Dieser Abschnitt ist nur in englischer Sprache verfügbar.

Notes to the consolidated financial statements

1 General information

General information

Sulzer Ltd (the “companyˮ) is a company domiciled in Switzerland. The address of the company’s registered office is Neuwiesenstrasse 15 in Winterthur, Switzerland. The consolidated financial statements for the year ended December 31, 2023, comprise the company and its subsidiaries (together referred to as the “groupˮ and individually as the “subsidiariesˮ) and the group’s interest in associates and joint ventures. The group specializes in energy-efficient pumping, agitation, mixing, separation, purification, crystallization and polymerization technologies for fluids of all types. Sulzer was founded in 1834 in Winterthur, Switzerland, and employs 13'130 people. The company serves clients in 160 production and service sites around the world. Sulzer Ltd is listed on SIX Swiss Exchange in Zurich, Switzerland (symbol: SUN).

Sulzer is a global leader in fluid engineering and chemical processing applications, developing innovative products and services that drive sustainable progress.

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). They were authorized for issue by the Board of Directors on February 21, 2024.

Details of the group’s accounting policies are included in note 34.

2 Significant events and transactions during the reporting period

2Significant events and transactions during the reporting period

The financial position and performance of the group was not affected by any significant event during the period. As disclosed in the Annual Report 2022, Sulzer entered into a sales agreement for its business in Russia on February 3, 2023, and successfully sold the business in the second half of 2023. Further details are provided in note 5.

For a detailed discussion about the group’s performance and financial position, please refer to the section “Financial review”.

3 Segment information

3Segment information

Segment information by divisions

 

 

Flow Equipment

 

Services

 

Chemtech

millions of CHF

 

2023

 

2022

 

2023

 

2022

 

2023

 

2022

Order intake (unaudited) 1)

 

1’466.5

 

1’419.2

 

1’271.3

 

1’171.3

 

842.5

 

834.9

Nominal growth (unaudited)

 

3.3%

 

7.1%

 

8.5%

 

0.7%

 

0.9%

 

22.9%

Currency-adjusted growth (unaudited)

 

10.6%

 

9.4%

 

18.5%

 

1.8%

 

7.5%

 

21.7%

Organic growth (unaudited) 2)

 

11.2%

 

8.9%

 

19.8%

 

1.6%

 

10.5%

 

22.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

Order backlog as of December 31 (unaudited)

 

878.3

 

850.1

 

547.3

 

492.9

 

521.2

 

501.7

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales recognized at a point in time

 

893.2

 

843.4

 

870.2

 

825.9

 

373.2

 

357.5

Sales recognized over time

 

461.1

 

479.5

 

284.6

 

291.1

 

399.4

 

382.4

Sales 3)

 

1’354.4

 

1’323.0

 

1’154.8

 

1’117.0

 

772.5

 

739.9

Nominal growth

 

2.4%

 

–4.8%

 

3.4%

 

–0.1%

 

4.4%

 

14.1%

Currency-adjusted growth (unaudited)

 

9.4%

 

–3.1%

 

12.6%

 

0.8%

 

11.3%

 

12.9%

Organic growth (unaudited) 2)

 

10.9%

 

–3.4%

 

14.5%

 

0.7%

 

15.5%

 

14.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational profit (unaudited)

 

108.2

 

87.4

 

171.3

 

159.0

 

95.0

 

80.0

Operational profitability (unaudited)

 

8.0%

 

6.6%

 

14.8%

 

14.2%

 

12.3%

 

10.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring expenses

 

–2.1

 

0.3

 

–0.7

 

–1.3

 

–0.3

 

0.8

Amortization

 

–25.4

 

–26.7

 

–3.7

 

–4.4

 

–6.8

 

–6.9

Impairments on tangible and intangible assets

 

–0.1

 

–8.0

 

–0.0

 

–24.2

 

–0.1

 

–12.3

Non-operational items (unaudited) 4)

 

–6.5

 

–20.4

 

12.7

 

–75.1

 

–2.9

 

–23.4

EBIT

 

74.1

 

32.6

 

179.6

 

54.0

 

84.9

 

38.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

–28.8

 

–30.4

 

–27.3

 

–29.0

 

–12.8

 

–13.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating assets

 

1’427.7

 

1’554.1

 

944.4

 

980.0

 

533.2

 

579.7

Unallocated assets

 

 

 

 

 

 

Total assets as of December 31

 

1’427.7

 

1’554.1

 

944.4

 

980.0

 

533.2

 

579.7

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating liabilities

 

718.6

 

730.9

 

411.2

 

456.4

 

409.1

 

439.8

Unallocated liabilities

 

 

 

 

 

 

Total liabilities as of December 31

 

718.6

 

730.9

 

411.2

 

456.4

 

409.1

 

439.8

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating net assets

 

709.1

 

823.2

 

533.2

 

523.7

 

124.1

 

139.9

Unallocated net assets

 

 

 

 

 

 

Total net assets as of December 31

 

709.1

 

823.2

 

533.2

 

523.7

 

124.1

 

139.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditure (incl. lease assets)

 

–37.7

 

–37.9

 

–33.4

 

–42.0

 

–27.8

 

–16.8

 

 

 

 

 

 

 

 

 

 

 

 

 

Employees (number of full-time equivalents) as of December 31

 

5’465

 

5’263

 

4’630

 

4’559

 

2’849

 

2’852

1) Order intake from external customers.

2) Adjusted for acquisition, divestiture/deconsolidation and currency effects.

3) Sales from external customers.

4) Mainly consists of a gain on deconsolidation relating to the Russian business of CHF 8.0 million, including the reclassification of the accumulated currency translation adjustments being allocated to the divisions.

Segment information by divisions

 

 

Total divisions

 

Others 1)

 

Total Sulzer

millions of CHF

 

2023

 

2022

 

2023

 

2022 2)

 

2023

 

2022 2)

Order intake (unaudited) 3)

 

3’580.3

 

3’425.4

 

 

 

3’580.3

 

3’425.4

Nominal growth (unaudited)

 

4.5%

 

8.1%

 

 

 

4.5%

 

8.1%

Currency-adjusted growth (unaudited)

 

12.6%

 

9.2%

 

 

 

12.6%

 

9.2%

Organic growth (unaudited) 4)

 

13.9%

 

9.1%

 

 

 

13.9%

 

9.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

Order backlog as of December 31 (unaudited)

 

1’946.8

 

1’844.7

 

-

 

 

1’946.8

 

1’844.7

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales recognized at a point in time

 

2’136.6

 

2’026.8

 

 

 

2’136.6

 

2’026.8

Sales recognized over time

 

1’145.1

 

1’153.1

 

 

 

1’145.1

 

1’153.1

Sales 5)

 

3’281.7

 

3’179.9

 

 

 

3’281.7

 

3’179.9

Nominal growth

 

3.2%

 

0.8%

 

 

 

3.2%

 

0.8%

Currency-adjusted growth (unaudited)

 

11.0%

 

1.6%

 

 

 

11.0%

 

1.6%

Organic growth (unaudited) 4)

 

13.2%

 

1.8%

 

 

 

13.2%

 

1.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational profit (unaudited)

 

374.5

 

326.4

 

–8.9

 

–8.8

 

365.6

 

317.6

Operational profitability (unaudited)

 

11.4%

 

10.3%

 

n/a

 

n/a

 

11.1%

 

10.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring expenses

 

–3.1

 

–0.1

 

0.1

 

0.0

 

–3.0

 

–0.1

Amortization

 

–35.9

 

–38.0

 

–0.7

 

–0.8

 

–36.6

 

–38.8

Impairments on tangible and intangible assets

 

–0.2

 

–44.5

 

 

 

–0.2

 

–44.5

Non-operational items (unaudited) 6)

 

3.3

 

–119.0

 

0.5

 

–3.8

 

3.8

 

–122.8

EBIT

 

338.6

 

124.8

 

–9.0

 

–13.5

 

329.7

 

111.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

–68.9

 

–72.8

 

–2.6

 

–3.2

 

–71.4

 

–76.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating assets 7)

 

2’905.3

 

3’113.8

 

213.6

 

42.6

 

3’118.9

 

3’156.4

Unallocated assets 7)

 

 

 

1’250.5

 

1’463.7

 

1’250.5

 

1’463.7

Total assets as of December 31

 

2’905.3

 

3’113.8

 

1’464.2

 

1’506.4

 

4’369.5

 

4’620.2

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating liabilities 8)

 

1’538.9

 

1’627.0

 

261.3

 

98.1

 

1’800.2

 

1’725.1

Unallocated liabilities 8)

 

 

 

1’470.6

 

1’866.4

 

1’470.6

 

1’866.4

Total liabilities as of December 31

 

1’538.9

 

1’627.0

 

1’731.9

 

1’964.5

 

3’270.8

 

3’591.5

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating net assets

 

1’366.4

 

1’486.8

 

–47.7

 

–55.5

 

1’318.7

 

1’431.4

Unallocated net assets

 

 

 

–220.1

 

–402.7

 

–220.1

 

–402.7

Total net assets as of December 31

 

1’366.4

 

1’486.8

 

–267.8

 

–458.2

 

1’098.6

 

1’028.6

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditure (incl. lease assets)

 

–98.9

 

–96.7

 

–4.1

 

–3.3

 

–103.1

 

–100.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Employees (number of full-time equivalents) as of December 31

 

12’944

 

12’674

 

186

 

194

 

13’130

 

12’868

1) The most significant activities under “Others” relate to Corporate Center.

2) Amounts in 2022 were restated, please refer to 7) and 8) below.

3) Order intake from external customers.

4) Adjusted for acquisition, divestiture/deconsolidation and currency effects.

5) Sales from external customers.

6) Mainly consists of a gain on deconsolidation relating to the Russia business of CHF 8.0 million, including the reclassification of the accumulated currency translation adjustments being allocated to the divisions.

7) In 2022, within “Others”, operating assets were adjusted by CHF 90.1 million from CHF -47.5 million to CHF 42.6 million, the unallocated assets were adjusted by CHF -90.1 million from CHF 1’553.8 million to CHF 1’463.7 million. In “Total Sulzer”, operating assets were adjusted by CHF 90.1 million from CHF 3’066.3 million to CHF 3,156.4 million, the unallocated assets were adjusted by CHF -90.1 million from CHF 1’553.8 million to CHF 1’463.7 million.

8) In 2022, within “Others”, operating liabilities were adjusted by CHF 90.1 million from CHF 8.0 million to CHF 98.1 million, the unallocated liabilities were adjusted by CHF -90.1 million from CHF 1’956.5 million to CHF 1’866.4 million. In “Total Sulzer”, operating liabilities were adjusted by CHF 90.1 million from CHF 1’635.0 million to CHF 1’725.1 million, the unallocated liabilities were adjusted by CHF -90.1 million from CHF 1’956.5 million to CHF 1’866.4 million.

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”.

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 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 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 and sustainable 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 assessed 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 the measurement 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 deferred income tax assets, non-current receivables, defined benefit assets and other non-current financial assets. The allocation of sales from external customers is based on the location of the customer.

Non-current assets by region

millions of CHF

 

2023

 

2022

Europe, the Middle East and Africa

 

831.5

 

853.5

– thereof Switzerland

 

227.0

 

220.5

– thereof United Kingdom

 

175.5

 

180.1

– thereof Sweden

 

112.4

 

125.7

– thereof Finland

 

111.3

 

114.6

– thereof the Netherlands

 

79.7

 

84.6

 

 

 

 

 

Americas

 

375.8

 

413.4

– thereof USA

 

335.5

 

376.6

 

 

 

 

 

Asia-Pacific

 

123.6

 

136.7

– thereof China

 

47.1

 

52.4

 

 

 

 

 

Total

 

1’330.9

 

1’403.6

Sales by region

 

 

2023

millions of CHF

 

Flow Equipment

 

Services

 

Chemtech

 

Total Sulzer

Europe, the Middle East and Africa

 

607.7

 

446.5

 

191.8

 

1’246.0

– thereof United Kingdom

 

36.7

 

123.0

 

15.7

 

175.5

– thereof Saudi Arabia

 

91.1

 

32.4

 

30.7

 

154.2

– thereof Germany

 

60.6

 

46.1

 

39.3

 

145.9

– thereof France

 

34.7

 

36.4

 

8.2

 

79.3

– thereof Spain

 

43.1

 

5.9

 

5.4

 

54.5

 

 

 

 

 

 

 

 

 

Americas

 

452.8

 

561.2

 

185.8

 

1’199.8

– thereof USA

 

261.7

 

435.3

 

130.7

 

827.7

 

 

 

 

 

 

 

 

 

Asia-Pacific

 

293.9

 

147.2

 

394.9

 

836.0

– thereof China

 

177.7

 

24.7

 

266.7

 

469.1

 

 

 

 

 

 

 

 

 

Total

 

1’354.4

 

1’154.8

 

772.5

 

3’281.7

 

 

2022

millions of CHF

 

Flow Equipment

 

Services

 

Chemtech

 

Total Sulzer

Europe, the Middle East and Africa

 

602.0

 

439.9

 

166.0

 

1’207.9

– thereof United Kingdom

 

36.3

 

112.9

 

15.7

 

164.9

– thereof Germany

 

87.8

 

43.1

 

17.0

 

147.9

– thereof Saudi Arabia

 

66.3

 

23.7

 

20.3

 

110.3

– thereof France

 

32.3

 

31.3

 

8.6

 

72.2

– thereof Russia

 

31.2

 

23.2

 

14.0

 

68.4

 

 

 

 

 

 

 

 

 

Americas

 

420.9

 

525.5

 

196.4

 

1’142.8

– thereof USA

 

223.6

 

397.1

 

141.3

 

761.9

 

 

 

 

 

 

 

 

 

Asia-Pacific

 

300.1

 

151.6

 

377.5

 

829.2

– thereof China

 

202.2

 

28.3

 

254.6

 

485.1

 

 

 

 

 

 

 

 

 

Total

 

1’323.0

 

1’117.0

 

739.9

 

3’179.9

Segment information by market segment

The following table shows the allocation of sales from external customers by market segment. 

Sales by market segment – Flow Equipment

millions of CHF

 

2023

 

2022

Water

 

497.7

 

489.8

Energy

 

453.0

 

453.4

Industry

 

403.7

 

379.7

Total Flow Equipment

 

1’354.4

 

1’323.0

Sales by market segment – Services

millions of CHF

 

2023

 

2022

Pumps Services

 

629.3

 

593.7

Other Equipment

 

525.5

 

523.4

Total Services

 

1’154.8

 

1’117.0

Sales by market segment – Chemtech

millions of CHF

 

2023

 

2022

Chemicals

 

357.8

 

398.4

Gas and Refining

 

174.8

 

130.4

Renewables

 

115.8

 

73.9

Services

 

94.0

 

108.5

Water

 

30.1

 

28.6

Total Chemtech

 

772.5

 

739.9

4 Acquisitions of subsidiaries and transactions with non-controlling interests

4Acquisitions of subsidiaries and transactions with non-controlling interests 

Contingent consideration for former acquisitions

millions of CHF

 

2023

 

2022

Balance as of January 1

 

1.9

 

5.9

Payment of contingent consideration

 

–1.3

 

–4.2

Release to other operating income

 

–0.5

 

Currency translation differences

 

–0.1

 

0.2

Total contingent consideration as of December 31

 

 

1.9

– thereof non-current

 

 

– thereof current

 

 

1.9

The group paid a contingent consideration in the amount of CHF 1.3 million and recorded a release to other operating income amounting to CHF 0.5 million, both related to an acquisition in 2021. The payment of CHF 1.3 million is presented in the cash flow statement in "Acquisitions of subsidiaries, net of cash acquired". No businesses were acquired in 2023.

Transactions with non-controlling interests

millions of CHF

 

2023

 

2022

Carrying amount of non-controlling interests acquired (disposed)

 

0.4

 

–0.8

Consideration received (paid) in cash

 

–19.4

 

0.4

Non-cash consideration

 

–2.8

 

Consideration payable

 

–0.6

 

Decrease in equity attributable to owners of Sulzer Ltd

 

–22.4

 

–0.4

In January 2023, the group acquired the remaining 25% ownership in Sulzer Saudi Pump Company Limited for a total consideration of CHF 22.8 million, of which CHF 19.4 million were paid in cash. 

5 Disposals, loss of control and disposal group held for sale

5Disposals, loss of control and disposal group held for sale

Disposals and loss of control in 2023

In February 2023, the group entered into an agreement with a third party for the sale of four legal entities in Russia (AO Sulzer Pumps, Sulzer Pumps Rus LLC, Sulzer Turbo Services Rus LLC and Sulzer Chemtech LLC). From the date of the sales agreement, the group lost power over the relevant activities of these entities due to the contractual requirements and legal environment. Consequently, these four entities were deconsolidated in 2023, resulting in the derecognition of the assets and liabilities previously classified as held for sale. The deconsolidation resulted in a gain on deconsolidation amounting to CHF 8.0 million, of which CHF 11.2 million resulted from the reclassification of accumulated currency translation differences and CHF 0.6 million from the reclassification of cash flow hedge reserves, net of tax. The gain on deconsolidation is recorded in other operating income / (expenses), net. A loan with one of the former subsidiaries was measured at a fair value and recognized as a current financial asset at the time control was lost. The payment received on the financial asset exceeded the estimated fair value, the income from the impairment release was recorded in other financial income (see note 12).

Including other minor disposals in 2023, a net gain on disposal (pre-tax) of CHF 7.2 million was recorded in other operating income / (expenses), net, of which CHF 10.9 million pertains to the reclassification of accumulated currency translation differences and CHF 0.6 million to the reclassification of cash flow hedge reserves, net of tax (see note 11).

The aggregated assets and liabilities derecognized in the year 2023 as part of the disposals are presented in the below table. 

millions of CHF

 

2023 1)

Property, plant and equipment

 

0.2

Deferred income tax assets

 

0.6

Inventories and advance payments to suppliers

 

0.1

Trade accounts receivable

 

0.4

Cash and cash equivalents

 

32.6

Non-current liabilities

 

–0.3

Trade accounts payable

 

–0.6

Contract liabilities

 

–13.3

Current lease liabilities

 

–0.2

Current provisions

 

–0.4

Other current and accrued liabilities

 

–10.7

Net assets derecognized

 

8.5

1) Assets and liabilities classified as assets and liabilities of disposal groups held for sale prior to the disposal are presented as per their initial classification prior to the classification as held for sale.

Cash flow from divestments

millions of CHF

 

2023

 

2022

Cash consideration received

 

5.8

 

7.8

Cash disposed of

 

–32.6

 

–4.6

Cash consideration received for divestments in prior years

 

0.3

 

Total cash flow from divestitures, net of cash derecognized

 

–26.6

 

3.2

Disposals and loss of control in 2022

In the first half year of 2022, the group sold its 100% shareholding in the Brazilian subsidiary Sulzer Services Brasil, Triunfo. The disposal resulted in a loss of CHF 0.6 million, including a loss of CHF 1.0 million from the reclassification of currency translation differences into the income statement. The deconsolidation of two Polish subsidiaries resulted in a loss of CHF 6.2 million, including a loss of CHF 1.2 million from the reclassification of currency translation differences into the income statement. The investment retained was valued at zero. The losses are recorded in other operating expenses (see note 11).

The assets and liabilities derecognized in the year 2022 as part of the disposals are presented in the below table.

millions of CHF

 

2022

Property, plant and equipment

 

2.5

Deferred income tax assets

 

0.2

Inventories and advance payments to suppliers

 

2.0

Trade accounts receivable

 

9.0

Contract assets

 

0.6

Other current receivables

 

1.9

Cash and cash equivalents

 

4.7

Non-current provisions

 

–0.3

Trade accounts payable

 

–2.6

Contract liabilities

 

–0.7

Other current and accrued liabilities

 

–4.8

Net assets derecognized

 

12.5

Disposal group held for sale in 2022

In the June 2022, the four legal entities in Russia were classified as 'held for sale,' and as a result, impairments of CHF 88.9 million were recorded, of which CHF 32.2 million in other operating expenses, CHF 38.8 million in cost of goods sold, CHF 15.7 million in general and administrative expenses, and CHF 2.2 million in the income tax expenses line. The write-downs included mainly impairments of goodwill, other intangible assets, property, plant and equipment, lease assets, inventory and advance payments from customers. The total net impairment loss recorded on contract assets and receivables amounted to CHF 37.4 million as of December 31, 2022.

6 Critical accounting estimates and judgments

6Critical accounting estimates and judgments

All estimates and assessments are continually reviewed and are based on historical experience and other factors, including expectations regarding future events that appear reasonable under the given circumstances. The group makes estimates and assumptions that relate to the future. By their nature, these estimates will only rarely correspond to actual subsequent events. The estimates and assumptions that carry a significant risk, in the form of a substantial adjustment to the measurement of assets and liabilities within the next financial year, are set out below.

Employee benefit plans

Assets, liabilities and costs for defined benefit pension plans and other post-employment plans are determined on an actuarial basis using a number of assumptions. Assumptions used in determining the defined benefit assets / obligations include the discount rate, future salary and pension increases, and mortality rates. The assumptions are reviewed and reassessed at the end of each year based on observable market data, i.e., market yields of high-quality corporate bonds denominated in the corresponding currency and asset management studies. In case a defined benefit plan results in a surplus, the group needs to calculate the asset ceiling and the present value of the economic benefits available in the form of refunds or reductions in future contributions to the plan. For the calculation of the economic benefits, the future benefits are discounted with the applicable discount rate, adjusted for estimated future salary increases. These estimates might significantly impact the balance sheet. Further details on the defined benefit plans are provided in note 9 and note 34.

Income taxes

The group is subject to income taxes in numerous jurisdictions. Assumptions are required in order to determine income tax provisions. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The group recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. Management believes that the estimates are reasonable, and that the recognized liabilities for income tax-related uncertainties are adequate. Further details are disclosed in note 13.

Goodwill and other intangible assets

The group carries out an annual impairment test on goodwill in the first quarter of the year (after the budget and the three-year strategic plan have been approved by the Board of Directors in February), or when indications of a potential impairment exist. The recoverable amount from cash-generating units is measured on the basis of value-in-use calculations, with the terminal growth rate, the discount rate, and the projected cash flows as the main variables. Information about assumptions and estimation uncertainties that have significant risk of resulting in a material adjustment are disclosed in note 14. The accounting policies are disclosed in note 34.

Lease assets and lease liabilities

The group has applied judgment to determine the lease term for lease contracts that include renewal and termination options. The assessment of whether the group is reasonably certain to exercise such options impacts the lease term, which significantly affects the amount of lease liabilities and lease assets recognized. This assessment depends on economic incentives, such as removal and relocation costs. Further details are disclosed in note 16 and note 34.

Sales

At contract inception, the group assesses the goods or services promised in a contract with a customer and identifies each promise to transfer to the customer as a performance obligation. The group considers the terms of the contract and all other relevant facts, including the economic substance of the transaction. Judgment is needed to determine whether there is a single performance obligation or multiple separate performance obligations. 

If the consideration promised in a contract includes a variable amount (e.g., expected liquidated damages, early payment discounts, volume discounts), the group estimates the amount of consideration to which the group will be entitled in exchange for transferring the promised goods or services to a customer. The amount of the variable consideration is estimated by using either of the following methods, depending on which method the group expects to better predict the amount of consideration to which it will be entitled: the expected value or the most likely amount. The method selected is applied consistently throughout the contract and to similar types of contracts when estimating the effect of uncertainty on the amount of variable consideration to which the group is entitled. Depending on the outcome of the respective transactions, actual payments may differ from these estimates.

To allocate the transaction price to each performance obligation on a relative stand-alone selling price basis, the group determines the stand-alone selling price at contract inception of the distinct good or service underlying each performance obligation in the contract and allocates the transaction price in proportion to those stand-alone selling prices. If the stand-alone selling price is not directly observable, then the group estimates the amount with the expected cost-plus-margin method.

The group recognizes sales either over time or at a point in time. Sales are recognized over time if any of the conditions described in note 34 are met. The most critical estimate in determining whether sales should be recorded over time or at a point in time, is the existence of a right to payment. The group estimates if an enforceable right to payment (including reasonable profit margin) for performance to date exists in case the customer terminates the contract for convenience. For this estimate, the group reviews the contracts and considers relevant laws, legal precedents and customary business practice.

Applying the over time method requires the group to estimate the proportional sales and costs. To measure the stage of completion, generally, the cost-to-cost method is applied. Work progress of sub-suppliers is considered in determining the stage of completion. If circumstances arise that may change the original estimates of sales, costs or extent of progress toward completion, estimates are revised. These revisions may result in increases or decreases in estimated sales or costs and are reflected in income in the period in which the circumstances that give rise to the revision become known by management.

Further details are disclosed in note 20 and note 34.

Provisions

Provisions are made, among other reasons, for warranties, disputes, litigation and restructuring. A provision is recognized in the balance sheet when the group has a legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. The nature of these costs is such that judgment has to be applied to estimate the timing and amount of cash outflows. Depending on the outcome of the respective transactions, actual payments may differ from these estimates. Further details are disclosed in note 27 and note 34

Financial assets

The fair value needs to be measured for the financial assets measured at fair value through P&L. If there is no observable fair value, valuation approaches relying on unobservable inputs are used. These inputs inherently require a higher level of judgement. Assumptions and estimates of unobservable market inputs in the fair valuation of financial assets require significant judgment and could affect amounts recognized in the statement of income.

7 Financial risk management

7Financial risk management

7.1 Financial risk factors

The group’s activities expose it to market, credit and liquidity risks. The group’s overall risk management program focuses on the mitigation of such risks to minimize potential adverse effects on the group’s financial performance. The group uses derivative financial instruments to hedge certain risk exposures.

Financial risk management is carried out by a central treasury department (Group Treasury). Group Treasury identifies, evaluates and hedges financial risks in close cooperation with the group’s subsidiaries. Principles for overall risk management and policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity exist in writing.

a) Market risk

(I) Foreign exchange risk

The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures. The group is exposed to transactional foreign currency risk to the extent that sales, purchases, license fees, borrowings and other balance sheet items are denominated in currencies other than the functional currencies of group companies. The exposure originates mainly from group companies with the functional currencies CHF, USD, EUR, CNY and INR. Management has set up a policy to require subsidiaries to manage their foreign exchange risk against their functional currency. The subsidiaries are required to hedge their major foreign exchange risk exposure using forward contracts or other standard instruments, usually transacted with Group Treasury. The group’s management policy is to hedge 90% to 100% of the contractual FX exposures.

The group uses forward exchange contracts to hedge its currency risk, most with a maturity of less than one year from the reporting date. The contracts are generally designated for hedge accounting as cash flow hedges. The group determines the existence of an economic relationship between the hedging instruments and the hedged item based on the currency, amount and timing of the respective cash flows. For hedges of foreign currency purchases, the group enters into hedge relationships where the critical terms of the hedging instrument match exactly with the terms of the hedged item. The group therefore performs a qualitative assessment of effectiveness. If changes in circumstances affect the terms of the hedged item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the group uses the hypothetical derivative method to assess effectiveness. In hedges of foreign currency purchases, ineffectiveness may arise if the timing of the forecast transaction changes from what was originally estimated.

External foreign exchange contracts are designated as hedges of foreign exchange risk on specific assets, liabilities or future transactions on a gross basis. The group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. If required, currency exposure arising from the net assets of the group’s foreign operations is managed primarily through borrowings denominated in the relevant foreign currencies. Derivative financial instruments are only used on an ad hoc basis to manage foreign currency translation risk.

The following tables show the hypothetical influence on the income statement for 2023 and 2022 related to foreign exchange risk of financial instruments. The volatility used for the calculation is the one-year historic volatility on December 31 for the relevant currency pair and year. For 2023, the currency pair with the most significant exposure and inherent risk was the EUR versus the BRL. If, on December 31, 2023, the EUR had increased by 12.0% against the BRL with all other variables held constant, profit after tax for the year would have been CHF 0.6 million lower due to foreign exchange losses on EUR-denominated financial assets. A decrease of the rate would have caused a profit of the same amount.

Hypothetical impact of foreign exchange risk on income statement

millions of CHF

 

2023

Currency pair

 

EUR/BRL

 

EUR/CNY

 

EUR/INR

 

USD/MXN

Exposure

 

–6.7

 

6.5

 

–5.8

 

3.3

Volatility

 

12.0%

 

6.7%

 

7.2%

 

11.4%

Effect on profit after tax (rate increase)

 

–0.6

 

0.3

 

–0.3

 

0.3

Effect on profit after tax (rate decrease)

 

0.6

 

–0.3

 

0.3

 

–0.3

millions of CHF

 

2022

Currency pair

 

EUR/RUB

 

USD/BRL

 

EUR/BRL

 

USD/BHD

Exposure

 

5.9

 

7.8

 

–6.0

 

7.8

Volatility

 

54.5%

 

18.9%

 

19.1%

 

10.0%

Effect on profit after tax (rate increase)

 

2.3

 

1.1

 

–0.8

 

0.6

Effect on profit after tax (rate decrease)

 

–2.3

 

–1.1

 

0.8

 

–0.6

The following tables show the hypothetical influence on equity for 2023 and 2022 related to foreign exchange risk of financial instruments for the most important currency pairs as of December 31 of the respective year. The volatility used for the calculation is the one-year historic volatility on December 31 for the relevant currency pair and year. Most of the hypothetical effect on equity is a result of fair value changes of derivative financial instruments designated as cash flow hedges.

Hypothetical impact of foreign exchange risk on equity

millions of CHF

 

2023

Currency pair

 

GBP/USD

 

USD/MXN

 

EUR/USD

 

CHF/EUR

 

USD/INR

 

EUR/BRL

 

USD/CAD

Exposure

 

116.1

 

–57.2

 

52.5

 

–60.9

 

–59.9

 

15.7

 

–26.4

Volatility

 

8.3%

 

11.4%

 

7.6%

 

5.1%

 

3.2%

 

12.0%

 

6.1%

Effect on equity, net of taxes (rate increase)

 

7.3

 

–4.9

 

3.0

 

–2.4

 

–1.5

 

1.4

 

–1.2

Effect on equity, net of taxes (rate decrease)

 

–7.3

 

4.9

 

–3.0

 

2.4

 

1.5

 

–1.4

 

1.2

millions of CHF

 

2022

Currency pair

 

GBP/USD

 

EUR/USD

 

USD/MXN

 

EUR/CHF

 

USD/INR

 

GBP/EUR

 

USD/CHF

Exposure

 

156.3

 

47.6

 

–42.7

 

–57.9

 

–46.9

 

–28.7

 

–22.9

Volatility

 

12.5%

 

10.1%

 

10.4%

 

7.6%

 

5.2%

 

7.7%

 

9.4%

Effect on equity, net of taxes (rate increase)

 

14.3

 

3.5

 

–3.2

 

–3.2

 

–1.8

 

–1.6

 

–1.6

Effect on equity, net of taxes (rate decrease)

 

–14.3

 

–3.5

 

3.2

 

3.2

 

1.8

 

1.6

 

1.6

(II) Price risk

As of December 31, 2023, and 2022, the group was not exposed to significant price risk related to investments in equity securities.

(III) Interest rate risk

The group’s interest rate risk arises from interest-bearing assets and liabilities. Financial assets and liabilities at variable rates expose the group to cash flow interest rate risk. The group analyzes its interest rate exposure on a net basis, and if required, enters into derivative instruments in order to keep the volatility of net interest income or expense limited. The group’s non-current interest-bearing liabilities mainly comprise of bonds with a fixed interest rate.

The following table shows the hypothetical influence on the income statement for variable interest-bearing assets net of liabilities at variable interest rates, assuming market interest rate levels would have increased/decreased by 100 basis points. For the most significant currencies, CHF, USD, EUR, CNY and INR, increasing interest rates would have had a positive impact on the income statement, since the value of variable interest-bearing assets (comprising mainly cash and cash equivalents) exceed the value of variable interest-bearing liabilities.

Hypothetical impact of interest rate risk on income statement

millions of CHF

 

2023

Variable interest-bearing assets (net)

 

Amount

 

Sensitivity in basis points

 

Impact on post-tax profit

 

 

 

rate increase

 

rate decrease

CHF

 

282.2

 

100

 

2.1

 

–2.1

USD

 

180.1

 

100

 

1.4

 

–1.4

EUR

 

172.1

 

100

 

1.3

 

–1.3

CNY

 

144.1

 

100

 

1.1

 

–1.1

INR

 

39.2

 

100

 

0.3

 

–0.3

millions of CHF

 

2022

Variable interest-bearing assets (net)

 

Amount

 

Sensitivity in basis points

 

Impact on post-tax profit

 

 

 

rate increase

 

rate decrease

CHF

 

417.2

 

100

 

3.0

 

–3.0

USD

 

264.4

 

100

 

1.9

 

–1.9

EUR

 

181.3

 

100

 

1.3

 

–1.3

CNY

 

174.0

 

100

 

1.3

 

–1.3

INR

 

29.8

 

100

 

0.2

 

–0.2

On December 31, 2023, if the interest rates on CHF-denominated assets net of liabilities had been 100 basis points higher with all other variables held constant, post-tax profit for the year would have been CHF 2.1 million higher, as a result of higher interest income on CHF-denominated assets. A decrease of interest rates on CHF-denominated assets net of liabilities would have caused a loss of the same amount. As of December 31, 2022, if the interest rates had been 100 basis points higher with all other variables held constant, post-tax profit for the year would have been CHF 3.0 million higher, as a result of higher interest income on CHF-denominated assets.

b) Credit risk

Credit risk arises from cash and cash equivalents, derivative financial instruments, deposits with financial institutions and credit exposures to customers, including outstanding trade receivables, and contract assets. The maximum exposure to credit risk per class of financial asset is disclosed by carrying amounts in the fair value table. Equity instruments are not exposed to credit risks. The carrying amounts of financial assets and contract assets represent the maximum credit risk exposure.

Credit risks of banks and financial institutions are monitored and managed centrally. Generally, only independently rated parties with a strong credit rating are accepted, and the total volume of transactions is split among several banks to reduce the individual risk with one bank.

For every customer with a large order volume, an individual risk assessment of the credit quality of the customer is performed that considers independent ratings, financial position, past experience and other factors. Additionally, bank guarantees and letters of credit are requested. For more details on the credit risk of contract assets, please refer to note 20, and on the credit risk of trade accounts receivable, please refer to note 21.

c) Liquidity risk

Prudent liquidity risk management includes the maintenance of sufficient cash and marketable securities, the availability of funding from an adequate number of committed credit facilities, and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, Group Treasury maintains flexibility in funding through committed and uncommitted credit lines.

Management anticipates the future development of the group’s liquidity reserve on the basis of expected cash flows by performing regular group-wide cash forecasts. As of December 2023, Sulzer had access to a syndicated credit facility of CHF 500 million maturing on December 31, 2026. The facility includes two one-year extension options and a further option to increase the credit facility by CHF 250 million (subject to lenders’ approval). In 2022 and 2023, the group exercised the options, extending the term of the credit facility in the amount of CHF 415 million to December 2028.

The following table analyzes the group’s financial liabilities in relevant maturity groupings based on the remaining period from the reporting to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows translated at year-end closing rates, if not denominated in CHF. Borrowings include the notional amount and interest payments.

Maturity profile of financial liabilities

 

 

2023

millions of CHF

 

Carrying amount

 

<1 year

 

1–5 years

 

>5 years

 

Total

Borrowings

 

1’056.3

 

279.3

 

816.8

 

0.6

 

1’096.7

Lease liabilities

 

93.0

 

24.7

 

53.4

 

24.6

 

102.7

Trade accounts payable

 

367.7

 

367.7

 

 

 

367.7

Other current and non-current liabilities (excluding derivative liabilities)

 

405.5

 

404.3

 

1.2

 

 

405.5

Derivative liabilities

 

3.2

 

3.2

 

 

 

3.2

– thereof outflow

 

 

 

279.3

 

 

 

279.3

– thereof inflow

 

 

 

276.1

 

 

 

276.1

 

 

2022

millions of CHF

 

Carrying amount

 

<1 year

 

1–5 years

 

>5 years

 

Total

Borrowings

 

1’355.3

 

330.0

 

1’080.6

 

 

1’410.6

Lease liabilities

 

89.6

 

22.8

 

48.2

 

25.7

 

96.7

Trade accounts payable

 

440.8

 

440.8

 

 

 

440.8

Other current and non-current liabilities (excluding derivative liabilities)

 

432.5

 

431.2

 

0.1

 

1.2

 

432.5

Derivative liabilities

 

7.0

 

7.0

 

0.0

 

 

7.0

– thereof outflow

 

 

604.7

 

9.9

 

 

614.6

– thereof inflow

 

 

597.7

 

9.9

 

 

607.6

7.2 Capital risk management

The group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In this respect, the group aims at maintaining an investment-grade credit rating, either as a perceived rating or an external rating issued by a credit rating agency.

In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The following table shows the net debt/EBITDA ratio as of December 31, 2023, and 2022.

Net debt/EBITDA ratio

millions of CHF

 

2023

 

2022

 

 

 

 

 

Cash and cash equivalents

 

–974.7

 

–1’196.3

Current financial assets

 

–2.3

 

–14.0

Non-current borrowings

 

795.2

 

1’043.9

Non-current lease liabilities

 

69.0

 

67.2

Current borrowings

 

261.1

 

311.4

Current lease liabilities

 

23.9

 

22.4

Net debt as of December 31

 

172.3

 

234.6

 

 

 

 

 

Operating income (EBIT)

 

329.7

 

111.4

Depreciation

 

71.4

 

76.0

Impairments on tangible and intangible assets 1)

 

0.2

 

44.5

Amortization

 

36.6

 

38.8

EBITDA

 

437.9

 

270.7

 

 

 

 

 

Net debt

 

172.3

 

234.6

EBITDA

 

437.9

 

270.7

Net debt/EBITDA ratio

 

0.39

 

0.87

1) Impairments on tangible and intangible assets in 2022 include CHF 32.4 million impairments recorded in connection with the Russian business classified as held for sale, see Note 11.

Another important ratio for the group is the gearing ratio (borrowings-to-equity ratio), which is calculated as total borrowings and lease liabilities divided by equity attributable to shareholders of Sulzer Ltd.

As of December 31, 2023, and 2022, the gearing ratio was as follows:

Gearing ratio (borrowings-to-equity ratio)

millions of CHF

 

2023

 

2022

Non-current borrowings

 

795.2

 

1’043.9

Non-current lease liabilities

 

69.0

 

67.2

Current borrowings

 

261.1

 

311.4

Current lease liabilities

 

23.9

 

22.4

Total borrowings and lease liabilities

 

1’149.2

 

1’444.9

Equity attributable to shareholders of Sulzer Ltd

 

1’095.4

 

1’024.3

Gearing ratio (borrowings-to-equity ratio)

 

1.05

 

1.41

For the definition of net debt, EBITDA and gearing ratio, please refer to the section “Supplementary information”.

7.3 Fair value estimation

The following tables present the carrying amounts and fair values of financial assets and liabilities as of December 31, 2023, and 2022, including their levels in the fair value hierarchy. For financial assets and financial liabilities not measured at fair value in the balance sheet, fair value information is not provided if the carrying amount is a reasonable approximation of fair value.

Fair values are categorized into three different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

The fair value of financial instruments traded in active markets, including the outstanding bonds, is based on quoted market prices at the balance sheet date. Such instruments are included in level 1.

The fair values included in level 2 are based on valuation techniques using observable market input data. This may include discounted cash flow analysis, option pricing models or reference to other instruments that are substantially the same, while always making maximum use of market inputs and relying as little as possible on entity-specific inputs. The fair values of forward contracts are measured based on broker quotes for foreign exchange rates and interest rates.

Fair values determined using unobservable inputs are categorized within level 3 of the fair value hierarchy. Level 3 instruments consist of non-current financial assets at fair value through profit or loss. Non-current financial assets at fair value through profit or loss consist of unquoted equity or debt instruments including private equity or fund investments. Fair values are mainly determined based on external valuations. Unrealized fair value gains are recorded in other financial income / (expenses), net. For the partial release of a contingent consideration, an income of CHF 0.5 million (2022: CHF 0.0 million) was recorded in other operating income. For more information, please refer to note 4.

Level 3 financial assets at fair value through profit or loss 

millions of CHF

 

2023

 

2022

Balance as of January 1

 

22.6

 

8.6

Additions

 

0.6

 

6.4

Reclassification

 

–3.0

 

Unrealized fair value gain, net

 

1.9

 

7.6

Total level 3 financial assets at fair value through profit or loss as of December 31

 

22.0

 

22.6

In 2022, additional assets were measured at fair value and categorized within level 3 due to the classification as held for sale. The fair value of these assets was determined to be zero and losses in the amount of CHF 32.4 million were recorded. These assets were part of the Russian business that was deconsolidated in 2023, see note 5 and note 11

Fair value table

 

 

 

 

December 31, 2023

 

 

 

 

Carrying amount

 

Fair value

millions of CHF

 

Notes

 

Fair value hedging instruments

 

Fair value through profit or loss

 

Financial assets at fair value through other comprehensive income – equity instruments

 

Financial assets at amortized cost

 

Other financial liabilities

 

Total carrying amount

 

Level 1

 

Level 2

 

Level 3

 

Total fair value

Financial assets measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other non-current financial assets (at fair value)

 

18

 

 

 

22.2

 

9.5

 

 

 

 

 

31.7

 

9.7

 

 

22.0

 

31.7

Derivative assets – current

 

22,29

 

13.9

 

 

 

 

 

 

 

 

 

13.9

 

 

13.9

 

 

13.9

Current financial assets (at fair value)

 

18

 

 

 

1.6

 

 

 

 

 

 

 

1.6

 

1.6

 

 

 

1.6

Total financial assets measured at fair value

 

 

 

13.9

 

23.8

 

9.5

 

 

 

47.2

 

11.3

 

13.9

 

22.0

 

47.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial assets not measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other non-current financial assets (at amortized cost)

 

18

 

 

 

 

 

 

 

6.7

 

 

 

6.7

 

 

 

 

 

 

 

 

Non-current receivables (excluding non-current derivative assets)

 

 

 

 

 

 

 

 

 

1.2

 

 

 

1.2

 

 

 

 

 

 

 

 

Trade accounts receivable

 

21

 

 

 

 

 

 

 

540.8

 

 

 

540.8

 

 

 

 

 

 

 

 

Other current receivables (excluding current derivative assets and other taxes)

 

22

 

 

 

 

 

 

 

22.6

 

 

 

22.6

 

 

 

 

 

 

 

 

Current financial assets (at amortized cost)

 

18

 

 

 

 

 

 

 

0.7

 

 

 

0.7

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

23

 

 

 

 

 

 

 

974.7

 

 

 

974.7

 

 

 

 

 

 

 

 

Total financial assets not measured at fair value

 

 

 

 

 

 

1’546.7

 

 

1’546.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities – current

 

28,29

 

3.2

 

 

 

 

 

 

 

 

 

3.2

 

 

3.2

 

 

3.2

Total financial liabilities measured at fair value

 

 

 

3.2

 

 

 

 

 

3.2

 

 

3.2

 

 

3.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities not measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding non-current bonds

 

26

 

 

 

 

 

 

 

 

 

794.3

 

794.3

 

786.2

 

 

 

786.2

Other non-current borrowings

 

26

 

 

 

 

 

 

 

 

 

0.9

 

0.9

 

 

 

 

 

 

 

 

Other non-current liabilities (excluding non-current derivative liabilities)

 

 

 

 

 

 

 

 

 

 

 

1.2

 

1.2

 

 

 

 

 

 

 

 

Outstanding current bonds

 

26

 

 

 

 

 

 

 

 

 

250.0

 

250.0

 

250.0

 

 

 

250.0

Other current borrowings and bank loans

 

26

 

 

 

 

 

 

 

 

 

11.1

 

11.1

 

 

 

 

 

 

 

 

Trade accounts payable

 

 

 

 

 

 

 

 

 

 

 

367.7

 

367.7

 

 

 

 

 

 

 

 

Other current liabilities (excluding current derivative liabilities and other taxes)

 

28

 

 

 

 

 

 

 

 

 

404.3

 

404.3

 

 

 

 

 

 

 

 

Total financial liabilities not measured at fair value

 

 

 

 

 

 

 

1’829.5

 

1’829.5

 

 

 

 

 

 

 

 

Fair value table

 

 

 

 

December 31, 2022

 

 

 

 

Carrying amount

 

Fair value

millions of CHF

 

Notes

 

Fair value hedging instruments

 

Fair value through profit or loss

 

Financial assets at fair value through other comprehensive income – equity instruments

 

Financial assets at amortized cost

 

Other financial liabilities

 

Total carrying amount

 

Level 1

 

Level 2

 

Level 3

 

Total fair value

Financial assets measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other non-current financial assets (at fair value)

 

18

 

 

 

22.8

 

 

 

 

 

 

22.8

 

0.2

 

 

22.6

 

22.8

Derivative assets – non-current

 

29

 

0.1

 

 

 

 

 

 

 

 

 

0.1

 

 

0.1

 

 

0.1

Derivative assets – current

 

22,29

 

13.2

 

 

 

 

 

 

 

 

 

13.2

 

 

13.2

 

 

13.2

Current financial assets (at fair value)

 

18

 

 

 

1.5

 

8.8

 

 

 

 

 

10.3

 

10.3

 

 

 

10.3

Total financial assets measured at fair value

 

 

 

13.2

 

24.4

 

8.8

 

 

 

46.4

 

10.5

 

13.2

 

22.6

 

46.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial assets not measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other non-current financial assets (at amortized cost)

 

18

 

 

 

 

 

 

 

5.6

 

 

 

5.6

 

 

 

 

 

 

 

 

Non-current receivables (excluding non-current derivative assets)

 

 

 

 

 

 

 

 

 

0.9

 

 

 

0.9

 

 

 

 

 

 

 

 

Trade accounts receivable

 

21

 

 

 

 

 

 

 

585.5

 

 

 

585.5

 

 

 

 

 

 

 

 

Other current receivables (excluding current derivative assets and other taxes)

 

22

 

 

 

 

 

 

 

23.4

 

 

 

23.4

 

 

 

 

 

 

 

 

Current financial assets (at amortized cost)

 

18

 

 

 

 

 

 

 

3.6

 

 

 

3.6

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

23

 

 

 

 

 

 

 

1’196.3

 

 

 

1’196.3

 

 

 

 

 

 

 

 

Total financial assets not measured at fair value

 

 

 

 

 

 

1’815.5

 

 

1’815.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities – non-current

 

29

 

0.0

 

 

 

 

 

 

 

 

 

0.0

 

 

0.0

 

 

0.0

Derivative liabilities – current

 

28,29

 

7.0

 

 

 

 

 

 

 

 

 

7.0

 

 

7.0

 

 

7.0

Contingent considerations

 

4

 

 

 

1.9

 

 

 

 

 

 

 

1.9

 

 

 

1.9

 

1.9

Total financial liabilities measured at fair value

 

 

 

7.0

 

1.9

 

 

 

 

8.9

 

 

7.0

 

1.9

 

8.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities not measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding non-current bonds

 

26

 

 

 

 

 

 

 

 

 

1’043.9

 

1’043.9

 

1’003.7

 

 

 

1’003.7

Other non-current liabilities (excluding non-current derivative liabilities)

 

 

 

 

 

 

 

 

 

 

 

1.3

 

1.3

 

 

 

 

 

 

 

 

Outstanding current bonds

 

26

 

 

 

 

 

 

 

 

 

289.9

 

289.9

 

288.5

 

 

 

288.5

Other current borrowings and bank loans

 

26

 

 

 

 

 

 

 

 

 

21.5

 

21.5

 

 

 

 

 

 

 

 

Trade accounts payable

 

 

 

 

 

 

 

 

 

 

 

440.8

 

440.8

 

 

 

 

 

 

 

 

Other current liabilities (excluding current derivative liabilities, other taxes and contingent considerations)

 

28

 

 

 

 

 

 

 

 

 

396.3

 

396.3

 

 

 

 

 

 

 

 

Total financial liabilities not measured at fair value

 

 

 

 

 

 

 

2’193.6

 

2’193.6

 

 

 

 

 

 

 

 

8 Personnel expenses

8Personnel expenses

millions of CHF

 

2023

 

2022

Salaries and wages

 

822.6

 

793.2

Defined contribution plan expenses

 

29.9

 

29.6

Defined benefit plan expenses

 

14.4

 

15.7

Cost of share-based payment transactions

 

12.6

 

15.4

Social benefit costs

 

119.5

 

112.3

Other personnel costs

 

31.7

 

36.2

Total personnel expenses

 

1’030.8

 

1’002.4

9 Employee benefit plans

9Employee benefit plans

The present value of the defined benefit obligations and costs of the defined benefits are calculated using the projected unit credit method. For active members the calculation considers future salary increases, future pension increases as well as the probability of departures, and for retirees, current and future pension benefits considering future pension increases.

Reconciliation of the amount recognized in the balance sheet as of December 31

 

 

2023

millions of CHF

 

Funded plans Switzerland

 

Funded plans United Kingdom

 

Funded plans USA

 

Funded plans others

 

Unfunded plans

 

Total

Present value of funded defined benefit obligation

 

–731.2

 

–346.1

 

–48.6

 

–83.1

 

 

–1’209.0

Fair value of plan assets (funded plans)

 

899.9

 

268.5

 

38.6

 

56.2

 

 

1’263.2

Overfunding / (underfunding)

 

168.8

 

–77.6

 

–10.0

 

–27.0

 

 

54.2

Present value of unfunded defined benefit obligation

 

 

 

 

 

–10.9

 

–10.9

Adjustment to asset ceiling

 

 

 

 

 

 

Net asset / (liability) recognized in the balance sheet

 

168.8

 

–77.6

 

–10.0

 

–27.0

 

–10.9

 

43.2

– thereof defined benefit obligations

 

 

–77.6

 

–10.0

 

–28.7

 

–10.9

 

–127.3

– thereof defined benefit assets

 

168.8

 

 

 

1.7

 

 

170.5

 

 

2022

millions of CHF

 

Funded plans Switzerland

 

Funded plans United Kingdom

 

Funded plans USA

 

Funded plans others

 

Unfunded plans

 

Total

Present value of funded defined benefit obligation

 

–716.8

 

–355.3

 

–53.7

 

–78.3

 

 

–1’204.0

Fair value of plan assets (funded plans)

 

914.7

 

277.2

 

43.5

 

57.1

 

 

1’292.5

Overfunding / (underfunding)

 

197.9

 

–78.0

 

–10.2

 

–21.2

 

 

88.5

Present value of unfunded defined benefit obligation

 

 

 

 

 

–11.5

 

–11.5

Adjustment to asset ceiling

 

–197.9

 

 

 

–0.0

 

 

–197.9

Net asset / (liability) recognized in the balance sheet

 

 

–78.0

 

–10.2

 

–21.2

 

–11.5

 

–121.0

– thereof defined benefit obligations

 

 

–78.0

 

–10.2

 

–22.5

 

–11.5

 

–122.2

– thereof defined benefit assets

 

 

 

 

1.3

 

 

1.3

The group operates major funded defined benefit pension plans in Switzerland, the UK and the USA. The main unfunded defined benefit plan is a German pension benefit plan. The plans are exposed to actuarial risks, e.g., longevity risk, currency risk and interest rate risk, and the funded plans additionally to market (investment) risk.

In Switzerland, the group contributes to two pension plans funded via two different pension funds, i.e., a base plan for all employees and a supplementary plan for employees with salaries exceeding a certain limit. Both plans provide benefits depending on the pension savings at retirement. They include certain legal minimum interest credits to the pension savings (i.e., investment return) and guaranteed rates of conversion of pension savings into an annuity at retirement. In addition, the plans offer death in service and disability benefits. The two pension funds are collective funds administrating pension plans of group companies and also unrelated companies. In case of a material underfunding of the pension plans, the regulations include predefined steps, such as higher contributions by employer and employees or lower interest on pension savings, to eliminate the underfunding. The pension funds are legally separated from the group. The vast majority of the active participants in the two pension funds are employed by companies not belonging to the group. The Board of Trustees for the base plan comprises 10 employee representatives and 10 employer representatives. The discount rate in 2023 decreased compared to 2022 (from 2.2% to 1.5% for active employees and from 2.3% to 1.5% for pensioners). In 2023, a gain from the change in effect of asset ceiling amounting to CHF 202.3 million (2022: loss of CHF 197.9 million) was recorded in other comprehensive income (OCI) related to the Swiss pension plans. The net pension asset increased from CHF 0.0 million to CHF 168.8 million. The total expenses recognized in the income statement in 2023 amounted to CHF 11.3 million (2022: CHF 13.7 million) and includes past service costs amounting to CHF 1.3 million. The past service costs were recorded for a plan amendment to one of the pension plans, enabling employees to extend the retirement saving process. 

In the UK, the plan is a final salary plan and provides benefits linked to salary at closure to future accrual adjusted for inflation to retirement or earlier date of leaving service. The scheme is fully closed to new entrants and future accruals. The scheme is managed by nine trustees forming the Board. The plan is a multiemployer scheme with Sulzer (UK) Holding being the principal sponsor. The discount rate decreased in 2023 by 0.2 percentage points to 4.7% (2022: 4.9%). The net pension liability decreased from CHF 78.0 million in 2022 to CHF 77.6 million in 2023, with a loss recognized in OCI amounting to CHF 6.6 million (2022: gain of CHF 15.3 million). In 2023, the total expenses recognized in the income statement amounted to CHF 3.8 million (2022: CHF 2.8 million).

In the USA, the group operates non-contributory defined benefit retirement plans. The salaried plans provide benefits that are based on years of service and the employee’s compensation, averaged over the five highest consecutive years preceding retirement. The hourly plans’ benefits are based on years of service and a flat dollar benefit multiplier. All plans are closed to new entrants. The discount rate decreased in 2023 to 4.7% (2022: 4.8%). The net pension liability decreased from CHF 10.2 million in 2022 to CHF 10.0 million in 2023 with a loss recognized in OCI amounting to CHF 0.4 million (2022: gain of CHF 8.9 million). The total expenses recognized in 2023 amounted to CHF 1.1 million (2022: CHF 1.1 million).

In Germany, the group operates a range of different defined benefit pension plans, with one unfunded plan and two funded plans. All defined benefit plans are closed for new entrants and a new defined contribution plan for all employees was introduced in 2007. Existing employees who participated in the defined benefit plans continued to be eligible for these defined benefit pensions but also became eligible for the new defined contribution pensions. However, benefits received under the defined contribution plan are offset against the benefits under the defined benefit plans. The different defined benefit plans offer retirement pension, disability pension and survivor’s pension benefits.

Employee benefit plans

millions of CHF

 

2023

 

2022

Reconciliation of effect of asset ceiling

 

 

 

 

Adjustment to asset ceiling at January 1

 

–197.9

 

Interest (expenses) / income on effect of asset ceiling

 

–4.4

 

Change in effect of asset ceiling excl. interest (expenses) / income

 

202.3

 

–197.9

Currency translation differences

 

–0.0

 

–0.0

Adjustment to asset ceiling at December 31

 

 

–197.9

 

 

 

 

 

Reconciliation of net asset / (liability) recognized in the balance sheet

 

 

 

 

Net asset / (liability) recognized at January 1

 

–121.0

 

–45.7

Defined benefit income / (expenses) recognized in the income statement

 

–20.1

 

–18.7

Defined benefit income / (expenses) recognized in OCI

 

160.3

 

–90.8

Employer contributions

 

24.1

 

24.8

Divestitures of subsidiaries

 

 

0.2

Reclassification 1)

 

–6.0

 

Currency translation differences

 

5.9

 

9.2

Net asset / (liability) recognized at December 31

 

43.2

 

–121.0

 

 

 

 

 

Components of defined benefit income / (expenses) in the income statement

 

 

 

 

Current service costs (employer)

 

–12.1

 

–16.4

Past service costs

 

–1.5

 

0.9

Gains and (losses) on settlement

 

0.1

 

1.3

Interest expenses

 

–38.5

 

–17.3

Interest income on plan assets

 

37.2

 

14.5

Interest expenses / (income) on effect of asset ceiling

 

–4.4

 

Other administrative costs

 

–0.9

 

–1.5

Income / (expenses) recognized in the income statement

 

–20.1

 

–18.7

– thereof charged to personnel expenses

 

–14.4

 

–15.7

– thereof charged to interest income / expenses, net

 

–5.7

 

–2.9

 

 

 

 

 

Components of defined benefit gains / (losses) in OCI

 

 

 

 

Actuarial gains / (losses) on defined benefit obligation

 

–64.6

 

366.3

Returns on plan assets excl. interest income

 

22.4

 

–259.4

Changes in effect of asset ceiling excl. interest expenses / (income)

 

202.3

 

–197.9

Returns on reimbursement right excl. interest income / (expenses)

 

0.2

 

0.2

Defined benefit gains / (losses) recognized in OCI 2)

 

160.3

 

–90.8

1) Defined benefit plans reclassified from provisions to defined benefit obligation, see note 27.

2) The tax effect on defined benefit cost recognized in OCI amounted to CHF -31.5 million (2022: CHF 15.4 million).

Employee benefit plans

millions of CHF

 

2023

 

2022

Reconciliation of defined benefit obligation (funded and unfunded plans)

 

 

 

 

Defined benefit obligation as of January 1

 

–1’215.6

 

–1’692.3

Interest expenses

 

–38.5

 

–17.3

Current service costs (employer)

 

–12.1

 

–16.4

Past service costs

 

–1.5

 

0.9

Contributions by plan participants

 

–8.1

 

–7.5

Benefits paid / (deposited)

 

105.1

 

104.4

Gains and (losses) on settlement

 

0.1

 

1.3

Other administrative costs

 

–0.9

 

–1.5

Actuarial gains / (losses)

 

–64.6

 

366.3

Divestitures of subsidiaries

 

 

0.2

Reclassification 1)

 

–6.0

 

Currency translation differences

 

22.1

 

46.4

Defined benefit obligation as of December 31

 

–1’220.0

 

–1’215.6

 

 

 

 

 

Reconciliation of the fair value of plan assets

 

 

 

 

Fair value of plan assets as of January 1

 

1’292.5

 

1’646.6

Interest income on plan assets

 

37.2

 

14.5

Employer contributions

 

24.1

 

24.8

Contributions by plan participants

 

8.1

 

7.5

Benefits (paid) / deposited

 

–104.9

 

–104.4

Returns on plan assets excl. interest income

 

22.4

 

–259.4

Currency translation differences

 

–16.3

 

–37.1

Fair value of plan assets as of December 31

 

1’263.2

 

1’292.5

 

 

 

 

 

Total plan assets at fair value – quoted market price

 

 

 

 

Cash and cash equivalents

 

52.3

 

44.5

Equity instruments

 

242.4

 

237.8

Debt instruments

 

272.5

 

292.7

Real estate funds

 

29.4

 

33.0

Investment funds

 

5.0

 

4.9

Others

 

72.5

 

80.6

Total assets at fair value – quoted market price as of December 31

 

674.1

 

693.5

 

 

 

 

 

Total plan assets at fair value – non-quoted market price

 

 

 

 

Properties occupied by or used by third parties (real estate)

 

271.3

 

270.0

Others

 

317.7

 

329.1

Total assets at fair value – non-quoted market price as of December 31

 

589.0

 

599.0

 

 

 

 

 

Best estimate of contributions for upcoming financial year

 

 

 

 

Contributions by the employer

 

25.3

 

23.9

1) Defined benefit plans reclassified from provisions to defined benefit obligation, see note 27.

Employee benefit plans

millions of CHF

 

2023

 

2022

Components of defined benefit obligation, split

 

 

 

 

Defined benefit obligation for active members

 

–238.5

 

–211.4

Defined benefit obligation for pensioners

 

–777.4

 

–801.4

Defined benefit obligation for deferred members

 

–204.1

 

–202.7

Total defined benefit obligation as of December 31

 

–1’220.0

 

–1’215.6

 

 

 

 

 

Components of actuarial gains / (losses) on obligations

 

 

 

 

Actuarial gains / (losses) arising from changes in financial assumptions

 

–55.3

 

384.1

Actuarial gains / (losses) arising from changes in demographic assumptions

 

12.8

 

4.0

Actuarial gains / (losses) arising from experience adjustments

 

–22.1

 

–21.8

Total actuarial gains / (losses) on defined benefit obligation

 

–64.6

 

366.3

 

 

 

 

 

Maturity profile of defined benefit obligation

 

 

 

 

Weighted average duration of defined benefit obligation in years

 

10.8

 

10.4

The defined benefit obligations for the Swiss and UK pension plans represent 88% (2022: 88%) of the group. The following significant actuarial assumptions were used for these two countries:

Principal actuarial assumptions as of December 31

 

 

2023

 

2022

 

 

Funded plans Switzerland

 

Funded plans United Kingdom

 

Funded plans Switzerland

 

Funded plans United Kingdom

Discount rate for active employees

 

1.5%

 

n/a

 

2.2%

 

n/a

Discount rate for pensioners

 

1.5%

 

4.7%

 

2.3%

 

4.9%

Future salary increases

 

2.3%

 

n/a

 

1.5%

 

n/a

Future pension increases

 

0.0%

 

2.7%

 

0.0%

 

2.7%

Life expectancy at retirement age (male / female) in years

 

22/23

 

21/24

 

22/24

 

22/24

Sensitivity analysis of defined benefit obligations

millions of CHF

 

2023

 

2022 1)

Discount rate (decrease 0.25 percentage points)

 

–32.1

 

–30.8

Discount rate (increase 0.25 percentage points)

 

30.4

 

29.3

Future salary growth (decrease 0.25 percentage points)

 

2.1

 

1.9

Future salary growth (increase 0.25 percentage points)

 

–2.0

 

–1.9

Life expectancy (decrease 1 year)

 

66.6

 

63.7

Life expectancy (increase 1 year)

 

–64.9

 

–61.7

1) The sensitivity impacts of the comparison period 2022 were restated to correct a prior year misstatement. The adjustments are outlined in the table below.

Negative amounts in the above table indicate an increase in defined benefit obligations, positive amounts indicate a decrease in defined benefit obligations. The sensitivity analysis is based on reasonably possible changes of the significant actuarial assumptions as of year end. The sensitivities provided are based on the change in one assumption while holding the other assumptions unchanged, interdependencies were not considered. 

Restatement of the sensitivity analysis on defined benefit obligations

millions of CHF

 

2022 reported

 

Adjustment

 

2022 restated

Discount rate (decrease 0.25 percentage points)

 

–33.7

 

2.9

 

–30.8

Discount rate (increase 0.25 percentage points)

 

26.5

 

2.8

 

29.3

Future salary growth (decrease 0.25 percentage points)

 

0.6

 

1.3

 

1.9

Future salary growth (increase 0.25 percentage points)

 

–6.5

 

4.6

 

–1.9

Life expectancy (decrease 1 year)

 

15.2

 

48.4

 

63.7

Life expectancy (increase 1 year)

 

–15.1

 

–46.5

 

–61.7

10 Research and development expenses

10Research and development expenses

A breakdown of the research and development expenses per division is shown in the table below:

millions of CHF

 

2023

 

2022

Flow Equipment

 

38.6

 

36.7

Services

 

1.6

 

1.8

Chemtech

 

30.7

 

27.8

Total

 

70.8

 

66.4

11 Other operating income and expenses

11Other operating income and expenses

millions of CHF

 

2023

 

2022

Income from release of contingent consideration

 

0.5

 

Gain from sale of property, plant and equipment

 

0.6

 

5.5

Gain from deconsolidation of subsidiaries

 

8.3

 

Other operating income

 

8.3

 

19.2

Total other operating income

 

17.7

 

24.7

 

 

 

 

 

Restructuring expenses

 

–3.0

 

–0.1

Impairments on tangible and intangible assets

 

–0.2

 

–44.5

Cost for mergers and acquisitions

 

–1.8

 

–1.5

Loss from sale of property, plant and equipment

 

–0.1

 

–0.0

Loss from deconsolidation of subsidiaries

 

–1.1

 

–6.7

Operating currency exchange losses, net

 

–2.3

 

–13.9

Total other operating expenses

 

–8.4

 

–66.7

 

 

 

 

 

Total other operating income / (expenses), net

 

9.2

 

–42.1

Other operating income includes recharges to third parties not qualifying as sales to customers, government grants and incentives, and sundry other tax refunds. In 2023, other operating income included income from charges to the discontinued operation Applicator Systems division (later renamed medmix) for corporate support functions and centrally procured indirect spend utilized by medmix of CHF 1.6 million (2022: CHF 9.8 million).

In 2023, the total gain from deconsolidation primarily included a gain of CHF 8.0 million from the deconsolidation of four Russian legal entities. The total gain and loss from deconsolidation includes a net gain from the reclassification of currency translation adjustments of CHF 10.9 million and a gain of CHF 0.6 million from the reclassification of cash flow hedge reserves (see note 5).

In 2022, the loss from deconsolidation of subsidiaries includes a loss of CHF 6.2 million resulting from the deconsolidation of two subsidiaries in Poland and a loss of CHF 0.6 million from the disposal of a subsidiary in Brazil (see note 5).

In 2023, the group recognized net impairment losses on tangible and intangible assets amounting to CHF 0.2 million (2022: impairment losses of CHF 44.5 million), consisting of impairment losses of CHF 1.0 million, partially offset with the reversal of impairment losses amounting to CHF 0.8 million. In 2022, impairment losses amounting to CHF 12.1 million were recorded based on performed impairment tests on production machines and facilities as well as lease assets. Impairments of CHF 32.4 million on goodwill, other intangible assets, property, plant and equipment and lease assets were recorded in connection with the classification of the business in Russia as held for sale and the write-down to fair value less costs to sell (see note 5).

In 2023, the group recognized restructuring costs of CHF 5.2 million (2022: CHF 1.8 million), partially offset with the release of restructuring provisions of CHF 2.2 million (2022: CHF 1.7 million). Restructuring costs mainly relate to the reorganization in the Flow Equipment division.

12 Financial income and expenses

12Financial income and expenses

millions of CHF

 

2023

 

2022

Interest and securities income

 

18.3

 

9.3

Interest income on employee benefit plans

 

0.1

 

0.4

Total interest and securities income

 

18.3

 

9.7

Interest expenses on borrowings and lease liabilities

 

–24.5

 

–24.1

Interest expenses on employee benefit plans

 

–5.7

 

–3.2

Total interest expenses

 

–30.3

 

–27.3

Total interest income / (expenses), net

 

–11.9

 

–17.6

 

 

 

 

 

Fair value changes

 

5.1

 

24.0

Other financial income (expenses)

 

2.5

 

–1.5

Currency exchange gains / (losses), net

 

–17.9

 

–6.6

Total other financial income / (expenses), net

 

–10.3

 

16.0

 

 

 

 

 

Total financial income / (expenses), net

 

–22.2

 

–1.6

- thereof fair value changes on financial assets at fair value through profit or loss

 

5.1

 

24.0

- thereof interest income on financial assets at amortized costs

 

18.3

 

9.3

- thereof other financial expenses

 

2.5

 

–1.5

- thereof currency exchange gains / (losses), net

 

–17.9

 

–6.6

- thereof interest expenses on borrowings

 

–22.1

 

–22.1

- thereof interest expenses on lease liabilities

 

–2.5

 

–2.0

- thereof interest expenses on employee benefit plans, net

 

–5.7

 

–2.9

In 2023, the total financial expenses, net amounted to CHF 22.2 million, compared with CHF 1.6 million in 2022.

The total interest and securities income amounted to CHF 18.3 million (2022: CHF 9.3 million). The increase compared to the prior year is mainly due to higher variable interest rates on deposits.

The line “Fair value changesˮ includes gains from fair value changes of investments in financial instruments classified at fair value through profit or loss amounting to CHF 2.7 million (2022: CHF 8.7 million), with the remainder relating to fair value changes of derivative financial instruments used as hedging instruments to hedge foreign exchange risks.

Currency exchange gains/losses are mainly related to foreign currency differences of non-operating assets and liabilities recorded at the prevailing rate at the time of acquisition (or preceding year-end closing rate) as against the current balance sheet rate. The net currency exchange loss in 2022 includes a positive foreign exchange effect of CHF 21.0 million arising on unhedged intercompany loans to Russian entities prior to their classification as held for sale.

13 Income taxes

13Income taxes

millions of CHF

 

2023

 

2022

Current income tax expenses

 

–79.1

 

–76.3

Deferred income tax (expenses) income

 

5.4

 

–2.7

Total income tax expenses

 

–73.8

 

–79.0

The weighted average tax rate results from applying each subsidiary’s statutory income tax rate to the income before taxes. Since the group operates in countries that have differing tax laws and rates, the consolidated weighted average effective tax rate may vary from year to year according to variations in income per country and changes in applicable tax rates.

Reconciliation of income tax expenses

millions of CHF

 

2023

 

2022

Income before income tax expenses from continuing operations

 

304.3

 

107.0

Weighted average tax rate

 

23.7%

 

23.7%

Income taxes at weighted average tax rate

 

–72.1

 

–25.4

Income taxed at different tax rates

 

–12.3

 

3.4

Effect of tax loss carryforwards and allowances for deferred income tax assets

 

0.9

 

–2.7

Expenses not deductible for tax purposes

 

–11.4

 

–5.2

Effect of changes in tax rates and legislation

 

0.0

 

–2.2

Prior year items and others

 

21.2

 

–47.0

Total income tax expenses

 

–73.8

 

–79.0

Effective income tax rate

 

24.2%

 

73.8%

The effective income tax rate for 2023 was 24.2% (2022: 73.8%). The effective income tax rate was impacted by income taxed at different tax rates in the amount of CHF 12.3 million due to participation exemptions on dividend income and withholding taxes on dividends, trademark royalties and interests.

Expenses not deductible for tax purposes in the amount of CHF 11.4 million mainly relate to disallowances of group charges for services, financing and other expenses in India, Mexico, the UK and the USA.

Prior year items and others include current tax refunds and receivables from R&D tax credits in Brazil and the USA. Additionally, a deferred income tax asset of CHF 4.0 million was recognized on a step-up in relation to the Swiss Corporate Tax Reform (TRAF) enacted in prior periods. The deconsolidation of the Russian business positively impacted the reconciliation by CHF 2.3 million.

The effective income tax rate for 2022 was 73.8%. The effective income tax rate was significantly impacted by recognized impairments on the Russian business upon the classification of the four Russian entities as held for sale and the wind down of the Polish business. The total tax impact amounted to CHF 37.4 million, with CHF 32.3 million presented in prior year items and others. Furthermore, the effect of tax loss carryforwards and allowances for deferred income tax assets in the amount of –2.7 million was impacted by a reversal of Russian deferred tax assets in the amount of CHF 5.1 million. The effect of changes in tax rates and legislation mainly related to the announced tax rate change in France and UK causing the revaluation of a deferred tax position in the amount of CHF –2.2 million. Expenses not deductible for tax purposes in the amount of CHF –5.2 million mainly related to disallowances of group charges and interest. 

Income tax liabilities

millions of CHF

 

2023

 

2022

Balance as of January 1

 

32.8

 

42.4

Additions

 

78.9

 

76.1

Released as no longer required

 

–13.1

 

–16.6

Utilized

 

–48.8

 

–67.4

Currency translation differences

 

–2.9

 

–1.8

Total income tax liabilities as of December 31

 

46.8

 

32.8

– thereof non-current

 

2.7

 

2.7

– thereof current

 

44.1

 

30.0

Summary of deferred income tax assets and liabilities in the balance sheet

 

 

2023

 

2022

millions of CHF

 

Assets

 

Liabilities

 

Net

 

Assets

 

Liabilities

 

Net

Intangible assets

 

15.0

 

–52.4

 

–37.4

 

11.8

 

–57.9

 

–46.1

Property, plant and equipment

 

5.2

 

–13.6

 

–8.4

 

3.6

 

–17.4

 

–13.7

Other financial assets

 

16.6

 

–1.1

 

15.6

 

21.3

 

–1.6

 

19.7

Inventories

 

27.4

 

–2.2

 

25.1

 

32.3

 

–2.1

 

30.3

Other assets

 

23.7

 

–55.9

 

–32.1

 

18.9

 

–30.7

 

–11.7

Defined benefit obligations

 

21.8

 

–0.1

 

21.7

 

20.7

 

 

20.7

Non-current provisions

 

9.6

 

–0.1

 

9.5

 

9.1

 

–1.0

 

8.0

Current provisions

 

23.9

 

–1.5

 

22.4

 

29.2

 

–1.0

 

28.2

Other liabilities

 

44.4

 

–23.0

 

21.3

 

53.6

 

–16.8

 

36.9

Tax loss carryforwards

 

23.1

 

 

23.1

 

23.5

 

 

23.5

Elimination of intercompany profits

 

1.0

 

 

1.0

 

1.1

 

 

1.1

Tax assets / liabilities

 

211.7

 

–149.9

 

61.8

 

225.2

 

–128.3

 

96.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Offset of assets and liabilities

 

–66.8

 

66.8

 

 

–75.3

 

75.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net recorded deferred income tax assets and liabilities

 

144.9

 

–83.2

 

61.8

 

149.9

 

–53.0

 

96.9

Cumulative deferred income taxes recorded in equity as of December 31, 2023, amounted to CHF –12.5 million (2022: CHF 21.8 million). The group does not recognize any deferred taxes on investments in subsidiaries because it controls the dividend policy of its subsidiaries – i.e., the group controls the timing of reversal of the related taxable temporary differences and management is satisfied that no material amounts will reverse in the foreseeable future.

Movement of deferred income tax assets and liabilities in the balance sheet

 

 

2023

millions of CHF

 

Balance as of January 1

 

Recognized in profit or loss

 

Recognized in other comprehensive income

 

Divestment of subsidiaries

 

Currency translation differences

 

Balance as of December 31

Intangible assets

 

–46.1

 

5.7

 

 

 

3.0

 

–37.4

Property, plant and equipment

 

–13.7

 

4.5

 

 

 

0.8

 

–8.4

Other financial assets

 

19.7

 

–2.5

 

 

 

–1.7

 

15.6

Inventories

 

30.3

 

–3.9

 

 

 

–1.2

 

25.1

Other assets

 

–11.7

 

17.0

 

–36.7

 

 

–0.7

 

–32.1

Defined benefit obligations

 

20.7

 

–0.5

 

2.3

 

 

–0.8

 

21.7

Non-current provisions

 

8.0

 

2.2

 

 

 

–0.7

 

9.5

Current provisions

 

28.2

 

–4.5

 

 

 

–1.3

 

22.4

Other liabilities

 

36.9

 

–13.8

 

 

 

–1.7

 

21.3

Tax loss carryforwards

 

23.5

 

1.2

 

 

–0.6

 

–1.1

 

23.1

Elimination of intercompany profits

 

1.1

 

–0.1

 

 

 

 

1.0

Total

 

96.9

 

5.4

 

–34.4

 

–0.6

 

–5.5

 

61.8

 

 

2022

millions of CHF

 

Balance as of January 1

 

Recognized in profit or loss

 

Recognized in other comprehensive income

 

Currency translation differences

 

Balance as of December 31

Intangible assets

 

–54.6

 

4.6

 

 

3.9

 

–46.1

Property, plant and equipment

 

–13.6

 

–0.7

 

 

0.6

 

–13.7

Other financial assets

 

16.6

 

3.1

 

 

0.0

 

19.7

Inventories

 

28.2

 

1.5

 

 

0.6

 

30.3

Other assets

 

–32.2

 

15.4

 

5.4

 

–0.3

 

–11.7

Defined benefit obligations

 

33.0

 

–25.2

 

15.4

 

–2.5

 

20.7

Non-current provisions

 

13.4

 

–5.2

 

 

–0.2

 

8.0

Current provisions

 

26.5

 

2.2

 

 

–0.5

 

28.2

Other liabilities

 

33.4

 

4.7

 

 

–1.3

 

36.9

Tax loss carryforwards

 

28.9

 

–3.8

 

 

–1.6

 

23.5

Elimination of intercompany profits

 

0.5

 

0.6

 

 

 

1.1

Total

 

80.1

 

–2.7

 

20.7

 

–1.2

 

96.9

Tax loss carryforwards (TLCF)

 

 

2023

millions of CHF

 

Amount

 

Potential tax assets

 

Valuation allowance

 

Carrying amount

 

Unrecognized TLCF

Expiring in the next 3 years

 

2.5

 

0.1

 

–0.0

 

0.0

 

Expiring in 4–7 years

 

3.9

 

1.0

 

–0.0

 

1.0

 

0.4

Available without limitation

 

207.6

 

37.4

 

–15.4

 

22.0

 

90.5

Total tax loss carryforwards as of December 31

 

213.9

 

38.5

 

–15.4

 

23.1

 

90.9

 

 

2022

millions of CHF

 

Amount

 

Potential tax assets

 

Valuation allowance

 

Carrying amount

 

Unrecognized TLCF

Expiring in the next 3 years

 

0.1

 

0.0

 

 

0.0

 

Expiring in 4–7 years

 

6.0

 

1.1

 

–0.0

 

1.1

 

0.4

Available without limitation

 

219.4

 

39.4

 

–17.0

 

22.4

 

97.2

Total tax loss carryforwards as of December 31

 

225.5

 

40.5

 

–17.0

 

23.5

 

97.6

Deferred income tax assets are recognized for tax loss carryforwards to the extent that the realization of the related tax benefit through future taxable profits is probable. No deferred income tax assets have been recognized on tax loss carryforwards in the amount of CHF 90.9 million (2022: CHF 97.6 million) or on some step-ups in relation with the Swiss corporate tax reform (TRAF), which entered into effect on January 1, 2020.

Global Minimum top-up tax

The group operates in Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, Norway, Romania, South Korea, Sweden, Switzerland, and the United Kingdom, which has enacted new national legislation to implement the global minimum top-up tax. The group might be subject to the top-up tax in relation to its legal entities in Bahrain, Ireland, Qatar, and United Arab Emirates. As the new top-up tax legislation enacted in Switzerland implements only Qualified Domestic Top-up Tax (“QDMTT”) from January 1, 2024, the implementation of the QDMTTs in each individual country needs to be analyzed.

Furthermore, the Group has applied the temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax. The Group recognizes the top-up tax as a current tax when it incurs.

If the QDMTTs had applied in 2023, then the profits relating to the subsidiaries in Bahrain, Ireland, Qatar, and the United Arab Emirates for the year ended December 31, 2023, would not be subject to material top-up tax. The effective tax rate would not significantly increase.

14 Goodwill and other intangible assets

14Goodwill and other intangible assets

 

 

2023

millions of CHF

 

Goodwill

 

Trademarks and licenses

 

Research and development

 

Computer software

 

Customer relationship

 

Total

Acquisition cost

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of January 1

 

1’016.9

 

92.5

 

16.1

 

50.7

 

399.5

 

1’575.6

Additions

 

 

 

0.0

 

5.1

 

0.9

 

6.1

Disposals

 

 

 

 

–0.7

 

–3.3

 

–4.0

Reclassifications

 

 

 

2.6

 

0.0

 

0.5

 

3.1

Currency translation differences

 

–38.9

 

–4.6

 

–0.1

 

–1.7

 

–19.2

 

–64.5

Balance as of December 31

 

977.9

 

88.0

 

18.6

 

53.4

 

378.5

 

1’516.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated amortization and impairment losses

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of January 1

 

340.0

 

45.8

 

9.3

 

30.7

 

238.6

 

664.5

Additions 1)

 

 

7.9

 

1.3

 

2.8

 

24.6

 

36.6

Disposals

 

 

 

 

–0.7

 

–3.3

 

–4.0

Currency translation differences

 

 

–2.4

 

–0.0

 

–1.2

 

–11.9

 

–15.5

Balance as of December 31

 

340.0

 

51.3

 

10.6

 

31.5

 

248.1

 

681.5

 

 

 

 

 

 

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

 

 

 

 

 

 

As of January 1

 

676.9

 

46.7

 

6.7

 

20.0

 

160.8

 

911.2

As of December 31

 

637.9

 

36.6

 

8.0

 

21.8

 

130.4

 

834.8

1) In the statement of income, the amortization expense for trademark and licenses is recognized in “Research and development expense” and in “Selling and distribution expense”, the amortization expense for Customer relationship is primarily recognized in “Selling and distribution expense”.

 

 

2022

millions of CHF

 

Goodwill

 

Trademarks and licenses

 

Research and development

 

Computer software

 

Customer relationship

 

Total

Acquisition cost

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of January 1

 

1’067.3

 

93.8

 

9.8

 

47.2

 

449.5

 

1’667.6

Divestitures of subsidiaries

 

 

 

 

–0.3

 

–1.4

 

–1.7

Classification as held for sale 2)

 

–8.6

 

 

 

–0.8

 

–12.6

 

–22.0

Additions

 

 

 

2.2

 

6.4

 

0.1

 

8.7

Disposals

 

 

 

 

–4.1

 

–8.6

 

–12.6

Reclassifications

 

 

 

4.1

 

1.8

 

0.2

 

6.0

Currency translation differences

 

–41.8

 

–1.3

 

–0.0

 

0.5

 

–27.7

 

–70.3

Balance as of December 31

 

1’016.9

 

92.5

 

16.1

 

50.7

 

399.5

 

1’575.6

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated amortization and impairment losses

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of January 1

 

340.0

 

38.1

 

8.2

 

33.3

 

244.2

 

663.8

Divestitures of subsidiaries

 

 

 

 

–0.3

 

–1.4

 

–1.7

Classification as held for sale 2)

 

 

 

 

–0.3

 

–6.4

 

–6.7

Additions

 

 

8.4

 

1.1

 

2.3

 

27.0

 

38.8

Disposals

 

 

 

 

–4.1

 

–8.6

 

–12.6

Currency translation differences

 

 

–0.7

 

–0.0

 

–0.2

 

–16.2

 

–17.1

Balance as of December 31

 

340.0

 

45.8

 

9.3

 

30.7

 

238.6

 

664.5

 

 

 

 

 

 

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

 

 

 

 

 

 

As of January 1

 

727.3

 

55.7

 

1.6

 

14.0

 

205.3

 

1’003.8

As of December 31

 

676.9

 

46.7

 

6.7

 

20.0

 

160.8

 

911.2

1) In 2022, Goodwill in the amount of CHF 8.6 million and other intangible assets with a net book value of 6.7 million were allocated to the Russian disposal group and fully impaired. The impairments of CHF 15.3 million were recorded in other operating expenses (see note 11).

Goodwill impairment test

 

 

2023

millions of CHF

 

Goodwill

 

Headroom

 

Growth rate residual value

 

Pretax discount rate

Flow Equipment

 

362.3

 

628.5

 

2.0%

 

9.9%

Services

 

193.8

 

1’620.3

 

2.0%

 

10.8%

Chemtech

 

81.8

 

830.0

 

2.0%

 

10.9%

Total as of December 31

 

637.9

 

3’078.8

 

 

 

 

 

 

2022

millions of CHF

 

Goodwill

 

Headroom

 

Growth rate residual value

 

Pretax discount rate

Flow Equipment

 

384.9

 

605.7

 

2.0%

 

8.9%

Services

 

205.0

 

1’275.5

 

2.0%

 

10.2%

Chemtech

 

87.0

 

717.6

 

2.0%

 

10.5%

Total as of December 31

 

676.9

 

2’598.8

 

 

 

 

Goodwill is allocated to the smallest cash-generating unit (CGU) at which goodwill is monitored for internal management purposes (i.e., division). The recoverable amount has been determined based on a value-in-use calculation. The three-year strategic plan approved by the Board of Directors in the first quarter of the year forms the basis for the projected cash flows, with two additional periods based on a management calculation. The budget and the three-year strategic plan were approved by the Board of Directors in February 2023. Cash flows beyond the planning period are extrapolated using a terminal value including a growth rate as stated above. 

As of December 31, 2023, there is no indication of goodwill impairment. Updating the impairment test would not have resulted in any goodwill impairment.

Sensitivity analyses

The recoverable amount from cash-generating units is measured on the basis of value-in-use calculations significantly impacted by the terminal growth rate used to determine the residual value, the discount rate and the projected cash flows. The table above shows the amount by which the estimated recoverable amount of the CGU exceeds its carrying amount (headroom).

Sensitivity analyses were performed with regards to key assumptions, that would not change the conclusions of the impairment test. An increase of the discount rate by 5.0 percentage points or a decrease of the terminal growth rate by 5.0 percentage points would still lead to a recoverable amount exceeding the carrying amount for all CGU's. 

15 Property, plant and equipment

15Property, plant and equipment

 

 

2023

millions of CHF

 

Land and buildings

 

Machinery and technical equipment

 

Other non-current assets

 

Assets under construction

 

Total

Acquisition cost

 

 

 

 

 

 

 

 

 

 

Balance as of January 1

 

326.8

 

477.5

 

172.8

 

36.1

 

1’013.2

Divestitures of subsidiaries

 

–0.3

 

0.0

 

–0.1

 

–0.0

 

–0.4

Additions

 

3.0

 

13.8

 

7.4

 

35.3

 

59.5

Disposals

 

–1.6

 

–14.4

 

–9.4

 

 

–25.4

Reclassifications

 

9.6

 

13.8

 

6.0

 

–29.1

 

0.3

Currency translation differences

 

–22.9

 

–31.4

 

–11.1

 

–2.3

 

–67.7

Balance as of December 31

 

314.6

 

459.4

 

165.6

 

39.9

 

979.5

 

 

 

 

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

 

 

 

 

Balance as of January 1

 

152.9

 

350.1

 

147.1

 

2.6

 

652.6

Divestitures of subsidiaries

 

–0.2

 

–0.1

 

–0.1

 

-

 

–0.3

Additions

 

9.7

 

24.5

 

9.6

 

-

 

43.9

Disposals

 

–1.0

 

–11.3

 

–9.0

 

-

 

–21.3

Impairments (Reversal)

 

-

 

–0.1

 

–0.1

 

-

 

–0.2

Currency translation differences

 

–11.1

 

–24.4

 

–7.8

 

–0.1

 

–43.4

Balance as of December 31

 

150.4

 

338.7

 

139.7

 

2.4

 

631.3

 

 

 

 

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

 

 

 

 

As of January 1

 

173.9

 

127.4

 

25.7

 

33.5

 

360.5

As of December 31

 

164.2

 

120.6

 

25.9

 

37.5

 

348.2

 

 

2022

millions of CHF

 

Land and buildings

 

Machinery and technical equipment

 

Other non-current assets

 

Assets under construction

 

Total

Acquisition cost

 

 

 

 

 

 

 

 

 

 

Balance as of January 1

 

332.8

 

503.8

 

179.4

 

43.6

 

1’059.6

Divestitures of subsidiaries

 

–0.6

 

–5.4

 

–0.6

 

–0.1

 

–6.7

Classification as held for sale 1)

 

–9.1

 

–15.8

 

–4.1

 

–0.7

 

–29.7

Additions

 

4.6

 

14.8

 

7.8

 

34.0

 

61.2

Disposals

 

–3.1

 

–24.5

 

–6.7

 

 

–34.3

Reclassifications

 

10.5

 

20.5

 

2.5

 

–39.5

 

–6.0

Currency translation differences

 

–8.4

 

–15.9

 

–5.5

 

–1.2

 

–31.0

Balance as of December 31

 

326.8

 

477.5

 

172.8

 

36.1

 

1’013.2

 

 

 

 

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

 

 

 

 

Balance as of January 1

 

150.7

 

363.9

 

151.1

 

-

 

665.7

Divestitures of subsidiaries

 

–0.2

 

–3.6

 

–0.5

 

-

 

–4.3

Classification as held for sale 1)

 

–1.5

 

–9.4

 

–2.7

 

-

 

–13.5

Additions

 

10.1

 

25.9

 

11.0

 

-

 

47.0

Disposals

 

–1.6

 

–22.7

 

–6.3

 

-

 

–30.6

Impairments

 

-

 

7.8

 

0.0

 

2.7

 

10.5

Currency translation differences

 

–4.6

 

–11.9

 

–5.5

 

–0.1

 

–22.1

Balance as of December 31

 

152.9

 

350.1

 

147.1

 

2.6

 

652.6

 

 

 

 

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

 

 

 

 

As of January 1

 

182.2

 

139.8

 

28.4

 

43.6

 

394.0

As of December 31

 

173.9

 

127.4

 

25.7

 

33.5

 

360.5

1) In 2022, property, plant and equipment with a net book value of CHF 16.2 million was included in the Russian disposal group classified as held for sale and fully impaired; reference is made to note 5. The impairments of CHF 16.2 million are recorded in other operating expenses (see note 11).

The group performed impairment tests on production machines and facilities, resulting in impairments amounting to CHF 0.6 million and reversal of impairments amounting to CHF 0.8 million as of December 31, 2023 (December 31, 2022: impairment of CHF 10.5 million), all of which were charged or credited to operating expenses. 

In 2023, the group sold property, plant and equipment with a book value of CHF 4.1 million for CHF 4.6 million resulting in a net gain of CHF 0.5 million (2022: property, plant and equipment with a book value of CHF 3.6 million was sold for CHF 9.0 million, resulting in a net gain of CHF 5.5 million).

The contractual commitments to acquire property, plant and equipment as of December 31, 2023, amounted to CHF 5.1 million (December 31, 2022: CHF 5.0 million).

16 Leases

16Leases

Lease assets

 

 

2023

millions of CHF

 

Land and buildings, leased

 

Machinery and technical equipment, leased

 

Other non-current assets, leased

 

Total

Balance as of January 1

 

73.0

 

4.5

 

12.6

 

90.1

Additions

 

24.4

 

3.8

 

9.3

 

37.5

Depreciation

 

–19.1

 

–2.1

 

–6.3

 

–27.5

Impairments

 

–0.4

 

 

 

–0.4

Remeasurements and contract modifications

 

0.5

 

–0.1

 

–1.3

 

–0.8

Currency translation differences

 

–4.3

 

–0.4

 

–0.9

 

–5.6

Total lease assets as of December 31

 

74.1

 

5.7

 

13.4

 

93.2

 

 

2022

millions of CHF

 

Land and buildings, leased

 

Machinery and technical equipment, leased

 

Other non-current assets, leased

 

Total

Balance as of January 1

 

71.7

 

5.7

 

11.7

 

89.2

Classification as held for sale 1)

 

–0.7

 

 

–0.0

 

–0.7

Additions

 

33.6

 

1.4

 

8.4

 

43.3

Disposals

 

–5.8

 

–0.1

 

–0.6

 

–6.5

Depreciation

 

–20.2

 

–2.5

 

–6.3

 

–29.0

Impairments

 

–1.6

 

 

–0.0

 

–1.7

Remeasurements and contract modifications

 

–0.5

 

 

0.1

 

–0.4

Currency translation differences

 

–3.4

 

–0.0

 

–0.7

 

–4.1

Total lease assets as of December 31

 

73.0

 

4.5

 

12.6

 

90.1

1) In 2022, lease assets with a book value of CHF 0.7 million were included in the Russian disposal group classified as held for sale and fully impaired, reference is made to Note 5. The impairments of CHF 0.7m are recorded in other operating expenses (see note 11).

Lease liabilities

 

 

2023

 

2022

Balance as of January 1

 

89.6

 

88.8

Classification as held for sale

 

 

–0.5

Additions

 

37.5

 

43.3

Interest expenses

 

2.5

 

2.0

Cash flow for repayments – principal portion

 

–28.3

 

–32.1

Cash flow for repayments – interest portion

 

–2.5

 

–2.0

Remeasurements and contract modifications

 

–0.4

 

–6.0

Currency translation differences

 

–5.4

 

–4.0

Total lease liabilities as of December 31

 

93.0

 

89.6

- thereof non-current lease liabilities

 

69.0

 

67.2

- thereof current lease liabilities

 

23.9

 

22.4

The group leases land and buildings used for production, storage or office space. The terms are typically fixed for a period of three to five years. Various lease contracts for buildings contain extension options, providing the group with operational flexibility and planning security. Extension options are included in the measurement of the lease liability and the lease assets only if Management assesses these extension options as reasonably certain to be exercised.

Other leasing disclosures

millions of CHF

 

2023

 

2022

Recognized in the income statement

 

 

 

 

Expenses relating to short-term leases

 

–15.8

 

–13.8

Expenses relating to low-value asset leases, excluding short-term leases of low-value assets

 

–1.5

 

–1.0

Expenses relating to variable lease payments not included in the lease liability

 

–2.7

 

–2.7

Income from subleasing right-of-use assets

 

0.3

 

0.5

Interest expenses on lease liabilities

 

–2.5

 

–2.0

Total recognized in the income statement

 

–22.3

 

–19.0

 

 

 

 

 

Recognized in the statement of cash flows

 

 

 

 

Cash flow for short-term, low-value asset and variable leases (included within cash flow from operating activities)

 

–20.1

 

–17.6

Cash flow from subleasing right-of-use assets (included within cash flow from operating activities)

 

0.3

 

0.5

Cash flow for repayments of interest on lease liabilities (included within cash flow from operating activities)

 

–2.5

 

–2.0

Cash flow for repayments of the principal portion on lease liabilities (included within cash flow from financing activities)

 

–28.3

 

–32.1

Total cash outflow

 

–50.5

 

–51.1

17 Associates and joint ventures

17Associates and joint ventures

millions of CHF

 

2023

 

2022

Balance as of January 1

 

41.8

 

25.5

Additions

 

17.8

 

20.9

Reclassifications

 

1.8

 

Share of profit / (loss) of associates and joint ventures

 

–3.2

 

–2.7

Dividend payments received

 

–0.2

 

–0.1

Currency translation differences

 

–3.2

 

–1.8

Total investments in associates and joint ventures as of December 31

 

54.7

 

41.8

- thereof investments in associates:

 

54.5

 

41.8

- thereof investments in joint ventures:

 

0.2

 

In February 2023, the group acquired a strategic stake in Fuenix Ecogy Holding B.V., a circular technology company, for CHF 10.1 million and classified the investment as an investment in associates. In September 2023, the group acquired an additional ownership in Cellicon Holding B.V. for CHF 6.5 million, in addition to an existing ownership of CHF 3.0 million and the total investment was classified as an investment in associate.  

On September 22, 2022, the group increased its investment in the associate Worn Again by CHF 20.9 million. Worn Again is developing a unique polymer recycling process leveraging the group’s technology to enable the recycling of textiles and polyester packaging. Sulzer is accounting for its investment in Worn Again using the equity method of accounting. 

18 Other financial assets

18Other financial assets

 

 

2023

millions of CHF

 

Financial assets at fair value through profit or loss

 

Financial assets at fair value through other comprehensive income

 

Financial assets at amortized costs

 

Total

Balance as of January 1

 

24.4

 

8.8

 

9.3

 

42.5

Recognized through deconsolidation

 

 

 

3.1

 

3.1

Additions

 

1.0

 

 

0.3

 

1.3

Repayments 1)

 

 

 

–7.8

 

–7.8

Changes in fair value

 

3.3

 

0.7

 

 

4.0

Other non-cash items

 

 

 

2.6

 

2.6

Reclassifications

 

–3.0

 

 

 

–3.0

Currency translation differences

 

–1.7

 

 

–0.2

 

–2.0

Balance as of December 31

 

23.8

 

9.5

 

7.4

 

40.7

– thereof non-current

 

22.2

 

9.5

 

6.7

 

38.4

– thereof current

 

1.6

 

 

0.7

 

2.3

1) Repayments in the amount of CHF 4.9 million are presented in the statement of cash flows in “Divestitures and deconsolidation of subsidiaries, net of cash”.

 

 

2022

millions of CHF

 

Financial assets at fair value through profit or loss

 

Financial assets at fair value through other comprehensive income

 

Financial assets at amortized costs

 

Total

Balance as of January 1

 

10.9

 

22.5

 

11.3

 

44.7

Additions

 

6.7

 

 

2.9

 

9.6

Repayments

 

 

 

–4.4

 

–4.4

Changes in fair value

 

8.0

 

–13.7

 

 

–5.8

Currency translation differences

 

–1.1

 

 

–0.6

 

–1.7

Balance as of December 31

 

24.4

 

8.8

 

9.3

 

42.5

– thereof non-current

 

22.8

 

 

5.6

 

28.5

– thereof current

 

1.5

 

8.8

 

3.6

 

14.0

Financial assets that belong to the category “financial assets at fair value through profit or lossˮ include investments in equity securities.

The financial assets in the category “financial assets at fair value through other comprehensive incomeˮ are comprised of medmix shares amounting to CHF 9.5 million (2022: CHF 8.8 million), which were received as part of the Applicator Systems spin-off in 2021. The financial investment in medmix Ltd is recognized at its fair value based on the share price of medmix Ltd (a level 1 hierarchy valuation). Management has designated this investment at fair value through other comprehensive income at initial recognition. In 2023, fair value changes amounting to CHF 0.7 million
(2022: CHF –13.7 million) were recorded in other comprehensive income, with an associated deferred tax effect of CHF –0.1 million (2022: CHF 2.7 million). The dividend received amounted to CHF 0.2 million (2022: CHF 0.2 million).

19 Inventories

19Inventories

millions of CHF

 

2023

 

2022

Raw materials, supplies and consumables

 

166.9

 

192.3

Work in progress

 

255.4

 

250.3

Finished products and trade merchandise

 

72.8

 

79.9

Total inventories as of December 31

 

495.1

 

522.4

In 2023, the group recognized write-downs of CHF 16.6 million in the income statement. In 2022, the total write downs amounted to CHF 49.8 million, of which CHF 31.4 million were recorded in connection with the Russian business that was classified as 'held for sale' in that year. The accumulated write-downs on inventories amounted to CHF 72.7 million as of December 31, 2023 (2022: CHF 79.9 million). Material expenses in 2023 amounted to CHF 1’239.4 million (2022: CHF 1’192.1 million).

20 Assets and liabilities related to contracts with customers

20Assets and liabilities related to contracts with customers

millions of CHF

 

2023

 

2022

Sales recognized over time related to ongoing performance obligations

 

625.2

 

641.5

Sales recognized over time related to satisfied performance obligations

 

519.9

 

511.6

Sales recognized over time

 

1’145.1

 

1’153.1

Sales recognized at a point in time

 

2’136.6

 

2’026.8

Sales

 

3’281.7

 

3’179.9

– thereof sales recognized included in the contract liability balance at the beginning of the period

 

382.3

 

324.5

– thereof sales recognized from performance obligations satisfied (or partially satisfied) in previous periods

 

–0.0

 

0.1

 

 

 

 

 

Contract assets from sales recognized over time relating to ongoing performance obligations

 

1’048.4

 

1’087.4

Expected loss rate

 

0.1%

 

0.2%

Allowance for expected losses

 

–1.3

 

–2.4

Reversal of write-offs / (write-offs) on contract assets in the disposal group classified as held for sale (see note 5)

 

2.0

 

–26.8

Netting with contract liabilities

 

–619.0

 

–592.1

Contract assets

 

430.1

 

466.1

 

 

 

 

 

Contract liabilities from costs recognized over time relating to ongoing performance obligations

 

145.4

 

119.2

Advance payments from customers relating to point in time contracts

 

203.7

 

172.9

Advance payments from customers relating to over time contracts

 

720.8

 

682.3

Netting with contract assets

 

–619.0

 

–592.1

Contract liabilities

 

451.0

 

382.3

 

 

 

 

 

Order backlog (aggregate amount of transaction price allocated to unsatisfied performance obligations)

 

1’946.8

 

1’844.7

– thereof expected to be recognized as revenue within 12 months

 

1’810.9

 

1’650.5

– thereof expected to be recognized in more than 12 months

 

135.9

 

194.2

21 Trade accounts receivable

21Trade accounts receivable

Aging structure of trade accounts receivable

 

 

2023

 

2022

millions of CHF

 

Expected loss rate

 

Gross amount

 

Allowance

 

Net book value

 

Expected loss rate

 

Gross amount

 

Allowance

 

Net book value

Not past due

 

0.1%

 

393.1

 

–0.4

 

392.7

 

0.9%

 

439.0

 

–3.7

 

435.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Past due

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1–30 days

 

0.7%

 

61.7

 

–0.5

 

61.2

 

0.9%

 

61.6

 

–0.6

 

61.1

31–60 days

 

2.6%

 

29.3

 

–0.8

 

28.6

 

1.5%

 

31.7

 

–0.5

 

31.2

61–120 days

 

6.4%

 

24.9

 

–1.6

 

23.3

 

8.4%

 

20.7

 

–1.7

 

19.0

>120 days

 

53.7%

 

75.7

 

–40.6

 

35.0

 

52.2%

 

81.6

 

–42.6

 

39.0

Total trade accounts receivable as of December 31

 

 

 

584.7

 

–43.8

 

540.8

 

 

 

634.6

 

–49.1

 

585.5

Allowance for doubtful trade accounts receivable

millions of CHF

 

2023

 

2022

Balance as of January 1

 

49.1

 

56.5

Reclassification as held for sale

 

 

–8.6

Additions

 

9.0

 

19.3

Released as no longer required

 

–7.4

 

–10.1

Utilized

 

–3.8

 

–7.6

Currency translation differences

 

–3.1

 

–0.3

Balance as of December 31

 

43.8

 

49.1

The recoverability of trade accounts receivable is regularly reviewed, and the credit quality of new customers is thoroughly assessed. Due to the large and heterogeneous customer base, the credit risk from individual customers of the group is limited. The allowance for doubtful trade accounts receivable is based on expected credit losses by country and by division. These are based on historical observed default rates over the expected life of the trade receivables and are adjusted for forward-looking information such as development of gross domestic product (GDP).

Accounts receivable by geographical region

millions of CHF

 

2023

 

2022

Europe, the Middle East and Africa

 

250.0

 

265.9

– thereof United Kingdom

 

52.1

 

48.0

– thereof Saudi Arabia

 

32.8

 

38.6

– thereof France

 

24.9

 

23.4

– thereof Spain

 

20.7

 

21.7

– thereof Germany

 

18.4

 

22.8

 

 

 

 

 

Americas

 

131.0

 

124.8

– thereof USA

 

79.7

 

75.3

 

 

 

 

 

Asia-Pacific

 

159.8

 

194.8

– thereof China

 

102.8

 

127.5

 

 

 

 

 

Total as of December 31

 

540.8

 

585.5

22 Other current receivables and prepaid expenses

22Other current receivables and prepaid expenses

millions of CHF

 

2023

 

2022

Taxes (VAT, withholding tax)

 

61.3

 

55.8

Derivative financial instruments

 

13.9

 

13.2

Other current receivables

 

22.6

 

23.4

Total other current receivables as of December 31

 

97.8

 

92.4

 

 

 

 

 

Prepaid expenses

 

25.6

 

36.3

Total prepaid expenses as of December 31

 

25.6

 

36.3

 

 

 

 

 

Total other current receivables and prepaid expenses as of December 31

 

123.4

 

128.7

For further details on derivative financial instruments, refer to note 29. Other current receivables and prepaid expenses do not include any material positions that are past due or impaired.

23 Cash and cash equivalents

23Cash and cash equivalents

millions of CHF

 

2023

 

2022

Cash

 

780.8

 

939.6

Cash equivalents

 

193.9

 

256.8

Total cash and cash equivalents as of December 31

 

974.7

 

1’196.3

As of December 31, 2023, the group held restricted cash and cash equivalents of CHF 13.5 million (2022: CHF 15.7 million).

24 Equity

24Equity

Share capital

 

 

2023

 

2022

thousands of CHF

 

Number of shares

 

Share capital

 

Number of shares

 

Share capital

Balance as of December 31 (par value CHF 0.01)

 

34’262’370

 

342.6

 

34’262’370

 

342.6

The share capital amounts to CHF 342’623.70, made up of 34’262’370 shares with dividend entitlement and a par value of CHF 0.01. All shares are fully paid in and registered. On December 31, 2023, conditional share capital amounted to CHF 17’000 (2022: CHF 17’000), consisting of 1’700’000 shares with a par value of CHF 0.01.

Share ownership

Sulzer shares are freely transferable provided that, when requested by the company to do so, buyers declare that they have purchased and will hold the shares in their own name and for their own account. Nominees will only be entered in the share register with the right to vote provided that they meet the following conditions: the nominee is subject to the supervision of a recognized banking and financial market regulator; the nominee has entered into an agreement with the Board of Directors concerning its status; the share capital held by the nominee does not exceed 3% of the registered share capital entered in the commercial register; and the names, addresses and number of shares of those individuals for whose accounts the nominee holds at least 0.5% of the share capital have been disclosed. The Board of Directors is also entitled, beyond these limits, to enter shares of nominees with voting rights in the share register, provided that the above-mentioned conditions are met (see also paragraph 6a of the Articles of Association at https://www.sulzer.com/en/shared/about-us/corporate-governance).

Shareholders holding more than 3%

 

 

Dec 31, 2023

 

Dec 31, 2022

 

 

Number of shares

 

in %

 

Number of shares

 

in %

Viktor Vekselberg (direct shareholder: Tiwel Holding AG)

 

16’728’414

 

48.82

 

16’728’414

 

48.82

The Capital Group Companies, Inc.

 

1’034’950

 

3.02

 

1’034’950

 

3.02

Retained earnings

The retained earnings include prior years’ undistributed income of consolidated companies and all remeasurements of the net defined benefit assets and liabilities and other transactions recorded directly in retained earnings.

Treasury shares

During 2023, the group acquired 260’000 treasury shares for CHF 20.9 million (2022: 281’349 shares for CHF 19.5 million). The total number of shares held by the group as of December 31, 2023, amounted to 451’074 treasury shares (December 31, 2022: 523'855 shares).

The treasury shares are mainly held for the purpose of issuing shares under the management share-based payment programs.

Cash flow hedge reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments where the hedged transaction has not yet occurred. Amounts are reclassified to profit or loss when the associated hedged transaction affects the income statement.

Currency translation reserve

The currency translation reserve comprises all foreign exchange differences arising on the translation of the financial statements of controlled entities, whose functional currency differs from the reporting currency of the group. The cumulative amount is reclassified to profit or loss when the net investment is derecognized.

Acquisition of non-controlling interests without a change of control

Reference is made to note 4.

Transactions with non-controlling interests

An agreement entered with non-controlling shareholders of a subsidiary, agreeing on a fixed profit distribution for that subsidiary, resulted in the recognition of liability and a reduction in non-controlling interests. 

Contribution from medmix

The contribution relates to vested shares under Sulzer share plans for medmix employees.

Dividends

On April 19, 2023, the Annual General Meeting approved an ordinary dividend of CHF 3.50 (2022: ordinary dividend of CHF 3.50) per share to be paid out of reserves. The dividend was paid to shareholders on April 25, 2023. The total amount of the dividend to shareholders of Sulzer Ltd was CHF 118.9 million (2022: CHF 118.7 million), thereof paid dividends of CHF 80.9 million (2022: CHF 80.6 million), and unpaid dividends of CHF 38.1 million (2022: CHF 38.1 million). The unpaid dividends are reflected in the balance sheet position “Other current and accrued liabilitiesˮ (see note 28).

The Board of Directors decided to propose to the Annual General Meeting 2024 a dividend for the year 2023 of CHF 3.75 per share (2022: CHF 3.50).

25 Earnings per share

25Earnings per share

 

 

2023

 

2022

Net income attributable to shareholders of Sulzer Ltd (millions of CHF)

 

229.1

 

28.6

 

 

 

 

 

Issued number of shares

 

34’262’370

 

34’262’370

Adjustment for average treasury shares held

 

–377’719

 

–436’556

Average number of shares outstanding as of December 31

 

33’884’651

 

33’825’814

 

 

 

 

 

Adjustment for share participation plans

 

490’686

 

697’151

Average number of shares for calculating diluted earnings per share as of December 31

 

34’375’337

 

34’522’965

 

 

 

 

 

Earnings per share, attributable to a shareholder of Sulzer Ltd (in CHF) as of December 31

 

 

 

 

Basic earnings per share

 

6.76

 

0.85

Diluted earnings per share

 

6.67

 

0.83

26 Borrowings

26Borrowings

 

 

2023

millions of CHF

 

Non-current borrowings

 

Current borrowings

 

Total

Balance as of January 1

 

1’043.9

 

311.4

 

1’355.3

Cash flow from proceeds

 

 

26.0

 

26.0

Cash flow for repayments

 

–0.0

 

–324.9

 

–325.0

Changes in amortized costs

 

0.3

 

0.1

 

0.4

Other non-cash increase

 

0.9

 

0.1

 

1.0

Reclassifications

 

–249.9

 

249.9

 

0.0

Currency translation differences

 

–0.1

 

–1.5

 

–1.6

Total borrowings as of December 31

 

795.2

 

261.1

 

1’056.3

 

 

2022

millions of CHF

 

Non-current borrowings

 

Current borrowings

 

Total

Balance as of January 1

 

1’164.6

 

345.5

 

1’510.1

Cash flow from proceeds

 

169.6

 

1’054.0

 

1’223.6

Cash flow for repayments

 

–0.0

 

–1’376.1

 

–1’376.1

Changes in amortized costs

 

0.3

 

0.0

 

0.3

Reclassifications

 

–289.9

 

289.9

 

Currency translation differences

 

–0.8

 

–1.8

 

–2.6

Total borrowings as of December 31

 

1’043.9

 

311.4

 

1’355.3

Borrowings by currency

 

 

2023

 

2022

 

 

millions of CHF

 

in %

 

Interest rate

 

millions of CHF

 

in %

 

Interest rate

CHF

 

1’044.2

 

98.9

 

1.4%

 

1’333.8

 

98.4

 

1.4%

INR

 

4.7

 

0.4

 

5.6%

 

8.3

 

0.6

 

4.4%

IDR

 

3.3

 

0.3

 

8.7%

 

6.3

 

0.5

 

7.1%

USD

 

1.5

 

0.1

 

3.8%

 

5.0

 

0.4

 

3.8%

AED

 

0.9

 

0.1

 

2.8%

 

 

 

EUR

 

0.5

 

0.0

 

 

 

 

Other

 

1.2

 

0.1

 

 

1.9

 

0.1

 

Total as of December 31

 

1’056.3

 

100.0

 

 

1’355.3

 

100.0

 

As of December 2023, Sulzer had access to a syndicated credit facility of CHF 500 million maturing on December 31, 2026. The facility includes two one-year extension options and a further option to increase the credit facility by CHF 250 million (subject to lenders’ approval). In 2022 and 2023, the group exercised the options, extending the term of the credit facility in the amount of CHF 415 million to December 2028. The facility is subject to financial covenants based on net financial indebtedness and EBITDA, which were adhered to throughout the reporting period. As of December 31, 2023, and 2022, the syndicated facility was not used.

Outstanding bonds

 

 

2023

 

2022

millions of CHF

 

Amortized costs

 

Nominal

 

Amortized costs

 

Nominal

0.875% 07/2016–07/2026

 

124.9

 

125.0

 

125.0

 

125.0

1.300% 07/2018–07/2023

 

-

 

-

 

289.9

 

290.0

1.600% 10/2018–10/2024

 

250.0

 

250.0

 

249.9

 

250.0

0.800% 09/2020–09/2025

 

299.8

 

300.0

 

299.6

 

300.0

0.875% 11/2020–11/2027

 

199.8

 

200.0

 

199.7

 

200.0

3.350% 12/2022–11/2026

 

169.7

 

170.0

 

169.6

 

170.0

Total as of December 31

 

1’044.1

 

1’045.0

 

1’333.8

 

1’335.0

– thereof non-current

 

794.2

 

795.0

 

1’043.9

 

1’045.0

– thereof current

 

250.0

 

250.0

 

289.9

 

290.0

On July 6, 2023, Sulzer repaid CHF 290.0 million for the second and last tranche of a bond issued in 2018. This second tranche had a term of 5 years and carried a coupon of 1.300%.  

On December 16, 2022, Sulzer issued a CHF 170 million single tranche bond. The bond has a term of three years and 11 months and carries a coupon of 3.350% at a price of 100.055%.

All the outstanding bonds are traded on SIX Swiss Exchange.

27 Provisions

27Provisions

 

 

2023

millions of CHF

 

Other employee benefits

 

Warranties / liabilities

 

Restructuring

 

Environmental

 

Other

 

Total

Balance as of January 1

 

44.5

 

92.3

 

8.1

 

11.4

 

57.8

 

214.1

Additions

 

8.0

 

41.6

 

5.2

 

1.2

 

35.9

 

91.9

Released as no longer required

 

–4.2

 

–9.6

 

–2.2

 

 

–16.5

 

–32.6

Utilized

 

–7.1

 

–19.4

 

–4.7

 

–0.1

 

–32.5

 

–63.9

Reclassification 1)

 

–6.0

 

 

 

 

 

–6.0

Currency translation differences

 

–1.9

 

–6.0

 

–1.3

 

–0.2

 

–2.0

 

–11.4

Total provisions as of December 31

 

33.2

 

98.8

 

5.0

 

12.4

 

42.6

 

192.0

– thereof non-current

 

22.0

 

2.8

 

0.5

 

12.3

 

9.1

 

46.7

– thereof current

 

11.2

 

96.0

 

4.6

 

0.0

 

33.4

 

145.3

1) Includes a reclassification of CHF 6.0 million to the defined benefit obligation, see note 9.

 

 

2022

millions of CHF

 

Other employee benefits

 

Warranties / liabilities

 

Restructuring

 

Environmental

 

Other

 

Total

Balance as of January 1

 

53.9

 

93.8

 

21.0

 

11.8

 

55.4

 

235.8

Classified as held for sale

 

 

–2.5

 

 

 

 

–2.5

Additions

 

11.0

 

26.9

 

1.8

 

0.1

 

68.0

 

107.8

Released as no longer required

 

–7.0

 

–10.0

 

–1.7

 

 

–3.6

 

–22.3

Utilized

 

–10.6

 

–16.1

 

–12.7

 

–0.0

 

–58.7

 

–97.9

Currency translation differences

 

–2.8

 

0.1

 

–0.3

 

–0.5

 

–3.3

 

–6.7

Total provisions as of December 31

 

44.5

 

92.3

 

8.1

 

11.4

 

57.8

 

214.1

– thereof non-current

 

31.0

 

3.2

 

1.2

 

11.4

 

11.5

 

58.2

– thereof current

 

13.5

 

89.1

 

6.9

 

0.0

 

46.3

 

155.9

The category “Other employee benefitsˮ includes provisions for jubilee gifts and other obligations to employees. 

The category “Warranties/liabilitiesˮ includes provisions for warranties, customer claims, penalties, litigation and legal cases relating to goods delivered or services rendered. Warranties that provide customers with assurance that the product complies with the agreed specifications, are accounted for as provisions over the agreed warranty period.

In 2023, the group utilized CHF 4.7 million (2022: CHF 12.7 million) of restructuring provisions mainly relating to resizing measures of sites in Europe and the USA initiated in 2020 and 2021 and resizing measures in Indonesia initiated in 2022. The group recorded restructuring provisions of CHF 5.2 million (2022: CHF 1.8 million), partly offset by released restructuring provisions of CHF 2.2 million (2022: CHF 1.7 million). Restructuring costs mainly relate to reorganization in the Flow equipment division. The remaining restructuring provision as of December 31, 2023, is CHF 5.0 million, of which CHF 4.6 million is expected to be utilized within one year.

“Environmentalˮ mainly consists of expected costs related to inherited liabilities.

“Otherˮ includes provisions that do not fit into the aforementioned categories. A large number of these provisions refer to onerous contracts and indemnities, in particular related to divestitures. In addition, provisions for ongoing asbestos lawsuits and other legal claims are included. Based on the currently known facts, the group is of the opinion that the resolution of the open cases will not have material effects on its liquidity or financial condition. Although the group expects a large part of the category “Otherˮ to be realized in 2024, by their nature, the amounts and timing of any cash outflows are difficult to predict.

28 Other current and accrued liabilities

28Other current and accrued liabilities

millions of CHF

 

2023

 

2022

Liability related to the purchase of treasury shares

 

88.1

 

92.9

Outstanding dividend payments

 

277.2

 

239.2

Taxes (VAT, withholding tax)

 

31.4

 

33.0

Derivative financial instruments

 

3.2

 

7.0

Notes payable

 

 

20.6

Contingent consideration

 

 

1.9

Other current liabilities

 

38.9

 

43.6

Total other current liabilities as of December 31

 

438.9

 

438.2

 

 

 

 

 

Contract-related costs

 

121.3

 

137.8

Salaries, wages and bonuses

 

121.9

 

108.9

Vacation and overtime claims

 

23.0

 

22.4

Other accrued liabilities

 

147.3

 

167.3

Total accrued liabilities as of December 31

 

413.5

 

436.5

 

 

 

 

 

Total other current and accrued liabilities as of December 31

 

852.4

 

874.7

The outstanding dividend payments of CHF 277.2 million (2022: CHF 239.2 million) are explained in note 24.

29 Derivative financial instruments

29Derivative financial instruments

 

 

2023

 

2022

 

 

Derivative assets

 

Derivative liabilities

 

Derivative assets

 

Derivative liabilities

millions of CHF

 

Notional value

 

Fair value

 

Notional value

 

Fair value

 

Notional value

 

Fair value

 

Notional value

 

Fair value

Forward exchange rate contracts

 

817.6

 

13.9

 

276.1

 

3.2

 

575.4

 

13.2

 

607.6

 

7.0

Total as of December 31

 

817.6

 

13.9

 

276.1

 

3.2

 

575.4

 

13.2

 

607.6

 

7.0

– thereof due in <1 year

 

817.6

 

13.9

 

276.1

 

3.2

 

571.5

 

13.2

 

597.7

 

7.0

– thereof due in 1–5 years

 

 

 

 

 

3.9

 

0.1

 

9.9

 

0.0

In 2023, the notional value and the fair value of derivative assets and liabilities consists of current derivative financial instruments. Some of these derivative assets and liabilities are dedicated as hedging instruments for cash flow hedges. The cash flow hedges of expected future sales were assessed as highly effective. In 2023, the net unrealized gains for cash flow hedges recorded in the cash flow hedge reserves in other comprehensive income amount to CHF 8.3 million (2022: losses of CHF 7.5 million), net of a deferred tax impact of CHF 2.7 million (2022: CHF 2.6 million). As of December 31, 2023, the accumulated cash flow hedge reserve amounts to CHF 5.3 million (2022: CHF –5.7 million) with the recognition of net deferred tax liabilities of CHF 1.0 million (2022: deferred tax assets of CHF 1.6 million) relating to these cash flow hedges included in the cash flow hedge reserves. In 2023, gains of CHF 2.6 million (2022: gains of CHF 0.1 million) were reclassified from the cash flow hedge reserves to the income statement. The maximum exposure to credit risk at the reporting date is the fair value of the derivative assets in the balance sheet.

The hedged, highly probable forecast transactions denominated in foreign currencies are mostly expected to occur at various dates during the next 12 months. Gains and losses recognized in the cash flow hedge reserve in equity on forward foreign exchange contracts as of December 31, 2023, are recognized either in sales, cost of goods sold or other operating income / expenses in the period or periods during which the hedged transaction affects the income statement. This is generally within 12 months from the balance sheet date unless the gain or loss is included in the initial amount recognized for the purchase of fixed assets, in which case recognition is over the lifetime of the asset (5 to 10 years).

The group enters into derivative financial instruments under enforceable master netting arrangements. These agreements do not meet the criteria for offsetting derivative assets and derivative liabilities in the consolidated balance sheet. As of December 31, 2023, the amount subject to such netting arrangements was CHF 2.1 million (2022: CHF 2.7 million). Considering the effect of these agreements, the amount of derivative assets would reduce from CHF 13.9 million to CHF 11.8 million (2022: from CHF 13.2 million to CHF 10.5 million), and the amount of derivative liabilities would reduce from CHF 3.2 million to CHF 1.1 million (2022: from CHF 7.0 million to CHF 4.3 million).

30 Contingent liabilities

30Contingent liabilities

millions of CHF

 

2023

 

2022

Guarantees in favor of third parties

 

9.9

 

9.1

Total contingent liabilities as of December 31

 

9.9

 

9.1

As of December 31, 2023, guarantees provided to third parties amounted to CHF 9.9 million (2022: CHF 9.1 million) and relate to disposed businesses. 

31 Share participation plans

31Share participation plans

Share-based payments charged to personnel expenses

millions of CHF

 

2023

 

2022

Restricted share unit plan

 

0.9

 

1.6

Performance share plan

 

11.7

 

13.8

Total charged to personnel expenses

 

12.6

 

15.4

The compensation charged to personnel expenses for the services received during the period amounts to CHF 12.6 million including CHF 11.6 million relating to equity-settled plans credited in the retained earnings. The remaining CHF 1.0 million corresponds to cash-settled plans.

Restricted share unit plan settled in Sulzer shares

This long-term incentive plan covers the Board of Directors. Restricted share units (RSU) are granted annually. Awards to members of the Board of Directors automatically vest with the departure from the Board members. The plan features graded vesting over a three-year period. One RSU award is settled with one Sulzer share at the end of the vesting period. The fair value of the RSU granted is measured at the grant date closing share price of Sulzer Ltd, and discounted over the vesting period using a discount rate that is based on the yield of Swiss government bonds for the duration of the vesting period. Participants are not entitled to dividends declared during the vesting period. Consequently, the grant date fair value of the RSU is reduced by the present value of the dividends expected to be paid during the vesting period.

Given the spin-off of the Applicator Systems division in 2021, the group neutralized the consequences from the demerger for the restricted share plans. The number of originally granted RSU was recalculated to neutralize the effect of the spin-off on the share price, resulting in the same fair value before and after the spin-off and did not impact the share-based payments expense.

Restricted share units

Grant year

 

2023

 

2022

 

2021

 

2020

 

2019

 

Total

Outstanding as of January 1, 2022

 

 

 

16’632

 

14’164

 

4’078

 

34’874

Granted

 

 

11’637

 

 

 

 

11’637

Exercised

 

 

 

–10’344

 

–10’994

 

–4’078

 

–25’416

Outstanding as of December 31, 2022

 

 

 

11’637

 

6’288

 

3’170

 

 

21’095

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding as of January 1, 2023

 

 

11’637

 

6’288

 

3’170

 

 

21’095

Granted

 

10’128

 

 

 

 

 

10’128

Exercised

 

 

–6’279

 

–4’344

 

–3’170

 

 

–13’793

Outstanding as of December 31, 2023

 

10’128

 

5’358

 

1’944

 

 

 

17’430

 

 

 

 

 

 

 

 

 

 

 

 

 

Average fair value at grant date in CHF

 

77.05

 

77.82

 

106.32

 

65.22

 

97.76

 

 

Performance share plan settled in Sulzer shares

This long-term incentive plan covers the members of the Executive Committee and the members of the Sulzer Management Group. Performance share units (PSU) are granted annually, depending on the organizational position of the employee.

Vesting of the PSUs is subject to continuous employment and to the achievement of performance conditions over the performance period. Participants are not entitled to dividends declared during the vesting period. Vesting of the performance share plans (PSP) is based on three performance conditions: operational income before restructuring, amortization, impairments and non-operational items (operational profit) in the last year of the performance period (weighted 25%), average operational return on capital employed (operational ROCEA) (weighted 25%), and Sulzer’s total return to shareholders (TSR), compared to a selected group of peer companies (weighted 50%).

TSR is measured with a starting value of the volume-weighted average share price (VWAP) over the last three months prior to the first year, and an ending value of the VWAP over the last three months of the vesting period. The rank of Sulzer’s TSR at the end of the performance period determines the effective number of total shares.

The group neutralized the consequences of the spin-off of the Applicator Systems division in 2021. The number of originally granted PSUs was recalculated to neutralize the effect of the spin-off on share price, resulting in the same fair value before and after the spin-off. The target values of the Applicator Systems business for the PSP 2019, PSP 2020 and PSP 2021, as derived from their respective three-year financial plans, are deducted for the Sulzer group. As a result, the target values for the group comprise only what remain as continuing businesses within the group. Furthermore, for each non-market performance condition (i.e., operational profit and operational ROCEA) of PSP 2019, PSP 2020 and PSP 2021, the performance curve depicting the gradient formed from the threshold and cap performance level remains unchanged.

The following inputs were used to determine the fair value of the PSUs at grant date using a Monte Carlo simulation:

Grant year

 

2023

 

2022

 

2021

 

2020

 

2019

Fair value at grant date

 

88.38

 

84.69

 

124.95

 

78.18

 

115.95

Share price at grant date

 

77.45

 

76.35

 

101.12

 

76.05

 

92.46

Expected volatility

 

28.76%

 

35.59%

 

34.68%

 

37.45%

 

29.64%

Risk-free interest rate

 

1.96%

 

0.39%

 

–0.58%

 

–0.64%

 

–0.57%

The expected volatility of the Sulzer share and the peer group companies is determined by the historical volatility. The zero-yield curves of those countries in which the companies and indices are listed were used as the relevant risk-free rates. Historical data was used to arrive at an estimate for the correlation between Sulzer and the peer companies. For the TSR calculation, all dividends paid during the vesting period are added to the closing share price.

Performance share units – terms of awards

Grant year

 

2023

 

2022

 

2021

 

2020

 

2019

Number of awards granted

 

99’244

 

97’930

 

90’527

 

151’422

 

112’857

Grant date

 

April 1, 2023

 

April 1, 2022

 

April 1, 2021

 

June 1, 2020

 

April 1, 2019

Performance period for cumulative operational profit

 

01/23–12/25

 

01/22–12/24

 

01/21–12/23

 

01/20–12/22

 

01/19–12/21

Performance period for TSR

 

01/23–12/25

 

01/22–12/24

 

01/21–12/23

 

01/20–12/22

 

01/19–12/21

Fair value at grant date in CHF

 

88.38

 

84.69

 

124.95

 

78.18

 

115.95

Performance share units

Grant year

 

2023

 

2022

 

2021

 

2020

 

2019

 

Total

Initially granted

 

99’244

 

97’930

 

90’527

 

151’422

 

112’857

 

551’980

APS division spin-off restatement

 

 

 

44’801

 

74’680

 

53’141

 

172’622

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding as of January 1, 2022

 

 

 

127’491

 

210’194

 

151’809

 

489’494

Granted

 

 

97’930

 

 

 

 

97’930

Exercised

 

 

–998

 

–3’788

 

–6’202

 

–151’809

 

–162’797

Forfeited

 

 

–2’746

 

–6’634

 

–4’828

 

 

–14’208

Outstanding as of December 31, 2022

 

 

94’186

 

117’069

 

199’164

 

 

410’419

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding as of January 1, 2023

 

 

94’186

 

117’069

 

199’164

 

 

410’419

Granted

 

99’244

 

 

 

 

 

99’244

Exercised

 

–1’576

 

–6’666

 

–6’470

 

–199’164

 

 

–213’876

Forfeited

 

–3’386

 

–10’587

 

–1’867

 

 

 

–15’840

Outstanding as of December 31, 2023

 

94’282

 

76’933

 

108’732

 

 

 

279’947

32 Transactions with members of the Board of Directors, Executive Committee and related parties

32Transactions with members of the Board of Directors, Executive Committee and related parties

Key management compensation

 

 

2023

 

2022

thousands of CHF

 

Short-term benefits

 

Equity-based compensation

 

Pension and social security contributions

 

Total

 

Short-term benefits

 

Equity-based compensation

 

Pension and social security contributions

 

Total

Board of Directors

 

1’231

 

780

 

272

 

2’283

 

1’152

 

905

 

283

 

2’340

Executive Committee

 

8’681

 

3’231

 

1’892

 

13’804

 

7’065

 

2’822

 

1’649

 

11’536

As of December 31, 2023, there are no outstanding loans with members of the Board of Directors or the Executive Committee. No shares have been granted to members of the Board of Directors, the Executive Committee, or related persons, with the exception of shares granted in connection with equity-settled plans and service awards.

Transactions and balances with associates and joint ventures

In 2023, the group recorded transactions and balances with associates. Sales with associates amounted to CHF 0.5 million (2022: CHF 0.0 million), the operating expenses amounted to CHF 1.5 million (2022: CHF 2.5 million). As of December 31, 2023, loan receivables amount to CHF 2.0 million (2022: CHF 0.0 million), payables amount to CHF 0.1 million (2022: CHF 0.4 million). See note 17 for details on the investments in associates.

Transactions and balances with other related parties

In 2023, sale or other operating income with other related parties amounted to zero (2022: CHF 0.0 million), and operating expenses in relation to goods and services purchased amount to zero (2022: CHF 0.0 million). Open payables with related parties amounted to CHF 365.4 million (2022: CHF 332.0 million), of which CHF 88.1 million (2022: CHF 92.9 million) related to the purchase of treasury shares (see note 28) and CHF 277.2 million (2022: CHF 239.2 million) related to outstanding dividend payments (see note 24 and note 28). 

All related party transactions are priced on an arm’s-length basis.

33 Auditor remuneration

33Auditor remuneration

Fees for the audit services by KPMG as the appointed group auditor amounted to CHF 3.7 million (2022: CHF 4.1 million). Additional services provided by the group auditor amounted to a total of CHF 0.6 million (2022: CHF 1.9 million). This amount includes CHF 0.2 million (2022: CHF 0.2 million) for tax services and CHF 0.4 million (2022: CHF 1.7 million) for other services.

34 Key accounting policies and valuation methods

34Key accounting policies and valuation methods

34.1 Basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) using the historical cost convention except for:

  • financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income; and
  • net position from defined benefit plans, where plan assets are measured at fair value and the plan liabilities are measured at the present value of the defined benefit obligations (see note 34.18 a).

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements and have been applied consistently by all subsidiaries.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the group’s accounting policies. The areas involving a higher degree of judgment or complexity or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 6

Rounding

Due to rounding, numbers presented throughout the consolidated financial statements may not add up precisely to the totals provided. All ratios, percentages and variances are calculated using the underlying amount rather than the presented rounded amount.

Tables

Within tables, blank fields generally indicate that the field is not applicable or not meaningful, or that information is not available as of the relevant date or for the relevant period. Dashes (–) generally indicate that the respective figure is zero, while a zero (0.0) indicates that the relevant figure has been rounded to zero.

34.2 Change in accounting policies

a) Standards, amendments and interpretations which were effective for 2023

Starting from January 1, 2023, the group applied changes in standards, amendments and interpretations that became effective January 1, 2023. None of these changes had a material effect on the financial statements of the group. 

The group has adopted the amendments to IAS 12 International Tax Reform – Pillar Two Model Rules upon their release in May 2023. The amendments are effective immediately and provide a mandatory temporary exception from deferred tax accounting for the top-up tax and introduce new disclosures on the Pillar Two impact. The mandatory exception from deferred tax accounting applies retrospectively. No new tax legislation implementing top-up tax was enacted or substantively enacted on December 31, 2022, in any of the jurisdiction in which the group is operating and no related deferred tax assets or liabilities were recognized at that date. The retrospective application has no impact on the group's financial statements. 

b) Standards, amendments and interpretations issued but not yet effective, which the group decided not to adopt early in 2023

The following amended standards will become effective from January 1, 2024. The group does not expect these to have a material impact on the consolidated financial statements: 

  • Amendments to IAS 1 – Classification of liabilities as current or non-current and non-current liabilities with covenants. The amendments provide clarification when an entity should classify liabilities as current or non-current and introduce new disclosure requirements for non-current liabilities that are subject to future covenants. 
  • Amendments to IFRS 16 Leases – Lease liability in a sale and leaseback. The amendments provide further clarification how the lease liability should be measured by a seller-lessee.  
  • Amendments to IAS 7 and IFRS 7 – Disclosure of supplier finance arrangements. The amendments introduce new disclosure requirements for supplier finance arrangements that should allow users to assess the impact of such agreements on an entity's liabilities, cash flows and liquidity risk. 

The following amended standards will become effective from January 1, 2025. The group is in the process of assessing the below amendments and does currently not expect these to have a material impact on the consolidated financial statements:

  • Amendments to IAS 21 – Lack of exchangeability

34.3 Consolidation

a) Business combinations

The group accounts for business combinations using the acquisition method when control is transferred to the group. The consideration transferred in the acquisition is measured at the fair value of the assets given, the liabilities incurred to the former owner of the acquiree and the equity interest issued by the group. Any goodwill arising is tested annually for impairment. Any gain on a bargain purchase is recognized in the income statement immediately. Acquisition-related costs are expensed as incurred, except if related to the issue of debt or equity securities. Identifiable assets acquired, and liabilities and contingent liabilities assumed in a business combination, are measured initially at their fair values at the acquisition date.

Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognized in the income statement.

If share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree’s employees (acquiree’s awards), then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. The determination is based on the difference between the market-based measure of the replacement awards compared with the market-based measure of the acquiree’s awards and the extent to which the replacement awards relate to precombination service.

b) Subsidiaries

Subsidiaries are all entities controlled by the group. The group controls an entity when it is exposed to, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

According to the full consolidation method, all assets and liabilities and income and expenses of the subsidiaries are included in the consolidated financial statements. The share of non-controlling interests in the net assets and results is presented separately as non-controlling interests in the consolidated balance sheet and income statement, respectively.

c) Non-controlling interests

The group recognizes any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, at the non-controlling interest’s proportionate share of the recognized amounts of the acquiree’s identifiable net assets. Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions.

When the group loses control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any related non-controlling interest and other components of equity. Any resulting gain or loss is recognized in the income statement. Any interest retained in the former subsidiary is measured at fair value when control is lost.

d) Associates and joint ventures

Associates are those entities in which the group has significant influence, but no control, over the financial and operating policies. Significant influence is presumed to exist when the group holds, directly or indirectly, between 20% and 50% of the voting rights. Joint ventures are those entities over whose ­activities the group has joint control, established by contractual agreement and requiring unanimous consent for strategic, financial and operating decisions. Associates and joint ventures are accounted for using the equity method and are initially recognized at cost.

e) Transactions eliminated on consolidation

All material intercompany transactions and balances and any unrealized gains arising from intercompany transactions are eliminated in preparing the consolidated financial statements. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

34.4 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Executive Officer. The Chief Executive Officer, who is responsible for allocating resources and assessing performance (e.g., operating income) of the operating segments, has been identified as chief operating decision maker.

34.5 Foreign currency translation

a) Functional and presentation currency

Items included in the financial statements of subsidiaries are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in Swiss francs (CHF).

The following table shows the major currency exchange rates for the reporting periods 2023 and 2022:

 

 

2023

 

2022

CHF

 

Average rate

 

Year-end rate

 

Average rate

 

Year-end rate

EUR 1

 

0.97

 

0.93

 

1.00

 

0.98

GBP 1

 

1.12

 

1.08

 

1.18

 

1.11

USD 1

 

0.90

 

0.84

 

0.95

 

0.92

CNY 100

 

12.68

 

11.89

 

14.19

 

13.29

INR 100

 

1.09

 

1.01

 

1.21

 

1.12

b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement.

c) Subsidiaries

The results and balance sheet positions of subsidiaries that have a functional currency different from the presentation currency of the group are translated into the presentation currency as follows:

  • Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet.
  • Income and expenses for each income statement are translated at average exchange rates.

Translation differences resulting from consolidation are taken to other comprehensive income. In the event of a sale or liquidation of foreign subsidiaries, exchange differences that were recorded in other comprehensive income are recognized in the income statement as part of the gain or loss on sale or liquidation.

If a loan is made to a group company, and the loan in substance forms part of the group’s investment in the group company, translation differences arising from the loan are recognized directly in other comprehensive income as foreign currency translation differences. When the group company is sold or partially disposed of, and control no longer exists, gains and losses accumulated in equity are reclassified to the income statement as part of the gain or loss on disposal.

34.6 Intangible assets

Intangible assets with finite useful life are ­amortized in line with the expected useful life, usually on a straight-line basis. The period of useful life is to be assessed according to business rather than legal criteria. This assessment is made at least once a year. An impairment might be required in the event of sudden or unforeseen value changes.

a) Goodwill

Goodwill represents the difference between the consideration transferred and the fair value of the group’s share in the identifiable net asset value of the acquired business at the time of acquisition. Any goodwill arising as a result of a business combination is included within intangible assets.

Goodwill is subject to an annual impairment test and valued at its original acquisition cost less accumulated impairment losses. In cases where circumstances indicate a potential impairment, impairment tests are conducted more frequently. Profits and losses arising from the sale of a business include the book value of the goodwill assigned to the business being sold.

For impairment testing, goodwill is allocated to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. Goodwill originating from the acquisition of an associate or joint venture is included in the book value of the investment. 

b) Trademarks and licenses

Trademarks, licenses and similar rights acquired from third parties are stated at acquisition cost. Such assets are amortized over their expected useful life, generally not exceeding 10 years.

c) Computer software

Acquired computer software licenses in control of the group are capitalized on the basis of the cost incurred to acquire the specific software and bring to use. These costs are amortized over their estimated useful lives (three to max. five years).

d) Customer relationships

As part of a business combination, acquired customer rights are recorded at fair value (cost at the time of acquisition). These costs are amortized over their estimated useful lives, generally not exceeding 15 years.

34.7 Property, plant and equipment

Property, plant and equipment is stated at acquisition cost less depreciation and impairments. Acquisition cost includes expenditure that is directly attributable to the acquisition of the item. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that the future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. The carrying amount of the replaced item is derec­ognized. All other repairs and maintenance are charged to the income statement during the financial ­period in which they are incurred.

Depreciation is provided on a straight-line basis over the estimated useful life. Land is stated at cost and is not depreciated.

The useful lives are as follows:
Buildings: 20–50 years
Machinery: 5–15 years
Technical equipment: 5– 10 years
Other non-current assets: max. 5 years

34.8 Impairment of property, plant and equipment and intangible assets

Assets with a finite useful life are only tested for impairment if relevant events or changes in circumstances indicate that the book value is no longer recoverable. An impairment loss is recorded equal to the excess of the carrying value over the recoverable amount. The recoverable amount is the higher of the fair value of the asset less disposal costs and its value in use. The value in use is based on the estimated cash flow over a five-year period and the extrapolated projections for subsequent years. The results are discounted using an appropriate pretax, long-term interest rate. For the purposes of the impairment test, assets are grouped together at the lowest level for which separate cash flows can be identified (cash-generating units).

34.9 Lease assets and lease liabilities

The group recognizes lease assets and lease liabilities for most leases (these leases are on-balance-sheet). However, the group has elected not to recognize lease assets and lease liabilities for leases of low-value assets and short-term leases. The group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

The group presents lease assets and lease liabilities as separate line items on the balance sheet.

The group recognizes lease assets and lease liabilities at the lease commencement date. The lease asset is initially measured at cost and subsequently at cost less any accumulated depreciation and impairment losses and adjusted for certain remeasurements. The lease liability is initially measured at the present value of the lease payments that are not paid on commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the group’s incremental borrowing rate. Generally, the group uses currency and duration specific incremental borrowing rates for the discounting. 

The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made. It is remeasured when there is a change in future lease payments arising from a change in an index rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised, or a termination option is reasonably certain not to be exercised.

34.10 Financial assets

Financial assets are classified into the following three categories:

  • Financial assets measured at amortized cost
  • Financial assets at fair value through profit or loss (FVTPL)
  • Financial assets at fair value through other comprehensive income (FVOCI)

Debt instruments

Financial assets measured at amortized cost

Initially, financial assets are recognized at fair value. Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured subsequently at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in the income statement and presented in other financial income / (expenses), net together with foreign exchange gains and losses. Impairment losses are presented as separate line items in the income statement.

Equity instruments

The group measures all equity investments at fair value. Where the group is holding equity instruments not for trading and group’s management has elected to present fair value gains and losses on equity investments in other comprehensive income (OCI), there is no subsequent reclassification of fair value gains and losses to the income statement following the derecognition of the investment. Dividends from such investments continue to be recognized in the income statement as other income when the group’s right to receive payments is established. A gain or loss on an equity investment that is subsequently measured at FVTPL is recognized in the income statement and presented within other operating income and expenses or other financial income and expenses, depending on the nature of the investment, in the period in which it arises.

34.11 Derivative financial instruments and hedging activities

The group uses derivative financial instruments, such as forward currency contracts and other forward contracts, to hedge its risks associated with fluctuations in foreign currencies arising from operational and financing activities. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.

Any gains or losses arising from changes in fair value on the derivatives during the year that do not qualify for hedge accounting are taken directly into profit or loss.

The group applies hedge accounting to secure the foreign currency risks of future cash flows that have a high probability of occurrence. These hedges are classified as “cash flow hedgesˮ, whereas the hedge instrument is recorded on the balance sheet at fair value and the effective portions are booked against “Other comprehensive ­incomeˮ in the column “Cash flow hedge reserveˮ. If the hedge relates to a non-financial transaction that will subsequently be recorded on the balance sheet, the adjustments accumulated under “Other comprehensive incomeˮ at that time will be included in the initial book value of the asset or liability. In all other cases, the cumulative changes of fair value of the hedging instrument that have been recorded in other comprehensive income are included as a charge or credit to income when the forecasted trans­action is recognized or when hedge accounting is discontinued as the criteria are no longer met. In general, the fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date.

At the inception of the transaction, the group documents the relationship between hedging instruments and hedged items and its risk management objectives and strategy for undertaking various hedging transactions. The group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

34.12 Inventories

Raw materials, supplies and consumables are stated at the lower of cost or net realizable value. Finished products and work in progress are stated at the lower of production cost or net realizable value. Production cost includes the costs of materials, direct and indirect manufacturing costs, and contract-related costs of construction. Inventories are valued by reference to weighted average costs. Provisions are made for slow-moving and excess inventories and are recognized in the income statement in Costs of goods sold. 

34.13 Trade receivables

Trade and other accounts receivable are recognized initially at fair value and subsequently measured at amortized cost, less allowances for doubtful trade accounts receivable.

The allowance for doubtful trade accounts receivable is based on expected credit losses. The group applies the simplified approach, measuring the loss amount based on lifetime expected credit losses. These are based on historical observed default rates over the expected life of the trade receivables and are adjusted for forward-looking information such as development of gross domestic product (GDP) and oil price development.

34.14 Cash and cash equivalents

Cash and cash equivalents comprise bills, postal giros and bank accounts, together with other short-term highly liquid investments with a maturity of three months or less from the date of acquisition. Bank overdrafts are reported within borrowings in the current liabilities.

34.15 Trade payables

Trade payables and other payables are stated at face value. The respective value corresponds approx­imately to the amortized cost.

34.16 Borrowings

Financial debt is stated at fair value when initially recognized, after recognition of transaction costs. In subsequent periods, it is valued at amortized cost. Any difference between the amount borrowed (after deduction of transaction costs) and the repayment amount is reported in the income statement over the duration of the loan using the effective interest method. Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

34.17 Current and deferred income taxes

The current income tax charge comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the group’s subsidiaries operate and generate taxable income. The management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

The liability method is used to provide deferred taxes on all temporary differences between the tax base of assets and liabilities and their carry­ing amounts in the consolidated financial statements. Deferred taxes are valued by applying tax rates (and regulations) substantially enacted on the balance sheet date or any that have essentially been legally approved and are expected to apply at the time when the deferred tax asset is realized or the deferred tax liability is settled.

Income tax is recognized in the income statement except to the extent that it relates to items recognized directly in equity or other comprehensive income, in which case it is recognized directly in equity or other comprehensive income.

Deferred tax assets are recognized for unused tax losses and deductible temporary differences to the extent that it is probable that a taxable profit will be available against which they can be used. Deferred tax liabilities arising as a result of temporary differences relating to investments in subsidiaries, asso­ciates and joint venture are applied, unless the group can control when temporary differences are reversed and it is unlikely that they will be reversed in the foreseeable future.

34.18 Employee benefits

a) Defined benefit plans

The group’s net obligation in respect of defined benefit plans is calculated separately for each plan. The calculation of defined benefit assets / obligations is performed annually by a qualified actuary using the projected unit credit method. The net obligation is estimated based on the discounted future benefit that employees have earned in the current and prior periods, deducting the fair value of any plan assets. The discount rate is determined with reference to the interest rates on high-quality corporate bonds denominated in the currency of the expected cash flows and aligned with the estimated term.

When the calculation results in a potential asset for the group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest income on plan assets), and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income. The group determines the net interest expense / (income) on the net defined benefit liability / (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then net defined benefit liability / (asset), taking into account any changes in the net defined benefit liability/ (asset) during the period as a result of contributions and benefit payments. Net interest expenses and other expenses related to defined benefit plans are recognized in the income statement.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in the income statement. The group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

b) Defined contribution plans

Defined contribution plans are defined as pure savings plans, under which the employer makes certain contributions into a separate legal entity (fund) and does not have a legal or an extendible (constructive) liability to contribute any additional amounts in the event this entity does not have enough funds to pay out benefits. A “constructiveˮ commitment exists when it can be assumed that the employer will voluntarily make additional contributions in order not to endanger the relationship with its employees. Company contributions to such plans are considered in the income statement as personnel expenses.

c) Other employee benefits

Some subsidiaries provide other employee benefits such as jubilee gifts to their employees. Jubilee gifts are other long-term benefits. For example, in Switzerland, the group makes provisions for jubilee benefits based on a Swiss local directive. The provisions are reported in the category “Other employee benefitsˮ.

Short-term benefits are payable within 12 months after the end of the period in which the employees render the related employee service. In the case of liabilities of a long-term nature, the discounting effects and employee turnover are to be taken into consideration.

Obligations to employees arising from restructuring measures are included under the category “Restruc­turing provisionsˮ.

34.19 Share-based compensation

The group operates two equity-settled share-based payment plans. A performance share plan (PSP) covers the members of the Executive Committee and the members of the Sulzer Management Group. A restricted share plan (RSP) covers the members of the Board of Directors.

a) Performance share plan (PSP)

The fair value of the employee services received in exchange for the grant of the performance share units (PSU) is recognized as a personnel expense with a corresponding increase in equity. The total amount to be expensed over the vesting period is determined by reference to the fair value of the share units granted, excluding the impact of any non-market vesting conditions (e.g., target profit levels). At each balance sheet date, the group reassesses its estimates of the number of share units that are expected to vest. It recognizes the impact of the reassessment of original estimates, if any, in the income statement, and a corresponding adjustment to equity. The fair value of PSUs granted is measured by external valuation specialists based on a Monte Carlo simulation.

The group accrues for the expected cost of social charges in connection with the allotment of shares under the PSP. The dilution effect of the share-based awards is considered when calculating diluted earnings per share.

b) Restricted share plan (RSP)

The fair value of the employee services received in exchange for the grant of the share units is recognized as a personnel expense with a corresponding increase in equity. The total amount expensed is recognized over the vesting period, which is the period over which the specified service conditions are expected to be met.

The fair value of the restricted share units (RSU) granted for services rendered is measured at the Sulzer closing share price at grant date, and discounted over the vesting period using a discount rate that is based on the yield of Swiss government bonds with maturities matching the duration of the vesting period. Participants are not entitled to dividends declared during the vesting period. The grant date fair value of the RSUs is consequently reduced by the present value of dividends expected to be paid during the vesting period.

The group accrues for the expected cost of social charges in connection with the allotment of shares under the RSP. The dilutive effect of the share-based awards is considered when calculating diluted earnings per share.

34.20 Provisions

Provisions are recognized when the group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments. Provisions are not recognized for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required is determined by considering the class of obligation as a whole. A provision is recognized even if the likelihood of an outflow with respect to a single item included in the class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pretax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognized as interest expense.

34.21 Sales

Sales comprises the fair value of the consideration received or receivable for the sale of goods and rendering of services in the ordinary course of the group’s activities. This includes standard products (off the rack) and configured and engineered or tailor-made products. Sales are shown net of value-added tax, returns, rebates and discounts and after eliminating sales within the group.

The core principle is that sales are recognized at an amount that reflects the consideration to which the group expects to be entitled in exchange for transferring goods or services to a customer.

Sales are recognized when (or as) the group satisfies a performance obligation by transferring a promised good or service (i.e., an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset.

A customer obtains control of a good or service if it has the ability to direct the use of, and obtain substantially all of the remaining benefits from, that good or service (e.g., use, consume, sale, hold). A customer could have the future right to direct the use of the asset and obtain substantially all of the benefits from it (i.e., upon making a prepayment for a specified product).

There are two methods to recognize sales:

  • Over time method (OT): sales, costs and profit margin recognition in line with the progress of the project
  • Point in time method (PIT): sales recognition when the performance obligation is satisfied at a certain point in time

The group determines at contract inception whether control of each performance obligation transfers to a customer over time or at a point in time. Arrangements where the performance obligations are satisfied over time are not limited to services arrangements. The assessment of whether control transfers over time or at a point in time is critical to the timing of revenue recognition.

Over time method (OT)

Sales are recognized over time if any of the following is met:

  • The customer simultaneously receives / consumes as the group performs.
  • The group creates/enhances an asset and the customer controls it during this process.
  • The created asset has no alternative use for the group and the group has an enforceable right to payment (including reasonable profit margin) for performance completed to date if the customer terminates the contract for convenience.

The over time method is based on the percentage of costs to date compared with the total estimated contract costs (cost-to-cost method). In rare cases, other methods, such as a milestones method, may be used for a particular project, assuming that the stage of completion can be better estimated than by applying the cost-to-cost method. Work progress of sub-suppliers is considered to determine the stage of completion. If circumstances arise that may change the original estimates of sales, costs or extent of progress toward completion, estimates are revised. These revisions may result in increases or decreases in estimated sales or costs, and are reflected in income in the period in which the circumstances that give rise to the revision become known by management.

The income statement contains a share of sales, including an estimated share of profit. The balance sheet includes the corresponding contract assets if the assets exceed the advance payments from the customer of the project. When it appears probable that the total costs of an order will exceed the expected income, the total amount of expected loss is recognized immediately in the income statement.

Point in time method (PIT)

A performance obligation is satisfied at a point in time if none of the criteria for satisfying a performance obligation over time is met. Sales are recognized when (or as) the customer obtains control of that asset (depending on international commercial terms). The following points indicate that a customer has obtained control of an asset:

  • The entity has a present right to payment
  • The customer has legal title
  • The customer has physical possession
  • The customer has the significant risks and rewards of ownership
  • The customer has accepted the asset

For contracts applying the point in time method, the transfer of risks and rewards of ownership (depending on international commercial terms) typically depicts the transfer of control most appropriately.

Disaggregation of sales

In the segment information (note 3), sales are disaggregated by:

  • Divisions (group’s reportable segments)
  • Timing of sales recognition (sales recognition method: over time, point in time) and divisions
  • Market segments and divisions
  • Geographical regions and divisions

Payment terms

The group’s general terms and conditions of supply require payments within 30 days after the invoice date.

If the group’s general terms and conditions apply for a contract, the group is entitled to issue the invoices as follows: for one-third of the contract value within five days after effective date (date when the purchase order has been accepted by the supplier, or the date of the latest signing), for one-third after expiration of half of the delivery time, and for one-third within 45 days prior to delivery. Payments for prices calculated on a time basis are invoiced on a biweekly basis or after completion of the scope of supply, whichever occurs first.

Other payment terms may apply if otherwise defined in the customer contract, the purchase order, the respective change order or the quotation.

Variable considerations

If the consideration promised in a contract includes a variable amount (e.g., liquidated damages, early payment discount, volume discounts), the group estimates the amount of consideration to which the group will be entitled in exchange for transferring the promised goods or services to a customer. The amount of the variable consideration is estimated by using either of the following methods, depending on which method the group expects will better predict the amount of consideration to which it will be entitled: the expected value method or the most likely amount method. The method selected is applied consistently throughout the contract and to similar types of contracts when estimating the effect of uncertainty on the amount of variable consideration to which the group is entitled.

If the group fails to meet the delivery date and a purchase order expressly provides liquidated damages for such failure, the purchaser is entitled to demand that the group pay liquidated damages at the rate stated in the purchase order. The group’s obligation for estimated liquidated damages are recorded as a reduction in revenue.

Allocation of the transaction price

To allocate the transaction price to each performance obligation on a relative stand-alone, selling-price basis, the group determines the stand-alone selling price at contract inception of the distinct good or service underlying each performance obligation in the contract and allocates the transaction price in proportion to those stand-alone selling prices. If the stand-alone selling price is not directly observable, then the group estimates the amount with the expected cost-plus-margin method.

35 Subsequent events after the balance sheet date

35Subsequent events after the balance sheet date

The Board of Directors authorized these consolidated financial statements for issue on February 21, 2024. They are subject to approval at the Annual General Meeting, which will be held on April 16, 2024. At the time when these consolidated financial statements were authorized for issue, the Board of Directors and the Executive Committee were not aware of any events that would materially affect these financial statements.

36 Major subsidiaries

36Major subsidiaries

December 31, 2023

 

 

Subsidiary

 

Sulzer ownership and voting rights

 

Registered capital (including paid-in capital in the USA and Canada)

 

Direct participation by Sulzer Ltd

 

Research and development

 

Production and engineering

 

Sales

 

Service

Europe

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Switzerland

 

Sulzer Chemtech AG, Winterthur

 

100%

 

CHF 10’000’000

 

 

 

 

 

 

 

Sulzer Markets and Technology AG, Winterthur

 

100%

 

CHF 4’000’000

 

 

 

 

 

 

 

 

 

 

 

Sulzer Management AG, Winterthur

 

100%

 

CHF 500’000

 

 

 

 

 

 

 

 

 

 

 

Tefag AG, Winterthur

 

100%

 

CHF 500’000

 

 

 

 

 

 

 

 

 

 

 

Sulzer International AG, Winterthur

 

100%

 

CHF 100’000

 

 

 

 

 

 

 

 

 

Belgium

 

Sulzer Pumps Wastewater Belgium N.V.,Anderlecht

 

100%

 

EUR 123’947

 

 

 

 

 

 

 

 

 

Ensival Moret Belgium SA, Thimister-Clermont

 

100%

 

EUR 7’400’000

 

 

 

 

 

 

 

 

 

Germany

 

Sulzer Pumpen (Deutschland) GmbH, Bruchsal

 

100%

 

EUR 3’000’000

 

 

 

 

 

 

 

Sulzer Pumps Wastewater Germany GmbH, Bonn

 

100%

 

EUR 300’000

 

 

 

 

 

 

 

 

 

Sulzer Chemtech GmbH, Krefeld

 

100%

 

EUR 300’000

 

 

 

 

 

 

 

 

 

Nordic Water GmbH, Neuss

 

100%

 

EUR 25’565

 

 

 

 

 

 

Denmark

 

Sulzer Pumps Denmark A/S, Farum

 

100%

 

DKK 501’000

 

 

 

 

 

 

 

Finland

 

Sulzer Pumps Finland Oy, Kotka

 

100%

 

EUR 16’000’000

 

 

 

 

 

France

 

Sulzer Pompes France SASU, Buchelay

 

100%

 

EUR 6’600’000

 

 

 

 

 

 

 

Sulzer Ensival Moret France SASU, Saint-Quentin

 

100%

 

EUR 10’000’000

 

 

 

 

 

 

UK

 

Sulzer Pumps (UK) Ltd., Leeds

 

100%

 

GBP 9’610’000

 

 

 

 

 

 

 

 

Sulzer Chemtech (UK) Ltd., Stockton on Tees

 

100%

 

GBP 100’000

 

 

 

 

 

 

 

 

 

 

Sulzer Services (UK) Ltd., Birmingham

 

100%

 

GBP 48’756

 

 

 

 

 

 

 

 

 

Sulzer (UK) Holdings Ltd., Leeds

 

100%

 

GBP 6’100’000

 

 

 

 

 

 

 

 

 

 

 

Alba Power Ltd., Aberdeen

 

100%

 

GBP 1

 

 

 

 

 

 

Ireland

 

Sulzer Pump Solutions Ireland Ltd., Wexford

 

100%

 

EUR 2’222’500

 

 

 

 

 

 

 

Sulzer Finance (Ireland) Limited, Wexford

 

100%

 

EUR 100

 

 

 

 

 

 

 

 

 

 

Italy

 

Sulzer Italy S.r.l., Casalecchio di Reno

 

100%

 

EUR 600’000

 

 

 

 

 

 

 

 

Norway

 

Sulzer Pumps Wastewater Norway A/S, Sandvika

 

100%

 

NOK 502’000

 

 

 

 

 

 

 

 

 

Sulzer Pumps Norway A/S, Klepp Stasjon

 

100%

 

NOK 500’000

 

 

 

 

 

 

 

 

 

Nordic Water Products A/S, Straume

 

100%

 

NOK 150’000

 

 

 

 

 

 

 

 

The Netherlands

 

Sulzer Pumps Wastewater Netherlands B.V., Maastricht-Airport

 

100%

 

EUR 45’378

 

 

 

 

 

 

 

 

 

 

Sulzer Chemtech Nederland B.V., Breda

 

100%

 

EUR 1’134’451

 

 

 

 

 

 

 

 

 

 

Sulzer Turbo Services Venlo B.V., Lomm

 

100%

 

EUR 443’940

 

 

 

 

 

 

 

 

Sulzer Netherlands Holding B.V., Lomm

 

100%

 

EUR 10’010’260

 

 

 

 

 

 

 

 

 

 

 

Sulzer Capital B.V., Lomm

 

100%

 

EUR 50’000

 

 

 

 

 

 

 

 

 

 

Austria

 

Sulzer Austria GmbH, Wiener Neudorf

 

100%

 

EUR 350’000

 

 

 

 

 

 

 

Romania

 

Sulzer GTC Technology Romania S.R.L., Bucharest

 

100%

 

RON 1’345’070

 

 

 

 

 

 

 

 

Sweden

 

Sulzer Pumps Sweden AB, Vadstena

 

100%

 

SEK 3’000’000

 

 

 

 

 

 

 

Nordic Water Products AB, Mölndal

 

100%

 

SEK 200’000

 

 

 

 

 

 

Spain

 

Sulzer Pumps Spain S.A., Madrid

 

100%

 

EUR 1’750’497

 

 

 

 

 

 

 

 

Sulzer Pumps Wastewater Spain S.A.U., Rivas Vaciamadrid

 

100%

 

EUR 2’000’000

 

 

 

 

 

 

 

 

North America

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Canada

 

Sulzer Pumps (Canada) Inc., Burnaby

 

100%

 

CAD 2’771’588

 

 

 

 

 

 

 

 

 

Sulzer Chemtech Canada Inc., Edmonton

 

100%

 

CAD 1’000’000

 

 

 

 

 

 

 

 

Sulzer Rotating Equipment Services (Canada) Ltd., Edmonton

 

100%

 

CAD 7’000’000

 

 

 

 

 

 

 

 

JWC Environmental Canada ULC, Burnaby

 

100%

 

CAD 1’832’816

 

 

 

 

 

 

 

 

USA

 

Sulzer Pumps (US) Inc., Houston, Texas

 

100%

 

USD 40’381’108

 

 

 

 

 

 

 

 

Sulzer Pumps Solutions Inc., Easley, South Carolina

 

100%

 

USD 25’589’260

 

 

 

 

 

 

 

 

 

Sulzer Pump Services (US) Inc., Houston, Texas

 

100%

 

USD 1’000

 

 

 

 

 

 

 

 

 

Sulzer Chemtech USA, Inc., Tulsa, Oklahoma

 

100%

 

USD 47’895’000

 

 

 

 

 

 

 

 

Sulzer Turbo Services Houston Inc., La Porte, Texas

 

100%

 

USD 18’840’000

 

 

 

 

 

 

 

 

 

Sulzer Turbo Services New Orleans Inc., Belle Chasse, Louisiana

 

100%

 

USD 4’006’122

 

 

 

 

 

 

 

 

 

Sulzer Electro-Mechanical Services (US) Inc., Pasadena, Texas

 

100%

 

USD 12’461’286

 

 

 

 

 

 

 

 

 

Sulzer US Holding Inc., Houston, Texas

 

100%

 

USD 310’335’340

 

 

 

 

 

 

 

 

 

 

 

JWC Environmental Inc., Santa Ana, California

 

100%

 

USD 220’818’520

 

 

 

 

 

 

 

 

Sulzer GTC Technology US Inc., Houston, Texas

 

100%

 

USD 1

 

 

 

 

 

 

Mexico

 

Sulzer Pumps México, S.A. de C.V., Cuautitlán Izcalli

 

100%

 

MXN 4’887’413

 

 

 

 

 

 

 

 

Sulzer Chemtech, S. de R.L. de C.V., Cuautitlán Izcalli

 

100%

 

MXN 231’345’500

 

 

 

 

 

 

Central and South America

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Argentina

 

Sulzer Turbo Services Argentina S.A., Buenos Aires

 

100%

 

ARS 9’730’091

 

 

 

 

 

 

Brazil

 

Sulzer Brasil S.A., Jundiaí

 

100%

 

BRL 81’789’432

 

 

 

 

 

 

 

 

Sulzer Pumps Wastewater Brasil Ltda., Jundiaí

 

100%

 

BRL 37’966’785

 

 

 

 

 

 

Chile

 

Sulzer Bombas Chile Ltda., Vitacura

 

100%

 

CLP 46’400’000

 

 

 

 

 

 

 

 

Colombia

 

Sulzer Pumps Colombia S.A.S., Cota

 

100%

 

COP 7’142’000’000

 

 

 

 

 

 

 

Africa

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

South Africa

 

Sulzer Pumps (South Africa) (Pty) Ltd., Elandsfontein

 

75%

 

ZAR 100’450’000

 

 

 

 

 

 

 

 

Sulzer (South Africa) Holdings (Pty) Ltd., Elandsfontein

 

100%

 

ZAR 16’476

 

 

 

 

 

 

Morocco

 

Sulzer Maroc S.A.R.L. A.U., Nouaceur

 

100%

 

MAD 3’380’000

 

 

 

 

 

 

 

 

Nigeria

 

Sulzer Pumps (Nigeria) Ltd., Lagos

 

100%

 

NGN 5’000’000

 

 

 

 

 

 

 

Zambia

 

Sulzer Zambia Ltd., Chingola

 

100%

 

ZMK 15’000’000

 

 

 

 

 

 

 

Middle East

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United Arab Emirates

 

Sulzer Pumps Middle East FZCO, Dubai

 

100%

 

AED 500’000

 

 

 

 

 

 

 

Saudi Arabia

 

Sulzer Saudi Pump Company Limited, Riyadh

 

100%

 

SAR 44’617’000

 

 

 

 

 

 

Bahrain

 

Sulzer Chemtech Middle East W.L.L., Al Seef

 

100%

 

BHD 50’000

 

 

 

 

 

 

 

 

Asia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

India

 

Sulzer Pumps India Pvt. Ltd., Navi Mumbai

 

100%

 

INR 24’893’500

 

 

 

 

 

 

 

 

Sulzer India Pvt. Ltd., Pune

 

100%

 

INR 34’500’000

 

 

 

 

 

 

 

 

Sulzer Tech India Pvt. Ltd., Navi Mumbai

 

100%

 

INR 100’000

 

 

 

 

 

 

 

 

Indonesia

 

PT. Sulzer Indonesia, Purwakarta

 

95%

 

IDR 28’234’800’000

 

 

 

 

 

 

Japan

 

Sulzer Daiichi K.K., Tokyo

 

60%

 

JPY 30’000’000

 

 

 

 

 

 

 

 

 

 

Sulzer Japan Ltd., Tokyo

 

100%

 

JPY 30’000’000

 

 

 

 

 

 

Malaysia

 

Sulzer Pumps Wastewater Malaysia Sdn. Bhd., Selangor Darul Ehsan

 

100%

 

MYR 1’000’000

 

 

 

 

 

 

 

 

Singapore

 

Sulzer Singapore Pte. Ltd., Singapore

 

100%

 

SGD 1’000’000

 

 

 

 

 

 

South Korea

 

Sulzer Korea Ltd., Seoul

 

100%

 

KRW 222’440’000

 

 

 

 

 

 

 

 

 

 

Sulzer GTC Technology Korea Co. Ltd., Seoul

 

100%

 

KRW 4’870’000’000

 

 

 

 

 

 

Thailand

 

Sulzer (Thailand) Co., Ltd., Rayong

 

100%

 

THB 25’000’000

 

 

 

 

 

 

 

 

People’s Republic of China

 

Sulzer Dalian Pumps & Compressors Ltd., Dalian

 

100%

 

CHF 21’290’000

 

 

 

 

 

 

 

 

Sulzer Pumps Suzhou Ltd., Suzhou

 

100%

 

CNY 282’069’324

 

 

 

 

 

 

 

 

Sulzer Pump Solutions (Kunshan) Co., Ltd., Kunshan

 

100%

 

USD 5’760’000

 

 

 

 

 

 

 

 

 

 

Sulzer Shanghai Eng. & Mach. Works Ltd., Shanghai

 

100%

 

CNY 54’267’608

 

 

 

 

 

 

 

Sulzer Pumps Wastewater Shanghai Co. Ltd., Shanghai

 

100%

 

USD 1’550’000

 

 

 

 

 

 

 

 

 

Sulzer GTC (Beijing) Technology Inc., Beijing

 

100%

 

USD 150’000

 

 

 

 

 

 

 

Nordic Water Products (Beijing) Co., Ltd., Beijing

 

100%

 

USD 800’000

 

 

 

 

 

 

 

 

Australia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sulzer Australia Pty Ltd., Brisbane

 

100%

 

AUD 5’308’890

 

 

 

 

 

 

 

 

 

 

Sulzer Australia Holding Pty Ltd., Brendale

 

100%

 

AUD 34’820’100