Slide 1: H1 2020 results
H1 2020 results Greg Poux-Guillaume, CEO | Jill Lee, CFO | July 24, 2020
Slide 2: The safe harbor statement under the US private securities litigation reform act 1995
The safe harbor statement under the US private securities litigation reform act 1995 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
Slide 3: Business Review
Business Review H1 2020 results 3
Slide 4: H1 2020 highlights
H1 2020 highlights • Orders up 1.7% YoY (-0.6% organic), record backlog of close to CHF 2bn • Sales down 3.9% YoY (-5.5% organic) on lockdowns / supply chain • Operational profitability1 7.5%, -160bps YoY, 80% from APS lockdown impact • Dental and beauty outlets reopened, APS demand rebound has star
Slide 5: COVID-19 impact on Sulzer
COVID-19 impact on Sulzer Employee safety achieved while maintaining business operations • Keeping everyone safe always our first priority ❑ Currently 36 confirmed COVID-19 cases, mostly in US and Mexico ❑ All Sulzer sites are operating although India only at half capacity ❑ Supply chain still bumpy
Slide 6: Structural savings plan well underway
Structural savings plan well underway CHF 70m savings in Energy-related activities, to be delivered mostly in 2021 Cost Savings In CHF millions 2020 ~70m 30% CHF PE 32 OPEX 70m ~50m RES 9 CT 9 80m H1 53 ~10m 70% H2 27 Footprint Total Implementation Cost 80 2020 2021 2022 Already announced / under di
Slide 7: Pumps Equipment
Pumps Equipment Water outperformed, Industry 4% down but record profitability, Energy resilient Key figures Order intake by market In CHF millions H1 20 H1 19 YOY adj.1 org.2 Order intake 744 753 –1.1% 6.0% 7.3% Sales 617 690 –10.7% -4.4% -3.1% opEBITA 19 20 –3.8% –4.5% 6.3% H1 operational profitabi
Slide 8: Pumps Equipment Energy BU vs. Market
Pumps Equipment Energy BU vs. Market Orders and gross margin up on favorable geographies despite steep market drop Market Capex1 vs. PE Energy Orders and Margin PE Energy Orders by Geography +35% Sulzer +4% –25% Market 1H19 2H19 1H20 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20(E) KSA China Brazil US Other O
Slide 9: Rotating Equipment Services
Rotating Equipment Services Jump in orders, unchanged sales and profitability despite pandemic disruptions Key figures Order intake by product line In CHF millions H1 20 H1 19 YOY adj.1 org.2 Order intake 617 602 2.5% 10.2% 6.3% Sales 528 561 –5.9% 1.3% –1.2% opEBITA 64 68 –5.7% 3.8% 1.0% H1 3 opera
Slide 10: Chemtech
Chemtech Chemicals growth and big China rebound mitigating India shutdown and FIDs shift Key figures Order intake by market In CHF millions H1 20 H1 19 YOY adj.1 org.2 Order intake 319 350 –8.8% –3.2% –12.0% Sales 288 304 –5.3% 0.2% –7.7% opEBITA 23 27 –15.8% –9.6% –22.3% H1 3 operational profitabil
Slide 11: Applicator Systems
Applicator Systems Q2 market pause on customer lockdowns, pricing intact, rebound underway Key figures Order intake by market In CHF millions H1 20 H1 19 YOY adj.1 org.2 Order intake 160 228 –29.9% –27.3% –27.3% Sales 166 218 –23.9% –21.0% –21.0% opEBITA 20 47 –58.7% –58.3% –58.3% H1 3 operational p
Slide 12: Applicator Systems
Applicator Systems Demand recovery underway in all segments Market development YTD and expected development (as % of 2019) indicative Dental • US rebound drawn out until mid 2021 (loss of health coverage) • US dental OEM and Distributor customers ended furlough in 100% July, EU customers still on sh
Slide 13: Financial Review
Financial Review H1 2020 results 13
Slide 14: Overview
Overview Record high order backlog and strong H1 FCF Key figures Comment • Gross margins on order intake lower on In CHF millions H1 20 H1 19 YOY adj.1 org.2 mix effect (less APS) Order intake 1’841 1’933 –4.8% 1.7% –0.6% • Backlog 8.6% higher compared to pre- Order intake gross margin 33.3% 33.8% p
Slide 15: Quarterly order development
Quarterly order development Q2 2020 orders show impact from lockdowns after very strong Q1 Quarterly order intake Comment (in CHF millions ) –4.6% org Q2 down 4.6% organically 984 994 • PE +10% on Energy and Chemicals 949 925 900 901 874 889 • RES flat despite lockdowns and limited 856 847 site acce
Slide 16: Operational Profit
Operational Profit Hit by COVID-19 partly mitigated by swift cost actions Op. Profitability1 9.1% 7.5% (in CHF millions ) 162 Cost 8.4% savings 3 in Q2 117 3 120 -34 -10 -8 -17 21 H1 2019 Volume Margin Mix Under Cost Actions FX H1 2020 Acquisitions H1 2020 absorption organic total COVID-19 Impact H1
Slide 17: Operational Profit to EBIT
Operational Profit to EBIT Restructuring up on announced Energy resizing (in CHF millions ) 120 -32 -42 PE –15 RES –4 -4 CT –3 -6 APS –9 36 Other –1 PE –29 RES –8 CT –3 APS –1 Other –1 opEBITA Amortization Restructuring Impairment of assets Other non- EBIT H1 2020 operational items H1 2020 H1 2020 r
Slide 18: EBIT to Net Income
EBIT to Net Income Core net income down 29% to 82m (in CHF millions ) 36 -12 –0 -7 17 -1 Unchanged 15 from prior year Effective tax rate 28.4% Normalized tax rate 23.1% EBIT Financial result Income from Taxes Reported Minorities Reported H1 2020 associates net income net income H1 2020 shareholders
Slide 19: Balance sheet
Balance sheet Solid balance sheet continues to support selective acquisitions (in CHF millions ) June 2019 Dec 2019 June 2020 1093 939 962 218 Net debt 485 / 7111 347 / 5651 475 / 7361 226 260 Net debt / EBITDA 1.2x / 1.8x1 0.8x / 1.4x1 1.3x / 2.1x1 875 712 702 Balance sheet June 2020: • Total net d
Slide 20: Summary
SULZER o © E E S YW) H1 2020 results
Slide 21: Summary
Summary • Demonstrated solidity of our business model in H1, supported by the performance of service and aftermarket (45% of Sulzer) • RES, PE Water, and CT China (chemical-driven market, 30+% of CT) performed particularly well • Energy market corrected 25% in Q2 but Sulzer still grew its backlog at
Slide 22: 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
Slide 23: Supplementary Slides
Supplementary Slides H1 2020 results 23
Slide 24: FX Exposure
FX Exposure 32% USD & related 18% EUR 13% GBP 9% CNY 8% BRL / RUB / INR 6% CHF 14% Others H1 2020 results July 24, 2020 24