Supplementary information
Supplementary Information
Alternative performance measures (APM)
The financial information included in this report includes certain Alternative Performance Measures (APMs) which are not accounting measures as defined by IFRS. These APMs should not be used instead of, or considered as alternatives to, the group’s consolidated financial results based on IFRS. These APMs may not be comparable to similarly titled measures disclosed by other companies. All APMs presented relate to the performance of the current reported period and comparative periods.
Definition of alternative performance measures (APM)
Order intake
Order intake includes all registered orders of the period which will be recorded or have already been recorded as sales. The reported value of an order corresponds to the undiscounted value of revenues that the group expects to recognize following delivery of goods or services subject to the order, less any trade discounts and excluding value added or sales tax. Adjustments, corrections and cancellations resulting from updating the order backlog, are respectively included in the amount of the order intake.
Order intake gross margin
The order intake gross margin is defined as the expected gross profit of order intake divided by order intake.
Order backlog
Order backlog represents the undiscounted value of revenues the group expects to generate from orders on hand at the end of the reporting period.
ROS (return on sales)
ROS measures the profitability relative to sales. ROS is calculated by dividing EBIT by sales.
opEBITA (operational earnings before interest, taxes and amortization)
OpEBITA is used to determine the profitability of the business, without considering impairments, restructuring expenses and other non-operational items and before interest, taxes and amortization. Other non-operational items include significant acquisition-related expenses, gains and losses from sale of businesses or real estate, and certain non-operational items that are non-recurring or do not occur in similar magnitude.
opROSA (operational return on sales adjusted)
OpROSA measures how the group turns sales into operating profits. Other terms used for opROSA are opEBITA margin, profitability or opEBITA in percent of sales. OpROSA is calculated by dividing opEBITA by sales.
opROCEA (operational return on capital employed adjusted)
OpROCEA measures how the group generates operational profits from its capital employed. OpROCEA is calculated by dividing opEBITA by average capital employed. It is also called opEBITA in percent of average capital employed.
Capital employed
Capital employed refers to the amount of capital investment the group uses to operate and provides an indication of how the group is investing its money. For the calculation of the capital employed, please refer to the reconciliation statement below.
EBITDA (earnings before interest, taxes, depreciation and amortization)
The group uses EBITDA to determine the net debt/EBITDA ratio. EBITDA is defined as EBIT before depreciation and amortization.
Core net income
Core net income is used to determine the dividend proposal. Sulzer’s long-term target is to maintain a dividend payout ratio of approximately 40-70% of core net income with due consideration to liquidity and funding requirements as well as continuity. Core net income is defined as net income before tax-adjusted effects on restructuring, amortization, impairments and non-operational items.
FCF (free cash flow)
Free cash flow is used to assess the group’s ability to generate the cash required to conduct and maintain its operations. It also indicates the group’s ability to generate cash to finance dividend payments, repay debt and to undertake merger and acquisition activities. Free cash flow is calculated based on the IFRS cash flow from operating activities and adjusted for capital expenditures (investments in property, plant and equipment and intangible assets).
Net debt
Net debt is used to monitor the group’s overall short- and long-term liquidity. Net debt is calculated as the sum of total current and non-current borrowings and lease liabilities less cash and cash equivalents and current financial assets.
Net debt/EBITDA ratio
Net debt/EBITDA is a ratio measuring the amount of income generated and available to pay down debt before covering interest, taxes, depreciations and amortization expenses. The net debt/EBITDA ratio is used as a measurement of leverage. It is calculated as net debt divided by EBITDA.
Gearing ratio (borrowings-to-equity ratio)
The gearing ratio compares the borrowings and lease liabilities relative to the equity. The gearing ratio represents the group’s leverage, comparing how much of the business funding comes from borrowed funds (lenders) versus company owners (shareholders). The gearing ratio is defined as borrowings and lease liabilities divided by equity attributable to shareholders of Sulzer Ltd.
Currency-adjusted growth
Certain percentage changes in the financial review and the business review divisions have been calculated using constant exchange rates which allow for an assessment of the group’s financial performance with the effects of exchange rate fluctuations eliminated. The currency-adjusted growth is calculated by applying the previous year’s exchange rates for the current year and calculating the growth without currency effects.
Organic growth
Organic growth measures changes with the same period in the previous year after adjusting for effects arising from acquisitions, divestments and foreign exchange differences.
The impact of the organic growth is determined as follows:
- Currency-adjusted growth as described above
- For the current-year acquisitions, by deducting the currency-adjusted amount generated during the current-year by the acquired entities
- For previous year acquisitions, by deducting the currency-adjusted amount generated over the months during which the acquired entities were not consolidated in the previous year
- For current-year disposals, by adding the currency-adjusted amount generated by the divested entities in the previous year over the months during which those entities were no longer consolidated in the current-year
- For the previous year disposals, by adding for the current year the currency-adjusted amount generated in the previous year by the divested entities
Reconciliation statements for alternative performance measures (APM)
For reconciliation statements of opEBITA, opROSA, core net income and free cash flow, please refer to the “Financial review”, for EBITDA, net debt and gearing ratio to note 6 and for opROCEA to the table below.
OpROCEA reconciliation statement
|
millions of CHF |
2019 |
2018 |
|
Total assets |
5’109.5 |
4’898.3 |
|
./. Other intangible assets |
–430.1 |
–439.4 |
|
./. Cash and cash equivalents |
–1’035.5 |
–1’095.2 |
|
./. Current financial assets |
–57.5 |
–0.0 |
|
./. Total current and non-current income and deferred tax assets and liabilities |
–42.0 |
–44.2 |
|
./. Total non-current liabilities |
–1’644.1 |
–1’646.8 |
|
./. Total current liabilities |
–1’871.5 |
–1’610.4 |
|
Non-current borrowings |
1’199.2 |
1’316.3 |
|
Current borrowings |
131.0 |
18.0 |
|
Liability related to the purchase of treasury shares |
104.2 |
108.9 |
|
Outstanding dividend payments |
114.1 |
76.0 |
|
Adjustment for average calculation and currency translation differences |
270.7 |
195.4 |
|
Average capital employed |
1’848.1 |
1’776.8 |
|
|
|
|
|
opEBITA |
371.3 |
322.5 |
|
Average capital employed |
1’848.1 |
1’776.8 |
|
opROCEA |
20.1% |
18.1% |
Five-year summaries of key financial data
Key figures from consolidated income statement and statement of cash flows
|
millions of CHF |
|
2019 |
2018 |
2017 |
2016 |
2015 |
|
Order intake |
|
3’747.2 |
3’531.5 |
3’155.7 |
2’797.5 |
2’895.8 |
|
Order intake gross margin |
|
33.6% |
33.3% |
34.4% |
34.0% |
33.8% |
|
Order backlog |
|
1’792.6 |
1’786.9 |
1’593.5 |
1’439.1 |
1’510.7 |
|
Sales |
|
3’728.5 |
3’364.9 |
3’049.0 |
2’876.7 |
2’971.0 |
|
Operating income |
EBIT |
241.0 |
183.8 |
136.5 |
115.3 |
120.9 |
|
Operational EBITA |
opEBITA |
371.3 |
322.5 |
255.4 |
238.9 |
254.1 |
|
Operational EBITA margin (operational EBITA/sales) |
opROSA |
10.0% |
9.6% |
8.4% |
8.3% |
8.6% |
|
Net income attributable to shareholders of Sulzer Ltd |
|
154.0 |
113.7 |
83.2 |
59 |
73.9 |
|
– in percentage of equity attributable to shareholders of Sulzer Ltd |
ROE |
9.7% |
7.0% |
5.0% |
3.7% |
3.3% |
|
Reported EPS |
EPS |
4.52 |
3.56 |
2.44 |
1.73 |
2.17 |
|
Depreciation |
|
–102.6 |
–71.7 |
–71.7 |
–69.5 |
–74.1 |
|
Amortization |
|
–64.5 |
–69.0 |
–53.8 |
–47.3 |
–42.3 |
|
Impairments of tangible and intangible assets |
|
–4.4 |
–4.4 |
–15.4 |
–18.4 |
–13.0 |
|
Research and development expenses |
|
–85.6 |
–86.4 |
–81.0 |
–71.4 |
–73.4 |
|
Personnel expenses |
|
–1’191.1 |
–1’129.7 |
–1’078.2 |
–971.1 |
–1’020.8 |
|
Capital expenditure |
|
–142.1 |
–96.2 |
–81.2 |
–74.9 |
–73.7 |
|
Free cash flow |
|
213.4 |
181.3 |
127.0 |
200.5 |
155.8 |
|
FCF conversion (free cash flow/net income) |
|
1.35 |
1.56 |
1.46 |
3.34 |
2.08 |
|
Employees (number of full-time equivalents) as of December 31 |
|
16’506 |
15’572 |
14’732 |
14’005 |
14’253 |
Key figures from consolidated balance sheet
|
millions of CHF |
|
2019 |
2018 |
2017 |
2016 |
2015 |
|
Non-current assets |
|
2’172.0 |
2’057.7 |
1’990.5 |
1’809.9 |
1’574.0 |
|
– thereof property, plant and equipment |
|
544.4 |
527.0 |
531.6 |
511.0 |
491.4 |
|
Current assets |
|
2’937.5 |
2’840.6 |
2’126.8 |
1’926.0 |
2’680.8 |
|
– thereof cash and cash equivalents |
|
1’035.5 |
1’095.2 |
488.8 |
429.5 |
1’217.3 |
|
Total assets |
|
5’109.5 |
4’898.3 |
4’117.3 |
3’735.9 |
4’254.8 |
|
Equity attributable to shareholders of Sulzer Ltd |
|
1’580.7 |
1’629.9 |
1’680.1 |
1’581.2 |
2’224.7 |
|
Non-current liabilities |
|
1’644.1 |
1’646.8 |
900.1 |
980.3 |
472.1 |
|
– thereof long-term borrowings |
|
1’199.2 |
1’316.3 |
458.7 |
458.3 |
7.2 |
|
Current liabilities |
|
1’871.5 |
1’610.4 |
1’514.8 |
1’164.6 |
1’548.5 |
|
– thereof short-term borrowings |
|
131.0 |
18.0 |
255.1 |
7.1 |
514.4 |
|
|
|
|
|
|
|
|
|
Net debt |
|
346.9 |
239.0 |
225.0 |
35.9 |
–695.7 |
|
Equity ratio 1) |
|
30.9% |
33.3% |
40.8% |
42.3% |
52.3% |
|
Borrowings-to-equity ratio (gearing) |
|
0.84 |
0.82 |
0.42 |
0.29 |
0.23 |
1) Equity attributable to shareholders of Sulzer Ltd in relation to total assets.
Five-year summaries by division
|
|
Order intake |
Sales |
||||||||
|
millions of CHF |
2019 |
2018 |
2017 |
2016 |
2015 |
2019 |
2018 |
2017 |
2016 |
2015 |
|
Pumps Equipment |
1’458.9 |
1’372.1 |
1’180.2 |
1’066.8 |
1’152.8 |
1’477.0 |
1’284.2 |
1’120.0 |
1’155.3 |
1’276.8 |
|
Rotating Equipment Services |
1’193.2 |
1’109.7 |
1’047.7 |
986.4 |
1’034.1 |
1’167.0 |
1’063.7 |
1’029.5 |
1’003.4 |
1’024.6 |
|
Chemtech |
670.0 |
600.1 |
501.5 |
471.8 |
525.7 |
664.0 |
563.2 |
478.0 |
446.0 |
486.2 |
|
Applicator Systems |
425.1 |
449.6 |
426.3 |
272.6 |
183.2 |
420.6 |
453.8 |
421.6 |
272.0 |
183.4 |
|
Total |
3’747.2 |
3’531.5 |
3’155.7 |
2’797.5 |
2’895.8 |
3’728.5 |
3’364.9 |
3’049.0 |
2’876.7 |
2’971.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Order backlog |
Employees 1) |
||||||||
|
millions of CHF |
2019 |
2018 |
2017 |
2016 |
2015 |
2019 |
2018 |
2017 |
2016 |
2015 |
|
Pumps Equipment |
924.3 |
982.9 |
847.0 |
697.4 |
998.0 |
5’759 |
5’713 |
5’453 |
5’156 |
6’996 |
|
Rotating Equipment Services |
422.2 |
393.1 |
364.4 |
378.7 |
205.0 |
4’900 |
4’721 |
4’485 |
4’541 |
3’538 |
|
Chemtech |
385.3 |
345.9 |
315.3 |
304.9 |
307.7 |
3’803 |
3’063 |
2’878 |
2’570 |
3’539 |
|
Applicator Systems |
60.8 |
65.0 |
66.8 |
58.0 |
0.0 |
1’821 |
1’864 |
1’716 |
1’562 |
0 |
|
Divisions |
1’792.6 |
1’786.9 |
1’593.5 |
1’439.0 |
1’510.7 |
16’284 |
15’361 |
14’532 |
13’829 |
14’073 |
|
Others |
0.0 |
–0.0 |
0.0 |
0.1 |
0.0 |
222 |
211 |
200 |
176 |
180 |
|
Total |
1’792.6 |
1’786.9 |
1’593.5 |
1’439.1 |
1’510.7 |
16’506 |
15’572 |
14’732 |
14’005 |
14’253 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OpEBITA |
OpROSA |
||||||||
|
millions of CHF |
2019 |
2018 |
2017 |
2016 |
2015 |
2019 |
2018 |
2017 |
2016 |
2015 |
|
Pumps Equipment |
59.7 |
41.4 |
–3.7 |
13.0 |
118.1 |
4.0% |
3.2% |
–0.3% |
1.1% |
9.2% |
|
Rotating Equipment Services |
164.5 |
146.1 |
144.0 |
139.5 |
70.8 |
14.1% |
13.7% |
13.9% |
13.8% |
6.9% |
|
Chemtech |
63.8 |
50.0 |
25.0 |
18.0 |
67.4 |
9.6% |
8.9% |
5.2% |
4.0% |
13.9% |
|
Applicator Systems |
88.2 |
95.7 |
86.8 |
64.1 |
0.0 |
21.0% |
21.1% |
20.5% |
23.6% |
n/a |
|
Divisions |
376.2 |
333.2 |
252.1 |
234.6 |
256.3 |
10.1% |
9.9% |
8.2% |
8.1% |
8.6% |
|
Others |
–4.9 |
–10.7 |
3.3 |
4.3 |
–2.2 |
n/a |
n/a |
n/a |
n/a |
n/a |
|
Total |
371.3 |
322.5 |
255.4 |
238.9 |
254.1 |
10.0% |
9.6% |
8.4% |
8.3% |
8.6% |
|
|
|
|
|
|
|
|
|
|
|
|
1) Number of full-time equivalents as of December 31.
Five-year summaries by region
Order intake by region
|
millions of CHF |
2019 |
2018 |
2017 |
2016 |
2015 |
|
Europe, Middle East, Africa |
1’612.2 |
1’535.9 |
1’422.1 |
1’254.8 |
1’303.7 |
|
Americas |
1’290.2 |
1’297.1 |
1’038.2 |
949.8 |
1’065.3 |
|
Asia-Pacific |
844.8 |
698.5 |
695.4 |
592.9 |
526.8 |
|
Total |
3’747.2 |
3’531.5 |
3’155.7 |
2’797.5 |
2’895.8 |
Sales by region
|
millions of CHF |
2019 |
2018 |
2017 |
2016 |
2015 |
|
Europe, Middle East, Africa |
1’539.5 |
1’468.9 |
1’411.6 |
1’271.8 |
1’214.0 |
|
Americas |
1’321.3 |
1’107.6 |
1’003.5 |
1’041.9 |
1’134.9 |
|
Asia-Pacific |
867.5 |
788.4 |
633.9 |
563.0 |
622.1 |
|
Total |
3’728.3 |
3’364.9 |
3’049.0 |
2’876.7 |
2’971.0 |
Employees by company location1)
|
millions of CHF |
2019 |
2018 |
2017 |
2016 |
2015 |
|
Europe, Middle East, Africa |
7’751 |
7’462 |
7’279 |
6’804 |
6’504 |
|
Americas |
4’579 |
4’374 |
3’911 |
3’822 |
4’139 |
|
Asia-Pacific |
4’176 |
3’737 |
3’542 |
3’379 |
3’610 |
|
Total |
16’506 |
15’572 |
14’732 |
14’005 |
14’253 |
1) Number of full-time equivalents as of December 31.