Slide 1: Midyear Presentation 2014: Adjusted Sales Slightly Increased – Order Intake Decreased
Midyear Presentation 2014 Adjusted Sales Slightly Increased – Order Intake Decreased July 22, 2014
Slide 2: 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: Agenda
Agenda Business Review – H1 2014 Financial Review – H1 2014 Strategy Update Outlook Midyear Presentation 2014 3 | July 22, 2014 |
Slide 4: Highlights H1 2014
Highlights H1 2014 After a strong start, order intake decreased in Q2 due to a high basis, negative currency impact, and delay of major orders Adjusted sales increased by 1.2% year-over- year (YOY) Divisions’ operating income increased by 5.9% on an adjusted basis Sulzer is transforming itse
Slide 5: Key Figures H1 2014 – Total Sulzer
Key Figures H1 2014 – Total Sulzer In CHF millions H1 2014 H1 2013 YOY YOY adj.1) Order intake lower on Order intake 1583.4 1738.4 -8.9% -3.7% weaker Q2 Order backlog (June 30 vs Dec 31) 1772.7 1672.1 Adjusted sales increased Sales 1491.7 1551.6 -3.9% 1.2% slightly EBIT Divisions 107.5 106.8 0.7
Slide 6: Order Intake by Division and Region
Order Intake by Division and Region In CHF millions H1 2014 H1 2013 YOY YOY adj.1) By region Pumps Equipment 851.3 954.8 -10.8% -5.4% Rotating Equipment Services 379.9 373.2 1.8% 8.0% Chemtech 354.0 411.0 -13.9% -10.0% Total Divisions 1585.2 1739.0 -8.8% -3.6% Others -1.8 -0.6 Total Sulzer 1583.4 17
Slide 7: Quarterly Order Development
Quarterly Order Development Order intake (in CHF millions ) Q2 14 order intake was weaker on an adjusted basis compared to Q2 13. 932 Main reason was the high comparable basis Average quarter in 2013 = 812 828 In Q2 13 all three divisions had a strong order 807 755 intake 753 758 PE recorded
Slide 8: Sales by Division and Region
Sales by Division and Region In CHF millions H1 2014 H1 2013 YOY YOY adj.1) By region Pumps Equipment 809.5 846.1 -4.3% 1.2% Rotating Equipment Services 327.5 345.4 -5.2% 0.0% Chemtech 357.3 363.5 -1.7% 2.3% 23% Total Divisions 1494.3 1555.0 -3.9% 1.2% 41% Others -2.6 -3.4 Total Sulzer 1491.7 1551.6
Slide 9: EBIT by Division
EBIT by Division In CHF millions H1 2014 H1 2013 YOY YOY adj.1) Pumps Equipment 43.4 47.1 -7.9% -2.5% Lower margins on ROS % 5.4% 5.6% lower volumes in Asia-Pacific and in Rotating Equipment Services 24.1 24.7 -2.4% 3.9% Engineered Water ROS % 7.4% 7.2% Chemtech 40.0 35.0 14.3% 18.6% ROS % 11.2% 9.6
Slide 10: EBIT Bridges for PE and Others
EBIT Bridges for PE and Others EBIT Bridge PE (in CHF millions ) EBIT Bridge Others (in CHF millions ) 47.1 -8.5 5.0 1.2 -2.7 3.9 -11.0 43.4 1.3 -6.7 5.5 -8.3 H1 13 Volume Margin OPEX Restr. FX H1 14 H1 13 Real estate IT Others H1 14 Absorbtion Others provisions Negative impacts from volume and FX
Slide 11: Net Liquidity – Cash Deployment
Net Liquidity – Cash Deployment Net liquidity (in CHF millions ) Net liquidity at the end of June 2014 at CHF 741m FY 13 H1 14 The sale of Metco led to a cash inflow of 1400 1290 CHF 920m 1200 Priority is to deploy cash for internal and 1000 external growth 741 800 600 529 400 200 -44 0 -200 -
Slide 12: Agenda
Agenda Business Review – H1 2014 Financial Review – H1 2014 Strategy Update Outlook Midyear Presentation 2014 12 | July 22, 2014 |
Slide 13: Pumps Equipment – Key Figures and Review H1 14
Pumps Equipment – Key Figures and Review H1 14 1) Adjusted for currency effects as well In CHF millions H1 2014 H1 2013 YOY YOY adj.1) as acquisitions and divestitures. Order intake 851.3 954.8 -10.8% -5.4% Order backlog (June 30 vs Dec 31) 1241.1 1190.9 Sales 809.5 846.1 -4.3% 1.2% EBITR (EBIT befo
Slide 14: RES – Key Figures and Review H1 14
RES – Key Figures and Review H1 14 1) Adjusted for currency effects as well In CHF millions H1 2014 H1 2013 YOY YOY adj.1) as acquisitions and divestitures. Order intake 379.9 373.2 1.8% 8.0% Order backlog (June 30 vs Dec 31) 245.0 190.7 Sales 327.5 345.4 -5.2% 0.0% EBITR (EBIT before restructuring)
Slide 15: Chemtech – Key Figures and Review H1 14
Chemtech – Key Figures and Review H1 14 1) Adjusted for currency effects as well In CHF millions H1 2014 H1 2013 YOY YOY adj.1) as acquisitions and divestitures. Order intake 354.0 411.0 -13.9% -10.0% Order backlog (June 30 vs Dec 31) 286.6 290.5 Sales 357.3 363.5 -1.7% 2.3% EBITR (EBIT before restr
Slide 16: EBIT Bridge Total Sulzer
EBIT Bridge Total Sulzer EBIT Bridge H1 13 to H1 14 (in millions of CHF) -6.0 6.7 3.0 110.7 -13.0 10.0 -12.2 99.2 Divisions H1 13 Volume Margin OPEX Restr. FX "Others" H1 14 Absorbtion Others EBIT Negative impact from volume, FX, and “Others” line Positive impact from Margin, OPEX, and Restructu
Slide 17: Consolidated Income Statement – below EBIT Line
Consolidated Income Statement – below EBIT Line In CHF millions H1 2014 H1 2013 YOY Operating income (EBIT) 99.2 110.7 -10.4% Financial income (net) -8.1 -12.4 -34.7% Income before taxes (EBT) 91.1 98.3 -7.3% Income tax expenses -26.7 -24.6 8.5% tax rate (%) 29.3% 25.0% Net income from discontinued
Slide 18: Cash Flow
Cash Flow In CHF millions H1 2014 H1 2013 YOY Cash flow from operating activities 9.6 97.7 -90.2% Capital expenditure -53.1 -47.9 10.9% Sale of PP&E and intangible assets 3.4 1.4 142.9% Free cash flow -40.1 51.2 -178.3% Cash flow from operating activities remained below last year’s figure as inven
Slide 19: Agenda
Agenda Business Review – H1 2014 Financial Review – H1 2014 Strategy Update Outlook Midyear Presentation 2014 19 | July 22, 2014 |
Slide 20: Customer-Oriented and Focused on Three Key Markets
Customer-Oriented and Focused on Three Key Markets We want to be both an equipment and a service company for performance-critical applications in three key markets: oil and gas, power, and water Strategy for future product portfolio General Oil and Gas Power Water Industry Equipment: Equipment for f
Slide 21: Strategy: Where We Stand
Where We Stand Focus on three key markets Strategic priorities: Transforming Sulzer from a regional into Work on technology leadership, a market-oriented company focused on outstanding services, continuous Strategy oil and gas, power, and water operational improvements and collaborative advantag
Slide 22: Acquisitions
Acquisitions Acquisitions 2014 Transformational targets Saudi Pump Factory (mainly group perspective) large Large targets within existing New business areas enhancing JV with China business areas customer value proposition Huadian Corp Larger targets to form new BUs aixfotec Smaller ta
Slide 23: Agenda
Agenda Business Review – H1 2014 Financial Review – H1 2014 Strategy Update Outlook Midyear Presentation 2014 23 | July 22, 2014 |
Slide 24: Key Markets – Assessment for H2 2014
Key Markets – Assessment for H2 2014 Share of orders in % Activity level H1 Outlook H2 2014 Activity levels expected to Oil and Gas Good ~54% remain solid Power Low Similar levels of activity ~14% expected Water Mixed Some recovery expected in ~12% Picture selected regions General Mixed Similar leve
Slide 25: Financial Outlook for 2014 – Total Sulzer
Financial Outlook for 20141) – Total Sulzer H1 2014 H2 2014 YOY (adj) expectation Outlook Full Year 2014: Acceleration; Order intake -3.7% delayed orders to Slight growth be booked Similar to slightly Sales +1.2% better level Slight growth expected Expected to increase on higher volumes EBITR -7.2%
Slide 26: Capital Markets Day 2014 on November 25
Capital Markets Day 2014 on November 25 Our CMD will be held in Karlsruhe/Bruchsal (Germany) to combine the presentation of our new medium term targets with a site visit of our Bruchsal Pumps factory Preliminary agenda: Informal dinner on November 24 Hotel Radisson, Karlsruhe Presentations –
Slide 27: Financial Calendar and IR Contact
Financial Calendar and IR Contact Financial Calendar October 16, 2014 Order intake Jan.-Sep. November 25, 2014 Capital Markets Day February 12, 2015 Annual Report 2014 April 1, 2015 Annual General Meeting Your investor relations contact: Sulzer Managment Ltd Neuwiesenstrasse 15 8401 Winterthur Switz