Order intake increased
In 2017, Rotating Equipment Services reported growing order intake on a currency-adjusted basis, whereas organic order intake remained broadly stable. Sales, operational EBITA, and operational ROSA increased. Sulzer closed the acquisition of Rotec GT to become a sizeable player in the Russian gas turbine service market.
Becoming a leading independent gas turbine service provider in Russia
In the second quarter of the year, Sulzer closed the acquisition of a controlling stake in Rotec’s gas turbine maintenance business (Rotec GT). Rotec GT, headquartered in Moscow (Russia), is active mainly in the Russian market. Through this acquisition, Sulzer has become a leading independent gas turbine service provider for Russia and the CIS countries.
We are very pleased with the development of our Rotec acquisition. It gave us a new platform and strengthened our presence in Russia.
Daniel Bischofberger Division President Rotating Equipment Services
Sulzer changed its reporting structure and shifted the pumps spare parts business from Pumps Equipment to Rotating Equipment Services. Thereby customers benefit from a single access point for services and parts.
Higher order intake
In 2017, order intake increased on a currency-adjusted basis (4.9%) and remained broadly stable organically (–0.9%), which compared well against the broader market.
Regionally, the Americas and Asia-Pacific grew. Europe, the Middle East, and Africa also increased on a currency-adjusted basis but decreased organically. The organic decline was due to lower orders in the turbo services business, impacted by a challenging market environment for gas turbines.
Sales, operational EBITA, and operational ROSA increased
Rotating Equipment Services reported an increase in sales on a currency-adjusted basis (1.6%) and an organic sales decrease (–2.1%) compared with 2016. The decline was driven by lower volumes in the oil and gas as well as the power markets.
Operational EBITA increased on a currency-adjusted basis (2.4%) and decreased organically (–1.8%). Despite pricing pressure, operational ROSA increased to 13.9%.
Sales by market segment
Sales by region
Increased number of accidents
In 2017, the accident frequency rate (AFR) increased slightly to 2.0 cases per million working hours (2016: 1.9), driven by an increase in the number of incidents in the Americas region. With 42.6 lost days per million working hours, the division was able to slightly decrease the accident severity rate (ASR; 2016: 44.9). The Sulzer Safe Behavior Program has been rolled out to all new entities in the division. The company intensified intra-divisional exchange of lessons learned to improve safe behavior at the workplace. In 2018, the target is to increase the number of safety walks and observations to identify unsafe conditions and behavior. Moreover, all new entities will be ISO- and OHSAS-certified in 2018. Please read more about the company’s safety and health efforts in the chapter “Social sustainability”.
If not otherwise indicated, changes compared with the previous year are based on currency-adjusted figures.
Key figures Rotating Equipment Services
|
millions of CHF |
2017 |
2016 3) |
Change in +/–% |
+/–% adjusted 1) |
+/–% organic 2) |
|
Order intake |
1’071.0 |
1’009.7 |
6.1 |
4.9 |
–0.9 |
|
Order intake gross margin |
38.0% |
38.0% |
|
|
|
|
Order backlog as of December 31 |
364.4 |
378.7 |
–3.8 |
|
|
|
Sales |
1’034.5 |
1’011.3 |
2.3 |
1.6 |
–2.1 |
|
EBIT |
134.4 |
129.3 |
3.9 |
|
|
|
opEBITA |
144.0 |
139.5 |
3.2 |
2.4 |
–1.8 |
|
opROSA |
13.9% |
13.8% |
|
|
|
|
opROCEA |
28.4% |
25.9% |
|
|
|
|
Employees (number of full-time equivalents) as of December 31 |
4’485 |
4’541 |
–1.2 |
|
|
1) Adjusted for currency effects.
2) Adjusted for acquisition and currency effects.
3) Reclassified numbers according to new operational structure, effective since January 1, 2017.
Abbreviations
EBIT: Operating income
opEBITA: Operating income before restructuring, amortization, impairments, and non-operational items
opROSA: Return on sales before restructuring, amortization, impairments, and non-operational items (opEBITA/sales)
opROCEA: Return on capital employed (opEBITA/average capital employed)