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1. Company Snapshot

1.a. Company Description

Sulzer Ltd provides fluid engineering services.The company operates through Flow Equipment, Services, Chemtech, and Others segments.It offers side-mounted horizontal and top-mounted vertical agitators, dynamic chemical mixers, and tower and tank flow management products; tower management systems; turbo compressors, aeration systems, and mechanical aerators; cartridges, mixers, dispensers, and accessories; process solutions, which include the initial concept and pilot testing; medium consistency products; pumping solutions and auxiliary equipment; and control and monitoring equipment.


The company also provides lifting stations; pump and lifting station accessories; products for distillation, absorption, stripping, evaporation, phase separation, liquid-liquid extraction, and crystallization; static and submersible mixers; solids reduction, separation, and removal systems; and screening, sedimentation, and filtration solutions.In addition, its services include rotating equipment services; static equipment services, welding, plant maintenance, and turnaround project services.Further, the company digital solution, which includes control and monitoring software solutions that include a range of software primarily designed to simplify set-up and maintenance for web-based alarm handling and monitoring software; sense condition monitoring solutions, which detects possible equipment failures early on and optimizes maintenance planning.; PumpsOnline services that allow access to equipment-related information; BLUE BOX, a collaborative digital solution; and DOC BOX, which allows users to systematically identify the root cause of a problem.


It serves oil and gas; chemical; general industry; water; power; adhesive, dental, and healthcare; and beauty markets.The company operates in Switzerland, the United Kingdom, Saudi Arabia, Germany, Spain, Sweden, the Americas, and the Asia Pacific.Sulzer Ltd was founded in 1834 and is headquartered in Winterthur, Switzerland.

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1.b. Last Insights on SUN

Sulzer Ltd.'s recent performance has been impacted by a mixed pattern, with no major news event driving the movement. The company's H1 2025 earnings call highlighted a 6.3% sales increase, driven by the Flow and Services divisions. However, the company faces currency impacts and market uncertainties. Additionally, the European market volatility, with the STOXX Europe 600 Index declining by 1.10%, has led investors to seek stable options. Sulzer's ability to maintain stable payouts and demonstrate resilience amidst economic fluctuations will be crucial in navigating the current market landscape.

1.c. Company Highlights

2. Sulzer's H1 2025 Earnings: A Strong Performance Amidst Geopolitical Uncertainties

Sulzer reported a revenue growth of 6.3% in the first half of 2025, driven by double-digit growth in Flow (10.3%) and Services (15%). The company's EBITDA margin improved, with Flow's EBITDA margin expanding by 50 basis points. Earnings per share (EPS) came in at 3.74, in line with analyst estimates. The company's return on capital employed (ROCE) increased by 270 basis points to almost 23 percentage points.

Publication Date: Jul -29

📋 Highlights
  • Strong Sales Growth:: Sales grew by 6.3% in H1 2025, with Flow up 10.3% and Services up 15%, despite Chemtech's 13.6% decline.
  • Improved Profitability:: EBITDA margin improved by 50 basis points in Flow, and Services saw a 30 basis point increase, driven by operational excellence.
  • Resilient Order Intake:: Normalized order intake grew 2%, with improved quality, despite geopolitical uncertainties impacting Chemtech.
  • Chemtech Challenges:: Chemtech sales declined due to geopolitical tensions and overcapacity in Asia, but large orders in sustainable solutions are expected.
  • Solid Cash Flow:: Free cash flow decreased by CHF 12 million, but the company maintains a strong financial position with a growing order backlog.

Segmental Performance

The Flow segment saw strong sales growth, particularly in energy and water, driving an improvement in EBITDA margin. The Services segment also grew double-digit in order intake and sales, with a 30 basis point increase in EBITDA margin. However, Chemtech was impacted by geopolitical uncertainties and overcapacity in Asia, resulting in a decline in sales and order intake.

Order Intake and Backlog

Order intake was impacted by geopolitical uncertainties, but normalized order intake for the group would be plus 2%. The quality of order intake improved, with order intake margin up 210 basis points. The company has a growing order backlog, with a promising pipeline of large projects, particularly in the areas of sustainability and reducing ecological footprint.

Valuation and Outlook

With a P/E Ratio of 19.82 and an EV/EBITDA of 10.62, Sulzer's valuation appears reasonable. The company's ROIC is 11.04%, and ROE is 22.15%. Sulzer is confident in its guidance, expecting order intake to grow between 2% and 5%, sales between 5% and 8%, and EBITDA margin above 15%. As Thomas Zickler noted, "We're on track to achieve above 15% margin, with good execution on our backlog and sales."

Growth Prospects

Sulzer is well-positioned for growth, driven by its focus on sustainability and reducing ecological footprint. The company's Chemtech division is working on decarbonizing the material supply chain with biopolymer, and has received large orders for carbon capture. With a strong aftermarket representing 50% of its business, Sulzer's Ambition 2028 remains on track.

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.70%)

6. Segments

Flow Equipment

Expected Growth: 5%

Sulzer's Flow Equipment segment growth is driven by increasing demand for energy-efficient solutions, rising investments in water and wastewater treatment, and growing adoption of digitalization and automation in the oil and gas industry. Additionally, the company's strategic acquisitions and expansion into emerging markets contribute to its growth momentum.

Services

Expected Growth: 7%

Sulzer Ltd's 7% growth in services is driven by increasing demand for maintenance and repair services in the oil and gas industry, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on digitalization and IoT-based solutions is enhancing its service offerings, leading to increased revenue.

Chemtech

Expected Growth: 5%

Chemtech from Sulzer Ltd's 5% growth is driven by increasing demand for sustainable chemical processing, expansion in emerging markets, and strategic partnerships. Additionally, investments in digitalization and automation, as well as a strong order backlog, contribute to the segment's growth momentum.

7. Detailed Products

Pumps

Sulzer's pumps are designed for efficient and reliable fluid handling in various industries, including oil and gas, water, and power generation.

Agitators

Sulzer's agitators are designed for mixing and blending applications in various industries, including chemical, pharmaceutical, and food processing.

Compressors

Sulzer's compressors are designed for efficient and reliable compression of gases in various industries, including oil and gas, chemical, and power generation.

Turbomachinery Services

Sulzer's turbomachinery services provide maintenance, repair, and upgrade solutions for turbomachinery equipment in various industries.

Applicator Systems

Sulzer's applicator systems are designed for applying coatings and surface treatments in various industries, including aerospace, automotive, and industrial manufacturing.

Mixing and Blending

Sulzer's mixing and blending solutions are designed for efficient and reliable mixing and blending applications in various industries, including chemical, pharmaceutical, and food processing.

Separation Technology

Sulzer's separation technology solutions are designed for efficient and reliable separation of fluids and gases in various industries, including oil and gas, chemical, and power generation.

8. Sulzer Ltd's Porter Forces

Forces Ranking

Threat Of Substitutes

Sulzer Ltd has a moderate threat of substitutes due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

Sulzer Ltd has a high bargaining power of customers due to the concentration of buyers in the market and the availability of alternative suppliers.

Bargaining Power Of Suppliers

Sulzer Ltd has a low bargaining power of suppliers due to the availability of multiple suppliers in the market and the company's ability to negotiate prices.

Threat Of New Entrants

Sulzer Ltd has a moderate threat of new entrants due to the moderate barriers to entry in the market and the availability of resources.

Intensity Of Rivalry

Sulzer Ltd operates in a highly competitive market with many established players, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 51.20%
Debt Cost 3.95%
Equity Weight 48.80%
Equity Cost 11.72%
WACC 7.74%
Leverage 104.91%

11. Quality Control: Sulzer Ltd passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Danieli

A-Score: 5.3/10

Value: 7.0

Growth: 3.4

Quality: 5.2

Yield: 2.5

Momentum: 9.0

Volatility: 4.7

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Cargotec

A-Score: 5.2/10

Value: 6.9

Growth: 6.0

Quality: 5.9

Yield: 6.2

Momentum: 2.5

Volatility: 4.0

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Bucher

A-Score: 5.2/10

Value: 4.2

Growth: 3.4

Quality: 6.2

Yield: 5.0

Momentum: 4.0

Volatility: 8.3

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Sulzer

A-Score: 5.2/10

Value: 4.7

Growth: 3.8

Quality: 5.9

Yield: 6.9

Momentum: 3.5

Volatility: 6.3

1-Year Total Return ->

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Aalberts

A-Score: 4.2/10

Value: 4.7

Growth: 3.9

Quality: 4.0

Yield: 5.6

Momentum: 2.5

Volatility: 4.3

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Trelleborg

A-Score: 4.2/10

Value: 2.6

Growth: 5.8

Quality: 6.2

Yield: 3.8

Momentum: 4.0

Volatility: 2.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

141.6$

Current Price

141.6$

Potential

-0.00%

Expected Cash-Flows