Machinery industry Sulzer gains momentum in the first half of the year

Sulzer grew at all levels in the first half of 2024. Not only order intake and sales increased, but also profit. However, after the positive profit warning a week ago, this does not come as a big surprise.

Sales rose by 6.1 percent to 1.70 billion Swiss francs from January to June, as the industrial company announced on Friday. In organic terms, i.e. adjusted for consolidation and currency effects, sales even increased by 10.5 percent. Order intake increased organically by 8.9 percent to 2.08 billion Swiss francs.

Sulzer recorded sustained growth momentum in all divisions. In the largest division, Flow, both the water and industry as well as the power and infrastructure segments grew. Order intake here grew by 6.3 percent.

In the Chemtech division, momentum in the biopolymers and carbon capture markets led to an increase in order intake of over 8%. And the Services division received more than 12 percent more orders.

Further improvement in profitability

The increase in sales was also reflected in the profit figures. The operating result increased by almost 20 percent to CHF 193.5 million and the corresponding margin by 1.3 percentage points to 11.4 percent.

According to Sulzer, the "focus on operational excellence" also contributed to this improvement. Furthermore, the company emphasizes that the improvement in profitability was achieved despite additional expenditure for the strategic growth and "excellence" initiatives.

Net profit amounted to 117.4 million Swiss francs, 12.6 percent higher than the previous year's figure. Sulzer thus roughly met analysts' expectations, although the operating margin was expected to be a tad higher.

Just a week ago, Sulzer raised its guidance for the full year 2024. It is now forecasting an increase in order intake of 9 to 12 percent for the full year, compared with just 2 to 5 percent previously. At the same time, sales are expected to increase by 9 to 11 percent, compared to the previous forecast of 6 to 9 percent. These forecasts are adjusted for currency, acquisition and dilution effects.

The updated guidance reflects "the confidence in Sulzer's ability to capitalize on its strengths in highly demanding, critical customer applications and the quality of its business portfolio".

The forecast for operating profit for the full year is still from April. The EBITA margin is expected to rise to "around 12 percent".