Stable order intake sustained by China, operational profitability flat despite lower sales
In 2020, Chemtech reported stable orders in a challenging market environment. Despite a sales decline of 4.8%, operational profitability remained stable at 9.6% due to swift cost-out measures. Chemtech’s growing portfolio of sustainable technologies, from biopolymers to recycling, contributed to a resilient year.
If not otherwise indicated, changes from the previous year are based on currency-adjusted figures.
Chemtech technology is enabling the circular economy
Chemtech technology is at the heart of a groundbreaking textile recycling process by Worn Again, a start-up company jointly controlled by Sulzer and H&M. The teams are currently working on scaling up the process to an output of 1’000 tons a year, the final proof of concept before commercialization.
Chemtech is also pioneering bio-based and recycling technologies, expanding its R&D capabilities in Switzerland. We are driving the scaling-up of cutting-edge biopolymer processes and plastic recycling technologies. Today, renewable applications (bio-based, recycling, low-carbon solutions) make up a substantial part of Chemtech’s business, with a 2020 order intake of CHF 47 million. We expect this to grow significantly over the next few years.
Despite the pandemic-related impact, our order intake remained stable on the back of strong demand in China. We took swift structural action to resize our capacities, leading to a stable operational profitability despite the sales decline.
Torsten Wintergerste, Division President Chemtech
Key figures Chemtech
|
millions of CHF |
|
2020 |
|
2019 |
|
Change in +/–% |
|
+/–% adjusted 1) |
|
+/–% organic 2) |
|
Order intake |
|
620.8 |
|
670.0 |
|
–7.3 |
|
–1.1 |
|
–6.9 |
|
Order intake gross margin |
|
30.6% |
|
30.4% |
|
|
|
|
|
|
|
Order backlog as of December 31 |
|
396.9 |
|
385.3 |
|
3.0 |
|
|
|
|
|
Sales |
|
593.1 |
|
664.0 |
|
–10.7 |
|
–4.8 |
|
–9.7 |
|
EBIT |
|
35.9 |
|
54.0 |
|
–33.4 |
|
|
|
|
|
Operational profit |
|
56.9 |
|
63.8 |
|
–10.8 |
|
–4.1 |
|
–12.7 |
|
Operational profitability |
|
9.6% |
|
9.6% |
|
|
|
|
|
|
|
Employees (number of full-time equivalents) as of December 31 |
|
3’221 |
|
3’803 |
|
–15.3 |
|
|
|
|
1) Adjusted for currency effects.
2) Adjusted for acquisition and currency effects.
Stable order intake
Despite the pandemic, Chemtech’s order intake remained on the previous year’s level in 2020 (–1.1%). Strong demand in China (+29.2%) and CHF 17.7 milllion of orders from an internal transfer of the dissolved air flotation business from Pumps Equipment to the Chemtech division were counterbalanced by customers shifting investment decisions for larger projects and by site access restrictions.
Order intake in Asia-Pacific grew by 14.7%, due to strong Chinese demand. Orders decreased by 14.1% in the Americas and by 17.2% in EMEA (Europe, the Middle East and Africa).
Order intake by segment
Order intake by region
Stable operational profitability due to swift structural action
Sales declined by 4.8% compared with 2019. Strong growth and rapid factory ramp-up in Chemtech’s Chinese facility helped to partly offset the impact from lockdowns and lower orders in other parts of the world. Operational profit decreased by 4.1%, mainly due to the volume decline. The swift implementation of structural actions to resize capacities primarily in Europe and the Americas resulted in a stable operational profitability of 9.6%.
Safety performance in 2020
The company’s health and safety priorities shifted in early 2020 towards setting up and implementing the COVID-19 preventive measures in its facilities worldwide. Chemtech’s accident frequency rate (AFR) remained stable at very low 0.6 cases per million working hours. The accident severity rate (ASR) decreased to 27.3 lost days per million working hours, from 41.5 the year before. Thanks to the continued focus on the EYE 5 safety leadership initiative and the sharing of safety alerts identifying opportunities for improvement, Chemtech’s AFR and ASR metrics have steadily decreased in the past two years. The division’s business units successfully migrated from the OHSAS 18001 to the ISO 45001 standard and obtained certification by the independent certification company SGS.
Abbreviations
EBIT: Earnings before interest and taxes
For the definition of the alternative performance measures, please refer to “Supplementary information”.