📋 Tender Overview
CEO Greg Poux-Guillaume stated In 2019 we were again able to generate profitable growth. In a flat pricing environment higher volumes and solid operational execution led to increased profitability and record free cash flow. Prospects for 2020 are solid and we therefore expect to continue building on those successes.Strong order growthOrder intake increased by 8.2 compared with 2018. 6.3 organic growth and CHF 68.3 million from acquisitions drove this upsurge. Order intake gross margin increased nominally by 0.3 percentage points to 33.6 positively impacted by higher order selectivity in Pumps Equipment.Order intake in Pumps Equipment increased by 8.3 with 0.3 coming from acquisitions. The strong organic growth was the result of higher orders in the water and chemicals segments which grew 16 each organically. In Rotating Equipment Services order intake grew by 10.7 with 2.1 coming from the acquisition of Alba Power and Brithinee Electric. Order intake in Chemtech grew by 12.8 with organic growth of 6.5 supplemented by the GTC acquisition. In Applicator Systems orders decreased by 4.3 on disruptive market trends in the beauty segment down 14.3 while dental healthcare and adhesives grew by a combined 2.8.Sulzers total order intake grew organically by close to 20 in Asia-Pacific as well as 6 in Europe the Middle East and Africa while the Americas remained flat on a still depressed Latin American market.Currency translation effects had a negative impact on order intake of CHF 74.2 million due to the weaker euro British pound Chinese renminbi and Brazilian real partly offset by the stronger US dollar.As of December 31 2019 the order backlog amounted to CHF 1792.6 million December 31 2018 CHF 1786.9 million. Negative currency translation effects totaled CHF 28.6 million.Higher sales on strong organic growth and acquisitionsSales amounted to CHF 3728.5 million in 2019 an increase of 13.0. This rise was driven by strong organic growth of 10.8 on a higher order backlog entering the year the strong order intake during the year and CHF 71.8 million of acquisition-related sales. Negative currency translation effects totaled CHF 72.2 million.Sales growth was boosted by a tripling of our midstream volumes on a record opening backlog of pipeline projects. Sales to the chemical industry increased by 19.5 and by 4.7 to the water market after strong growth already in 2018. Sales increased by 1.0 to general industries and declined by 3.3 to the power market.Geographically sales grew across all regions most pronounced in the Americas.Profitability opROSA increased to 10.0Operational EBITA opEBITA amounted to CHF 371.3 million compared with CHF 322.5 million in 2018 an increase of 17.9. Higher sales savings of CHF 23 million achieved in the last year of the Sulzer Full Potential SFP transformation program and the contribution from acquisitions more than offset the negative mix impact. Overall the recently completed SFP delivered CHF 253m of cumulative cost savings ahead of time and ahead of target.EBIT increased by 34.2EBIT amounted to CHF 241.0 million an increase of 34.2 compared with CHF 183.8 million in 2018. Return on sales ROS was 6.5 compared with 5.5 in 2018.Non-operational costs impacted operating income EBIT as plans to consolidate two production facilities in Germany have led to an expense of CHF 27.8 million consisting of both restructuring provisions and non-operational costs. In the last year of the SFP program Sulzer has continued to streamline its organizational setup. SFP-related non-operational expenses were CHF 23.0 million and SFP-related restructuring expenses were CHF 2.0 million.In 2019 net income amounted to CHF 157.7 million compared with CHF 116.5 million in the previous year. Core net income excluding the tax-adjusted effects of non-operational items totaled CHF 257.8 million compared with CHF 223.0 million in 2018. Basic earnings per share increased from CHF 3.56 in 2018 to CHF 4.52 in 2019.Record free cash flowCash flow from operating activities amounted to CHF 319.6 million compared with CHF 260.8 million in 2018. Free cash flow amounted to CHF 213.4 million compared with CHF 181.3 million in the prior year. This was driven by the higher cash flow from operating activities partly offset by higher capital expenditure. Capital expenditure amounted to CHF 114.9 million CHF 142.1 million including IFRS 16 Leases impact above the CHF 96.2 million in 2018. Despite higher sales overall net working capital remained stable.A force for sustainable solutionsSulzers purpose and responsibilities do not stop at delivering strong financial results. We aim to harness the power of fluid engineering to make life better safer and more sustainable.In Water 13 of 2019 order intake we play a key role in increasingly efficient systems transporting clean water and processing waste water to sustain human development.In Oil and Gas 28 of 2019 order intake of which close to half is aftermarket we develop solutions and equipment that deliver market-leading efficiency levels reducing the environmental footprint of both new and existing facilities.In Chemicals 21 of 2019 order intake our separation technologies offer ground-breaking solutions that contribute to the circular economy with leading positions in biopolymers biofuels and the recycling of plastics and emissions.Sulzer continues to pursue significant advances in the areas of health and safety emissions water and energy-efficiency waste management and community engagement. In 2019 we improved our safety performance considerably and reached our lowest ever accident frequency rate AFR at 1.7 cases per million working hours 1.1 excluding acquisitions down 41.3. Per working hour we reduced our greenhouse gas emissions by 4.0 our energy consumption by 1.4 and our percentage of haza
