– Business review – Flow Equipment
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 and acquisitions/deconsolidations).
The Flow Equipment division experienced strong order growth of 25.1% compared to the first half of 2022, mainly driven by strong increases in the global energy market, with Water remaining stable. Sales increased 14.1% to CHF 662.5 million due to strong growth in the Water and Industry business units. Operational profitability rose 170 basis points year-on-year, reflecting disciplined pricing and improved commercial and operational excellence. The division continues to focus on operational efficiency across its business units to meet growing demand for infrastructure and services in support of the energy transition.
Enabling renewable energy
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. The rightsizing activities of the Energy business helped the division achieve strong H1 results, as reflected in order intake, sales and improved margins. Water remains a strategic market and continues to grow profitably, while Industry is basically stable year-on-year.
Earlier this year, a major energy producer in Canada selected Sulzer technology to support net zero biofuel production at industrial scale. The operation relies on a range of Sulzer flow equipment to realize an annual carbon reduction of up to 3'000,000 tonnes. Recently, Sulzer announced its business-critical role in enabling green hydrogen production after having been selected by Air Products to support their project for end customer NEOM, in Saudi Arabia. This facility has a projected capacity of approximately 222'000 tonnes of carbon-free green hydrogen per year.
While working to strengthen its position through portfolio expansion and geographic reach, the Water business remains resilient, with stable order intake for its state-of-the-art wastewater treatment solutions. The Industry business maintains its leading position in the pulp and paper market and continues to strategically focus on customer and product development in other industry segments.
Moving forward, the Flow Equipment division will continue to leverage its technologies and potential across the three businesses to support customers with innovative solutions that improve efficiencies and advance their sustainability objectives.
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Flow Equipment is well positioned to capture growth opportunities in our core markets. We develop innovative and reliable solutions that support our customers’ green energy transitions. With our continuous focus on operational efficiency, all business areas contribute to our profitable growth.”
Jan LüderDivision President Flow Equipment
Key figures Flow Equipment (January 1 – June 30)
|
millions of CHF |
|
2023 |
|
2022 |
|
Change in +/–% |
|
+/–% adjusted 1) |
|
+/–% organic 2) |
|
Order intake |
|
824.8 |
|
709.1 |
|
16.3 |
|
24.4 |
|
25.1 |
|
Order intake gross margin |
|
28.7% |
|
31.1% |
|
|
|
|
|
|
|
Order backlog as of June 30 / December 31 |
|
978.4 |
|
850.1 |
|
15.1 |
|
|
|
|
|
Sales |
|
662.5 |
|
631.9 |
|
4.9 |
|
11.8 |
|
14.1 |
|
EBIT 3) |
|
28.4 |
|
3.7 |
|
671.9 |
|
|
|
|
|
Operational profit |
|
46.4 |
|
33.7 |
|
37.6 |
|
38.9 |
|
39.8 |
|
Operational profitability |
|
7.0% |
|
5.3% |
|
|
|
|
|
|
|
Employees (number of full-time equivalents) as of June 30 / December 31 |
|
5’334 |
|
5’263 |
|
1.3 |
|
|
|
|
1) Adjusted for currency effects.
2) Adjusted for acquisition, deconsolidation and currency effects.
3) 2022 was impacted by write-offs related to Russia and Poland.
Continued strong order growth
Following a number of large orders in the first quarter, order growth normalized in Q2. Orders for the first half of the year rose 25.1%, driven by strong demand for clean energy.
Order intake by segment
H1 2023
Order intake by region
H1 2023
Sales and profitability
Sales increased by 14.1 percentage points across all business units. Operational profitability increased by 1.7 percentage points to 7.0%, mainly driven by an increased focus on price realization against inflation and disciplined control of operational expenditures.