Slide 1: Midyear Presentation 2015
Midyear Presentation 2015 Growing order intake – but challenging market environment impacting H1 2015 results Winterthur │July 28, 2015 THE SAFE HARBOR STATEMENT UNDER THE US PRIVATE SECURITIES LITIGATION REFORM ACT 1995 This presentation may contain forward-looking statements, including but not lim
Slide 2: Oil and gas market continues to experience an overall downturn
Agenda Market Update Business and Financial Review – H1 2015 Update on Sulzer Full Potential program Outlook 3 Midyear presentation 2015 | July 28, 2015 | Oil and gas market continues to experience an overall downturn Oil and Gas Our short-term Oil price predictability remains low market outlook
Slide 3: Headwinds in the oil & gas market are impacting Sulzer and the industry
Headwinds in the oil & gas market are impacting Sulzer and the industry Commodity price uncertainty Economy (real GDP growth) Forecast Oil price (Upstream) China USA HPI Boxscore (Downstream) Europe Sources: Bloomberg; Hydrocarbon Processing, Boxscore database 5 Midyear presentation 2015 | July 28,
Slide 4: H1 order intake and free cash flow improved – market headwind and strong Swiss franc impacted profitability
Agenda Market Update Business and Financial Review – H1 2015 Update on Sulzer Full Potential program Outlook 7 Midyear presentation 2015 | July 28, 2015 | H1 order intake and free cash flow improved – market headwind and strong Swiss franc impacted profitability Orders in Q2 growing by Key figures
Slide 5: Despite headwinds in oil and gas, Q2 order intake grew by 8.9% YOY
Despite headwinds in oil and gas, Q2 order intake grew by 8.9% YOY1) Order intake (in CHF millions ) Drivers of order intake in Q2 were 932 In Pumps Equipment order intake grew by 13.3% 859 YOY1), as the good performance of water and 807 828 800 784 power more than compensated the decline in oil
Slide 6: OpEBITA declined as a result of lower volumes
OpEBITA declined as a result of lower volumes – reallocation of costs distort divisional YOY comparison Operational EBITA In CHF millions H1 2015 H1 2014 YOY YOY adj.1) Total Sulzer 98.3 120.7 -18.6% -18.7% opROSA % 7.1% 8.1% Pumps Equipment with Divisions 93.3 128.5 -27.4% -27.3% lower margins on l
Slide 7: SFP expected to yield a 0.6pp opROSA contribution in full year 2015
SFP expected to yield a 0.6pp opROSA contribution in full year 2015 SFP contribution of CHF 5.0m in H1 2015 Main H1 contributions from: Adapting operational setup in Chemtech as previously announced, mainly in China, Singapore, Canada, Switzerland Procurement, e.g. electric motors General and
Slide 8: Underlying tax rate at 25.9%
Underlying tax rate at 25.9% (in CHF millions ) Tax rate as reported 47.6 -11.5 28.5%; underlying tax rate 25.9% -5.2 2.8 -11.1 27.8 26.8 -1.0 Of which 5.2m accrued interest for the legal case EBIT Financial Income from Taxes Net profit Minorites Net profit H1 15 result associates Group H1 15 Shareh
Slide 9: Sulzer Full Potential program steers our transformation journey
Agenda Market Update Business and Financial Review – H1 2015 Update on Sulzer Full Potential program Outlook 17 Midyear presentation 2015 | July 28, 2015 | Sulzer Full Potential program steers our transformation journey Sulzer Full Potential (SFP) STRATEGY OPERATING OPERATIONAL Oil and Gas MODEL EXC
Slide 10: We remain committed to deliver top tier profitability
We remain committed to deliver top tier profitability Q1 profitability H1 profitability 2014 PROFITABILITY COMPARISON development YOY1) development YOY2) Company A – Company B Company D 1) Company F Company C Company E 4-6% 1) impact Company H Company G – – Sulzer 9.4% – Company K – Company L – – Co
Slide 11: On track for an 0.6pp contribution in operational EBITA margin for 2015
On track for an 0.6pp contribution in operational EBITA margin for 2015 Profit contribution by lever slide 4-6pp 24 slide 23 slide Expected 22 2015 profit contribution PE CT 2018 steady Procurement operational G&A Service Selling operational state excellence excellence Comprehensive program across
Slide 12: Strengthen operational capabilities to compete efficiently in the years to come
Strengthen operational capabilities to compete efficiently in the years to come Objectives Achievements Adjust global footprint Launched global PE to market demand manufacturing organization Leverage best cost regions to improve cost Strengthened focus of of components without sites (e.g. on
Slide 13: Track Sulzer Full Potential results with periodic updates to investors
Track Sulzer Full Potential results with periodic updates to investors 2 0 1 5 Continue to provide periodic progress 2 0 1 6 updates to investors 2 0 1 7 25 Midyear presentation 2015 | July 28, 2015 | Agenda Market Update Business and Financial Review – H1 2015 Update on Sulzer Full Potential progra
Slide 14: Key markets – assessment for H2 2015
Key markets – assessment for H2 2015 Share of orders in % Activity level H1 Outlook H2 2015 Activity levels expected to Oil and Gas Reduced ~52% remain weak Power Good Similar levels of activity ~16% expected Good Similar levels of activity Water ~13% expected General Reduced Similar levels of activ
Slide 15: Key reporting dates and contact
Key reporting dates and contact Financial Calendar October 15, 2015 9M 2015 order intake February 25, 2016 FY 2015 results Your investor relations contact: Christoph Ladner Head of Investor Relations Sulzer Management Ltd Neuwiesenstrasse 15 Phone: +41 52 262 20 22 8401 Winterthur Mobile: +41 79 326
Slide 16: Despite headwinds in oil and gas, order intake grew by 3.9% in H1 2015
Despite headwinds in oil and gas, order intake grew by 3.9% in H1 2015 Order intake by region In CHF millions H1 2015 H1 2014 YOY YOY adj. 1) Total Sulzer 1'584.1 1'583.4 0.0% 3.9% 19% Total Divisions 1'589.9 1'585.2 0.3% 4.2% 44% Pumps Equipment 834.8 851.3 -1.9% 3.5% Rotating Equipment Services 36
Slide 17: Operational EBITA to EBIT bridges for divisions
Operational EBITA to EBIT bridges for divisions In CHF millions PE RES CT Divisions Others Total opEBITA H1 2015 31.7 27.8 33.8 93.3 5.0 98.3 Amortization -8.4 -3.1 -7.9 -19.4 -1.1 -20.5 Restructuring costs -2.8 -2.0 -3.1 -7.9 0.0 -7.9 Legal case 0.0 0.0 0.0 0.0 -8.7 -8.7 Other 0.0 0.0 0.0 0.0 -13.6
Slide 18: Free cash flow improved in H1 2015 by CHF 98.8m
Free cash flow improved in H1 2015 by CHF 98.8m, resulting in net income to FCF conversion of 120% in CHF millions 63.1 26.1 8.9 33.3 27.8 -24.9 -37.0 -30.7 Mainly tax payments -40.1 Cash collection Metco contribution +25.4 to FCF in H1 2014 -65.5 Net income Inventories Accounts Accounts Net Net of
Slide 19: Disclaimer
This document may contain forward-looking statements, including, but not limited to, projections of financial developments and future performance of materials and products, containing risks and uncertainties. These statements are subject to change based on known and unknown risks and various other f