Top-line growth across all regions
In 2018, order intake, sales and operational EBITA increased compared with the previous year. Operational ROSA was impacted by the power segment. By acquiring Brithinee Electric, Sulzer expanded its electromechanical services to Southern California and into wind power.
Digitalizing service model and expanding into new markets
Rotating Equipment Services continued to take its service model into the digital age. In 2018, the pumps spare parts manufacturing center in Leeds, UK, went fully paperless. This move has improved the speed of delivery of spare parts to customers and saved cost and effort. Furthermore, the parts manufacturing centers around the globe are ramping up their use of additive manufacturing to improve delivery time and sourcing flexibility.
In 2018, our service business achieved an increased order intake across all regions. Taking our service model into the digital age will help us sustain growth for the future.
Daniel Bischofberger, Division President Rotating Equipment Services
In November 2018, Sulzer acquired Brithinee Electric, a leading independent electromechanical service provider targeting the wind market in Southern California, USA. In 2017, Brithinee recorded annual sales of about USD 10 million with a workforce of 46 employees.
Increase in order intake
In 2018, Rotating Equipment Services reported growing order intake. The increase stemmed largely from the oil and gas market rebound. Order intake in the power market decreased. Whilst orders were up in pumps services and electromechanical services, they declined in the turbo services business.
Order intake increased in all regions compared with 2017. Growth was most pronounced in the Asia-Pacific region.
Sales and operational EBITA increased
Sales increased in 2018 compared with the previous year. The division reported growth across all regions.
Operational EBITA increased, whereas operational ROSA showed a slight decrease. Higher sales volumes were offset by lower margins because of pricing erosion in the power segment, particularly in the Americas.
Sales by (sub-)segment
Sales by region
Safety performance in 2018
In 2018, the accident frequency rate (AFR) increased slightly to 2.1 cases per million working hours (2017: 2.0), driven by a higher number of lost time accidents in Europe, the Middle East and Africa (EMEA). The accident severity rate increased to 53.7 (2017: 42.6) despite efforts to develop risk assessment and other safety-related competencies. Throughout 2019, the division will focus on pre-work planning, control of high-risk activities and root cause analyses. You can read more about the company’s health and safety efforts in the chapter “Social sustainability”.
If not otherwise indicated, changes from the previous year are based on currency-adjusted figures. These are reported without consideration of IFRS 15, applying the same accounting policies as in the prior year.
Key figures Rotating Equipment Services
|
millions of CHF |
2018 (new accounting policies) 1) |
2018 (previous accounting policies) 2) |
2017 |
Change in +/–% 3) |
+/–% adjusted 4) |
+/–% organic 5) |
|
Order intake |
1’109.7 |
1’109.7 |
1’047.7 |
5.9 |
7.6 |
5.8 |
|
Order intake gross margin |
37.7% |
37.7% |
38.0% |
|
|
|
|
Order backlog as of December 31 |
393.1 |
368.2 |
364.4 |
1.1 |
|
|
|
Sales |
1’063.7 |
1’087.4 |
1’029.5 |
5.6 |
7.2 |
5.2 |
|
EBIT |
130.8 |
133.5 |
134.4 |
–0.7 |
|
|
|
opEBITA |
146.1 |
148.8 |
144.0 |
3.4 |
4.9 |
3.0 |
|
opROSA |
13.7% |
13.7% |
13.9% |
|
|
|
|
opROCEA |
26.6% |
26.6% |
28.4% |
|
|
|
|
Employees (number of full-time equivalents) as of December 31 |
4’721 |
4’721 |
4’485 |
5.3 |
|
|
1) According to IFRS 15, see financial review and note 34 of the consolidated financial statements for details.
2) Without consideration of IFRS 15, applying the same accounting policies as in the prior year.
3) Comparing 2018 (previous accounting policies) with 2017.
4) Adjusted for currency effects. Comparing 2018 (previous accounting policies) with 2017.
5) Adjusted for acquisition and currency effects. Comparing 2018 (previous accounting policies) with 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)