In This Article:
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Order Intake Growth: Increased by almost 9% in H1 2024.
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Sales Growth: Sales increased by approximately 11% in H1 2024.
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Profitability Increase: Operational profitability rose by 130 basis points to 11.4%.
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Gross Margin: Improved by 140 basis points to 33.7%.
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Order Backlog: Increased to CHF 2.4 billion, up CHF 450 million from the end of last year.
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Flow Division Profitability: Operational profitability increased by 250 basis points to 9.5%.
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Services Order Intake Growth: Grew by 12.6%.
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Chemtech Profitability Increase: Improved by 150 basis points to 13.2%.
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EBIT Increase: Approximately 20% higher than H1 2023.
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Free Cash Flow: Lower due to higher net working capital, tax payments, and CapEx.
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Updated Guidance: Order intake growth of 9% to 12%, sales growth of 9% to 11%, and EBITA margin around 12% for the year.
Release Date: July 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Sulzer AG (SULZF) reported a strong order intake growth of almost 9% in H1 2024, despite a high baseline from the previous year.
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The company achieved a significant increase in profitability, with operational profitability rising by 130 basis points to 11.4%.
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Gross margin improved by 140 basis points, attributed to better pricing strategies and operational excellence.
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Order backlog increased to CHF 2.4 billion, providing strong visibility for future operations.
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Sulzer AG (SULZF) updated its guidance, expecting order intake growth between 9% and 12%, and sales growth of 9% to 11% for the full year.
Negative Points
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Negative foreign exchange impacts affected both order intake and sales, reducing nominal values by approximately 4%.
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Free cash flow was lower due to increased net working capital, higher tax payments, and increased capital expenditures.
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The services division did not see an increase in profitability due to significant investments to meet growing demand.
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Return on capital employed remained stable due to increased asset values from currency remeasurement, despite higher EBIT.
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The company faces challenges in repatriating cash from countries like Brazil, China, and India, which incurs higher effective tax rates.
Q & A Highlights
Q: You have increased your profitability despite a negative product mix. Have you booked more services or aftermarket business into flow divisions instead of the services divisions? A: No, there is no rebooking done to make figures look better. The improvement is linked to operating excellence, strict cost discipline, and strong pricing. (Thomas Zickler, CFO)