Sulzer AG Half Year 2025 Earnings Call Transcript: Navigating Uncertainty with Strategic Pillars

Sulzer AG reported its half-year 2025 earnings, with CEO Suzanne Thoma highlighting the company's strategy of profitable organic growth and Sulzer Excellence along the entire value chain. Despite a changing geopolitical framework with tariffs and low market visibility, Sulzer aims for growth above the market and EBITDA margin above 17%. The company's midterm financial goals include a return on capital employed of above 22%.

Sulzer AG (XSWX:SUN) reported its half-year 2025 earnings, showcasing a robust performance despite a challenging geopolitical landscape. The company's CEO, Suzanne Thoma, emphasized the strategy of profitable organic growth and Sulzer Excellence along the entire value chain.

Key Financial Highlights

- Sales Growth: Overall sales increased by 6.3% in the first half of 2025. The Flow and Services divisions reported double-digit growth, with 10.3% and 14.8% increases, respectively. Conversely, the Chemtech division saw a 13.6% decrease in sales [1].
- EBITDA Margin: The EBITDA margin improved by 90 basis points to 14.4%, with the potential for a further increase of 120 basis points excluding currency effects [1].
- Order Intake: Order intake improved by 210 basis points, indicating a healthy order book. The Services division experienced a 12% increase, while the Flow division saw a 2% increase excluding a large prior-year order. The Chemtech division faced a 20% decrease in order intake [1].
- Free Cash Flow: Free cash flow was CHF12 million lower than the first half of 2024, primarily due to project delays and increased inventory and accounts receivable [1].

Division Performance

- Flow Division: Sales grew by 10.3%, and the EBITDA margin increased by 50 basis points. The division's order intake margin improved by 210 basis points [1].
- Services Division: Sales increased by 14.8%, with a 30 basis point improvement in the EBITDA margin. The division's order intake grew by 12% [1].
- Chemtech Division: Sales decreased by 13.6%, with a 20% decrease in order intake. The EBITDA margin decreased by almost 3 percentage points [1].

Currency Impact

Currency fluctuations, particularly the appreciation of the Swiss franc against the US dollar, negatively impacted sales and order intake by approximately 4%, equating to around CHF70 million [1].

Midterm Financial Goals

Sulzer AG aims to achieve full-year profitability above 15% of sales, with year-on-year organic growth of 2% to 5% for order intake and 5% to 8% for sales. The company's midterm financial goals include a return on capital employed above 22% [1].

Outlook

Despite geopolitical uncertainties, including tariffs and low market visibility, Sulzer AG remains committed to its strategy of profitable organic growth and Sulzer Excellence. The company is focusing on smaller projects and products for China, while anticipating more projects in the renewable area outside China.

References

[1] https://finance.yahoo.com/news/sulzer-ag-xswx-sun-h1-070243125.html
[2] https://www.sulzer.com/en/shared/news/250724-strong-sales-growth-profit-increase-and-growing-order-backlog