Forced market pause in the second quarter followed by a strong rebound in the second half-year
Order intake and sales in Applicator Systems (APS) decreased by 11.0% and 13.4% in 2020, as markets stalled in the second quarter with lockdowns around the world. All segments rebounded strongly in the second half of 2020. Decisive cost-out measures delivered operational profitability of 12.7% compared with 21.0% in the previous year. APS continues to expand its presence in the healthcare segment with the acquisition of Haselmeier, a leading provider of drug delivery devices.
If not otherwise indicated, changes from the previous year are based on currency-adjusted figures.
Boosting presence in drug delivery devices market
In 2020, Sulzer boosted its presence in medical devices with the acquisition of Haselmeier, a Swiss-German developer and manufacturer of drug delivery devices. With the CHF 119 million transaction, APS complemented its healthcare portfolio, leveraging its expertise in precision injection molding to seize opportunities in the fast-growing drug delivery device market. Haselmeier delivered revenues of CHF 40 million in the prior year. The transaction, closed on October 1, added orders of CHF 13.6 million in 2020.
APS took further steps to integrate sustainability into its processes and make its products eco-friendlier. Geka received the Platinum award from the prestigious EcoVadis sustainability rating provider, placing the beauty player amongst the top 1% of companies assessed worldwide. Furthermore, Geka obtained the International Sustainability and Carbon Certification and a “B" rating in the Carbon Disclosure Program, ahead of its competition.
After the forced pause in demand following lockdowns in the first half of 2020, all our segments rebounded in the second half-year. Thanks to our proactive measures and strict cost control, we were able to significantly mitigate the impact of COVID-19. Looking ahead, we are excited to have Haselmeier on board to boost our presence in the fast-growing drug delivery devices market.
Girts Cimermans, Division President Applicator Systems
Key figures Applicator Systems
|
millions of CHF |
|
2020 |
|
2019 |
|
Change in +/–% |
|
+/–% adjusted 1) |
|
+/–% organic 2) |
|
Order intake |
|
364.8 |
|
425.1 |
|
–14.2 |
|
–11.0 |
|
–14.2 |
|
Order intake gross margin |
|
46.0% |
|
46.3% |
|
|
|
|
|
|
|
Order backlog as of December 31 |
|
82.0 |
|
60.8 |
|
34.9 |
|
|
|
|
|
Sales |
|
351.2 |
|
420.6 |
|
–16.5 |
|
–13.4 |
|
–15.2 |
|
EBIT |
|
20.2 |
|
40.2 |
|
–49.8 |
|
|
|
|
|
Operational profit |
|
44.7 |
|
88.2 |
|
–49.3 |
|
–48.6 |
|
–47.9 |
|
Operational profitability |
|
12.7% |
|
21.0% |
|
|
|
|
|
|
|
Employees (number of full-time equivalents) as of December 31 |
|
1’857 |
|
1’821 |
|
2.0 |
|
|
|
|
1) Adjusted for currency effects.
2) Adjusted for acquisition and currency effects.
Order and sales decline – rebound in the second half-year
Order intake decreased by 11.0% and sales by 13.4% in 2020. In the first half-year, Adhesives, Dental and Beauty segments suffered from pandemic-related closing of stores, factories and dental clinics following lockdowns, while growing Healthcare and China were the only bright spots.
All APS segments rebounded strongly in the second half of 2020 on continuing market reopening and customer restocking, with year-on-year order and sales growth in the fourth quarter. Thanks to Sulzer’s high safety standards and the quick implementation of additional preventive measures, global APS factories remained operational throughout the pandemic.
Order intake by segment
Order intake by region
Operational profit and profitability decreased
Operational profit decreased by 48.6%, due to the large volume hit and negative mix effects following lockdowns. APS reacted early in the year and took decisive cost-out measures, which helped mitigate the impact of the pandemic and resulted in an operational profitability of 12.7%.
Safety performance in 2020
In 2020, APS reported an accident frequency rate (AFR) of 4.8 cases per million working hours (2019 7.4), and the number of major accidents reduced from 23 to 16. The accident severity rate (ASR) dropped from 171.1 in 2019 to 64.9 lost days per million working hours. The decrease is visible across all business units, and is the result of continued drive for line ownership and structured risk assessment.
Abbreviations
EBIT: Earnings before interest and taxes
For the definition of the alternative performance measures, please refer to “Supplementary information”.