Sulzer (SUN) H1 2024 earnings summary

Executive summary

• Achieved strong H1 2024 results with order intake up 8.9% to CHF 2,079m and sales up 10.5% to CHF 1,992m, with all divisions and geographies contributing.

• Profitability improved by 130 basis points year-over-year to 11.4%, with gross margin up 140 basis points to 33.7%.

• Strategy 2028 implementation is underway, incurring some one-off operational costs but already contributing to improved margins and supporting ambitions for top industrial company status.

• Net income increased 12.6% year-over-year to CHF 117.4 million; EPS rose to CHF 3.44.

• 2024 guidance for order intake raised to 9–12% and sales to 9–11% on continued market momentum.

Financial highlights

• Order backlog as of June 30, 2024, was CHF 2,404.3 million, up 23.5% from December 2023.

• EBIT rose approximately 20% year-over-year to CHF 170m, driven by higher sales and gross margins.

• Free cash flow declined to CHF 55.4 million from CHF 106.6 million, mainly due to higher working capital and tax payments.

• Net working capital as a percentage of sales decreased to 21.9% from 22.2% in H1 2023.

• Net debt increased to CHF 226.0 million, up 31.2% from December 2023.

Outlook and guidance

• Updated full-year guidance: order intake expected to rise 9–12%, sales up 9–11%, and EBITDA/EBITA margin around 12%.

• No slowdown in order intake observed in July; strong project pipelines across divisions.

• Net working capital targeted to be reduced by CHF 50 million by year-end.

• Order book provides 4–6 months visibility overall, with some divisions up to 9 months.

• Management expects continued growth in structurally expanding markets and strong execution in the second half.