– Business review – Flow Equipment
Significant rise in order intake and profitability
Note: If not otherwise indicated, changes from the previous year are based on organic figures (adjusted for currencies and acquisitions).
The Flow Equipment division returned a strong performance in 2022. Order intake increased by 8.9%, despite the war in Ukraine, while profitability rose by a substantial 70 basis points year on year. Sales were impacted by corrections in the Energy market during the pandemic and fell by 3.4%. Effective January 2023, Jan Lüder took charge of Flow Equipment as its new Division President. The division continues to pursue its strategy of broadening its sustainability‑ enhancing and cleantech solutions. It closed the year with its best safety performance in over 15 years.
New Division President
On January 1, 2023, Jan Lüder took over the leadership of the Flow Equipment division as its new Division President. Jan brings extensive experience in leading successful international businesses – from 2019 to 2022 he was CEO of thyssenkrupp Mining Technologies, where he led the transformation of the EUR 1.2 billion business from loss-making to sustainable profit. Before that, he was CEO of various thyssenkrup entities, in addition to CEO roles at Primetals Technologies and Siemens Metals Technologies.
The Flow Equipment division has accelerated growth in energy transition applications, with fourfold growth in renewable and sustainable applications. The sectors with the highest growth rates were waste to energy, biofuels and solar, where Sulzer offers customers a combination of process knowledge, engineering expertise, product reliability and optimized lifecycle costs.
The division is also seeing successes in its carbon capture, utilization and storage (CCUS) projects, further increasing our contribution towards CO2 reduction with new orders for specialized multistage, high pressure, supercritical CO2 injection pumps. In 2022, Sulzer was awarded a project to provide the pumping solutions for one of the largest CCUS operations in the world, accounting for 20% of all human-made CO2 captured in the world each year. Our technologies will enable the capture of the low-pressure CO2 emissions being vented during the natural gas extraction process, and then compress them to sales-quality supercritical CO2 for use in various applications.
Key figures Flow Equipment
|
millions of CHF |
|
2022 |
|
2021 |
|
Change in +/–% |
|
+/–% adjusted 1) |
|
+/–% organic 2) |
|
Order intake |
|
1’419.2 |
|
1’324.7 |
|
7.1 |
|
9.4 |
|
8.9 |
|
Order intake gross margin |
|
30.2% |
|
30.0% |
|
|
|
|
|
|
|
Order backlog as of December 31 |
|
850.1 |
|
811.5 |
|
4.8 |
|
|
|
|
|
Sales |
|
1’323.0 |
|
1’389.0 |
|
–4.8 |
|
–3.1 |
|
–3.4 |
|
EBIT 3) |
|
32.6 |
|
35.1 |
|
–7.2 |
|
|
|
|
|
Operational profit |
|
87.4 |
|
81.4 |
|
7.3 |
|
6.8 |
|
7.5 |
|
Operational profitability |
|
6.6% |
|
5.9% |
|
|
|
|
|
|
|
Employees (number of full-time equivalents) as of December 31 |
|
5’263 |
|
5’325 |
|
–1.2 |
|
|
|
|
1) Adjusted for currency effects.
2) Adjusted for acquisition and currency effects.
3) Impacted by write-offs related to Russia and Poland.
Strong order intake growth
The Flow Equipment division continued its strong growth trajectory with orders increasing by a significant 8.9% in 2022, more than compensating for the impacts of the war and the subsequent exit from the Russian market. The growth was driven by the Industry and Energy business units in particular, which returned 12.8% and 11.0% growth respectively.
Order intake by market segment
2022
Order intake by region
2022
Rising profitability
Sales in the Flow Equipment division fell by 3.4%, largely due to a drop in Energy orders in 2021 associated with market corrections during the pandemic and ongoing supply chain difficulties. Profitability increased by 66 basis points from 5.9% to 6.6%, despite the slight drop in sales, thanks to well-implemented cost discipline and efficiency measures.
Safety performance in 2022
In 2022, Flow Equipment reported a significantly improved accident frequency rate (AFR) of 1.1 cases per million working hours compared to the previous year (2021: 1.9). The accident severity rate (ASR) decreased slightly to 33.3 lost days per million working hours, down from 35.4 in the previous year. Almost all business units delivered a good, sustained safety performance, most notably BU Water, to achieve these results. The “Take Care" campaign released in Q4 2021 continued to build momentum throughout 2022 and has had a very positive effect. In 2022, the Flow Equipment division had seven fewer lost time incidents compared to 2021. The 2022 safety performance of the Flow Equipment division was its best result for more than 15 years.
Abbreviations
EBIT: Earnings before interest and taxes
For the definition of the alternative performance measures, please refer to “Supplementary information”