By John Revill and Zuzanna Szymanska
July 24 – Swiss industrial group Sulzer expects sales to recover in the second half of the year and the company to return to pre-pandemic profitability in 2021, it said on Friday.
The maker of industrial pumps and dental applicators expects the oil and gas market to remain difficult, but saw some relief as COVID-19 restrictions are lifted, boosting other parts of its business, Chief Executive Greg Poux-Guillaume said.
“Sulzer sales are usually 10% higher in the second half of the year than they are in the first half of the year,” Poux-Guillaume told reporters.
“When we look at how our businesses are behaving, we think it will be a similar order of magnitude this year.”
Sales, profit and order intake all suffered during the first half as oil prices plunged, depressing demand for new equipment, and lockdowns hit the business.
Orders fell 4.8% to 1.8 billion Swiss francs ($1.95 billion), while sales dropped 10% to 1.6 billion francs. Its operating return on sales (opROSA) fell by a quarter to 120.2 million francs.
In response, Sulzer launched an 80 million franc cost-saving scheme which could see it close an energy pump factory in Europe and scale back two sites in the United States.
Poux-Guillaume declined to say how many jobs would go.
The cost savings would add 10 million francs to profit this year, 40 million francs more in 2021 and an extra 20 million francs in 2022.
This would help return the opROSA margin, which sank to 7.5% in the first six months, to around 8.5% to 9% by the end of the year, and to pre-crisis levels of around 10% in 2021.
Sulzer would continue to look at acquisitions worth up to 100 million francs in services, health care and water pumps, he added.
Shares rose 2.9% in early trade.
($1 = 0.9245 Swiss francs) (Reporting by Zuzanna Szymanska in Gdansk and John Revill in Zurich; Editing by Catherine Evans)