Increase in order intake, sales and operational EBITA
Rotating Equipment Services reported growing order intake in the first six months of 2019. Sales and operational EBITA also grew, whereas operational ROSA decreased slightly. Sulzer acquired Alba Power, a leading independent service provider for aero-derivative gas turbines, thus diversifying into distributed power.
Diversifying into the distributed power industry
On July 2, 2019, Sulzer announced the acquisition of Alba Power, a leading independent service provider for aero-derivative gas turbines in Aberdeen, UK. With that, Sulzer has diversified its gas turbine service business into distributed power and offshore as well as marine applications. There are sizable, active markets and numerous cross-selling synergies with its existing pump, motor, generator and turbo service customers. Alba Power employs 80 people and generated sales of CHF 44 million with a profit margin above 20% in 2018.
By welcoming Alba Power to our team, we are diversifying our service offering for gas turbines into distributed power and offshore as well as marine applications. It’s an excellent opportunity for cross-selling to our existing customers.
Daniel Bischofberger, Division President Rotating Equipment Services
Further, the division is advancing a powerful global initiative to streamline the processes of its operations. The project aims at faster delivery by using a standardized repair approach and digitalization. This will enable the division to provide the same excellent quality at double the speed.
All product lines contributed to order growth
Order intake increased in the first half of 2019 compared with the same period of the previous year. All product lines – Pump Services, Turbo Services and Electromechanical Services – contributed to growth, with a particularly strong demand for Pump Services. Order intake grew in all regions and was most pronounced in Europe, the Middle East and Africa (EMEA).
Increase of sales and operational EBITA – operational ROSA decreased
Sales increased considerably compared with the first six months of 2018. Growth in Pump Services and Electromechanical Services more than offset a decrease in Turbo Services.
Higher volumes led to an increase of operational EBITA. Operational ROSA, on the other hand, decreased slightly to 12.0% from 12.3% in the first half of 2018, due to timing impact.
If not otherwise indicated, changes from the previous year are based on currency-adjusted figures. These are reported without consideration of IFRS 16, applying the same accounting policies as in the previous year.
Sales by market segment
Sales by region
Key figures Rotating Equipment Services (January 1 – June 30)
|
millions of CHF |
2019 (new accounting policies) 1) |
2019 (previous accounting policies) 2) |
2018 3) |
Change in +/–% 4) |
+/–% adjusted 5) |
+/–% organic 6) |
|
Order intake |
602.2 |
602.2 |
572.1 |
5.3 |
7.3 |
6.2 |
|
Order intake gross margin |
39.4% |
39.4% |
37.4% |
|
|
|
|
Order backlog as of June 30/December 31 |
429.4 |
429.4 |
393.1 |
9.2 |
|
|
|
Sales |
561.4 |
561.4 |
499.8 |
12.3 |
14.9 |
13.7 |
|
EBIT |
64.1 |
63.4 |
56.6 |
12.1 |
|
|
|
opEBITA |
67.9 |
67.2 |
61.4 |
9.5 |
12.6 |
12.3 |
|
opROSA |
12.1% |
12.0% |
12.3% |
|
|
|
|
Employees (number of full-time equivalents) as of June 30/December 31 |
4’882 |
4’882 |
4’721 |
3.4 |
|
|
1) According to IFRS 16, see financial review and note 13 of the consolidated financial statements for details.
2) Without consideration of IFRS 16, applying the same accounting policies as in the prior year.
3) Adjusted due to the reassessment of a customer contract. See note 13 of the consolidated financial statements for details.
4) Comparing 2019 (previous accounting policies) with 2018.
5) Adjusted for currency effects. Comparing 2019 (previous accounting policies) with 2018.
6) Adjusted for acquisition and currency effects. Comparing 2019 (previous accounting policies) with 2018.
Abbreviations
EBIT: Operating income
opEBITA: Operating income before restructuring, amortization, impairments and non-operational items
opROSA: Return on sales before restructuring, amortization, impairments and non-operational items (opEBITA/sales)