Annual Report 2021 - Sulzer Annual Report 2021

3Segment information

Segment information by divisions

	Flow Equipment		Services		Chemtech
millions of CHF	2021	2020	2021	2020	2021	2020
Order intake from continuing operations (unaudited) 1)	1’324.7	1’297.6	1’163.4	1’130.8	679.5	620.8
Nominal growth (unaudited)	2.1%	–11.1%	2.9%	–5.2%	9.5%	–7.3%
Currency-adjusted growth (unaudited)	1.8%	–4.1%	2.8%	2.5%	8.8%	–1.1%
Organic growth (unaudited) 2)	–3.9%	–2.9%	2.0%	0.6%	8.8%	–6.9%

Order backlog as of December 31 (unaudited)	811.5	845.0	479.5	435.0	433.2	396.9

Sales recognized at a point in time	993.5	839.5	898.8	887.3	377.0	372.6
Sales recognized over time	395.5	456.9	219.0	191.1	271.6	220.5
Sales from continuing operations 3)	1’389.0	1’296.3	1’117.7	1’078.3	648.5	593.1
Nominal growth	7.1%	–12.2%	3.7%	–7.6%	9.4%	–10.7%
Currency-adjusted growth (unaudited)	6.9%	–5.7%	3.5%	0.1%	8.4%	–4.8%
Organic growth (unaudited) 2)	2.0%	–4.5%	2.7%	–1.1%	8.4%	–9.7%

Operational profit from continuing operations (unaudited)	81.4	55.2	158.7	150.3	64.8	56.9
Operational profitability from continuing operations (unaudited)	5.9%	4.3%	14.2%	13.9%	10.0%	9.6%

Restructuring expenses	–7.5	–34.1	–0.6	–11.3	–1.3	–5.7
Amortization	–38.1	–29.6	–4.9	–9.2	–6.7	–6.8
Impairments on tangible and intangible assets	–0.9	–2.1	–2.8	–1.5	–0.5	–5.3
Non-operational items (unaudited)	0.1	–5.6	–2.3	–1.9	–2.7	–3.2
EBIT from continuing operations	35.1	–16.1	148.2	126.3	53.6	35.9

Depreciation	–33.4	–34.6	–31.5	–28.5	–12.8	–12.2

Operating assets	1’573.9	1’456.4	939.5	893.6	552.8	507.0
Unallocated assets	–	–	–	–	–	–
Total assets as of December 31	1’573.9	1’456.4	939.5	893.6	552.8	507.0

Operating liabilities	745.0	725.1	403.3	354.9	404.0	323.6
Unallocated liabilities	–	–	–	–	–	–
Total liabilities as of December 31	745.0	725.1	403.3	354.9	404.0	323.6

Operating net assets	829.0	731.3	536.2	538.7	148.7	183.5
Unallocated net assets	–	–	–	–	–	–
Total net assets as of December 31	829.0	731.3	536.2	538.7	148.7	183.5

Capital expenditure (incl. lease assets)	–33.9	–34.7	–57.1	–40.9	–20.7	–11.1

Employees (number of full-time equivalents) as of December 31	5’325	5’362	4’571	4’449	3’734	3’221

1) Order intake from external customers.

2) Adjusted for currency and acquisition effects.

3) Sales from external customers.

Segment information by divisions

Total divisions

Others 5)

Total Sulzer

millions of CHF

2021

2020 4)

2021

2020 4)

2021

2020 4)

Order intake from continuing operations (unaudited) 1)

3’167.6

3’049.2

–

3’167.6

3’049.2

Nominal growth (unaudited)

3.9%

–8.2%

–

3.9%

–8.2%

Currency-adjusted growth (unaudited)

3.6%

–1.1%

–

3.6%

–1.1%

Organic growth (unaudited) 2)

0.9%

–2.5%

–

0.9%

–2.5%

    
        Order backlog as of December 31 (unaudited)
      
        1’724.1
      
        1’676.8
      
        –
      
        –
      
        1’724.1
      
        1’676.8

Sales recognized at a point in time

2’269.3

2’099.3

–

2’269.3

2’099.3

Sales recognized over time

886.0

868.4

–

886.0

868.4

Sales from continuing operations 3)

3’155.3

2’967.8

–

3’155.3

2’967.8

Nominal growth

6.3%

–10.3%

–

6.3%

–10.3%

Currency-adjusted growth (unaudited)

6.0%

–3.5%

–

6.0%

–3.5%

Organic growth (unaudited) 2)

3.5%

–4.3%

–

3.5%

–4.3%

Operational profit from continuing operations (unaudited)

304.9

262.4

–11.6

–7.4

293.3

255.0

Operational profitability from continuing operations (unaudited)

9.7%

8.8%

n/a

9.3%

8.6%

Restructuring expenses

–9.4

–51.2

–0.0

–1.4

–9.5

–52.6

Amortization

–49.6

–45.6

–0.6

–1.1

–50.2

–46.7

Impairments on tangible and intangible assets

–4.2

–8.9

–

–0.5

–4.2

–9.4

Non-operational items (unaudited)

–4.8

–10.7

–2.9

–3.2

–7.7

–13.8

EBIT from continuing operations

236.9

146.1

–15.0

–13.6

221.8

132.5

Depreciation

–77.7

–75.4

–3.3

–3.0

–81.0

–78.3

Operating assets

3’066.2

2’857.0

180.3

804.4

3’246.5

3’661.4

Unallocated assets

–

1’763.9

1’705.6

1’763.9

1’705.6

Total assets as of December 31

3’066.2

2’857.0

1’944.3

2’510.1

5’010.4

5’367.0

Operating liabilities

1’552.3

1’403.5

196.8

267.6

1’749.1

1’671.1

Unallocated liabilities

–

1’982.0

2’278.7

1’982.0

2’278.7

Total liabilities as of December 31

1’552.3

1’403.5

2’178.8

2’546.3

3’731.1

3’949.8

Operating net assets

1’513.9

1’453.4

–16.4

536.9

1’497.5

1’990.3

Unallocated net assets

–

–218.1

–573.1

–218.1

–573.1

Total net assets as of December 31

1’513.9

1’453.4

–234.6

–36.2

1’279.3

1’417.2

    
        Capital expenditure (incl. lease assets)
      
        –111.7
      
        –86.7
      
        –7.7
      
        –1.3
      
        –119.4
      
        –88.0

    
        Employees (number of full-time equivalents) as of December 31
      
        13’631
      
        13’032
      
        185
      
        165
      
        13’816
      
        13’197

1) Order intake from external customers.

2) Adjusted for currency and acquisition effects.

3) Sales from external customers.

4) Comparative information has been re-presented due to discontinued operations (details are described in note 7).

5) The most significant activities under “Others” relate to Corporate Center. Total assets and total liabilities under “Others” include the former Applicator Systems (APS) division for the period 2020.

For the definition of operational profit, operational profitability, currency-adjusted growth and organic growth, reference is made to the section “Supplementary information” and for the reconciliation statements to the section “Financial review”.

The segment information for the discontinued operations (Applicator Systems division) is disclosed in note 7.

Information about reportable segments

Operating segments are determined based on the reports reviewed by the Chief Executive Officer that are used to measure performance, make strategic decisions and allocate resources to the segments. The business is managed on a divisional basis and the reported segments have been identified as follows:

Flow Equipment

The Flow Equipment division (renamed in 2021 from Pumps Equipment) specializes in pumping solutions specifically engineered for the processes of its customers. The division provides pumps, agitators, compressors, grinders, screens and filters developed through intensive research and development in fluid dynamics and advanced materials. The focus is on pumping solutions for water, oil and gas, power, chemicals and most industrial segments.

Services

The Services division (renamed in 2021 from Rotating Equipment Services) provides cutting-edge parts as well as maintenance and repair solutions for pumps, turbines, compressors, motors and generators, through a network of over 100 service sites around the world. The division services Sulzer original equipment, but also all associated third-party rotating equipment run by the customers, maximizing its sustainability and life-cycle cost-effectiveness. The division’s technology-based solutions, fast execution and expertise in complex maintenance projects are available at its customers’ doorsteps.

Chemtech

The Chemtech division focuses on innovative mass transfer, static mixing and polymer solutions for chemicals, petrochemicals, refining and LNG. Chemtech also provides ecological solutions such as bio-based chemicals, polymers and fuels, recycling technologies for textiles and plastic as well as carbon capture and utilization/storage, contributing to a circular economy. The division’s product offering ranges from process components to complete process plants and technology licensing.

Others

Certain expenses related to the Corporate Center are not attributable to a particular segment and are reviewed as a whole across the group. Also included are the eliminations for operating assets and liabilities.

The Chief Executive Officer primarily uses operational profit to assess the performance of the operating segments. However, the Chief Executive Officer also receives information about the segments’ order intake and backlog, sales, and operating assets and liabilities on a monthly basis.

Sales from external customers reported to the Chief Executive Officer are measured in a manner consistent with that in the income statement. There are no significant sales between the segments. No individual customer represents a significant portion of the group’s sales.

Operating assets and liabilities are assets or liabilities related to the operating activities of an entity and contributing to the EBIT.

Segment information by region

The allocation of assets is based on their geographical location. Non-current assets exclude other financial assets, deferred tax assets and defined benefit assets. The allocation of sales from external customers is based on the location of the customer.

Non-current assets by region

millions of CHF	2021	2020 1)
Europe, the Middle East and Africa	941.9	1’440.2
– thereof United Kingdom	203.0	209.9
– thereof Switzerland	201.5	274.8
– thereof Sweden	162.2	187.4
– thereof Finland	109.0	106.8
– thereof the Netherlands	100.8	116.8

Americas	425.9	452.8
– thereof USA	390.3	417.1

Asia-Pacific	144.6	141.8
– thereof China	53.6	54.6

Total	1’512.4	2’034.7

1) The balance sheet as of December 31, 2020, has been adjusted following the finalization of the purchase price accounting and measurement period adjustments related to acquisitions in 2020. A reconciliation to the previously published balance sheet is provided in note 4.

Sales by region

	2021
millions of CHF	Flow Equipment	Services	Chemtech	Total Sulzer
Europe, the Middle East and Africa	671.8	485.6	140.0	1’297.5
– thereof Saudi Arabia	118.7	25.4	15.2	159.3
– thereof Germany	65.6	55.7	26.7	148.0
– thereof United Kingdom	25.7	112.1	5.3	143.1
– thereof Russia	34.2	35.6	15.9	85.6
– thereof France	27.3	30.8	9.1	67.2

Americas	386.0	473.5	118.6	978.1
– thereof USA	236.0	368.3	63.0	667.4

Asia-Pacific	331.1	158.6	390.0	879.7
– thereof China	227.3	30.7	265.8	523.7

Total	1’389.0	1’117.7	648.5	3’155.3

	2020
millions of CHF	Flow Equipment	Services	Chemtech	Total Sulzer 1)
Europe, the Middle East and Africa	555.7	469.6	172.7	1’198.1
– thereof Saudi Arabia	89.0	26.9	31.2	147.0
– thereof Germany	58.2	49.2	26.3	133.7
– thereof United Kingdom	25.7	107.4	7.9	140.9
– thereof Russia	31.5	50.9	11.7	94.1
– thereof France	26.8	30.9	7.3	65.0

Americas	452.7	446.2	128.2	1’027.1
– thereof USA	297.8	358.8	81.9	738.5

Asia-Pacific	288.0	162.5	292.2	742.6
– thereof China	206.5	24.0	188.2	418.7

Total	1’296.3	1’078.3	593.1	2’967.8

1) Comparative information has been re-presented due to discontinued operations (details are described in note 7).

Segment information by market segment

The following table shows the allocation of sales from external customers by market segment. The group changed the market segment definition in 2021 and prior-year numbers have been reclassified accordingly.

Sales by market segment — Flow Equipment

millions of CHF	2021	2020
Energy	507.9	532.0
Water	497.0	403.8
Industry	384.1	360.6
Total Flow Equipment	1’389.0	1’296.3

Sales by market segment — Services

millions of CHF	2021	2020
Pumps Services	601.0	592.1
Other Equipment	516.7	486.2
Total Services	1’117.7	1’078.3

Sales by market segment — Chemtech

millions of CHF	2021	2020
Chemicals	366.4	317.2
Gas and Refining	128.1	141.2
Services	96.7	84.5
Renewables	38.3	32.0
Water	19.1	18.1
Total Chemtech	648.5	593.1