Notes to the consolidated financial statements

1 General information

1General information

Sulzer Ltd (the “companyˮ) is a company domiciled in Switzerland. The address of the company’s registered office is Neuwiesenstrasse 15 in Winterthur, Switzerland. The unaudited consolidated interim financial statements for the six months ended June 30, 2024 comprise the company and its subsidiaries (together referred to as the “groupˮ and individually as the “subsidiariesˮ) and the group’s interest in associates and joint ventures. The company specializes in energy-efficient pumping, agitation, mixing, separation, purification, crystallization and polymerization technologies for fluids of all types. Sulzer was founded in 1834 in Winterthur, Switzerland, and employs 13'409 people. The company serves clients through a network of 160 production and service sites around the world. Sulzer Ltd is listed on the SIX Swiss Exchange in Zurich, Switzerland (symbol: SUN).

Sulzer is a global leader in fluid engineering and chemical processing applications, developing innovative products and services that drive sustainable progress.

The consolidated interim financial statements have been prepared in accordance with the requirements of IAS 34 “Interim Financial Reporting". Details of the group’s accounting policies are described in note 12.

2 Segment information

2Segment information

Segment information by divisions

 

 

Flow

 

Services

 

Chemtech

millions of CHF

 

2024

 

2023

 

2024

 

2023

 

2024

 

2023

Order intake 1)

 

848.0

 

824.8

 

701.4

 

662.7

 

529.4

 

504.9

Nominal growth

 

2.8%

 

16.3%

 

5.8%

 

12.7%

 

4.8%

 

15.5%

Currency-adjusted growth

 

6.3%

 

24.4%

 

12.6%

 

21.5%

 

7.9%

 

21.7%

Organic growth 2)

 

6.3%

 

25.1%

 

12.6%

 

22.1%

 

8.3%

 

25.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

Order backlog as of June 30 / December 31

 

1’052.0

 

878.3

 

677.5

 

547.3

 

674.8

 

521.2

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales recognized at a point in time

 

453.5

 

450.5

 

442.4

 

420.7

 

161.1

 

191.8

Sales recognized over time

 

258.7

 

212.1

 

150.2

 

137.4

 

233.4

 

189.1

Sales 3)

 

712.1

 

662.5

 

592.6

 

558.1

 

394.5

 

380.9

Nominal growth

 

7.5%

 

4.9%

 

6.2%

 

2.8%

 

3.6%

 

11.4%

Currency-adjusted growth

 

11.3%

 

11.8%

 

11.6%

 

10.2%

 

6.9%

 

17.8%

Organic growth 2)

 

11.2%

 

14.1%

 

12.0%

 

11.3%

 

7.2%

 

24.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational profit

 

67.8

 

46.4

 

83.9

 

79.4

 

52.1

 

44.7

Operational profitability

 

9.5%

 

7.0%

 

14.2%

 

14.2%

 

13.2%

 

11.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring expenses

 

–0.0

 

–0.0

 

–0.7

 

0.0

 

–0.8

 

–0.4

Amortization

 

–12.9

 

–12.9

 

–1.9

 

–1.9

 

–3.5

 

–3.4

Impairments on tangible and intangible assets 4)

 

 

0.0

 

–4.6

 

–0.0

 

 

–0.0

Non-operational items 5)

 

1.5

 

–5.1

 

0.0

 

14.2

 

0.0

 

–2.7

EBIT

 

56.4

 

28.4

 

76.7

 

91.7

 

47.8

 

38.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

–14.2

 

–14.8

 

–13.8

 

–13.8

 

–6.5

 

–6.6

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating assets

 

1’515.7

 

1’427.7

 

1’036.9

 

944.4

 

587.7

 

533.2

Unallocated assets

 

 

 

 

 

 

Total assets as of June 30 / December 31

 

1’515.7

 

1’427.7

 

1’036.9

 

944.4

 

587.7

 

533.2

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating liabilities

 

733.3

 

718.6

 

450.0

 

411.2

 

440.2

 

409.1

Unallocated liabilities

 

 

 

 

 

 

Total liabilities as of June 30 / December 31

 

733.3

 

718.6

 

450.0

 

411.2

 

440.2

 

409.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating net assets

 

782.3

 

709.1

 

587.0

 

533.2

 

147.5

 

124.1

Unallocated net assets

 

 

 

 

 

 

Total net assets as of June 30 / December 31

 

782.3

 

709.1

 

587.0

 

533.2

 

147.5

 

124.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditure (incl. lease assets)

 

–19.0

 

–20.6

 

–20.0

 

–18.1

 

–15.3

 

–6.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Employees (number of full-time equivalents) as of June 30 / December 31

 

5’454

 

5’465

 

4’797

 

4’630

 

2’975

 

2’849

1) Order intake from external customers.

2) Adjusted for acquisition, divestiture/deconsolidation and currency effects.

3) Sales from external customers.

4) An impairment of tangible assets is reported in the consolidated income statement in the line cost of goods sold.

5) The amounts reported in 2023 mainly consist of a gain on deconsolidation related to the Russian business of CHF 8.0 million, including the reclassification of the accumulated currency translation adjustments being allocated to the divisions.

Segment information by divisions

 

 

Total divisions

 

Others 6)

 

Total Sulzer

millions of CHF

 

2024

 

2023

 

2024

 

2023

 

2024

 

2023

Order intake 1)

 

2’078.8

 

1’992.4

 

 

 

2’078.8

 

1’992.4

Nominal growth

 

4.3%

 

14.9%

 

 

 

4.3%

 

14.9%

Currency-adjusted growth

 

8.8%

 

22.7%

 

 

 

8.8%

 

22.7%

Organic growth 2)

 

8.9%

 

24.1%

 

 

 

8.9%

 

24.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

Order backlog as of June 30 / December 31

 

2’404.3

 

1’946.8

 

 

 

2’404.3

 

1’946.8

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales recognized at a point in time

 

1’057.1

 

1’063.0

 

 

 

1’057.1

 

1’063.0

Sales recognized over time

 

642.2

 

538.6

 

 

 

642.2

 

538.6

Sales 3)

 

1’699.3

 

1’601.6

 

 

 

1’699.3

 

1’601.6

Nominal growth

 

6.1%

 

5.6%

 

 

 

6.1%

 

5.6%

Currency-adjusted growth

 

10.3%

 

12.6%

 

 

 

10.3%

 

12.6%

Organic growth 2)

 

10.5%

 

15.4%

 

 

 

10.5%

 

15.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational profit

 

203.7

 

170.5

 

–10.2

 

–8.1

 

193.5

 

162.4

Operational profitability

 

12.0%

 

10.6%

 

n/a

 

n/a

 

11.4%

 

10.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring expenses

 

–1.5

 

–0.4

 

0.0

 

0.0

 

–1.5

 

–0.4

Amortization

 

–18.3

 

–18.2

 

–0.5

 

–0.4

 

–18.8

 

–18.5

Impairments on tangible and intangible assets 4)

 

–4.6

 

–0.0

 

 

 

–4.6

 

–0.0

Non-operational items 5)

 

1.5

 

6.4

 

0.0

 

1.6

 

1.5

 

8.1

EBIT

 

180.9

 

158.3

 

–10.7

 

–6.8

 

170.1

 

151.5

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

–34.5

 

–35.2

 

–1.2

 

–1.3

 

–35.7

 

–36.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating assets

 

3’140.3

 

2’905.3

 

235.9

 

213.6

 

3’376.2

 

3’118.9

Unallocated assets

 

 

 

1’199.2

 

1’250.5

 

1’199.2

 

1’250.5

Total assets as of June 30 / December 31

 

3’140.3

 

2’905.3

 

1’435.1

 

1’464.2

 

4’575.4

 

4’369.5

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating liabilities

 

1’623.5

 

1’538.9

 

293.0

 

261.3

 

1’916.5

 

1’800.2

Unallocated liabilities

 

 

 

1’510.6

 

1’470.6

 

1’510.6

 

1’470.6

Total liabilities as of June 30 / December 31

 

1’623.5

 

1’538.9

 

1’803.6

 

1’731.9

 

3’427.1

 

3’270.8

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating net assets

 

1’516.8

 

1’366.4

 

–57.1

 

–47.7

 

1’459.7

 

1’318.7

Unallocated net assets

 

 

 

–311.4

 

–220.1

 

–311.4

 

–220.1

Total net assets as of June 30 / December 31

 

1’516.8

 

1’366.4

 

–368.5

 

–267.8

 

1’148.2

 

1’098.6

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditure (incl. lease assets)

 

–54.3

 

–45.5

 

–1.9

 

–2.4

 

–56.2

 

–47.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Employees (number of full-time equivalents) as of June 30 / December 31

 

13’227

 

12’944

 

183

 

186

 

13’409

 

13’130

1) Order intake from external customers.

2) Adjusted for acquisition, divestiture/deconsolidation and currency effects.

3) Sales from external customers.

4) An impairment of tangible assets is reported in the consolidated income statement in the line cost of goods sold.

5) The amounts reported in 2023 mainly consist of a gain on deconsolidation related to the Russian business of CHF 8.0 million, including the reclassification of the accumulated currency translation adjustments being allocated to the divisions.

6) The most significant activities under “Others” relate to Corporate Center.

For the definition of operational profit, operational profitability, currency-adjusted growth and organic growth, please refer to "Supplementary information" in the Sulzer Annual Report 2023.

Information about reportable segments

Operating segments are determined based on the reports reviewed by the Chief Executive Officer that are used to measure performance, make strategic decisions and allocate resources to the segments. The business is managed on a divisional basis, and the reported segments have been identified as follows:

Flow 

The Flow division (renamed in 2024 from Flow Equipment) specializes in pumping solutions specifically engineered for the processes of its customers. The division provides pumps, agitators, compressors, grinders, screens and filters developed through intensive research and development in fluid dynamics and advanced materials. The focus is on pumping solutions for water, oil and gas, power, chemicals and most industrial segments.

Services

The Services division provides cutting-edge parts as well as maintenance and repair solutions for pumps, turbines, compressors, motors and generators through a network of over 100 service sites around the world. The division services Sulzer original equipment, but also all associated third-party rotating equipment run by customers, maximizing its sustainability and life cycle cost-effectiveness. The division’s technology-based solutions, fast execution and expertise in complex maintenance projects are available at its customers’ doorsteps.

Chemtech

The Chemtech division focuses on innovative mass transfer, static mixing and polymer solutions for chemicals, petrochemicals, refining and LNG. Chemtech also provides ecological solutions such as biobased chemicals, polymers and fuels, recycling technologies for textiles and plastic as well as carbon capture and utilization/storage, contributing to a circular and sustainable economy. The division’s product offering ranges from process components to complete process plants and technology licensing.

Others

Certain expenses related to the Corporate Center are not attributable to a particular segment and are assessed as a whole across the group. Also included are the eliminations for operating assets and liabilities.

The Chief Executive Officer primarily uses operational profit to assess the performance of the operating segments. However, the Chief Executive Officer also receives information about the segments’ order intake, backlog, sales and operating assets and liabilities on a monthly basis.

Sales from external customers reported to the Chief Executive Officer are measured in a manner consistent with the measurement in the income statement. There are no significant sales between the segments. No individual customer represents a significant portion of the group’s sales.

Operating assets and liabilities are assets or liabilities related to the operating activities of an entity and contributing to EBIT.

Segment information by region

The allocation of sales from external customers is based on the location of the customer.

Sales by region

 

 

2024

millions of CHF

 

Flow

 

Services

 

Chemtech

 

Total Sulzer

Europe, the Middle East and Africa

 

293.8

 

212.0

 

85.8

 

591.7

– thereof United Kingdom

 

15.6

 

51.3

 

11.5

 

78.4

– thereof Germany

 

32.4

 

23.0

 

17.8

 

73.1

– thereof Saudi Arabia

 

41.7

 

15.3

 

12.6

 

69.5

– thereof France

 

17.5

 

12.4

 

2.7

 

32.7

– thereof Spain

 

21.1

 

3.2

 

2.5

 

26.8

 

 

 

 

 

 

 

 

 

Americas

 

253.6

 

307.5

 

98.1

 

659.2

– thereof USA

 

152.2

 

240.7

 

74.4

 

467.3

 

 

 

 

 

 

 

 

 

Asia-Pacific

 

164.8

 

73.1

 

210.6

 

448.4

– thereof China

 

111.3

 

14.6

 

145.2

 

271.2

 

 

 

 

 

 

 

 

 

Total

 

712.1

 

592.6

 

394.5

 

1’699.3

 

 

2023

millions of CHF

 

Flow

 

Services

 

Chemtech

 

Total Sulzer

Europe, the Middle East and Africa

 

299.6

 

212.3

 

102.4

 

614.2

– thereof United Kingdom

 

20.8

 

58.1

 

9.1

 

88.0

– thereof Saudi Arabia

 

39.3

 

14.4

 

19.4

 

73.1

– thereof Germany

 

31.8

 

22.0

 

17.0

 

70.7

– thereof France

 

18.9

 

19.0

 

4.1

 

42.0

– thereof United Arab Emirates

 

8.4

 

16.6

 

6.1

 

31.1

 

 

 

 

 

 

 

 

 

Americas

 

228.2

 

277.2

 

89.5

 

594.9

– thereof USA

 

136.8

 

211.5

 

65.6

 

413.9

 

 

 

 

 

 

 

 

 

Asia-Pacific

 

134.7

 

68.7

 

189.0

 

392.4

– thereof China

 

87.7

 

9.7

 

132.7

 

230.1

 

 

 

 

 

 

 

 

 

Total

 

662.5

 

558.1

 

380.9

 

1’601.6

Segment information by market segment

The following table shows the allocation of sales from external customers by market segment.

Sales by market segment — Flow

millions of CHF

 

2024

 

2023 1)

Water & Industrial

 

415.8

 

430.5

Energy & Infrastructure

 

296.4

 

232.1

Total Flow

 

712.1

 

662.5

1) The comparative amounts for 2023 were restated and aligned with the market segment definition in 2024. The former market segments “Water” and “Industry” were combined to “Water & Industrial”, with Desalination now included in “Energy & Infrastructure”.

Sales by market segment — Services

millions of CHF

 

2024

 

2023

Pumps Services

 

326.4

 

292.3

Other Equipment

 

266.2

 

265.9

Total Services

 

592.6

 

558.1

Sales by market segment — Chemtech

millions of CHF

 

2024

 

2023

Chemicals

 

178.2

 

188.6

Gas and Refining

 

89.5

 

80.1

Renewables

 

62.6

 

51.5

Services

 

51.2

 

45.9

Water

 

12.8

 

14.7

Total Chemtech

 

394.5

 

380.9

3 Acquisitions and disposals of businesses, transactions with non-controlling interests

3Acquisitions and disposals of businesses, transactions with non-controlling interests

Acquisitions in 2024

The table below presents the amounts of the assets acquired, the liabilities assumed, the goodwill recorded and the consideration transferred on the date of acquisition. If new information is obtained within one year since the date of acquisition about facts and circumstances that existed on the date of acquisition and, if this information was known on the date of acquisition would have resulted in additional assets and liabilities being recorded or a different measurement, then the accounting of the acquisition will be revised.

millions of CHF

 

Owatec Group Oy

 

Other

 

Total

Intangible assets

 

5.5

 

1.5

 

7.0

Property, plant and equipment

 

0.9

 

4.0

 

4.8

Other non-current assets

 

0.7

 

 

0.7

Other current assets

 

2.3

 

0.3

 

2.6

Cash and cash equivalents

 

0.5

 

 

0.5

Non-current borrowings

 

–1.6

 

 

–1.6

Non-current liabilities (excluding borrowings)

 

–1.4

 

 

–1.4

Current borrowings

 

–1.3

 

 

–1.3

Current liabilities (excluding borrowings)

 

–1.0

 

–0.1

 

–1.1

Net identifiable assets

 

4.6

 

5.7

 

10.3

Non-controlling interests

 

0.0

 

 

0.0

Goodwill

 

10.7

 

0.1

 

10.8

Total consideration

 

15.4

 

5.8

 

21.1

 

 

 

 

 

 

 

Purchase price paid in cash

 

6.9

 

5.8

 

12.7

Purchase price not yet paid

 

5.6

 

 

5.6

Contingent consideration

 

2.9

 

 

2.9

Total consideration

 

15.4

 

5.8

 

21.1

Owatec Group Oy

On April 3, 2024, Sulzer acquired a controlling stake in Owatec Group Oy ("Owatec"), a provider of mobile water treatment solutions headquartered in Finland. Sulzer acquired shares representing an ownership of 60 percent in Owatec and entered into a binding agreement to transfer the remaining 40 percent of the shares over the next five years. The total consideration amounts to CHF 15.4 million, of which CHF 6.9 million was paid in cash, CHF 2.9 million results from a contingent consideration agreement and CHF 5.6 million relate to the purchase price not yet paid. The purchase price not yet paid represents a liability for the estimated payments for the remaining 40 percent shares not yet transferred. 

The goodwill is attributable to the skills and knowledge of the workforce and favorable synergies. The goodwill is not expected to be deductible for tax purposes. The fair value of the trade accounts receivable amounts to CHF 0.4 million, which is equal to the gross contractual amount.

Contingent consideration and purchase price not yet paid

The contingent consideration depends mainly on the achievement of an operating income (EBIT) target for 2024. Because of the small number of possible outcomes, the contingent consideration was estimated based on the most likely amount. It is expected that all targets could be achieved and the liability reflects the maximum amount payable.

The liability for the purchase price not yet paid was recorded in other non-current liabilities. The shares were agreed to be transferred in four tranches, with payments expected each year in the years 2026 to 2029. The payments depend on the achieved average operating income (EBIT) in the two years before the payment, with an agreed minimum and maximum payment amount for each tranche. The recorded liability consists of the discounted expected payments estimated with the expected value method.

Others

On April 30, 2024, Sulzer acquired assets and liabilities that constitute a business, from Texas Electric Equipment Company Ltd. in the USA. The acquisition contributes to the group's Services business footprint in the USA. 

Cash flow from acquisition of subsidiaries

millions of CHF

 

2024

 

2023

Cash consideration paid

 

–12.7

 

Cash acquired

 

0.5

 

Contingent consideration paid

 

 

–1.3

Total cash flow from acquisitions, net of cash acquired

 

–12.2

 

–1.3

Contingent consideration

millions of CHF

 

2024

 

2023

Balance as of January 1

 

-

 

1.9

Assumed in a business combination

 

2.9

 

Payment of contingent consideration

 

-

 

–1.3

Release to other operating income

 

–0.0

 

–0.5

Currency translation differences

 

-

 

–0.0

Total contingent consideration as of June 30 / December 31

 

2.8

 

– thereof non-current

 

 

– thereof current

 

2.8

 

Disposals in 2023

In February 2023, the group entered into an agreement with a third party for the sale of four legal entities in Russia. From the date of the sales agreement, the group lost power over the relevant activities of these entities due to contractual requirements and the legal environment. Consequently, these four entities were deconsolidated in the first half of 2023, resulting in the derecognition of the assets and liabilities previously classified as held for sale. The deconsolidation resulted in a gain on deconsolidation amounting to CHF 8.0 million, of which CHF 11.2 million resulted from the reclassification of accumulated currency translation differences and CHF 0.6 million from the reclassification of cash flow hedge reserves, net of tax. The gain on deconsolidation was recorded in other operating income. The total net cash outflow from divestments of subsidiaries in the first half of 2023 amounted to CHF 32.0 million, with cash and cash equivalents in the amount of CHF 32.3 million derecognized as part of the divestments.

Transactions with non-controlling interests

millions of CHF

 

2024

 

2023

Carrying amount of non-controlling interests acquired (disposed)

 

 

0.4

Consideration received (paid) in cash

 

 

–19.4

Non-cash consideration

 

 

–2.8

Consideration payable

 

 

–0.6

Decrease in equity attributable to owners of Sulzer Ltd

 

 

–22.4

In the first half of 2024, a payment of CHF 0.3 million in connection with the acquisition of the remaining 25 percent ownership in Sulzer Saudi Pumps Company in 2023 is reported in the cash flow statement in divestiture (acquisition) of non-controlling interests.

4 Financial instruments

4Financial instruments

The following tables present the carrying amounts and fair values of financial assets and liabilities as of June 30, 2024, and December 31, 2023, including their levels in the fair value hierarchy. For financial assets and financial liabilities not measured at fair value in the balance sheet, fair value information is not provided if the carrying amount is a reasonable approximation of fair value.

Fair values are categorized into three different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

The fair value of financial instruments traded in active markets, including outstanding bonds, is based on quoted market prices at the balance sheet date. Such instruments are included in level 1.

The fair values included in level 2 are based on valuation techniques using observable market input data. These may include discounted cash flow analysis, option pricing models or reference to other instruments that are substantially the same, while always making maximum use of market inputs and relying as little as possible on entity-specific inputs. The fair values of forward contracts are measured based on broker quotes for foreign exchange rates and interest rates.

Fair values measured using unobservable inputs are categorized within level 3 of the fair value hierarchy. The level 3 financial assets at fair value through profit or loss are non-current and comprise unquoted debt or equity instruments, including private equity and fund investments. Additionally, in the first half of 2024, the group recorded a contingent consideration liability amounting to CHF 2.8 million as of June 30, 2024. The contingent consideration depends mainly on the achievement of an operating income target for 2024. For further information see note 3.

Financial assets at fair value through profit or loss - level 3

millions of CHF

 

2024

 

2023

Balance as of January 1

 

22.0

 

22.6

Additions

 

0.1

 

0.6

Divestments

 

–0.0

 

Unrealized fair value (loss) / gain, net

 

–1.2

 

1.9

Reclassification

 

 

–3.0

Total level 3 financial assets at fair value through profit or loss as of June 30 / December 31

 

20.9

 

22.0

Fair value table

 

 

 

 

June 30, 2024

 

 

 

 

Carrying amount

 

Fair value

millions of CHF

 

Notes

 

Fair value hedging instruments

 

Fair value through profit or loss

 

Financial assets at fair value through other comprehensive income – equity instruments

 

Financial assets at amortized cost

 

Other financial liabilities

 

Total carrying amount

 

Level 1

 

Level 2

 

Level 3

 

Total fair value

Financial assets measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other non-current financial assets (at fair value)

 

 

 

 

 

21.1

 

7.6

 

 

 

 

 

28.7

 

7.8

 

 

20.9

 

28.7

Derivative assets – current

 

 

 

3.1

 

 

 

 

 

 

 

 

 

3.1

 

 

3.1

 

 

3.1

Current financial assets (at fair value)

 

 

 

 

 

0.6

 

 

 

 

 

 

 

0.6

 

0.6

 

 

 

0.6

Total financial assets measured at fair value

 

 

 

3.1

 

21.6

 

7.6

 

 

 

32.4

 

8.4

 

3.1

 

20.9

 

32.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial assets not measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other non-current financial assets (at amortized cost)

 

 

 

 

 

 

 

 

 

3.4

 

 

 

3.4

 

 

 

 

 

 

 

 

Non-current receivables (excluding non-current derivative assets)

 

 

 

 

 

 

 

 

 

0.9

 

 

 

0.9

 

 

 

 

 

 

 

 

Trade accounts receivable

 

 

 

 

 

 

 

 

 

612.1

 

 

 

612.1

 

 

 

 

 

 

 

 

Other current receivables (excluding current derivative assets and other taxes)

 

 

 

 

 

 

 

 

 

25.0

 

 

 

25.0

 

 

 

 

 

 

 

 

Current financial assets (at amortized cost)

 

 

 

 

 

 

 

 

 

0.5

 

 

 

0.5

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

931.4

 

 

 

931.4

 

 

 

 

 

 

 

 

Total financial assets not measured at fair value

 

 

 

 

 

 

1’573.2

 

 

1’573.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities – current

 

 

 

4.7

 

 

 

 

 

 

 

 

 

4.7

 

 

4.7

 

 

4.7

Current contingent consideration

 

3

 

 

 

2.8

 

 

 

 

 

 

 

2.8

 

 

 

2.8

 

2.8

Total financial liabilities measured at fair value

 

 

 

4.8

 

2.8

 

 

 

 

7.6

 

 

4.7

 

2.8

 

7.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities not measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding non-current bonds

 

9

 

 

 

 

 

 

 

 

 

794.4

 

794.4

 

791.0

 

 

 

791.0

Other non-current borrowings

 

9

 

 

 

 

 

 

 

 

 

1.4

 

1.4

 

 

 

 

 

 

 

 

Other non-current liabilities

 

 

 

 

 

 

 

 

 

 

 

7.7

 

7.7

 

 

 

 

 

 

 

 

Outstanding current bonds

 

9

 

 

 

 

 

 

 

 

 

250.0

 

250.0

 

250.1

 

 

 

250.1

Other current borrowings and bank loans

 

9

 

 

 

 

 

 

 

 

 

16.2

 

16.2

 

 

 

 

 

 

 

 

Trade accounts payable

 

 

 

 

 

 

 

 

 

 

 

389.2

 

389.2

 

 

 

 

 

 

 

 

Other current liabilities (excluding current derivative liabilities, other taxes and contingent consideration)

 

11

 

 

 

 

 

 

 

 

 

456.0

 

456.0

 

 

 

 

 

 

 

 

Total financial liabilities not measured at fair value

 

 

 

 

 

 

 

1’914.9

 

1’914.9

 

 

 

 

 

 

 

 

Fair value table

 

 

 

 

December 31, 2023

 

 

 

 

Carrying amount

 

Fair value

millions of CHF

 

Notes

 

Fair value hedging instruments

 

Fair value through profit or loss

 

Financial assets at fair value through other comprehensive income – equity instruments

 

Financial assets at amortized cost

 

Other financial liabilities

 

Total carrying amount

 

Level 1

 

Level 2

 

Level 3

 

Total fair value

Financial assets measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other non-current financial assets (at fair value)

 

 

 

 

 

22.2

 

9.5

 

 

 

 

 

31.7

 

9.7

 

 

22.0

 

31.7

Derivative assets – current

 

 

 

13.9

 

 

 

 

 

 

 

 

 

13.9

 

 

13.9

 

 

13.9

Current financial assets (at fair value)

 

 

 

 

 

1.6

 

 

 

 

 

 

 

1.6

 

1.6

 

 

 

1.6

Total financial assets measured at fair value

 

 

 

13.9

 

23.8

 

9.5

 

 

 

47.2

 

11.3

 

13.9

 

22.0

 

47.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial assets not measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other non-current financial assets (at amortized cost)

 

 

 

 

 

 

 

 

 

6.7

 

 

 

6.7

 

 

 

 

 

 

 

 

Non-current receivables (excluding non-current derivative assets)

 

 

 

 

 

 

 

 

 

1.2

 

 

 

1.2

 

 

 

 

 

 

 

 

Trade accounts receivable

 

 

 

 

 

 

 

 

 

540.8

 

 

 

540.8

 

 

 

 

 

 

 

 

Other current receivables (excluding current derivative assets and other taxes)

 

 

 

 

 

 

 

 

 

22.6

 

 

 

22.6

 

 

 

 

 

 

 

 

Current financial assets (at amortized cost)

 

 

 

 

 

 

 

 

 

0.7

 

 

 

0.7

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

974.7

 

 

 

974.7

 

 

 

 

 

 

 

 

Total financial assets not measured at fair value

 

 

 

 

 

 

1’546.7

 

 

1’546.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities – current

 

 

 

3.2

 

 

 

 

 

 

 

 

 

3.2

 

 

3.2

 

 

3.2

Total financial liabilities measured at fair value

 

 

 

3.2

 

 

 

 

 

3.2

 

 

3.2

 

 

3.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities not measured at fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding non-current bonds

 

9

 

 

 

 

 

 

 

 

 

794.3

 

794.3

 

786.2

 

 

 

786.2

Other non-current borrowings

 

9

 

 

 

 

 

 

 

 

 

0.9

 

0.9

 

 

 

 

 

 

 

 

Other non-current liabilities (excluding non-current derivative liabilities)

 

 

 

 

 

 

 

 

 

 

 

1.2

 

1.2

 

 

 

 

 

 

 

 

Outstanding current bonds

 

9

 

 

 

 

 

 

 

 

 

250.0

 

250.0

 

250.0

 

 

 

250.0

Other current borrowings and bank loans

 

9

 

 

 

 

 

 

 

 

 

11.1

 

11.1

 

 

 

 

 

 

 

 

Trade accounts payable

 

 

 

 

 

 

 

 

 

 

 

367.7

 

367.7

 

 

 

 

 

 

 

 

Other current liabilities (excluding current derivative liabilities, and other taxes)

 

11

 

 

 

 

 

 

 

 

 

404.3

 

404.3

 

 

 

 

 

 

 

 

Total financial liabilities not measured at fair value

 

 

 

 

 

 

 

1’829.5

 

1’829.5

 

 

 

 

 

 

 

 

5 Other operating income and expenses

5Other operating income and expenses

millions of CHF

 

2024

 

2023

Income from release of contingent consideration

 

0.0

 

0.5

Gain from sale of property, plant and equipment

 

0.2

 

0.6

Gain from deconsolidation of subsidiaries

 

 

8.3

Other operating income

 

0.0

 

5.6

Total other operating income

 

0.3

 

14.9

 

 

 

 

 

Cost for mergers and acquisitions

 

–1.3

 

–1.0

Loss from sale of property, plant and equipment

 

–0.3

 

–0.0

Loss from deconsolidation of subsidiaries

 

–0.1

 

–0.9

Operating currency exchange losses, net

 

–4.1

 

–3.4

Other operating expenses

 

–3.2

 

–0.4

Total other operating expenses

 

–9.0

 

–5.9

 

 

 

 

 

Total other operating income / (expenses), net

 

–8.7

 

9.1

In the first half of 2023, other operating income included, among others, income from charges to the discontinued operation Applicator System division (later renamed medmix) for corporate support functions and centrally procured indirect spend utilized by medmix of CHF 1.6 million.

In the first half of 2023, the total gain from deconsolidation primarily included a gain of CHF 8.0 million from the deconsolidation of four Russian legal entities (see note 3). The total gain and loss from deconsolidation of subsidiaries in the first half of 2023 included a net gain from the reclassification of currency translation adjustments of CHF 10.7 million and a gain of CHF 0.6 million from the reclassification of cash flow hedge reserves.

6 Financial income and expenses

6Financial income and expenses

millions of CHF

 

2024

 

2023

Interest and securities income

 

8.4

 

10.5

Interest income on employee benefit plans

 

1.3

 

0.0

Total interest and securities income

 

9.7

 

10.5

Interest expenses on borrowings and lease liabilities

 

–11.7

 

–14.0

Interest expenses on employee benefit plans

 

–2.4

 

–2.1

Total interest expenses

 

–14.1

 

–16.1

Total interest income / (expenses), net

 

–4.4

 

–5.6

 

 

 

 

 

Fair value changes

 

–11.4

 

–9.1

Other financial income / (expenses)

 

0.4

 

–0.7

Currency exchange gains / (losses), net

 

3.7

 

2.7

Total other financial income / (expenses), net

 

–7.3

 

–7.2

 

 

 

 

 

Total financial income / (expenses), net

 

–11.8

 

–12.8

- thereof fair value changes on financial assets at fair value through profit or loss

 

–11.4

 

–9.1

- thereof interest income on financial assets at amortized costs

 

8.4

 

10.5

- thereof other financial income / (expenses)

 

0.4

 

–0.7

- thereof currency exchange gains / (losses), net

 

3.7

 

2.7

- thereof interest expenses on borrowings

 

–10.3

 

–12.7

- thereof interest expenses on lease liabilities

 

–1.4

 

–1.3

- thereof interest expenses on employee benefit plans, net

 

–1.1

 

–2.1

In the first half of 2024, total financial expenses, net, amounted to CHF 11.8 million, compared to CHF 12.8 million in the first half of 2023.

Total interest and securities income amounted to CHF 9.7 million for the first half of 2024 (first half of 2023: CHF 10.5 million). The decrease compared to the prior year results from lower variable interest rates on deposits.

Lower total interest expenses are mainly the result of the repayment of a maturing bond of CHF 290 million with an interest rate of 1.3% in July 2023.

The fair value changes are largely related to derivative financial instruments that are classified as financial assets or financial liabilities at fair value through profit and loss and that are used as hedging instruments to hedge foreign exchange risks.

Currency exchange gains/losses are mainly related to foreign currency differences of non-operating assets and liabilities recorded at the prevailing rate at the time of acquisition (or the preceding year-end closing rate) as against the current balance sheet rate. 

7 Income taxes

7Income taxes

Income tax expense is recognized at an amount that is determined by multiplying the profit before tax for the interim reporting period by management’s best estimate of the weighted average annual income tax rate expected for the full financial year, adjusted for the tax effect of certain items recognized in full in the interim period. Income tax expenses comprise current and deferred tax. Sulzer’s estimated average annual tax rate for 2024 is 24.9%, compared with 24.2% for the six months ending June 30, 2023. 

Sulzer is subject to the global minimum top-up tax under Pillar Two legislation. The top-up tax relates to subsidiaries in Bahrain, Ireland, Qatar and the United Arab Emirates, where the statutory tax rate is below 15%. No top-up tax was recorded in the first half of 2024. New top-up tax legislation was enacted in Switzerland and became applicable from January 1, 2024. The new legislation includes only Qualified Domestic Top-up Tax (“QDMTT"); Sulzer considered the impact on the estimated income tax rate for the full financial year. By June 30, 2024, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Malaysia, the Netherlands, Norway, Romania, South Korea, Sweden, Switzerland and the United Kingdom had enacted new tax legislation to implement a domestic minimum top-up tax.

The group has applied the temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax. The group recognizes the top-up tax as current tax when it incurs it.

8 Equity

8Equity

The share capital amounts to CHF 342’623.70, made up of 34’262’370 shares with dividend entitlement and a par value of CHF 0.01. All shares are fully paid in and registered. On June 30, 2024, conditional share capital amounted to CHF 17’000 (December 31, 2023: CHF 17’000), consisting of 1'700’000 shares with a par value of CHF 0.01. 

Treasury shares

In the first half year 2024, the group acquired 150’000 treasury shares for CHF 15.7 million. The total number of treasury shares held by Sulzer Ltd as of June 30, 2024, was 378’924 shares (December 31, 2023: 451’074 shares). 

The treasury shares are mainly held for the purpose of issuing shares under the management share-based payment programs.

Dividends

On April 16, 2024, the Annual General Meeting approved an ordinary dividend of CHF 3.75 (2023: ordinary dividend of CHF 3.50) per share to be paid out of reserves. The dividend was paid to shareholders on April 22, 2024. The total amount of the dividend to shareholders of Sulzer Ltd was CHF 127.3 million (2023: CHF 118.9 million), thereof paid dividends of CHF 86.5 million (2023: CHF 80.9 million) and unpaid dividends of CHF 40.8 million (2023: CHF 38.1 million). The unpaid dividends are reflected in the balance sheet position “Other current and accrued liabilitiesˮ (see note 11).

Acquisition of non-controlling interests without change of control

Reference is made to note 3.

Contribution from medmix

The contribution relates to vested shares under Sulzer share plans for medmix employees. 

9 Borrowings

9Borrowings

 

 

2024

millions of CHF

 

Non-current borrowings

 

Current borrowings

 

Total

Balance as of January 1

 

795.2

 

261.1

 

1’056.3

Acquired through business combination

 

1.6

 

1.3

 

2.9

Cash flow from proceeds

 

 

22.1

 

22.1

Cash flow for repayments

 

 

–18.9

 

–18.9

Changes in amortized costs

 

0.1

 

0.0

 

0.2

Reclassifications

 

–1.1

 

0.0

 

–1.1

Currency translation differences

 

0.0

 

0.5

 

0.5

Total borrowings as of June 30

 

795.8

 

266.2

 

1’062.0

 

 

2023

millions of CHF

 

Non-current borrowings

 

Current borrowings

 

Total

Balance as of January 1

 

1’043.9

 

311.4

 

1’355.3

Cash flow from proceeds

 

 

26.0

 

26.0

Cash flow for repayments

 

–0.0

 

–324.9

 

–325.0

Changes in amortized costs

 

0.3

 

0.1

 

0.4

Other non-cash increase

 

0.9

 

0.1

 

1.0

Reclassifications

 

–249.9

 

249.9

 

0.0

Currency translation differences

 

–0.1

 

–1.5

 

–1.6

Total borrowings as of December 31

 

795.2

 

261.1

 

1’056.3

Outstanding bonds

 

 

2024

 

2023

millions of CHF

 

Amortized costs

 

Nominal

 

Amortized costs

 

Nominal

0.875% 07/2016–07/2026

 

125.0

 

125.0

 

124.9

 

125.0

1.600% 10/2018–10/2024

 

250.0

 

250.0

 

250.0

 

250.0

0.800% 09/2020–09/2025

 

299.8

 

300.0

 

299.8

 

300.0

0.875% 11/2020–11/2027

 

199.8

 

200.0

 

199.8

 

200.0

3.350% 12/2022–11/2026

 

169.8

 

170.0

 

169.7

 

170.0

Total as of June 30 / December 31

 

1’044.4

 

1’045.0

 

1’044.1

 

1’045.0

– thereof non-current

 

794.4

 

795.0

 

794.2

 

795.0

– thereof current

 

250.0

 

250.0

 

250.0

 

250.0

All outstanding bonds are traded on SIX Swiss Exchange.

As of June 30, 2024, Sulzer had access to a syndicated credit facility of CHF 500 million maturing on December 31, 2026. The facility includes two one-year extension options and a further option to increase the credit facility by CHF 250 million (subject to lenders’ approval). In 2022 and 2023, the group exercised the options, extending the term of the credit facility in the amount of CHF 415 million to December 2028. The facility is subject to financial covenants based on net financial indebtedness and EBITDA, which were adhered to throughout the reporting period. As of June 30, 2024 and December 31, 2023, the syndicated facility had not been used.

10 Provisions

10Provisions

 

 

2024

millions of CHF

 

Other employee benefits

 

Warranties / liabilities

 

Restructuring

 

Environmental

 

Other

 

Total

Balance as of January 1

 

33.2

 

98.8

 

5.0

 

12.4

 

42.6

 

192.0

Additions

 

3.6

 

10.9

 

1.5

 

 

11.7

 

27.8

Released as no longer required

 

–0.6

 

–2.5

 

 

 

–9.6

 

–12.7

Utilized

 

–2.0

 

–10.2

 

–2.4

 

 

–6.8

 

–21.4

Currency translation differences

 

1.3

 

3.4

 

0.1

 

0.3

 

1.5

 

6.6

Total provisions as of June 30

 

35.6

 

100.4

 

4.3

 

12.7

 

39.5

 

192.5

– thereof non-current

 

22.6

 

3.2

 

0.9

 

12.6

 

8.2

 

47.6

– thereof current

 

12.9

 

97.2

 

3.3

 

0.0

 

31.3

 

144.9

The category “Other employee benefitsˮ includes provisions for jubilee gifts, and other obligations to employees.

The category “Warranties / liabilitiesˮ includes provisions for warranties, customer claims, penalties, litigation and legal cases relating to goods delivered or services rendered. Warranties that provide customers with assurance that the product complies with the agreed specifications are accounted for as provisions over the agreed warranty period.

In the first half of 2024, the group utilized CHF 2.4 million of restructuring provisions, mainly relating to the reorganization of the Flow division. The remaining restructuring provisions as of June 30, 2024 amount to CHF 4.3 million, of which CHF 3.3 million is expected to be utilized within one year.

“Environmentalˮ mainly consists of expected costs related to inherited liabilities.

“Otherˮ includes provisions that do not fit into the aforementioned categories. A large number of these provisions refer to onerous contracts and indemnities, in particular related to divestitures. In addition, provisions for ongoing asbestos lawsuits and other legal claims are included. Based on the currently known facts, the group estimates that resolution of the open cases will not have material effects on its liquidity or financial condition. Although the group expects a large part of the category “Otherˮ to be realized in one year, by their nature, the amounts and timing of any cash outflows are difficult to predict.

11 Other current and accrued liabilities

11Other current and accrued liabilities

millions of CHF

 

2024

 

2023

Liability related to the purchase of treasury shares

 

91.8

 

88.1

Outstanding dividend payments

 

318.0

 

277.2

Taxes (VAT, withholding tax)

 

32.5

 

31.4

Derivative financial instruments

 

4.7

 

3.2

Contingent consideration

 

2.8

 

Other current liabilities

 

46.2

 

38.9

Total other current liabilities as of June 30 / December 31

 

496.0

 

438.9

 

 

 

 

 

Contract-related costs

 

145.0

 

121.3

Salaries, wages and bonuses

 

93.0

 

121.9

Vacation and overtime claims

 

30.5

 

23.0

Other accrued liabilities

 

207.1

 

147.3

Total accrued liabilities as of June 30 / December 31

 

475.5

 

413.5

 

 

 

 

 

Total other current and accrued liabilities as of June 30 / December 31

 

971.5

 

852.4

Outstanding dividend payments amounted to CHF 318.0 million (December 31, 2023: CHF 277.2 million), which is an increase of CHF 40.8 million. For further details on dividends, refer to note 8.

12 Accounting policies

12Accounting policies

12.1 Basis of preparation

These interim financial statements have been prepared in accordance with the requirements of IAS 34 Interim Financial Reporting. The accounting policies applied are consistent with those applied in the consolidated financial statements for the year 2023 and the corresponding interim reporting period, except for the adoption of new and amended standards, as set out below.

These interim financial statements do not include all the notes of the type normally included in an annual financial report. Accordingly, these financial statements are to be read in conjunction with the financial statements for the year ended December 31, 2023 and any public announcements made by Sulzer during the interim reporting period.

The preparation of these interim financial statements requires management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results in the future could differ from such estimates. A description of information that requires significant judgements to be made by Management and the key sources of estimation uncertainty, is disclosed in note 6, Critical accounting estimates and judgments, in the December 31, 2023 consolidated financial statements. 

Due to rounding, numbers presented throughout this report may not add up precisely to the total provided. All ratios, percentages and variances are calculated using the underlying amount rather than the presented rounded amount. 

12.2 Change in accounting policies

a) Standards, amendments, and interpretations that are effective for 2024

Starting from January 1, 2024, the group applied changes in standards, amendments and interpretations that became effective from January 1, 2024. None of these changes had a material effect on the consolidated interim financial statements of the group. 

b) Standards, amendments, and interpretations issued but not yet effective

In 2024, the group has not adopted early any standard, amendment, or interpretation issued but not yet effective. The following amended standard will become effective from January