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Notes to the financial statements of Sulzer Ltd

1 General information

1General information

Sulzer Ltd, Winterthur, Switzerland (the company), is the parent company of the Sulzer group. Its financial statements are prepared in accordance with Swiss law and serve as complementary information to the consolidated financial statements.

These financial statements were prepared according to the provisions of the Swiss Law on Accounting and Financial Reporting (32nd title of the Swiss Code of Obligations). Where not prescribed by law, the significant accounting and valuation principles applied are described below.

2 Key accounting policies and principles

2Key accounting policies and principles

Treasury shares

Treasury shares are recognized at acquisition cost and deducted from shareholders’ equity at the time of acquisition. In case of a resale, the gain or loss is recognized through the income statement as financial income or financial expenses.

Investments in subsidiaries and third parties

The participations are valued at acquisition cost or if the value is lower, at value in use, using generally accepted valuation principles.

Non-current interest-bearing liabilities

Non-current interest-bearing liabilities are recognized in the balance sheet at amortized cost. Discounts and issue costs for bonds are amortized on a straight-line basis over the bond’s maturity period.

Share-based payments

Sulzer Ltd operates a share-based payment program that covers the Board of Directors. Restricted share units (RSU) are granted annually. 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. Awards automatically vest with the departure from the Board. The fair value of the Sulzer share at vesting date is recognized as compensation to the Board of Directors.

Foregoing a cash flow statement and additional disclosures in the notes

As Sulzer Ltd has prepared its consolidated financial statements in accordance with a recognized accounting standard (IFRS), it has decided to forego presenting additional information on audit fees and interest-bearing liabilities in the notes and a cash flow statement in accordance with the law.

3 Cash and cash equivalents

3Cash and cash equivalents

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.

4 Investments in subsidiaries

4Investments in subsidiaries

A list of the major subsidiaries held directly or indirectly by Sulzer Ltd is included in note 36 to the consolidated financial statements.

5 Equity

5Equity

Share capital

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.

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

Treasury shares held by Sulzer Ltd

 

 

2023

 

2022

millions of CHF

 

Number of shares

 

Total transaction amount

 

Number of shares

 

Total transaction amount

Balance as of January 1

 

523’855

 

42.9

 

534’733

 

51.0

Purchase

 

260’000

 

20.9

 

281’349

 

19.5

Share-based remuneration

 

–332’781

 

–27.1

 

–292’227

 

–27.6

Balance as of December 31

 

451’074

 

36.7

 

523’855

 

42.9

The total number of treasury shares held by Sulzer Ltd as of December 31, 2023, amounted to 451'074 (December 31, 2022: 523'855 shares), which are mainly held for the purpose of issuing shares under the management share-based payment programs.

6 Interest-bearing liabilities

6Interest-bearing liabilities

 

 

2023

 

2022

millions of CHF

 

Book value

 

Nominal

 

Book value

 

Nominal

0.875% 07/2016–07/2026

 

125.0

 

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% 12/2022–12/2026

 

169.7

 

170.0

 

169.7

 

170.0

Total as of December 31

 

1’044.3

 

1’045.0

 

1’333.8

 

1’335.0

– thereof non-current

 

794.3

 

795.0

 

1’043.9

 

1’045.0

– thereof current

 

250.0

 

250.0

 

289.9

 

290.0

All the outstanding bonds are traded on SIX Swiss Exchange.

7 Contingent liabilities

7Contingent liabilities

millions of CHF

 

2023

 

2022

Guarantees, sureties and comfort letters for subsidiaries

 

 

 

 

– to banks and insurance companies

 

845.5

 

937.3

– to customers

 

216.3

 

258.2

– to others

 

399.3

 

455.7

Guarantees for third parties

 

9.3

 

9.0

Total contingent liabilities as of December 31

 

1’470.4

 

1’660.2

As of December 31, 2023, CHF 406.3 million (2022: CHF 410.8 million) in guarantees, sureties and comfort letters for subsidiaries to banks and insurance companies were utilized.

8 Administrative expenses

8Administrative expenses

millions of CHF

 

2023

 

2022

Compensation of Board of Directors

 

2.6

 

1.8

Other administrative expenses

 

98.3

 

68.3

Total administrative expenses

 

100.9

 

70.1

Sulzer Ltd does not have any employees. The compensation of the Board of Directors includes share-based payments and remuneration. Other administrative expenses contain management services and recharges from subsidiaries.

9 Investment income and investment and loan expenses

9Investment income and investment and loan expenses

In 2023, the investment income contains ordinary and extraordinary dividend payments from subsidiaries amounting to CHF 182.3 million (2022: CHF 142.9 million). The release of allowances on investments amounts to CHF 17.6 million (2022: CHF 0.0 million). The income from the sale of subsidiaries amounts to CHF 0.4 million (2022: CHF 7.0 million), net.

The investment and loan expenses contain allowances on investments amounting to CHF 10.5 million (2022: CHF 44.6 million) and waivers on loans and receivables amounting to CHF 0.8 million (2022: CHF 71.3 million). The share of loss from associates amounts to CHF 2.9 million (2022: CHF 2.5 million).

10 Other income

10Other income

The income from trademark license amounts to CHF 44.2 million (2022: CHF 42.3 million).

11 Financial income and expenses

11Financial income and expenses

The financial income contains interests on loans with subsidiaries amounting to CHF 35.1 million (2022: CHF 42.1 million) and CHF 2.5 million (2022: CHF 0.5 million) with banks. The realized and unrealized gain on marketable securities amounts to CHF 4.3 million (2022: loss of CHF 18.5 million). 

The financial expenses contain mainly interest expenses on interest-bearing liabilities of CHF 17.5 million (2022: CHF 15.8 million). The foreign currency revaluation on intercompany loans resulted in a loss of CHF 48.8 million (2022: loss of CHF 11.4 million).

12 Share participation of the Board of Directors, Executive Committee and related parties

12Share participation of the Board of Directors, Executive Committee and related parties

Restricted share units for members of the Board

The compensation of the Board of Directors consists of a fixed cash component and a restricted share unit (RSU) component with a fixed grant value. The number of RSU is determined by dividing the fixed grant value by the volume-weighted share price of the last ten days prior to the grant date. One-third of the RSU each vest after the first, second and third anniversaries of the grant date, respectively. Upon vesting, one vested RSU is converted into one share in Sulzer Ltd. The vesting period for RSU granted to the members of the Board of Directors ends no later than on the date on which the member steps down from the Board.

 

 

2023

 

 

Sulzer shares

 

Restricted share units (RSU) 1)

 

Performance share units (PSU) 2021 2)

 

Performance share units (PSU) 2022 3)

 

Performance share units (PSU) 2023 4)

Board of Directors

 

9’320

 

17’430

 

 

 

Suzanne Thoma

 

2’559

 

2’886

 

 

 

Markus Kammüller

 

536

 

3’085

 

 

 

Alexey Moskov

 

2’114

 

3’295

 

 

 

David Metzger

 

1’736

 

3’295

 

 

 

Per Utnegaard

 

1’375

 

1’623

 

 

 

Hariolf Kottmann

 

1’000

 

1’623

 

 

 

Prisca Havranek-Kosicek

 

 

1’623

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive Committee

 

11’114

 

 

4’264

 

14’362

 

36’548

Suzanne Thoma

 

2’559

 

 

 

2’120

 

12’778

Thomas Zickler

 

3’402

 

 

1’212

 

5’074

 

5’112

Haining Auperin

 

5’153

 

 

1’364

 

1’142

 

4’217

Tim Schulten

 

 

 

1’212

 

5’074

 

5’112

Jan Lüder

 

 

 

 

 

5’112

Uwe Boltersdorf

 

 

 

476

 

952

 

4’217

1) Restricted share units assigned by Sulzer.

2) The average fair value of one performance share unit 2021 at grant date amounted to CHF 124.95.

3) The average fair value of one performance share unit 2022 at grant date amounted to CHF 84.69.

4) The average fair value of one performance share unit 2023 at grant date amounted to CHF 88.38.

 

 

2022

 

 

Sulzer shares

 

Restricted share units (RSU) 1)

 

Performance share units (PSU) 2020 2)

 

Performance share units (PSU) 2021 3)

 

Performance share units (PSU) 2022 4)

Board of Directors

 

23’434

 

21’095

 

 

 

Suzanne Thoma

 

744

 

4’701

 

 

 

Matthias Bichsel

 

12’600

 

4’406

 

 

 

Alexey Moskov

 

2’217

 

3’786

 

 

 

David Metzger

 

600

 

2’808

 

 

 

Hanne Birgitte Breinbjerg Sørensen

 

7’273

 

3’786

 

 

 

Markus Kammüller

 

 

1’608

 

 

 

Executive Committee

 

32’723

 

 

16’827

 

12’412

 

20’640

Suzanne Thoma

 

744

 

 

 

 

2’120

Thomas Zickler

 

1’513

 

 

1’273

 

1’212

 

5’074

Armand Sohet

 

6’791

 

 

7’777

 

4’994

 

4’186

Tim Schulten

 

 

 

 

1’212

 

5’074

Torsten Wintergerste

 

23’675

 

 

7’777

 

4’994

 

4’186

1) Restricted share units assigned by Sulzer.

2) The average fair value of one performance share unit 2020 at grant date amounted to CHF 78.18.

3) The average fair value of one performance share unit 2021 at grant date amounted to CHF 124.95.

4) The average fair value of one performance share unit 2022 at grant date amounted to CHF 84.69.

Granted Sulzer shares to members of the Board of Directors

 

 

2023

 

2022

 

 

Quantity

 

Value in CHF

 

Quantity

 

Value in CHF

Allocated to members of the Board of Directors

 

10’128

 

780’000

 

11’637

 

905’000

13 Subsequent events after the balance sheet date

13Subsequent events after the balance sheet date

At the time when these financial statements were authorized for issue, the Board of Directors was not aware of any events that would materially affect these financial statements.