Continued strong order growth and profitability
Note: If not otherwise indicated, changes from the previous year are based on organic figures (adjusted for currency effects, acquisitions and divestitures/deconsolidations).
The Flow Equipment division returned a strong performance in 2023. Order intake increased by 11.2%, driven by stronger markets and extraordinarily large orders booked in the first half of 2023. Profitability rose by 140 basis points year on year. Robust sales growth of 10.9% can be attributed to a strong backlog combined with improvements in execution and supply chain stabilization. The division continues to focus on operational efficiency across its business units to meet the growing demand for infrastructure and services in support of the energy transition.
Investments in growth, productivity and sustainability
The Flow Equipment division continues to see strong activity in the energy markets, driven by future-proven solutions that reliably support customers in the green energy transition. Water and Industry remain strategic markets, with sales continuing to grow profitably.
The division has maintained a strategic commitment to advancing research and development efforts, with a primary focus on pioneering new transition technologies such as for biofuels and energy storage. In 2023, Sulzer pumps were selected to enable a 100% renewable and carbon-free biofuel facility in the ambitious smart city of NEOM, Saudi Arabia, with a capacity projected at some 220’000 tonnes of carbon-free, green hydrogen per year.
The Flow Equipment division is also expanding its American water business, investing in its product manufacturing and testing facilities to support planned water and wastewater infrastructure development across the country in compliance with the U.S. Infrastructure Investment and Jobs Act. Water and sanitation remain pivotal to the division on a global scale. In Bahrain, for example, Sulzer’s advanced filtration systems have upgraded a key wastewater treatment plant, enabling it to process 250,000 m3/day of wastewater for local agricultural irrigation. In 2023, the division also expanded its flow equipment manufacturing plant in Riyadh, Saudi Arabia, to meet the growing demand for infrastructure development in the region.
New organizational structure
To better serve customers and improve operational excellence, the Flow Equipment division was strategically reorganized, effective January 1, 2024. With an emphasis on growth, the new and more customer-centric structure consolidates the Water and Industry business units into a single unified entity, now called the Water & Industrial business unit. Desalination was integrated with the existing Energy business, leading to the establishment of the Energy & Infrastructure business unit. The reorganization will support the division in achieving the profitable growth objectives outlined in Sulzer 2028.
Key figures Flow Equipment
|
millions of CHF |
|
2023 |
|
2022 |
|
Change in +/–% |
|
+/–% adjusted 1) |
|
+/–% organic 2) |
|
Order intake |
|
1’466.5 |
|
1’419.2 |
|
3.3 |
|
10.6 |
|
11.2 |
|
Order intake gross margin |
|
30.2% |
|
30.2% |
|
|
|
|
|
|
|
Order backlog as of December 31 |
|
878.3 |
|
850.1 |
|
3.3 |
|
|
|
|
|
Sales |
|
1’354.4 |
|
1’323.0 |
|
2.4 |
|
9.4 |
|
10.9 |
|
EBIT 3) |
|
74.1 |
|
32.6 |
|
> 100 |
|
|
|
|
|
Operational profit |
|
108.2 |
|
87.4 |
|
23.8 |
|
27.5 |
|
27.8 |
|
Operational profitability |
|
8.0% |
|
6.6% |
|
|
|
|
|
|
|
Employees (number of full-time equivalents) as of December 31 |
|
5’465 |
|
5’263 |
|
3.8 |
|
|
|
|
1) Adjusted for currency effects.
2) Adjusted for acquisition, divestiture/deconsolidation and currency effects.
3) 2022 was impacted by write-offs related to Russia and Poland.
Strong order intake
The Flow Equipment division continued its strong growth trajectory with orders increasing by a significant 11.2% in 2023. This was driven by large one-time orders in the first half coupled with strong expansion in energy transition and security solutions.
Order intake by market segment
2023
Order intake by region
2023
Sustained growth in profitability
The Flow Equipment division experienced strong overall growth in sales (10.9%), with all business units contributing. This was primarily driven by enhanced execution, supply chain stabilization and productivity investments. Operational profitability increased by 140 basis points from 6.6% to 8.0%, mainly driven by an increased focus on price realization against inflation, disciplined control of operational expenditures and improved commercial and operational excellence.
Safety performance in 2023
The Flow Equipment division achieved the best safety performance result in 2023 that it has achieved in over 15 years. The division continued to affect a positive downwards trend in its accident frequency rate (AFR), reporting 0.95 cases per million working hours compared to the previous year (2022: 1.1). The accident severity rate (ASR) decreased significantly to 16.9 lost days per million working hours, down from 33.3 in the previous year.
The division participated in a Group-wide “Stop Work" campaign in 2023 that gave stop-work authority to any employee observing a tangible risk of injury. Holding safety paramount, the Flow Equipment business units delivered an excellent, sustained safety performance to achieve these good results.
Abbreviations
EBIT: Earnings before interest and taxes
For the definition of the alternative performance measures, please refer to “Supplementary information”