Order growth with improved profitability

In the first six months of 2020, Pumps Equipment (PE) recorded growing order intake compared with the same period of the previous year. The pandemic and the resulting market disruptions impacted sales and operational EBITA, while operational ROSA improved to 3.1% due to solid execution and cost discipline.

If not otherwise indicated, changes from the previous year are based on currency-adjusted figures.

Swift response in unprecedented times

The team reacted quickly to the challenges caused by the pandemic and implemented measures early-on to ensure employee safety and business continuity.

The business was granted license from authorities around the world to continue operations during lockdowns in order to maintain power, water, hospitals, shipping, refineries and other essential infrastructure. PE’s production facilities remained operational around the world throughout the crisis, while the teams swiftly managed disruptions in supply chain and logistics.

Because high oil stocks and lower demand are likely to impact investments in the energy market for some time, Sulzer announced structural actions to reduce the capacity in its Energy business by one-third, such as the intended consolidation of production and rightsizing of resources.

Pumps Equipment’s performance remained resilient against adverse market conditions. Our quick and decisive reaction to the pandemic will help us soften the impact on our results going forward.

Frédéric Lalanne, Division President Pumps Equipment

Driving digitalization and diversification

Due to travel restrictions and difficulties accessing customer sites, Sulzer has fostered digitalization projects to support business continuity. The company has expanded its remote pump witness testing program, allowing for fast and efficient digital sign-off on pump engineering projects during the COVID-19 crisis, without customers having to travel. Becoming the preferred choice for clients going forward, it is also a clear step towards smart factories.

With a 25% investment in the Finnish technology company Tamturbo announced in June, Sulzer further diversified its business and complemented its existing offering of lower pressure compressors with oil-free industrial air compressor systems. Tamturbo’s disruptive solutions enable cleaner, more energy-efficient and almost maintenance-free compressed air production.

Increase in order intake

Order intake increased by 6.0%, supported by its broad geographical presence including a strong market position in the Middle East. Excluding the two large orders totaling CHF 42 million in the first half of 2019, orders from the Water market increased by 2.5%. Order intake in General Industry segments decreased by 6.3% due to the COVID-19-related softening of markets.

Regionally, order intake grew by 21.2% in the Americas and by 4.4% in Asia-Pacific. Excluding the high base of the same period in 2019 driven by the two large orders mentioned above, Europe, the Middle East and Africa saw an increase of 10.2%.

Solid profitability on lower sales

Despite lockdowns leading to supply chain and logistics disruptions which impacted sales by 4.4%, profitability (opROSA) improved to 3.1%. Operational EBITA decreased on lower sales volumes, but operational ROSA improved owing to robust execution and cost measures.

Key figures Pumps Equipment (January 1 – June 30)

Abbreviations

EBIT: Earnings before interest and taxes

opEBITA: Operational earnings before interest, taxes and amortization

opROSA: Operational return on sales adjusted

For the definition of the alternative performance measures, please refer to the Sulzer Annual Report 2019.