Half Year 2024 Sulzer AG Earnings Call Transcript
Key Points
- Sulzer AG (SULZF) reported a strong order intake growth of almost 9% in H1 2024, despite a high baseline from the previous year.
- The company achieved a significant increase in profitability, with operational profitability rising by 130 basis points to 11.4%.
- Gross margin improved by 140 basis points, attributed to better pricing strategies and operational excellence.
- Order backlog increased to CHF 2.4 billion, providing strong visibility for future operations.
- 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 foreign exchange impacts affected both order intake and sales, reducing nominal values by approximately 4%.
- Free cash flow was lower due to increased net working capital, higher tax payments, and increased capital expenditures.
- The services division did not see an increase in profitability due to significant investments to meet growing demand.
- Return on capital employed remained stable due to increased asset values from currency remeasurement, despite higher EBIT.
- The company faces challenges in repatriating cash from countries like Brazil, China, and India, which incurs higher effective tax rates.
Ladies and gentlemen, welcome to our midyear results presentation. With me, I have our CFO, Thomas Zickler.
We are very happy to report to you a good H1 2024. Our results are encouraging also in the light of the economic development around the world. You see that in 2024, we have recorded a very good order intake growth. And that is particularly remarkable because in the first half 2023, we had an exceptionally high order intake growth. So the baseline with which we had to compare was quite ambitious.
Also, we see good sales development. And the interesting thing there is the sales development is good in all three regions as is the order intake in all three regions and in all three divisions.
When we look at our profitability, we have increased our profitability, up 130 basis points compared to the first half year of 2023. Also there, an additional comment that is of importance, of course, with our Strategy 2028 and all the measures that we are taking to execute
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