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Sulzer AG (CH:SUN)
:SUN
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Sulzer AG
(OTC:SUN)
Rating:66Neutral
Price Target:
CHF157.00
â–²(10.10%Upside)
Positive Factors
Earnings Growth
Further earnings growth is expected from better pricing and capacity optimization.
Financial Performance
Sulzer just released FY24 results, in line with upgraded guidance and ahead of consensus on sales, OpEBIT, and orders.
Service Demand
Services continues to thrive, supported by unbroken demand from turbine verticals with orders growing HSD (+9% YoY, +8% org) to CHF392m (+5% vs. cons.).
Negative Factors
Chemtech Orders
Orders in Chemtech are down -17% YoY to CHF230m against tough comps.
Order Performance
1Q25 orders came in softer as already envisaged, flat YoY to CHF1,020m, -3% vs. cons. and primarily driven by a larger Chemtech order shifting into 2Q as well as high uncertainty in Oil & Gas verticals in the US.
Sulzer AG (SUN) vs. iShares MSCI Switzerland ETF (EWL)
Market Cap
CHF4.82B
Dividend Yield2.45%
Average Volume (3M)49.38K
Price to Earnings (P/E)18.4
Beta (1Y)1.13
Revenue Growth7.58%
EPS Growth14.41%
CountryCH
Employees13,455
SectorIndustrials
Sector Strength86
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)N/A
Shares Outstanding34,262,367
10 Day Avg. Volume65,728
30 Day Avg. Volume49,375
Financial Highlights & Ratios
PEG Ratio-0.87
Price to Book (P/B)2.38
Price to Sales (P/S)0.00
P/FCF Ratio49.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
CHF184.34Price Target Upside29.27% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Sulzer AG Business Overview & Revenue Model
Company DescriptionSulzer AG (SUN) is a global leader in fluid engineering, specializing in the development and manufacturing of pumping solutions, services for rotating equipment, and separation, mixing, and application technologies. The company serves a diverse range of industries, including oil and gas, power, water, and general industry, providing innovative and sustainable solutions tailored to meet the specific needs of their clients.
How the Company Makes MoneySulzer AG generates revenue primarily through the sale of its highly engineered products and the provision of aftermarket services. The company's key revenue streams include the sale of pumps, agitators, and mixers, as well as the provision of maintenance and repair services for rotating equipment. Additionally, Sulzer benefits from long-term service agreements and contracts with major industrial players, ensuring a stable income stream. The company's focus on innovation and sustainability, along with strategic partnerships and acquisitions, further strengthens its market position and contributes to its earnings.
Sulzer AG Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q4-2024)
| % Change Since: 7.39%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Positive
The earnings call conveyed a generally positive outlook with strong financial results, double-digit growth in sales and order intake, and improved profitability. However, challenges in the Chinese market and lower than anticipated free cash flow were noted as areas of concern.Q4-2024 Updates
Positive Updates
Double-Digit Growth in Sales and Order Intake
Sulzer reported double-digit growth in both sales and order intake for 2024, with CHF 3.5 billion in sales, a significant increase from the previous year.
Strong Profitability Improvements
The company saw a strong improvement in profitability with an EBITDA of CHF 436 million, and a return on capital employed reaching 19.7% for 2024.
Significant Increase in Dividend
Sulzer proposed a substantial increase in dividend payments from CHF 3.75 per share to CHF 4.25 per share, reflecting the company's solid financial performance.
Order Intake Margin Growth
Order intake margin increased by 110 basis points in 2024, indicating a strong market position.
Strong Performance in Services and Flow Divisions
The Services division grew by 12.5% in order intake, while the Flow division saw a 14.7% increase in the Energy segment and 10.6% in the Water and Industry segment.
Negative Updates
Challenges in the Chinese Market
Chemtech's growth was slower at 5.4% due to a 20-25% market decline in China, although this was partially mitigated by expansion in the Americas and the Middle East.
Free Cash Flow Below Expectations
Free cash flow was CHF 235 million, lower than expected due to increased CapEx and higher tax payments.
High Net Working Capital
Net working capital was high due to a significant increase in backlog from CHF 1.9 billion to CHF 2.3 billion.
FX Impact on Financials
A negative FX impact of 3% affected order intake and sales, though less than the 8% impact in 2023.
Company Guidance
In the recent earnings call, Sulzer presented its 2024 financial results, showcasing a robust double-digit growth in both sales and order intake. The company achieved CHF 3.5 billion in sales, reflecting significant growth over the previous year, despite a 3% negative impact from the Swiss franc's appreciation. EBITDA improved to CHF 436 million, marking a substantial enhancement in profitability. Sulzer's return on capital employed increased by 200 basis points to 19.7%, indicating a positive trend in operational efficiency. The company's backlog rose to CHF 2.3 billion, demonstrating strong demand. In terms of regional performance, the Americas and Asia Pacific exhibited strong growth, with services in the U.S. and APAC regions showing continued expansion. Sulzer's strategic focus on essential industries such as energy, water, and chemicals, coupled with operational excellence initiatives, has positioned the company for sustained growth. The company plans to propose a dividend increase from CHF 3.75 to CHF 4.25 per share, reflecting its solid financial standing. Looking ahead to 2025, Sulzer anticipates sales growth between 5% and 8%, with an EBITDA margin projected above 15%.Sulzer AG Financial Statement Overview
Summary
Sulzer AG demonstrates a strong financial position with a consistent revenue growth rate of 7.6% and solid profitability margins. The balance sheet shows manageable debt levels with a reasonable Debt-to-Equity Ratio of 0.95, and robust cash flow management supports growth and investment.Income Statement
Sulzer AG has shown consistent revenue growth with a Revenue Growth Rate of 7.6% from 2023 to 2024. Its Gross Profit Margin is solid at 33.5% and Net Profit Margin at 7.4% in 2024, indicating strong profitability. The EBIT Margin of 10.8% and EBITDA Margin of 14.2% also highlight efficient operations. The company's income statement reflects a healthy growth trajectory and profitability, although there was a dip in net income in 2021 due to one-off factors.85
Very Positive
Balance Sheet
The company's Debt-to-Equity Ratio is 0.95 in 2024, which is reasonable for the industry, showing balanced leverage. The Return on Equity (ROE) is strong at 21.4%, indicating efficient use of equity to generate profits. The Equity Ratio is 25.9%, suggesting a moderate reliance on equity financing. Overall, the balance sheet is stable, but the company should monitor its debt levels to maintain financial flexibility.78
Positive
Cash Flow
Sulzer AG's Free Cash Flow increased by 4.4% from 2023 to 2024, supporting growth and investment. The Operating Cash Flow to Net Income Ratio is 1.24, indicating strong cash conversion from profits. The Free Cash Flow to Net Income Ratio is 0.88, showing a solid capacity to fund operations and growth initiatives. Cash flow management is robust, supporting business sustainability.80
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.53B | 3.28B | 3.18B | 3.16B | 2.97B |
| Gross Profit | 1.18B | 1.08B | 939.60M | 946.90M | 872.50M |
| EBITDA | 503.00M | 440.00M | 250.10M | 334.80M | 261.20M |
| Net Income | 261.90M | 229.10M | 28.60M | 1.42B | 83.60M |
Balance Sheet | |||||
| Total Assets | 4.71B | 4.37B | 4.70B | 5.08B | 5.43B |
| Cash, Cash Equivalents and Short-Term Investments | 1.06B | 977.00M | 1.21B | 1.53B | 1.43B |
| Total Debt | 1.16B | 1.15B | 1.44B | 1.60B | 1.84B |
| Total Liabilities | 3.48B | 3.27B | 3.67B | 3.80B | 4.01B |
| Stockholders Equity | 1.22B | 1.10B | 1.02B | 1.27B | 1.40B |
Cash Flow | |||||
| Free Cash Flow | 231.40M | 296.60M | 49.50M | 230.30M | 263.20M |
| Operating Cash Flow | 323.80M | 362.20M | 119.30M | 316.40M | 368.70M |
| Investing Cash Flow | -98.20M | -104.80M | -87.00M | 414.50M | -461.80M |
| Financing Cash Flow | -151.60M | -448.60M | -286.30M | -365.20M | 236.50M |
Sulzer AG Technical Analysis
Neutral
142.60
Price Trends
148.13
Negative
146.31
Negative
139.14
Positive
Market Momentum
-2.60
Positive
45.61
Neutral
36.13
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:SUN, the sentiment is Neutral. The current price of 142.6 is below the 20-day moving average (MA) of 148.57, below the 50-day MA of 148.13, and above the 200-day MA of 139.14, indicating a neutral trend. The MACD of -2.60 indicates Positive momentum. The RSI at 45.61 is Neutral, neither overbought nor oversold. The STOCH value of 36.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CH:SUN.
Sulzer AG Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | CHF4.00B | 17.65 | 2.30% | -11.73% | -35.55% | ||
71 Outperform | CHF1.68B | 26.94 | 1.57% | -5.25% | -6.32% | ||
70 Outperform | CHF2.16B | 28.17 | 2.14% | 10.38% | 18.74% | ||
68 Neutral | CHF1.21B | 18.36 | 5.37% | -11.92% | 100.79% | ||
66 Neutral | CHF4.82B | 18.43 | 22.45% | 2.45% | 7.58% | 14.41% | |
65 Neutral | $10.77B | 15.80 | 5.51% | 1.90% | 3.03% | -26.66% | |
52 Neutral | CHF5.14B | 24.00 | 1.76% | -3.33% | -8.90% |
* Industrials Sector Average
Performance Comparison
CH:SUN
Sulzer AG
142.60
10.39
7.86%
CH:OERL
OC Oerlikon Corporation AG
3.73
-0.97
-20.64%
CH:KARN
Kardex AG
280.50
56.75
25.36%
CH:INRN
Interroll Holding AG
2,035.00
-626.41
-23.54%
CH:BUCN
Bucher Industries AG
391.00
44.03
12.69%
CH:GF
Georg Fischer AG
62.65
2.44
4.05%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.