Ladies and gentlemen, welcome to our annual results communication. Thank you very much for taking the time and the effort to be here personally. It's a great honor for us. Thank you also to the 27 or so audiences. Not audiences, but the people who are joining us from remote. Thank you for your interest in our company. Now, 2025 has been an exciting year, I think, for all of us. One thing that you can see in our results, hopefully, here we go, is that we, as Sulzer, we are serving essential industries. Now, this is not just something we are saying because we need to have a nice slogan. It has a deeper meaning. The deeper meaning is that we are producing or we are serving industries that are essential for people and industries, customers, businesses around the globe.
With industries like energy, the chemical industry, and definitely natural resources, which in the case of Sulzer, is mostly linked to water, we have a underlying growth trajectory. Because there are more people in the world and more people moving into middle classes, and we also have, in the already developed economies, a trend towards using more energy, more chemicals, and definitely also more water. At the same time, these industries have a heavy ecological footprint. Whether this topic is in right now or not, we, as a society, will have to find way to have a higher energy efficiency, to reduce emissions, to reduce pollutions, while keeping everything affordable. That is what Sulzer is doing for our customers in our industries. This is why, although 2025 was.
Well, let's call it an interesting year, we had an underlying, an underlying growth momentum and an obvious growth momentum in all of our industries. This has not gone away. Due to the situation with the volatile political environment and the tariffs and all the things that you know very well, we did, in some industries, for example, in the oil and gas industry and also in the chemical industry, see that customers don't mind delaying some final decisions for their large-scale projects. If I look at our order pipeline in this industry, it is still growing. Not all the projects were only delayed, some of them were also stopped. If I look at the figures, it's about 80% of the project that were supposed to happen in 2025, and I'm speaking about the large-scale project, have moved into 2026. They're not dead.
They will come this year or next year. We are still running against an ever-increasing Swiss franc, which for all the Swiss companies that are reporting in Swiss francs, of course, is, on the one hand, a continuous fitness training, and at the other hand, of course, does have a certain influence on our results, particularly in sales and order intake. Because we are really very well-distributed regionally, it does have a certain impact, but not such a high one when it comes to our profitability. Thomas Zickler will be speaking more about that. Let's look at 2025, a little bit more concretely on what we did. We accelerated our strategy implementation, and our strategy is a rather down-to-earth, not-so-complicated strategy.
Doesn't mean it is easy to implement it, because it is thousands, many thousands different steps that we are taking. We concentrated on our markets and on our customers. This means, for example, that we invested in our sales force. While we were very cost-conscious, we also consciously invested in our sales force and in the upgrade of our sales force. We also upgraded or invested in supporting technologies for Commercial Excellence. You see it a little bit in our margin development. We learned to find a price point better than in the past. We're on a journey to improving that. We have made important steps. We are not there yet at all, to stop having a fragmented approach to our customers, to go as a One Sulzer wherever it made sense.
We accelerated in the area of effectiveness and efficiency, which we summarize under the term of Sulzer Excellence. This is quite a fundamental cultural change in Sulzer. Because we come from a history, a successful history, that prides itself almost only on innovation and engineering excellence. This is still important for our company, know that, but it has to be paired with being effective and efficient from the first moment we analyze a market, until we do aftermarket business with our customer. We reorganized Chemtech. We did not restructure Chemtech, it's reorganizing. That is an interesting word because we or it stressed a plain word, because we believe that Chemtech is going to come back to a good level. This is also why we invested also in Chemtech, in more salespeople, and in an upgrade of the salespeople.
At the same time, of course, we cut costs wherever they did not contribute to value creation or not enough. What we also did, and that was very important for Chemtech, we streamlined innovation. What do I mean we're streamlining innovation? We made sure that our innovation is set up in a way that it really serves market needs and customer needs. We still have some budget for blue sky research, but most of it is now really midterm-oriented and also research for our core business, which is focusing on purification and separation. We upgraded and developed our supply chain, finding the right balance between resilience in this volatile time and purchasing from best cost country. This is a journey, but we made nice progress in it, and we did report a good contribution to our profitability.
I am very proud to say that we have improved in on-time delivery, we have improved in quality, and we have improved in safety records. Now, for you, that might not be so important as with a very financial outlook, but it shows an underlying, again, an underlying quality improvement in the company, including the safety record. That is why I mentioned it. All of this leads that we can report highest reported sales or the order intake and profit. Now, our CFO, Thomas Zickler, said, "You have to say, Suzanne, currency adjusted, and also in constant currency, and also adjusted for acquisition and divestment." Yes, he's of course, right, like, mostly, but it is also almost we could almost say nominally, but we are correct. Right? Yes, yes, of course.
I will go quicker through these figures because Thomas will go a bit deeper on that. We had an order in intake of 2.1%. We had strong growth in aftermarket and in what we call non-cyclical or water, which is more than 60% of our turnover. Our business of smaller projects, short cycle projects, grew nicely in all three divisions, because this is the type of decisions that our customers like to do also in those volatile environments that we are acting. We did have some large projects, customer project, that were delayed, particularly, as I mentioned already, in oil and gas, in the chemical industry, and also some in what we call the new technologies. We still have order intake above sales of 1.06%, the company is still definitely growing.
What is also growing is the customer pipeline. Now, a pipeline, and I don't mean the technical pipeline, but I mean the order pipeline. A project in the pipeline is not an order, clearly, but if you don't have a full pipeline, it's probably difficult to have orders. It's like an early sign. We are happy to say that we grew our sales. We did grow them with commercial discipline. We increased our margin. We were not buying sales. We're not buying order intake. We increased our profitability figures significantly. As you see it here, Thomas will speak about them more. These are our figures at a glance.
I would just like to highlight earning per share, going up very nicely, and also our EBITDA, which is a record EBITDA. We're a bit, little bit lower in free cash flow, in line with expectation. Thomas will speak about it more. Here you see the relative development. Again, what can I mention? Yeah, we upped 140 basis points in the return on capital employed. The return on capital point is a very important figure for us, and the earning per shares went up 18%, 19%. If you look at this slide, you, we look back a little bit for the last three years. The summary of this slide is: the strategy is working. The strategy is working. You see that our sales grew on the average 10%.
We increased the EBITDA since 2022 by more than 700 basis points, and we really upped the return on capital employed. One step after the other, very systematically, and this is how we are running Sulzer. With a lot of fire in our heart, and at the same time, very systematically. It goes together actually quite well. Given this very positive development, and because we are really convinced that, independent of how good 2026 is then really going to be
Our company is on the right way forward. The industry that we are serving are growing, and what we have to offer is more needed than ever, and at the same time, internally, we are becoming better. We increase our dividend again by CHF 0.50, if it is approved by the general assembly, to CHF 4.75 per share. Ladies and gentlemen, now let's look a little bit deeper into our figures with our CFO, Thomas Zickler.
Thank you very much, Suzanne. Good morning and good day also from my side. A lot of well-known faces I see here in the room, and thank you also for dialing in. As you heard already from Suzanne, we had, in 2025, quite a good year when it comes to our profitability, but also to sales. Before I go into the details of the year 2025, let me say one thing upfront, and Suzanne mentioned this already. When you look at our order intake and sales numbers, you have to have the following thing in mind, and Suzanne stressed that I noted when she's doing her presentation, that we need to be aware of the FX impact.
When you look at our order intake and our sales, on both KPIs, we have round about CHF 190 million negative FX impact. In other or in easy words, our order intake and our sales would have been round about CHF 200 million higher, excluding the negative FX impacts. Let me talk about our growth. We have a very robust growth, and when you look at our share of the aftermarket business, over the last three consecutive years, Services has grown double digit. We have achieved over the last years, that our aftermarket share has grown to 62%, which makes us really a highly resilient company. Why I'm addressing this? I'm addressing this because when I have to characterize the year 2025 in one or two sentences, it's that overall, our, say, smaller and non-cycled business is running very well.
The larger orders, this was the topic of 2025, and I'm not going into the story of the geopolitical uncertainties, but you see here with then landing at around about 2% plus order intake and 5.6% plus on sales, that we are really a resilient company. When we look in Q4, you have seen on a quarter-to-quarter comparison, so Q4 2025 to Q4 2024, that we had, by the end of the year 2025, our order intake growing by around about 12%. You see that towards the end of the year 2025, we really picked up in our business development. When you look at our order intake margin, we haven't really bought any orders in just to get order intake. This is very important.
I'm saying this for now, four years in a row. We are getting our order intake with a still increasing order intake margin, you see this compared to last year, still 70 basis points higher order intake margin. As said by Suzanne Thoma, we have overall, talking about the whole Sulzer Group, a still positive book-to-bill ratio of 1.06. Talking about our EBITDA profitability, it is indeed a record profitability over the last at least 20 years. When you look at our profitability at the EBITDA, you see it's 556. What you have to know, I mentioned on the first slide, that we were seeing headwinds from the FX side. On our EBITDA, we had a negative FX impact of round about CHF 40 million.
To say it in other words, our EBITDA, without this negative FX impacts, would have been close to CHF 600 or somehow around CHF 600. When we talk about the success, why is our EBIT and EBITDA increasing so much? You see 140 basis points compared to last year. It is on the one-hand side, yes, we still have very favorable markets. We are growing in most of our market segments, except of Chemtech, where I go a bit into details later on. We have also a lot of success from our rigorous improvement of our Sulzer Commercial and Operational Excellence. What do I mean by this? I really mean that we have improved our production efficiency, our project execution efficiency. We are much better on the supply chain side, and we are much better on People Excellence.
We discussed about getting on the sales side more from the farmers to the hunters, changing the company, and here you see in the numbers, the success. This is what I want to address here. On the return on capital employed, I think the story is very simple. Because, yes, we have a higher EBIT because of all this, what I explained, and on the other hand side, we have more or less a stable CapEx and efficient use of our capital. This means higher EBIT, stable capital, that the return on capital is growing up by 140 basis points. Now let me come very proudly to this slide. This is basically a reflection on the period when Suzanne and I started, beginning of 2023. You see, the total shareholder return of Sulzer is 121%.
Compared to the Swiss Performance Index already, also including the dividends, with 33%. We really have outperformed the market. When you look at the tables with the dividend and the proposed dividend for the year 2025, you see we increased the dividend then finally by almost 40% over the last years. Market capitalization, I checked just 5 minutes ago, our share price, we are more or less flattish compared to yesterday. You see that our market capitalization from 2023 to end of 2025 went up to CHF 5 billion. When you take our share price as of today, we are close to CHF 6 billion. I calculated we are currently at 177. If we would have been at 178, we would be at exactly CHF 6.0 market capitalization.
Let's go a bit deeper into our individual divisions. When we talk about Flow, what is the overall story? In Flow, we had, in 2025, a really good development on the sales side and on the profitability. Look at the profitability increase. Flow increased by 160 basis points compared to last year when we talk about EBITDA profitability. They are currently standing at 13.3% EBITDA profitability. As I said, in Flow, we have also seen a lot of Operational Excellence measures, really realizing in 2025, helping to optimize the cost set-up, helping also to improve the profitability by also, in parallel, increasing the sales. You see that sales in Flow increased double digit by 12.3%.
When you look at the sales increase, you see that we have here one BU really standing out. This is energy, with over 20% sales increase compared to the prior year. We also have had a very good sales development in the water and in the industry area. Overall, it is really on the sales side, on the top line, a success story for Flow. Let me also talk a bit about order intake in the Flow division. Order intake is a bit of, I call it, a more mixed picture. Why is it mixed? Let me start with energy. In energy, we had in H1 2024, one large, big order, elephant order from the Middle East with $100 million. These large orders, they haven't come in in 2025. This is the overall storyline for 2025.
When you look where Energy landed by end of the year 2025, Energy landed with around -3%. -3% without having the $100 million large order means if you would have taken out this one order, Energy would have been at least +5% and more. You see that also on the Energy side, we have a very, very good base business, which is reflected in these numbers. What we see also on the order intake side in Water, that on the Water side, we grew double-digit. As you know, we are not announcing the numbers separately for Water and for Industry. Let me leave it here with the statement: Water grew double-digit in 2025.
Knowing Water grew double-digit, you maybe have seen in January our announcement, where we announced a Water Treatment Center of Excellence, combining all our expertise, which we have in our company, and even to focus more on the further development of the water and wastewater treatment. As I said, when you look into Flow, you see a really very excellent improvement on profitability and sales. As explained on profitability, because of a high base with large orders, a bit of a mixed picture. When we look in the last quarter of Q4 2025, we have also seen in Flow, a very positive development.
Flow had in Q4, compared to Q4 the prior year, a plus of round about 18%. You saw also in Flow an uptick when it comes to the business performance in 2025. Let me go to Services. Services is also I'm so proud to tell you all these stories. It's a new record result when it comes to profitability. You see, Services, they grew by 150 basis points, there's an internal competition, 10 basis points lower than Flow, they grew by with 150 basis points on the profitability. What is the reason for this? Yes, also Operational Excellence, as I have mentioned on the first slide, Services is growing for the third consecutive year in order intake and also in sales.
You see it here in the headline, we have done in Services, a lot of investments into growth. Let me just give you an update of what have we done in 2025 for this growth. In Services, we opened a new service center in Argentina for the market there, for whole Latin America. We have bought in January a company called Davis & Mills for the Middle East in Bahrain. This was basically an EMS company, where we now, with our full Services network, we expand this. We use this as a regional footprint to tackle much more the market in the Middle East for Services, because, you know, more than half of the services business is coming out of America. This is a very important strategic move to also grow services more in the Middle East region.
Last but not least, we have invested in the U.S. in our, and I wrote it down, in our largest turbomachinery service in North America. We further invested to extend the production and service capacities there because of the still highly booming U.S. markets when it comes to pump services and turbo services. Why is it growing so much on the services side? Story is very simple. We have on the CapEx side, a bit the hesitation, the delays, the postponements from the customers, but we have also, on the other hand side, a lot of equipment which needs to stay really reliable and safe for the customers. Here, Services is on its way with upgrades, modernization, repairs, retrofits, to really ensure that all the customers have a reliable energy equipment available.
That's from my side. I forgot one point. Order intake, because I got this question this morning in some analyst calls. They said, "Thomas, what's going on with Services? The Q4 to Q4 order intake is only growing by 3.8%." I tell you the story. The reason is very simple. Last year in Q4, we received a larger order in the region, Europe, for South Africa, for a big energy provider there. When you have then the like-for-like comparison, Q4 to Q4, you have the impact that then the region, Europe, and Africa, they were in the minus because of this high base impact last year.
Believe me, still, Americas, and you saw it also in the email, which we shared this morning with most of you and in the press release, that Americas is still growing almost by 10%, and also in MEC by more than 25%. More challenging environment, Chemtech. Chemtech, what is here the headline is really the overcapacity, especially the refining overcapacity. Chemtech, we have the overcapacity, especially in the refining area, for the refineries in China, but we have also the overall weak market sentiment in the chemical industry. When I talk about orders in Chemtech, we have seen a mixed picture. We are missing here also the larger orders which we have received in the past because of this uncertainty in the markets.
We have basically, in this smaller project, short-cycle-based business, we have a reasonably good order intake. We also have grown in Chemtech, our aftermarket services share, where we go now because the equipment is there, more on the services side, in the power field services, turnaround services, and so on. Here, the strategy is really working very well. We have on the Chemtech side, also achieved when we talk about order intake, and you know that we had our footprint mostly coming out of China and Asia. We have reduced the share of, say, orders coming in from Asia, from round about 50% to 37%. This is a reduction by 12% of the Asian share.
On the other hand side, we have increased the share in EMEA by round about 11%. Some of you remember, we are going to open a service shop in Saudi Arabia for Chemtech this year, by mid of this year. You see also from the numbers, our strategy a bit going out, is the wrong word, relocating our focus from Asia, which were historically grown more now to the Middle East. This is working out. Last word to Chemtech on the profitability side. Yes, the profitability on Chemtech went down by two percentage points. Here, and Suzanne already addressed it, I really want to explain to you, this is a very value accretive margin. Why I'm saying this? Yes, the profitability went down because Chemtech lost 13.6% of their sales.
On the other hand side, we have done a lot on Operational Excellence on the Chemtech side. We have done a reorganization, where we refocused on the regions India and Middle East and combined. We also have, on the R&D side, focused more on market topics. We have improved our supply chain by centralizing a lot of functions, and we also merged two BUs within the Chemtech organization. We did cost cutting. Cost cutting in the headquarter, cost cutting also in China, where basically we dismissed more than 200 people in our factories in China. All in all, you see that with this 2% decrease in the profitability for Chemtech, this is a very good result, seeing the sharp decrease on our sales.
On the other hand side, this means when we achieve this year on the Chemtech side, that they are slightly going up in 2026. This is what we expect, that then you have a much lower cost base, and then you will see that we have also an acceleration coming on the Chemtech side when we talk about profitability. Outlook also a bit with the Q4 to Q4 comparison. In Chemtech, we had around about 18% plus in order intake Q4 compared to Q4 2024. What is very important for me to address is that, especially in MTCS, we had on a quarter Q4 2024 to quarter Q4 2025, an increase of more than 13%, which indicates that we most probably have seen the end, the light at the end of the tunnel.
Let me go to the EBIT and net income. EBIT, you see here, with 22% plus. I think story is the same. I don't want to repeat it. It is that we really were able to expand our gross margins, rigorous cost management, and implementation of Sulzer Excellence. Also here on the EBIT, I want to address the FX impact. Our EBIT would have been around about CHF 36 million higher if we wouldn't have had a negative FX impact on our EBIT. Net income, kind of the same story. Why is net income not growing so much than our EBIT in percentages? Mainly, say two reasons for this. We have, because of the lower interest rates globally, lower interest income for Sulzer.
Also, since we earn more and more and get a higher and higher profitability, finally, we also have to pay higher taxes, and this is the reason why we are a bit lower in the growth on the net income side. Let me talk about our cash flow. Cash flow, most of you remember when I gave updates, I think cash flow really came in in line with expectations. Why I'm saying in line with expectations? Some of you said: "Hey, Thomas, why is the cash flow not going up to almost CHF 300?" Explanation is very simple. Please recognize that in the year 2025, because of Chemtech delivering no cash flow, free cash flow because of their business situation, because they had to invest in one-offs, they had to take care of their profitability. We have missed completely, the contribution for Chemtech for our free cash flow.
This one as well.
Okay. Well, thank you then.
Yes.
Yeah. And with this, we would have been close to 300 with a working Chemtech. However, when we look in our free cash flow, you see that we are CHF 22 million less, despite the fact that we have higher tax payments and a lower interest income. Just to drop the numbers, tax payments are around about CHF 10 million higher, and lower interest income is around about CHF 7 million. Alone, when you add these two ones, you see that we can explain the lower cash flow. Now it's working. Balance sheet and net debt EBITDA ratio.
What I did this time, I changed a bit the layout on this slide and the content because some of you were almost or always addressing, "Thomas, why do you show not just the net liquidity of Sulzer?" This is what we have done here, and we do it in the future. You see that, when you talk about our cash and cash equivalents, and these are the cash and cash equivalents which belong to Sulzer. This is not including the Tiwel cash. You know that we have the dividends which we basically keep in our house, and this would then increase the cash. This is only the cash which you see for 2025 with CHF 640 million. It's only our own Sulzer cash.
On the other hand side, the debt, nothing has changed. Why is the debt around about CHF 30 million higher? Very simple. Last year, we had an expiring bond of CHF 300 million, and we replaced this bond with two new bonds in the total amount of CHF 330 million, and this is why we have CHF 30 million more debt. Then when you do the calculation, net debt divided by EBITDA, we have then a net debt in 2025 of 555 and an EBITDA of 556. You see it's a 1.0. When you compare this with last year, it's basically a no change. It's a stable 1.0 on the net debt side. Now my last slide. Let me talk about the dividend.
Suzanne already addressed it, that we are proposing for the AGM to increase the dividend to 4.75 CHF per share. Just let me give you some reasoning. Look at the left side of the chart. We started with 2015, with a dividend of 3.50 CHF, and you see then a lot of dots, and then till 2021, you have here still 3.50 CHF, and you see in the last years that we steadily increased the dividend because we are, as you know, on our Sulzer 2028, we are focusing on organic growth. We always said that we are not doing big M&A transactions, but we are also sharing a portion of our success with the shareholders, and this is why we have steadily increased the dividends.
What is important, because some of you already addressed, is this too high or how does it look like? We have a dividend policy within Sulzer, which says between 40% and 70% of our core net income is in our dividend policy, what we can pay as a dividend. You see it here on the right side in the last bullet point, we have a dividend payout ratio of 50% in this range, between 40% and 70%. We are still on the lower end side of the possible range of the dividend, and I think with this, you see that we are very carefully, also deciding on the dividend increases, and we are focusing more on a steady development in the future than increasing the dividend one time by higher amounts. With this, I would like to hand back to Suzanne and then ask, no.
I still have a few things, too. As a matter of fact, we have already 45 minutes, I will try to really stick to the most important things and not mention every word on the slide. I'll try to be short, but still interesting, I hope. These are our industry spoke about it. The change that we have in our understanding of Sulzer is, well, it is a fact, we just see it differently now. Is that our divisions serve, by and large, the same industries, and in many cases, they serve the same customers. This is something that we have started to leverage in 2025, and that we are going to increasingly leverage going forward. That does also require some internal changes.
I'm not speaking of a reorganization, but of a way we are handling business demands from one customer to several divisions. There we are sometimes a bit our own enemy. Let's look at energy, our number one market. We have spoken about it, that large projects, exploration, large extensions, rather a little bit subdued. We do expect in 2026 to get some large orders coming through, because momentum is really still there, both in the Middle East, but also the large American companies do speak about producing more in the area of oil and gas, and not less. What stays is that these operations, all energy operations, have to be safe and have to be clean and compliant, and this helps our business, because what is it that we are doing? We are helping to make the processes and the infrastructure of our customers more efficient and cleaner and better.
Power generation is the topic. We need more electricity around the globe, which also leads to the fact that, for example, old gas-fired turbines are coming back up into operation after having been overhauled very often by our Services division. The chemical industry, new capacity is indeed subdued, except for some specialty segments. Purification and separation, very high level purification and separation, for example, for semiconductors, for example, for batteries and other high-tech applications, are increasing. If you have infrastructure, it has to be safe, it has to be compliant, it has to be energy efficient, and if you have an aging infrastructure, this is even more the case. This is where Sulzer has a growth potential, also short term in the chemical industry. If we look at water, that is a simple story. Water is like power production, the topic around the world.
We need more water, cleaner water. We cannot take, for example, for mining, more and more groundwater out. We have to take care of our water. We need more. Industrial and municipal wastewater treatment is very important. Water in mining, you see it here in the picture, is a big topic. Desalination is coming up more and more. Water infrastructure also to transport a lot of water, for example, from the sea to a desalination plant and then to a city, is an increasing business. We are looking forward to double-digit growth in water as well. New technologies, mostly Chemtech, not only. There are some uncertainties. What you read in the news right now about new technologies does more reflect the political speech, let's say that, than what we do see in our market.
We clearly see improved interest and hopefully large projects in 2026 when it comes to bio-based plastics. We see it in the Middle East and in Asia, not in the United States, and not so much in Europe. We see carbon capture still being there. It is clearly a niche market. It depends on the regulation and also, let's say, on the social license that, for example, large oil companies want to have or don't want to have when they invest heavily into gas-fired power plant for data centers in the United States. What we see growing in many regions is alternative fuels, be it sustainable aviation fuels, be it bioethanol. What do we expect for Sulzer in 2026? We see a solid order intake.
It is most likely going to be somewhat muted in the first semester. There we are also suffering from the comparison base. If you look our Q1 order intake, the base is around about CHF 1 billion. If you have an CHF 50 million order in March, or you have it in April, makes a difference of 5 percentage point. This is why we really don't think that the Q1 order intake has too much of an information value. We see not so much momentum H1. We see very good momentum in H2. We are not just saying that because we hope that this is the case, but we see it in the pipeline of the large projects and the communication of our customers when these orders are going to be placed in a legally binding way.
We do see for all of 2026 continued growth in aftermarket, in small-scale project and in the water. We do see an upwards trajectories for our new technologies in most of the regions of the world. Trying to summarize it, our markets are growing structurally for the reasons that I mentioned at the beginning of my presentation. The macroeconomic situation creates a certain volatility, which leads to our customers may be hesitating a bit longer than they would otherwise for projects that they are planning to do. At the same time, if we look at what is happening with population growth and so on, the global opportunities are there for our company. The challenges that our customers have in order to have safe, clean, less emission, and so on, is also driving our markets.
We believe that Sulzer is clearly on an upward trajectory, potentially not every quarter. What do we do in 2026? We accelerate and intensify our strategy implementation. It is not so easy because this company is successful, and we are now really changing the ways that we are doing certain things, and we are making it better and more efficient, but it's still a change. Human beings are not so comfortable with change, but we are pushing that through. We strengthen our aftermarket business. We are further streamlining our order-winning process. We are too slow and too complicated when it comes to order winning, when it comes to tendering, and when it comes to order-specific engineering. We are moving towards integrated customer solutions. Solutions for specific industry centers like water, where all of our three divisions are selling into.
Right now, still mostly in a fragmented way. Again, this requires to change how we are doing things. We are going to push that forwards in 2026, which also means One Sulzer. Our fragmented way of accessing customers, I put it in a positive way. There is a lot of potential for growth if we eliminate the fragmented way of accessing our customers, while still staying very effective. No, becoming more effective and efficient in how we are doing our processes. This leads us to the following outlook. Now, giving an outlook these days, ladies and gentlemen, is not that easy, and this outlook stands unless we Well, what I want to say is that this is a quite significant information. There would have been some reasons to give you a higher outlook, but it is difficult.
The visibility is rather low because of the geopolitical situation. We are guiding an order intake of 1%-5%. We are guiding sales for 2%-5%, and we do see an EBITDA margin that is further improving to above about 16.5%. Very short. I have been told you like these examples, so I will do it, but I'll be through in five minutes. I promise. We are still making traditional energy cleaner and less expensive and readily available, and that will continue this business for a very long time, cause the world needs more energy. You see an example here where a customer of ours thought they had to replace two full compressors, which would have shut down their offshore operations for apparently several years.
We came in with our retrofit solutions from the Services division and could upgrade the compressors. We contributed to a smaller environmental footprint because the energy consumption of the operations was, is now down 14%. For the customer, most importantly. The project time was strongly reduced. This is really engineering. When we speak about repair and maintenance, it sounds so easy, but this is real engineering work. Sulzer is very good at that. Now, we still speak about keeping the energy transition moving because it is still moving almost worldwide. This is a nice example for a bioethanol plant in Brazil, where we were the main supplier. The feed for this plant is biomass from waste. Very important. Now, the water treatment, the Global Center for Water Treatment, Thomas mentioned it.
We have launched it now two months ago. This is following the strategy of having industry-specific offers from a One Sulzer perspective. Here, very specifically, we have around the globe, quite some very good but smaller companies active in water treatment, who are regionally well-established. Now we are opening our sales channels to them globally, and we expect very nice growth from the water treatment. Last but not least, we are scaling our global capabilities through Business Services Hubs. We have 4 business hubs now in Mexico, in Madrid, in Pune, and in Suzhou, for the type of work that can be very easily standardized and automated, mainly in some business functions and in the finance function. It has to do with sales support and tendering support and, of course, supply chain support.
This is another important building blocks to support a One Sulzer approach in our back office processes. This is one example from the Excellence front. Let me finish, ladies and gentlemen. Key takeaways: We see further order intake and sales in a volatile market in the areas that we have grown nicely already in 2025. We do see some large projects that are in the pipeline, this growing pipeline that we have, that will materialize in 2026. We are working together to strengthen the foundation of Chemtech, so that it is very well prepared to pick up the growth that we are expecting this year. Growth compared to 2025, we don't expect a full recovery to the level of 2024 in this year. As Thomas said, it will also then improve the profitability significantly.
Sulzer Excellence is the key to making Sulzer a top industrial company. We are going to intensify and accelerate what we are doing there, with also an increased excellence organization that works hand in hand with our business to improve the many, many good things that we are doing. Our strategy is working, and we push on with this strategy while staying very adaptable to what is going on in the world. Thank you very much, ladies and gentlemen, for your interest. That is what we wanted to present to you, looking back and looking forward in 2025. We are now going to take questions, if you have any. Thomas and I together. Thank you. Okay. Well, must you take it?
No, no. Yes.
Can I thank you. Patrick Glauser from UBS. How many questions can I go with? Three to start?
It depends how complicated they are.
Okay, let's start with two first. One is on the order intake margin, Thomas, you mentioned the 70 bips improvement. If I look at H1, H2 was actually down on my calculations. Can you elaborate on that? Is that mostly mix? How should we think about the order intake margin in 2026?
I'm thinking about the answer, but I'm, like always, very transparent. The order intake margin, when you compare H1 to H2, is a bit lower in H2 because, you know, we had the difficulties with our order intake to really come to the guidance to the end of the year. This means towards H2, we pushed really on the order intake side to get some more orders in, and this is the true story. It is no business development, no change on the business side. It's just that really, we then landed at above 2%.
That is indeed very transparent. Thank you. Does that maybe also explain the softer guidance for H1 or the more muted guidance because you brought forward some orders?
No, it.
No.
It was not to a large extent, definitely not. H1 is simply that when we look at our pipeline, we believe that the large projects will rather come in H2. Many of our customers have no reason to decide finally in H1.
Okay. A question on the margin expansion. It's very impressive, adding another almost one percentage point or thereabout. In 26. If you allocate that to the three divisions, I mean, Chemtech, you already mentioned, will definitely improve, but how do you think about Services and Flow?
Uh, the mar
versus 25, right? Yeah.
For 2026? Well, I definitely expect a further margin expansion in Services, because their relative increase was less than in Flow. Definitely, still expect a continuation of the margin increase, maybe at a little bit lower level, not well, rate, in Flow. We are not buying sales. That is very n ot buying order intake.
Yes.
The margin, of course, also not only depends on the price, it also depends on the efficiency of our operations production, and we will work heavily on the efficiency of our operations.
Can I go for one more?
If it's a short one like that.
A short one.
Okay.
If it's a short one like that. You talked about the large orders, for the second half. Just trying to understand, how much do you build in, how much optionality do we have if all goes well, versus the guidance?
Well, you know, we are business people, not analysts, we don't quite such calculations. That was meant in a very friendly way. Just really also like Thomas answering how it is really are. I can just I know you want the figure for your thing. What's now?
maybe I take
Yes.
I take over.
Please.
For the guidance which we have given on order intake, we have planned very conservatively, which includes, I wouldn't say almost no larger order, but say the big orders which we are planning for and which are in our order intake pipeline for H2, these orders are not included in this guidance because of the geopolitical environment. This was also what Suzanne addressed when she talked about the guidance. These uncertainties are too high that we are really able now to forecast for the next 12 months or next 10 months on our order intake coming in.
Very useful. Thank you both.
Yes. Good morning, Christian Arnold from Oddo BHF. On the margin, EBITDA margin, I mean, you achieved a record high EBITDA margin, 15.6%, and now you are guiding for quite a step, actually, in 2026, 16.5%, which is impressive. Thinking about your, order intake margin increase of 70 basis points, sales close of 2%-5%, which probably leads to some operating leverage. Think about the Chemtech division, which you refocused and probably also achieving higher margins. I mean, we could even think about a higher margin than the 16.5% you are targeting, despite the fact that the level is very, very high. What could go against you? Are these higher personnel costs, are these product mix effects, which we have to think about? Yeah.
Well, one thing that theoretically could go against us is a tightening in the raw material situation with higher costs, let's say for steel, for example. That could be. We don't see it only a little bit right now. We don't see it in a significant way. That is one thing. We still believe that to go another percentage step up, percentage point, is already quite ambitious. It is true, some of the measures that we have taken in 2025 and also had costs, will have an effect in 2026, but then you never know what's going to happen, so we give our best guess. Not estimate, but assessment.
Yes. Yeah. Also we want to be in line and sustainable with the last four years, where we have already almost every year guided with one percentage point growth. We think, as Suzanne Thoma explained, we think also for 2026, we can do it. However, I don't want to repeat everything, the geopolitical uncertainties, just think about what is happening with Iran, what is happening to other topics. I think the 1% with our Excellence, which we do, we are quite comfortable, and the rest, let's see how it really develops during the year.
Okay. Thank you very much. Maybe just a small question on CapEx. What do you think, what will you spend in 2026 and 2027?
Same
About the same.
Yeah. Sorry. Same levels.
Same.
Thank you very much.
Please, gentleman over there.
Merci. Alessandro Foletti, Octavian. Can I ask you also two, three questions, please? Maybe first on the H1, H2 split. I think you guided in the press release that the H1 will be as lower than H2. The backlog entering the full year is quite high, like, basically like last year. Why still this H1 weakness somehow in
Our guidance was related to order intake, not sales.
Okay. That means on sales, that we should not expect this huge H1, H2?
Yeah.
Yeah. You know, Alessandro, sales is always much more stable, coming from the order backlog, than order intake. Our message was addressing on the order intake, where we see really from especially the larger projects, in our pipeline, that they are coming in the second half of this year and not in the first six months of this year.
Okay, thanks. On the profitability, again, in Flow, particularly, I think, Mr. Thomas, you mentioned that, you did have some help from the market to increase the profitability there. Can you dissect how much of this improvement your own actions and how much is market tailwind?
What do you mean with help from the market?
Good markets mean good prices, means good margin.
Well, the markets are quite competitive in the Flow area. We did definitely have good markets in water. I cannot dissect it, per se. Maybe you can.
No, it's very difficult. What we have on the Flow side especially, is still a market where we have a bit of a pricing power left. It is much more competitive than it was, whatever, two years ago, for sure. This combined with our, say, cost measures, this enables us to get the profitability up. On the pricing side, I think we are very disciplined. We have new pricing tools. We are using here a bit more sophisticated tools. Overall, yes, the markets, they are supporting this development, but I cannot really give you whatever X, Y, Z%.
All right. Maybe one last one on the large orders again. There was some discussion with you during the year, last year, about the carbon capture. Now, you mentioned it, but not sure that there's still the levels. Are they still around, these projects? Are they not around?
Yeah.
Where?
We have a large project in 2025, the Teesside project in the U.K. We are speaking about several larger carbon capture project, interestingly, in the United States. Why? Because they are going to use so much more energy. They will need the gas-fired turbines to do so. There is not only a question of whether there is political support for the big AI companies, it's also a question of the social license.
I mean, there are still many people also in the United States who think we should reduce our CO2 footprint, even if the government says something different. In that sense, or in that playing field, for the moment, we see momentum. You see in my long explanation that I'm also not completely sure about it. We do see momentum in carbon capture. Also in the Middle East. We see discussion in China. That will come much later. We do not see it in India.
Right. Is it correct, I understand correctly that, these hyperscalers or data centers, they would do it voluntarily, basically?
Possibly. Possibly. Well, voluntarily in the sense that they like to do it, I don't know. They already do have some pushback.
Without the regulation .
Without regulation, possibly, yes. That is the discussion they are having with us. Are they with very clear projects. Are they pushing it through? That I cannot guarantee.
Right. And the, and your assessment of the competitive landscape for those projects?
We are definitely the market leader when it comes to large-scale carbon capture projects.
Good. Thanks.
Armin Walpen, AWP. If I remember correctly, you mentioned of the nine month orders, that you have a couple of bigger projects in the pipeline, where you hope to let them materialize before the end of the year. Can you tell us if some of them materialized? The projects you see now the bigger projects coming rather in the second half, are these new projects, or are they still the same, and they wait another half year?
Very good question. They are partly new project, but it is also true that many of them have moved into 2026, even H2. Some were also lost. I mean, I can give you a bit of feeling for our energy and infrastructure business unit. In September, we were still speaking about a project volume. We wouldn't have gotten all the project, but in the order of CHF 300 million, of which we maybe would have gotten half or 40%. Of those, 220 have moved into 2026, and 80 were lost.
There are some new that have become more concrete, so that they, you know, they weren't that concrete in September, so I didn't speak about them. All in all, that's what I was trying to say with my underlying momentum. There is this strong underlying momentum when it comes to energy generation worldwide, not only in power, also in oil and gas. We would be very amazed if we wouldn't have any orders in the next 12 to 16 months that are really major. Very likely in the H2.
Good morning, Arben Hasanaj from Vontobel. My question would be around the outlook for the service business for this year and also next two, three years. I mean, if you look at the CapEx budgets, also in the area of data centers, they have become even more bullish. I was wondering, how confident are you that this kind of momentum continues and maybe even still double-digit momentum? Yeah, I was wondering, how do you see the market this year and next two, three years? How long can this super cycle last in your view?
We are very positive over the next two, three years, four years because of some underlying drivers. Go on, Thomas, yeah.
Let me add to this. I just want to manage a bit the expectations, and you know me in the meantime. I'm a bit more conservative on the expectation management and then over achieve than vice versa. You said double-digit in the next years. If we can agree mid-high single-digits over the next years, I'm fine, but I think we cannot commit on double-digit growth over the next
No, that was not a.
Yeah
That was an.
Yeah
an expectation. It was not an additional guidance.
Yeah.
Thank you for reining that in. Any other questions? No, then we come to the. Yeah, exactly. Marlene is coming in with maybe questions from.
Yes, exactly.
Thank you.
I have two questions from Fabian Piasta from Jefferies. The first one is, can you please provide more details on specific measures taken as part of Operational Excellence program? How much headroom is there left for improvements?
There is a lot of headroom left for improvements. I cannot quantify it. In my assessment, we have only started in 2025 in a very systematic way with Operational Excellence. Operational Excellence is also many, many, many small steps. It does take energy, and it does take time, and it is a continuous improvement that we will have and not a step change. We are definitely at the beginning in many dimensions.
Thank you. Second question for Thomas: Can you provide more details on the strong Q4 order intake? Does this mark a trend reversal or is this more seasonally driven with respect to your guidance, implying a more muted first half of 2026 versus second half of 2026?
It's the latter one. It's more the year-end, the strong Q4, which we normally in the industry have every year when with the customers we push for the year-end closing. We had very strong numbers in 2025, and this doesn't indicate a trend. This is why we are so cautious with our H1 order intake guidance. If it comes better, then it comes better. Seeing it, I really would say it's a normal process which happens every year in Q4, where the industry, as well as the industrial companies, push for order intake and also for sales in the year-end race for the Q4 numbers.
Which also means we have already done it in 2024, so the comparison base is also y ou know, is Q4.
Yeah
in every year, so. Right? I would also not take it as a fundamental trend change. Too early.
Fabian Piasta says, "Great, thanks." Oh! Nope, wait a second. Sorry. I have another question from Louis Billon: Could you give us more details on your operational capacity in North America for the energy market? If the gas turbine maintenance market experiences a boom, will you be able to keep up with demand?
Our business is not linked to the new turbines directly. As you know, the new turbines, they now have delivery times of four, five, and six years. That does still impact our business positively, because in many cases, the old turbines are being dug out or reinstated with reengineering and put into operations again, because that goes much faster. Taking care of the older and the old turbines is our business, a very good business, because also the new turbines become old within a cycle.
Indirectly, we will profit from that. Definitely, we see it today, and yes, we have invested in our operations in the United States. Capital investments, which our American colleagues were very happy about because they hadn't gotten that much over the years. We have improved our Operational Excellence, which also means that you can do the more things, more volume, with plus-minus the same operations. Yes, we are going to profit from that, but not in an extreme way because there is this distribution over time in our business, which is good.
This has been the last question online. Thank you.
Thank you very much. Again, thank you very much for attending online, and thank you very much for taking the time and the effort to come here. It's much appreciated, and we are happy to invite you now for a small, uncomplicated lunch, like every year, and continue our conversation. Thank you very much.
Thank you.