Commercial Rebound At Sulzer Under Way

11.11.2020
CEO Greg Poux-Guillaume stated: “Our orders in the first nine months of 2020 declined by 2% as the global economy absorbed the full effect of the country lockdowns. Our aftermarket activities proved again resilient despite customer access restrictions which impacted our performance in Q3."
Commercial Rebound At Sulzer Under Way

Image source: Sulzer Ltd.

"Our Applicator System division strongly rebounded in the third quarter on continued market reopening and customer restocking. With the closing of the Haselmeier acquisition, we complemented our portfolio of healthcare applicators and are well positioned to seize growth opportunities in the fast-growing drug delivery devices market.”

In the first nine months of 2020, order intake declined by CHF 243 million, minus 2% currency-adjusted and minus 3.6% organic. Currency impact was a negative 6.5% and acquisitions contributed CHF 44.9 million.

Organic order intake in Sulzer’s end markets was mixed: orders from oil and gas grew organically by 1.7% compared with the same period a year ago, while chemicals were organically flat (-0.6%). The municipal water market held up well and our water segment was flat organically, excluding two large water infrastructure projects booked in the Middle East last year. Orders from the power market were also flat for the nine-month period, dampened by pandemic-driven site access restrictions in our service business. In Applicator Systems, significant order growth in healthcare could not offset the impact of lockdowns on the beauty and dental markets, but all applicator segments rebounded strongly in Q3 on continuing market reopening, doubling sequentially.

Orders increased in Asia-Pacific (+3.1% organic) and declined in EMEA (-6.3% organic) and the Americas (-4.8 % organic).

Haselmeier acquisition
Sulzer completed its acquisition of drug delivery device developer and manufacturer Haselmeier on October 1, 2020.

The EUR 100 million transaction offers substantial value creation potential as Sulzer complements its healthcare portfolio and leverages its APS expertise in precision injection molding to seize growth opportunities in the fast-growing drug delivery device market. The integration of the acquired business is expected to generate cost synergies through insourcing and leveraging the scale of the combined businesses.

Outlook 2020
The current business environment continues to be characterized by high uncertainty, driven by the continued spread of COVID-19 and its economic impact. For the full year, we expect organic order intake to be down 3 to 4% and organic sales to be down around 5% on a continued rebound in the fourth quarter 2020.

The ambitious cost measures are on track to deliver the targeted savings and mitigate the impact of the pandemic. Sulzer will deliver the full CHF 60m of its OPEX squeeze as planned in 2020, with CHF 45m already achieved. Furthermore, the structural measures to resize our energy business are on track to yield recurring savings of CHF 70m, most of which will impact our P&L in 2021. All actions are launched and progressing well. Corresponding costs of CHF 80m, mostly restructuring, will be recognized in 2020.

Sulzer confirm its guidance on operational profitability for the full year 2020, which is estimated to land towards the middle of the 8.5–9.0% range previously indicated, and the expected rebound around pre-pandemic levels for the full year 2021.

Source: Sulzer Ltd.

More articles on this topic

Sulzer Inaugurates New Cutting-Edge Innovation Technology Hub in Singapore

06.03.2024 -

Sulzer celebrated the official opening of its new Innovation Technology Hub (InTecH) in Singapore’s Jurong Innovation District. The new 700-square-meter Singapore-based InTecH includes a state-of-the-art chemical engineering R&D test center, laboratories and small-scale production plants. Sulzer’s Singapore InTecH will test and deliver clean process technologies to enable sustainable manufacturing in the region.

Read more

EMW Pump Reduces Maintenance Needs by Three Quarters

12.02.2024 -

After years of changing new casings and propellers every three months to their process pump, a metal industry operator switched their worn-out pump to one of Sulzer’s EMW slurry pumps at their melt shop. The client considered the change a leap forward in their slurry pumping technology since the maintenance interval grew significantly, pump efficiency improved, and the change reduced power consumption.

Read more

Condensate Pumps Retrofitted by Sulzer Offer Fourfold Improvement in MTBF

05.02.2024 -

Operators of offshore platforms are very focused on the reliability of their equipment. Working in such a remote location means that major repairs, if not carefully planned, can result in extended downtime and loss of production. For one platform in Malaysia, a change in output was shortly followed by an increased rate of seal failures on the condensate pumps – an issue that was effectively resolved with a Sulzer retrofit, through their OEM-X line service.

Read more