Growing order intake, sales and profitability
Pumps Equipment recorded growing order intake and sales in 2018. Operational EBITA and operational ROSA increased significantly, bringing the division back to profitability. Sulzer completed its acquisition of JWC Environmental, LLC. As of January 1, 2019, Frédéric Lalanne was appointed as President of the Pumps Equipment division.
Award-winning Internet of Things solution
Sulzer continued to take its offering into the digital age. The company’s BLUE BOX™ platform for advanced remote analytics went live for Phillips 66, a major pipeline company in the US. Thanks to BLUE BOX, Phillips 66 can improve its energy efficiency and optimize management of its assets. In November 2018, the pioneering solution won the Gold Certificate Industry 4.0 at the Swiss Digital Economy Awards.
We returned to profitability in 2018. I am excited to lead Pumps Equipment’s continued rebound in a market with solid momentum.
Frédéric Lalanne, Division President Pumps Equipment (as of January 1, 2019)
In January 2018, Sulzer completed its acquisition of JWC Environmental, LLC (JWC). JWC is a supplier to the North American wastewater market and employs around 230 people.
As of January 1, 2019, Sulzer appointed Frédéric Lalanne, previously Chief Commercial and Marketing Officer, as President of the Pumps Equipment division. Michael Streicher stepped down from the Executive Committee to assume his new responsibilities as Global Head of the water pumps business.
Order intake increased
In 2018, Pumps Equipment reported increasing order intake. All market segments except for power contributed to growth. Bookings were particularly good in the oil and gas segment. The acquisition of JWC added orders totaling CHF 87 million.
Regionally, order intake was strong in the Americas, particularly in the US where major pipeline orders have been booked. Orders in Europe, the Middle East and Africa (EMEA) remained stable, while orders in the Asia-Pacific region decreased.
Increase in sales and return to profitability
Sales increased in 2018 by 15.5%. Sales grew in all of Sulzer’s key markets and were particularly strong in all segments of the oil and gas industry.
Operational EBITA increased significantly compared with 2017, bringing the division back to profitability. This was supported by higher volumes in the water and industrial markets as well as a positive contribution from the JWC acquisition. Operational ROSA increased to 3.1%.
Sales by (sub-)segment
Sales by region
Safety performance in 2018
In 2018, Pumps Equipment reported a decrease in its accident frequency rate (AFR) to 2.7 cases per million working hours (2017: 2.8*). The accident severity rate (ASR) amounted to 107.3 lost days per million working hours (2017: 49.3*). The carryover of lost time from accidents that occurred in the previous year, but which did not close fully until 2018, contributed to the increase. In 2019, the division will focus on improving safety performance, particularly in the EMEA region, which saw an unusual rise in accidents in 2018. You can read more about the company’s health and safety efforts in the chapter “Social sustainability”.
* Adjusted for acquisition effects.
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 Pumps Equipment
|
millions of CHF |
2018 (new accounting policies) 1) |
2018 (previous accounting policies) 2) |
2017 |
Change in +/–% 3) |
+/–% adjusted 4) |
+/–% organic 5) |
|
Order intake |
1’372.1 |
1’372.1 |
1’180.2 |
16.3 |
16.5 |
8.6 |
|
Order intake gross margin |
26.3% |
26.3% |
28.3% |
|
|
|
|
Order backlog as of December 31 |
982.9 |
910.3 |
847.0 |
7.5 |
|
|
|
Sales |
1’284.2 |
1’299.9 |
1’120.0 |
16.1 |
15.5 |
7.5 |
|
EBIT |
–27.2 |
–29.0 |
–61.7 |
53.0 |
|
|
|
opEBITA |
41.4 |
39.7 |
–3.7 |
n/a |
n/a |
n/a |
|
opROSA |
3.2% |
3.1% |
–0.3% |
|
|
|
|
opROCEA |
5.8% |
5.4% |
–0.6% |
|
|
|
|
Employees (number of full-time equivalents) as of December 31 |
5’713 |
5’713 |
5’453 |
4.8 |
|
|
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)