– Business review – Services
Continued strong growth
Note: If not otherwise indicated, changes from the previous year are based on organic figures (adjusted for currency effects and acquisitions/deconsolidations).
In the first half of 2023, the Services division saw order intake rise by 22.1% compared to H1 2022, mainly driven by the Americas and the EMEA region. Sales increased by 11.3% compared to the same period a year ago, with all regions and product lines contributing to the growth. Operational profitability increased by 90 basis points due to higher volume and a better mix. The division continues to invest in its service offering to broaden its scope of technical services and geographic reach.
Strong demand driven by sustainable solutions
With the growing focus on decarbonization and efficiency, the division sees increasing demand for retrofits and repairs. Retrofits for legacy equipment are driving demand, as Pumps Services leverages its broad technical expertise across industries and locations. Meanwhile, Turbo Services continues to demonstrate its expertise, recently helping a gas turbine powerplant in China reduce nitrogen oxide (NOx) emissions and comply with a stringent new emissions standard.
As Sulzer’s global service network is a key competitive advantage, the company continues to upgrade facilities and expand its footprint. A recently opened new purpose-built, 1'680-square-meter service center in Lausitz, Germany, features enhanced digital technologies and capabilities, also offering a central location to better support industrial customers in Germany, Poland and the Czech Republic. Other examples include facility expansions in Orange, Texas, and Baton Rouge, Louisiana, where capacity was doubled in the first half of the year at each site, with further network upgrades currently underway.
Our performance demonstrates agility in capturing market upswings. We focus on reducing lead times by further improving our responsiveness and flexibility. We continue to invest in the business to ensure we are close to our customers and able to deliver critical services when and where needed.”
Tim SchultenDivision President Services
Key figures Services (January 1 – June 30)
|
millions of CHF |
|
2023 |
|
2022 |
|
Change in +/–% |
|
+/–% adjusted 1) |
|
+/–% organic 2) |
|
Order intake |
|
662.7 |
|
587.9 |
|
12.7 |
|
21.5 |
|
22.1 |
|
Order intake gross margin |
|
38.4% |
|
37.3% |
|
|
|
|
|
|
|
Order backlog as of June 30 / December 31 |
|
568.5 |
|
492.9 |
|
15.3 |
|
|
|
|
|
Sales |
|
558.1 |
|
542.8 |
|
2.8 |
|
10.2 |
|
11.3 |
|
EBIT 3) |
|
91.7 |
|
–19.0 |
|
n/a |
|
|
|
|
|
Operational profit |
|
79.4 |
|
72.2 |
|
10.0 |
|
17.7 |
|
18.5 |
|
Operational profitability |
|
14.2% |
|
13.3% |
|
|
|
|
|
|
|
Employees (number of full-time equivalents) as of June 30 / December 31 |
|
4’571 |
|
4’559 |
|
0.3 |
|
|
|
|
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 growth trajectory
The Services division increased order intake by 22.1% year-on-year, continuing its growth trajectory. Both EMEA and the Americas saw double-digit growth in H1 2023, driven by increasing energy demand and new sustainability targets of customers. Retrofits for legacy equipment are driving demand, as Pumps Services leverages its broad technical expertise across industries and locations. Due to a particularly large order received in early 2022, Asia-Pacific was lower in the first half of 2023 compared to the same time period last year.
Order intake by market segment
H1 2023
Order intake by region
H1 2023
Increasing sales
All regions contributed to the significant sales growth of 11.3% compared with the first half of 2022, more than compensating the exit from the Russian market. Despite inflationary pressures, operational profitability increased by 90 basis points, that was mainly driven by a better mix and increased volumes.