Growing in all product lines
Rotating Equipment Services improved order intake and sales compared with 2018. The division was able to increase profitability significantly on a strong performance in pump services and power. The acquisition of Alba Power contributed positively to the results and further diversified the division’s service offering.
Expanded service offering
In 2019, Sulzer acquired Alba Power, a Scottish aeroderivative gas turbine service provider, expanding its service offering into distributed power, offshore and marine applications. The light and compact aeroderivative gas turbines are not facing the same pressures as the large gas turbine market and provide an excellent opportunity for cross-selling to Sulzer’s existing customers.
Our strategy to build on our strong position in pump services and the gas turbine power market, expand our footprint and drive operational excellence has paid off. We grew on orders, sales and profitability in 2019.
Daniel Bischofberger, Division President Rotating Equipment Services
Key figures Rotating Equipment Services
|
millions of CHF |
2019 |
2018 |
Change in +/–% |
+/–% adjusted 1) |
+/–% organic 2) |
|
Order intake |
1’193.2 |
1’109.7 |
7.5 |
10.7 |
8.6 |
|
Order intake gross margin |
38.6% |
37.7% |
|
|
|
|
Order backlog as of December 31 |
422.2 |
393.1 |
7.4 |
|
|
|
Sales |
1’167.0 |
1’063.7 |
9.7 |
12.8 |
10.0 |
|
EBIT |
152.2 |
130.8 |
16.4 |
|
|
|
opEBITA |
164.5 |
146.1 |
12.6 |
17.2 |
15.5 |
|
opROSA |
14.1% |
13.7% |
|
|
|
|
Employees (number of full-time equivalents) as of December 31 |
4’900 |
4’721 |
3.8 |
|
|
1) Adjusted for currency effects.
2) Adjusted for acquisition and currency effects.
Order intake increased across the board
In Rotating Equipment Services, order intake was up by 10.7% from last year. The division leveraged its favorable position in the gas turbine power market as well as in pump services, capitalizing on opportunities in Sulzer’s installed pumps base to grow strongly across the board. All businesses and regions developed positively.
Growth was most pronounced in Europe, the Middle East and Africa (EMEA, 10.2%) as well as the Americas (11.0%).
Order intake by segment
Order intake by region
Improved sales and profitability
Sales grew significantly in all product lines. The acquisitions of Brithinee Electric and Alba Power contributed CHF 29.8 million to sales growth.
Operational EBITA grew on higher volumes with slightly increased margins, leading to an operational ROSA of 14.1%, up 40 basis points from 2018.
Safety performance in 2019
In 2019, RES reported a significant decrease in its accident frequency rate (AFR) from 2.1 in 2018 to 0.7 cases per million working hours at year-end. The improvement stems mainly from the EMEA region, achieved through focusing more on pre-work planning.
The accident severity rate (ASR) increased slightly from 53.7 in 2018 to 60.7 lost days per million working hours in 2019, mainly due to two severe accidents that had occurred in 2018 and continued to add lost time into 2019. Please read more about the company’s health and safety efforts in the chapter “Safety”.
If not otherwise indicated, changes from the previous year are based on currency-adjusted figures.
Abbreviations
EBIT: Earnings before interest and taxes
opEBITA: Operational earnings before interest, taxes and amortization
opROSA: Operational return on sales adjusted
For the definition of the alternative performance measures, please refer to “Supplementary information”.