Sulzer Annual Report 2023

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

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