Sulzer Ltd

Sulzer reported H1 2026 order intake down 3.9% and sales up 1% versus the prior year. Group EBITDA margin was 15.5%, up 110 basis points year over year, and order intake margin was 35.7%, down 60 basis points. Currency was a headwind of around CHF 100 million, or about 5%, on both sales and orders. Free cash flow was pressured by higher net working capital, which increased by CHF 117 million year over year, with roughly CHF 40 million of cash flow impact; management said Q4 large orders and down payments should help year-end working capital. Full-year 2026 guidance was reiterated: order intake up 1% to 5%, sales up 2% to 5%, and EBITDA margin around 16.5%.

Suzanne Thoma framed the half year as difficult but operationally strong, emphasizing that Sulzer’s base business and small projects are holding up well while large projects are delayed. She repeatedly pointed to the company’s “Excellence” program as the source of better profitability, stronger execution, and resilience against FX and geopolitical disruption. Her tone was confident on the strategy, but cautious on Chemtech and on the timing of large-project conversion, which she expects mainly in Q4.

Thomas Zickler emphasized that the group remained resilient despite few large orders and around CHF 100 million of FX headwind on sales and orders. He highlighted margin expansion to 15.5% EBITDA from 12.9% in H1 2023, with Flow EBITDA margin at 13.3%, Services at improved profitability with order intake gross margin of 40.6%, and Chemtech holding EBITDA stable through cost actions. He also said free cash flow was weighed down by higher net working capital, up CHF 117 million year over year, and that larger Q4 orders should bring down working capital and improve cash conversion.

Analysts focused on delays in Services repairs, the timing and durability of large projects, and whether MTCS in Chemtech has truly bottomed. Management said roughly 20% to 30% of repair customers are delaying cycles by weeks or months, but argued the work is deferred rather than lost, and noted the business is still supported by a large installed base. On Chemtech, management said MTCS appears to be stabilizing and likely bottoming, while larger projects are still expected later in the year, mostly in Q4; they also said a weak Q3 alone would not trigger a guidance change. They additionally confirmed the Texas gas turbine service expansion would raise capacity by about 20% and that U.S. gas turbine services are around CHF 150 million in annual sales.