Sulzer Ag · SIX:SUN
Sulzer — H1 2021 Earnings Presentation
28 slides from Sulzer's earnings presentation, Jul 22, 2021
Slide 1: H1 2021 results
H1 2021 results Greg Poux-Guillaume, CEO | Jill Lee, CFO | July 22, 2021
Slide 2: Disclaimer
Disclaimer IMPORTANT The presentation has been prepared by Sulzer Ltd. (“Sulzer”, and together with its subsidiaries, the "Sulzer Group") and the Applicator System (“APS”) division of the Sulzer Group to be spun off and re-named medmix (“medmix”) for information and background purposes only. This do
Slide 3: Business Review
Business Review H1 2021 results 3
Slide 4: H1 2021 highlights
H1 2021 highlights ▪ Orders up 12% (+7% organic) in Q2 YOY, +8% sequentially ▪ Sales up 9% (6% organic) in H1 YOY ▪ Operational Profitability reached 10.0% in H1, up 250 bps YOY ▪ FCF tripled YOY to reach H1 record CHF117m ▪ Addition of Nordic Water gives Sulzer one of the broadest range of water pu
Slide 5: H1 2021 Orders and Profit split
H1 2021 Orders and Profit split Positive trends in all divisions APS 15% PE Asia APS 25% 19% 24% PE EMEA 34% 44% Orders Op. Profit Orders CT 20% 1’820 172 1’820 mCHF mCHF mCHF CT 16% RES Americas 40% 32% RES 31% Highlights ▪ Service (RES): order continue to show positive momentum, sales and profitab
Slide 6: Pumps Equipment (PE)
Pumps Equipment (PE) Water and Industry dynamic, Energy at trough, sustained profitability momentum Key figures Order intake by segment In CHF millions H1 21 H1 20 YOY adj.1 org.2 Energy Order intake 627 744 -15.8% -15.3% -20.2% 28% Sales 664 617 7.7% 8.8% 4.4% EBIT 15 -27 Water Operational profit (
Slide 7: Pumps and mixers for new bioproduct mill in Finland
Pumps and mixers for new bioproduct mill in Finland Major project win for Industry ▪ Frame agreement to supply more than 400 pumps and agitators for the Metsä Fibre plant in Finland, at 1.5 million tons per year the largest wood-based bioproduct mill in the northern hemisphere (under construction) ▪
Slide 8: Rotating Equipment Services (RES)
Rotating Equipment Services (RES) Orders trending up, strong improvement in profitability Key figures Order intake by segment In CHF millions H1 21 H1 20 YOY adj.1 org.2 Order intake 571 617 -7.5% -5.6% -6.0% Sales 526 528 -0.5% 1.3% 0.9% Other EBIT 66 51 Equipment 47% Pumps Operational profit (opEB
Slide 9: Shore-to-ship solution upgrade to lower CO2 emissions
Shore-to-ship solution upgrade to lower CO2 emissions Sulzer a leader in sustainability-driven upgrades ▪ RES received a CHF 6m order from a Sydney harbor owner to upgrade the rotating frequency converter from 3MVA to 5MVA ▪ The rotating frequency converter is part of the harbor’s shore-to-ship elec
Slide 10: Chemtech (CT)
Chemtech (CT) Chemical market active, renewable technologies gaining traction, strong profitability Key figures Order intake by segment Water In CHF millions H1 21 H1 20 YOY adj.1 org.2 Renewables 3% Order intake 354 319 10.8% 12.8% 12.8% 13% Sales 306 288 6.2% 7.7% 7.7% EBIT 21 11 Gas & Operational
Slide 11: Partnership with Blue Planet to reduce CO2 emissions
Partnership with Blue Planet to reduce CO2 emissions Chemtech carbon capture solution helps lower emissions from cement industry ▪ Sulzer is enabling the further development and optimization of Blue Planet’s innovative carbon mineralization process for carbon capture, utilization and storage (CCUS)
Slide 12: Applicator Systems (APS)
Applicator Systems (APS) Strong recovery in Dental and Industry, profitability nearing pre-pandemic level Key figures Order intake by segment In CHF millions H1 21 H1 20 YOY adj.1 org.2 Surgery Drug Delivery 3% Order intake 269 160 67.9% 69.4% 53.3% 10% Sales 228 166 37.5% 38.4% 25.8% Industry EBIT
Slide 13: Commercial win for ecopaCC TM
Commercial win for ecopaCCTM APS sustainable solutions gaining traction ▪ Applicator Systems has secured two new customers in the Chinese construction market thanks to its award winning ecopaCCTM collapsible cartridge for industry ▪ The revolutionary design slashes costs, resources and waste, with s
Slide 14: Financial Review
Financial Review H1 2021 results 14
Slide 15: Overview
Overview Sales growth, strong execution and cost actions result in higher profit margins Key figures Comment ▪ Order intake in Q2 up 12% YOY (7% organic) and In CHF millions H1 21 H1 20 YOY adj.1 org.2 8% sequentially on continued market rebound Order intake 1’820 1’841 -1.1% 0.2% -3.3% ▪ Gross marg
Slide 16: Operational Profit
Operational Profit Strong margin improvement Operational profitability (opEBITA/sales) 7.5% 10.0% (in CHF millions ) Sulzer ex APS 24 172 3 2 23 17 -17 120 H1 20 Volume Margin/Mix OPEX-squeeze Cost Acquisitions Δ APS H1 21 reversal actions H1 2021 results July 22, 2021 16
Slide 17: Operational Profit to EBIT
Operational Profit to EBIT Low impact from restructuring and other one-off items (in CHF millions ) 172 -36 -2 -1 -4 129 PE -19 RES -2 CT -3 APS -11 Operational Amortization Restructuring Impairment of assets Other non- EBIT Profit operational items H1 21 H1 21 H1 2021 results July 22, 2021 17
Slide 18: EBIT to Net Income
EBIT to Net Income Tax rate normalized with low restructuring expenses (in CHF millions ) 129 -13 -1 -28 86 -1 86 Effective tax rate 24.4% EBIT Financial result Income from Taxes Reported Minorities Reported H1 21 associates net income net income H1 21 shareholders H1 21 Core net income 119 H1 2021
Slide 19: Free Cash Flow
Free Cash Flow FCF hitting new record in half-year EBITDA to FCF H1 21 (in CHFm) (in CHF millions ) EBITDA 220 117 Change in Net Working Capital1 -18 Change in non-Net Working Capital2 -47 Total Cashflow from Operating Activities 155 PP&E Capex -34 37 Purchase of Intangibles -4 Free Cashflow 117 -12
Slide 20: Balance sheet
Balance sheet Solid balance sheet continues to support selective acquisitions (in CHF millions ) June 20 June 21 1295 962 305 Net debt 475 5571 260 Net debt / EBITDA 1.3x 1.3x1 991 Tiwel Payable 702 Cash & Equivalents / Financial Assets Debt Balance sheet June 2021: -1333 Leases (IFRS 16) ▪ Total ne
Slide 21: Outlook
SULZER x fe) fe) _ =) O H1 2021 results
Slide 22: Financial guidance 2021
Financial guidance 2021 As of 22/07/21, adjusted for FX, including acquisitions already closed Order Intake Sales Operational Profitability % up 4% – 6% up 8% – 10% 10.0% – 10.5% ▪ Sulzer excluding medmix expects 2021 orders to be up 2-3%, sales up 6-8% and operational profitability to be around 9%,
Slide 23: Spin-off of APS as medmix
Spin-off of APS as H1 2021 results 23
Slide 24: Spin-off transaction structure
Spin-off transaction structure Symmetrical split for high transparency and corporate governance standards Pre-transaction Post-transaction Sulzer Shareholders Sulzer Shareholders New Shareholders Sulzer AG APS Sulzer AG medmix ▪ Spin-off APS division (to be named medmix going forward) in the form of
Slide 25: Transaction rationale
Transaction rationale Two focused leaders for attractive end-markets Flow control specialist for water, chemical, industry and energy Innovative, high-precision delivery devices • A global leader in industrial flow control • Leading positions in dental, pharma, adhesives and beauty • Continuous shif
Slide 26: Mid-term targets
financial highlights Attractive financial profile with substantial revenue growth and highly resilient margins 2021E sales CHF 450m ~25% adj. EBITDA margin Mid-term targets 8% Healthcare share EBITDA margin target sales CAGR >50% ~30% Expected leverage post capital increase (net debt / EBITDA)1 ~ 1
Slide 27: Takeaways
Takeaways Sulzer ▪ Positive trend in orders continued in Q2. All divisions growing sequentially ▪ Q3 likely to be seasonally lower, but expected to show a strong improvement compared to Q3 20 on continued growth in all business segments (except PE Energy) and an acceleration in Service APS spin-off
Slide 28: 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