 415 671 Net debt / EBITDA 1.3x 0.2x1 1167 1233 Tiwel Payable Cash & Equivalents2 Highlights Debt Leases (IFRS 16) ▪ FCF of 211m (continuing busine
Slide 20: Dividend
Dividend CHF 3.50 proposed 4.00 4.00 3.50 3.50 3.50 3.50 3.50 Medmix 3.50 dividend of 3.20 3.20 “not lower 3.00 3.00 than CHF 0.50 per share”2 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 proposed Dividend yield1 2.1% 3.0% 2.2% 2.2% 3.3% 3.7% 3.3% 3.0% 4.5% 3.7% 4.3% 3.9% 1 Dividend y
Slide 21: Outlook
Outlook Frédéric Lalanne | CEO designate
Slide 22: Sulzer strategy
Sulzer strategy We have a clear path to value creation, based on strong positions 1 2 3 4 Grow Water Leverage unique Defend Chemical ESG focus as a key to and Industry in service proposition leadership while strong, sustainable Flow Equipment and digital / additive boosting Biopolymers financial per
Slide 23: Sustainability at Sulzer: Minimize – Enable – Engage
Sustainability Minimize – Enable – Engage at Sulzer as of December 2021 Minimize Enable Engage our carbon footprint A low carbon society Our employees and communities We operate in a sustainable way We contribute to a circular economy We make life better for those around us We reduce our carbon foot
Slide 24: 2022 Guidance
2022 Guidance As of February 18, 2022 adjusted for FX Order Intake Sales Operational organic growth organic growth Profitability % up 4% – 6% (excl. Energy) up 3% – 5% close to 10.0% up 2% – 4% (incl. Energy) Orders Sales ▪ Flow Equipment: continued growth in Water and Industry, Energy to ▪ Flow Equ
Slide 25: Mid-term targets
Mid-term targets Confirmed as presented at the June 2021 Capital Markets Day Flow Equipment Services Chemtech Sulzer Sales Growth1 3-4% 3-5% 5-7% 4-5% Operational Profitability2 7-8% 15% 11-12% 10-11% 1. Average sales growth p.a., FX adjusted 2. opEBITA margin as a percentage of sales February 17, 2
Slide 26: Takeaways
Takeaways ▪ Post split, Sulzer is well-positioned as a pure play flow control leader to accelerate growth in markets driven by sustainability (e.g. Water in Flow Equipment, Renewables in Chemtech) ▪ High resilience of business demonstrated during pandemic ▪ Delivered on the guidance in 2021 ▪ For 20
Slide 27: 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 February 18, 2022 Annual Results 2021 27