Sulzer Aktie

Good morning, and welcome to the Midyear Results Presentation of Sulzer. [Operator Instructions]

And now, I hand over to our host, Executive Chair, Suzanne Thoma; and CFO, Thomas Zickler.

Ladies and gentlemen, welcome to our midyear results presentation 2026. The first half year of 2026 has been both a challenging year for Sulzer -- half year -- and a very successful half year.

Looking at our order intake, of course, with minus 3.9%, we cannot be satisfied. At the same time, we have to put this result into perspective. In one of our growth markets, the Middle East, there is, unfortunately, a war taking place. And this is not the moment for our customers to make major decisions on large-size projects. At the same time, we see increasing planning activities for the time after the, hopefully soon, end of the war or the necessity of protecting the owned infrastructure. The situation in the Middle East does not only impact the Middle East, but it also has repercussions outside of the region. For example, as you have read in the newspapers, for the fertilizer production, where Sulzer is involved with its separation and purification technology.

At the same time, and again, to put numbers a little bit into perspective, for Sulzer, in the half year results, a minus of 3.9% or a flat result. The difference is an order intake of below CHF 80 million. Now, the result is as it is, but one large bioplastic polymer order that was expected to come in February would have moved us up in the half year from this result to flat. At the same time, you see also that our base business and the small project business is holding up very well in our -- in this situation and is actually increasing its share of our business, which is a very good development for Sulzer because of the resilience of that business. At the same time, let me repeat, we see a clearly filling order pipeline, not only for the coming half year, but also for the years afterwards.

What is the success for Sulzer is clearly the improvement in the profitability that we have gained against a more or less flat sales of plus 1%. Thomas is going to speak about that in more detail. This also means that we do not only have a higher percentage, it also means that we have a higher absolute EBITDA in Swiss francs and a higher net income in Swiss francs. So we have also compensated through our Excellence journey, the increase in value of the Swiss francs.

So we can summarize it as follows. Our divisions, Flow and Services, are very well on track. They are resilient in a difficult environment and growing, particularly the aftermarket and the small project business. Chemtech, on the other hand, is now in an accelerated transition situation, of course, also impacted by the decision patterns -- the slow decision patterns that we see from our customers, but we are also now strongly restructuring the division. We are reducing costs, and we strengthened the focus on the market and on the true needs of our customers. We are also happy to report that our core business, that is the purification and separation business, we also often refer to as the MTCS business, is stabilizing clearly.

Again, as mentioned, we see a resilient aftermarket and base business, so we can call it the small project business. Nevertheless, we are still facing customer and investment decision cycles, which are slow, we believe that are picking up in the second half of this year.

To summarize, hundreds of initiatives happening around the globe under the title of Excellence, I can simply say the Sulzer Excellence machine is working and is taking up speed.

I am now handing over to our CFO, Thomas Zickler, to go a little bit deeper into the numbers. Thank you.

Thank you very much, Suzanne, and also a very warm good morning from my side. When we look a bit deeper into our H1 numbers, we really will see that Sulzer is a very resilient company, and as Suzanne already elaborated, in a very challenging environment, mentioning the geopolitical area in the Middle East. We also, as anticipated, have seen very few large orders in H1. And all in all, this impacted our order intake, as already elaborated by Suzanne, in H1.

What is the story all about? We have Flow and Services really being on track, working very well. On the other hand side, when we talk about order intake, we have continued growth in Flow and Services in the aftermarket, but also in our base business. Chemtech was mainly impacted by a lot of project delays and decision delays in our new technologies. When I talk about new technologies in Chemtech, what do I mean with this? I mean projects in the era of biopolymers like PLA, carbon capture and also sustainable aviation fuels. However, our core business in Chemtech, our MTCS business, remained stable and shows also some first signs of bottoming.

In all our KPIs, we have seen a better development in Q2 when we talk about a comparison between quarter-to-date, Q1 to Q2. For example, when we look at our order intake for the group, we have seen, in Q1, a decrease of 8.6% compared to Q2 quarter-to-date, an increase of plus 1.2%. On the sales side, we have also seen a good development despite the impact from Chemtech because when you take the 0.5% growth in Flow, you have to see that this is based on H1 2025, where Flow grew with 10.7% in H1 last year. For Services, it's even more or a better performance because their 4.4% are in relation to a 14.8% growth of Services in H1 last year.

When we talk about our book-to-bill ratios, you will see that in all our Bus -- I'm not talking about divisions -- in all our BUs, the book-to-bill ratio is above 1, except of our new technologies in Chemtech, where it is below. And explicitly, I say, for MTCS, also the book-to-bill ratio is above 1.0. As a last point on this slide, I want to talk about the currency impact. So we have, on sales and on orders, around about CHF 100 million in absolute numbers or 5% FX impact.

As a last point, I want to address on this slide, our order intake margin. You see that the order intake margin is at 35.7%. This is a decrease of 60 basis points compared to last year. What is it? Let me give you an explanation. It is mainly caused by Chemtech, by the business development in Chemtech, where we had a reduction of the order intake gross margin of 3.6 percentage points. So here, the order intake gross margin reduced from 35.9% to 32.3%. And this is mainly coming from the new technologies area in Chemtech. So we missed in H1 this year, a larger PLA order, which was highly profitable also in the past. In the last year, in H1 2025, we had a PLA order impact of around about CHF 65 million. Also, on the MTCS side, we see a bit lower margins in -- on the order intake side for MTCS.

Let me now come to the next slide and talk about our profitability. So, first of all, you see that our profitability again increased by 110 basis points. This is an almost 1 percentage point increase for the fourth year in a row. And it's caused, as I already explained to you, by a better gross margin and also by rigorous implementation of our commercial and operational excellence. When we reflect on the EBITDA margin, I just want to remind and remember you that in H1 2023, our margin was for the group at 12.9%. Nowadays, today, we are at 15.5% in H1.

Important to note, when we talk about our profitability, is the following fact. We have changed our measures, our KPIs, and we are now reporting EBITDA without any adjustments. What does it mean? So this means every measures, every spend, every investment which we have to take on our Sulzer Ambition 2028 Excellence program has to be financed by the current result, by the current profit of our business. So, for example, this year, or in this first half year, we had a lot of spend to improve our sales organization across our company. We also had some restructuring costs, which we had to compensate on our profit. For example, as you can see in our half year reporting for Flow, we have for this restructuring cost of CHF 6 million. But in the same magnitude, we also have a onetime spend in Services and in Chemtech.

Now, let me talk about return on capital employed. Return on capital employed, you see just a slight increase despite a very strong increase of EBITDA and EBIT. What is behind? Story is relatively easy. We have higher assets. And the higher assets are mainly coming from a higher net working capital, which is caused by many project delays on the customer side and -- to just give you a number, when you compare our net working capital H1 2025 to H2 -- to H1 2026, we have around about CHF 100 million more net working capital.

Now let me talk about Flow. Here, the headline says everything. In Flow, we have really an ongoing strong profitability improvement for many years. When we look back on the EBITDA percentage, on the EBITDA margin, we started in H1 2023 with 8.7%. I repeat it, with 8.7%. Today, we have reached 13.3%, and compared to H1 last year, again, a 100 basis point increase. When we talk about order intake, you see order intake is just up 1.4%. But let me also give you here the Q1, Q2 development for order intake. We have seen in Flow in Q1, an order intake of minus 3.8%. But in Q2, we have seen a plus 6.6%. So you see also here that our Flow division is regaining momentum in Q2 when we talk about the business development.

When we further talk about order intake, we see overall in Flow that we have a solid performance or a good performance of our base business. And this good performance in our base business is compensating a lot for the missing large orders, and the missing large orders, especially in Energy and Infrastructure, which we have announced in our media conference already in February this year, where we have seen, in our order intake or in our order pipeline, that most probably, all these bigger orders will come very back-end loaded in H2 this year.

We also see on the Flow side, talking about the other BU, Water and Industry, impacts from the Middle East conflict, especially for Industry, where we have an industry in the fertilizer production seen supply chain disruptions because of the blocking of the Strait of Hormuz. And therefore, in Industry -- our Industry business is performing the weakest currently, when we talk about order intake in Flow.

Now, let me talk about sales. In sales, we have a stable development despite -- and I remember here, all of the participants of this call, on a strong H1 2025. In H1 2025, we had a sales growth inflow of 10.7%. So you see, when we have now a sales growth of plus 0.5%, this is based on a very strong sales growth in H1 last year. Last, let me also give a bit more details about the EBITDA margin development. You see 100 basis points plus. So what is it? On the one hand side, yes, better gross margins, but also a very disciplined structured implementation and execution, I say, of our Sulzer Excellence machine -- of Sulzer Excellence across the BUs in Flow. And this is basically our sample case for the whole company, when we talk about profitability improvement.

Then let me talk about Services. In Services, we have seen, in the first half year, a sales growth of 4.4%. This sales growth of 4.4%, as I said in the very beginning, you have to see in comparison to an H1 sales growth of 14.8%. So this is quite an achievement in my eyes. Also, let me talk about the order intake development Q1 to Q2. In Services, we had, in Q1, order intake of minus 2.6%. And in Q2, we had an order intake development of plus 3.1%. So you see also here that we are gaining momentum back with our Services division.

When we talk about orders, it is very important that you understand, in Services, what is behind the relatively low increase of the, say, rate when we come to orders. On the one hand side, as I told you, we have a record H1 2025. This is one point. On the other hand side, we have received last year in H1, 2 larger orders for Services in Europe with around about a value of CHF 50 million. And because of the geopolitical tensions and volatility and the increased oil and gas prices, we have seen a lot of customers delaying their service cycles, especially in our repair business, for basically a couple of months. And this is why we are impacted also on the Services side with delays in repair business. However, they cannot delay it forever. This is something which will come then back in the future with a higher growth rate.

Order intake margin in Services has grown by 140 basis points in H1 this year compared to H1 last year. So now, we have an order intake gross margin of 40.6% for Services. Then, EBITDA margin, you see that Services is also gaining 100 basis points on profitability. And this, I want to stress, is despite 2 facts. One is, also in Services, we have a higher spend this year compared to last year for strategic growth areas, and this is in the Middle East and in India. But also because of the Middle East crisis or conflict, we had some operational interruptions in the Middle East, like in our service shops in Bahrain and Iraq. And therefore, this performance here on Services when it comes to the profitability increase is really outstanding, seeing the current market situation in which we are in.

Then, let me talk about Chemtech. Suzanne already addressed it. Chemtech, I think, it's -- the story is very simple. In Chemtech, we have the core business stabilizing. The core business, it seems that it's bottoming. It was stable in the first half of 2026 compared to the first half of 2025. However, we have still headwinds -- huge headwinds when it comes to larger orders, especially in the area of the new technologies, biopolymers, carbon capture and sustainable aviation fuels.

Let me also do some good messaging about Chemtech. When we compare here, order intake Q1 to Q2, and sorry for being here in negative numbers. So in Q1, we had an order intake of minus 27.7%. It improved in Q2 to minus 16.1%. So, at least a slight improvement, mainly caused by the missing larger orders in the new technologies business. But when we look in Chemtech and compare it to the H1 numbers in total for order intake and sales, I also want to tell you here the truth. We have currently minus 22.7% for H1 this year. Last year, we were minus 21.5%. And when we talk about sales, we have this year, minus 4.9%, and we had last year, minus 15.1%.

So now, let me talk about sales before I come to the cost reduction programs, but let me first talk about sales. What is the main reason why we have less sales despite a reasonable high order backlog. The sales are down by 4.5% (sic) [ 4.9% ] because many customers in this area, they are delaying the delivery time lines. And this means that we cannot record the sales. And also, we have lower orders, as you have seen in the order intake numbers. So all in all, this led to a, yes, very sizable sales decrease.

Now, let me talk about profitability and EBIT margin. So in Chemtech, we have the following situation. We have, as I explained, lower volumes, lower sales. And on the other hand side, we have starting under-absorptions in some of our factories and plants. However, when you see our EBITDA margin, the EBITDA margin remained stable for H1 2026. How was this possible? So we compensated through really stringent and continued execution of Excellence, plus an additional cost reduction program, which we already started in H2 2025 for Chemtech when we have seen that the business and the market is not developing as we imagined originally in our plan.

So in this additional cost reduction of H2, we have taken out around about 10% of our sales force, and this enabled us, together with some other cost reduction measures, that we are staying stable on our profitability this year. However, as I mentioned, when you look at the numbers, we from the Sulzer management, we have realized that based on the weak and lower order intake and sales numbers, and we have decided that we start an additional cost-cutting restructuring program for Chemtech. You will hear then from Suzanne, after my presentation, more details about this additional cost adjustment and cost-cutting program in the Chemtech division. But it's only one goal to make Chemtech fit for the future and adjust the cost base to the current business situation.

Then, let me talk about our free cash flow. Free cash flow was, in H1, highly impacted by our increased net working capital. I already talked about net working capital. It has increased. When you look here at the net working capital H1 to H1 2026, you see a delta of CHF 117 million. However, because of the year-end closing and bookkeeping rules, you cannot just take the CHF 117 million as the explanation for the higher net working capital. In reality, when you go into our cash flow statement, you will see that caused by higher net working capital flowing then into our free cash flow, we had an impact of around about CHF 40 million. So when you look at the CHF 30 million plus CHF 40 million, we would have been slightly above our free cash flow from last year. And in addition to this, you see in the second bullet point, we have -- since we have not received really larger orders in H1 2026, we have also not received any larger down payments from customers. And this also had a big impact on our free cash flow because last year, we were able to cash in some larger down payments from customers. All in all, when you see the net working in relation to our sales, you see we have an increase to 26%, coming from 22% in the prior H1. This is mainly caused by more or less stable sales but a much higher net working capital.

With this, I would like to hand back to Suzanne and...

Thank you very much, Thomas. I would like to take you now through a few strategic thoughts, but I will start with Chemtech, just underlying what Thomas just said. You can summarize it that Chemtech is in an accelerated transition. So the cost measures that we launched last year and that have now an effect on the division's profitability in H1 2026 have been even further accelerated. We are cutting costs, and we are reducing personnel by another 10%. We decided that finally in July. So early this -- well, we decided it in June, and we executed it in July. This also means that the full cost benefit will be seen in the first half of 2027. What we didn't do is to reduce the sales force or any of our customer channels in any way.

We do have now a simplified organizational setup. The setup is such that we have our core business in one BU and that we have our new technologies business, carbon capture, sustainable aviation fuel or biopolymers together in the second BU. You can also say that the second BU is heavily dependent on large projects coming to fruition.

Another very important point in the reorganization is sharpening our R&D focus, making it much more customer-oriented, making it much more oriented towards solving immediate customer problems like, for example, making the new technologies more cost-effective, more practical to implement. All of that means that the division will be leaner, more effective and more oriented towards the customer needs.

However, the underlying industry trends are intact. Why are we saying that? Because we see what is going on at customers. We see an ever-increasing pipeline of early, mid-stage and late-stage project planning. We see this particularly in the area of the biopolymers, and we see it in the area of the sustainable aviation fuels. We see it a little bit less in carbon capture. However, there are large projects also in the United States. We know of one large project to be precise where we are in the process of hopefully acquiring it.

So this is the way forward to -- for Chemtech. It's quite a cultural change, but we are very pleased to confirm that our colleagues understand and that we are moving ahead together.

The Sulzer Strategy 2028 is based on organic growth above markets that grow structurally. It doesn't mean they are growing every year, but they are growing structurally because of population growth, the increased need of more energy, more water, bigger role that base chemicals are playing. And at the same time, just as important and also the base for Sulzer's growth in the market is Sulzer Excellence along the value chain.

What we have not spoken about and is emerging step by step is that there are new growth areas for energy, water and chemicals in regions and countries we don't speak about so often. This is important for Sulzer because Sulzer, with its global setup being present in many, many countries, can respond to emerging customer needs in countries like Libya, where we have made a joint venture with a customer -- a company from Libya for the Service division for rotating equipment services; in Iraq, where we are already present, of course, we had less activities now in the first half of this year; Egypt, which is preparing to invest heavily in its water infrastructure but also in its energy infrastructure; Guyana, which is the place to be for deep-sea oil drilling; and depending on the political situation, how it will develop, the country of Venezuela, which, of course, has a huge need for reconstruction of its energy and water infrastructure.

What we do see is that the gas turbine boom, which is happening because of strongly increasing electricity consumption, not only with the data centers, but also with the data centers, is driving our business mid and long term because all of these turbines sooner or later have to be repaired and refurbished. And right now, we also see many customers taking old turbines out to have them deployed. And before they do that, we need to refurbish that. We see an increasing interest in liquid natural gas transport infrastructure, both for LNG pipelines, but also for LNG transport on the sea.

Of course, going forward and hopefully soon, there will be the topic of rebuilding and strengthening the Middle East infrastructure for securing supply and also securing resilience of supply that becomes an ever-more important topic, not only in the Middle East but around the globe. We see this, for example, also in the buildup of the municipal wastewater infrastructure in Asia.

Now, all of this, Sulzer can provide and can provide very well if we follow, in a very disciplined and very systematic way, our strategy of operational excellence along the value chain. Operation -- Sulzer Excellence is not only about production. It is also about production. And we have made great progress in on-time delivery, in-spec delivery, which reduces our quality costs and keeps our customers happy.

In the commercial area, commercial excellence, there are several examples. I would like to highlight the market value pricing, still a culture change for Sulzer, not to do cost plus, but to see the pricing from the customer's perspective and price our products and services and solutions accordingly and order cycle time reduction. What does that mean? It means that with the existing capacity, we can tender more and better. And by tendering more, we can also increase our sales. The supply chain, on which we have been working heavily in the last 3 years, is now going into a new phase, supply chain excellence. An important example is design to cost. What does that mean? Really designing our products and services to the customers' need and expectation, what they really need, even if it means quality that is a little bit inferior to what -- or fit for use, so -- and maybe not what Sulzer is very proud of to do.

When it comes to people, excellence happens on the shop floor. It happens in the offices. It happens in the everyday work. And this is why we are doing a systematic training of our employees around the globe with black belt and green belt training. And as you can see in our results, the Sulzer Excellence machine delivers results.

Now, what did we show with this little film? Excellence is about hundreds of actions, we call it initiatives, being taken around the globe. And we see a convergence of these initiatives coming together, giving results that you could see under the topic of One Sulzer.

Let me speak a little bit just shortly about innovation. And before, I spoke about design to cost and maybe sometimes accepting quality, if the customer requires it, that is a little bit below what Sulzer would traditionally want to do. Now here, you see a completely different example. Here, you see pumps that are deployed right now, 3 of them, in a subsea application. What are they doing? It is a collaboration with our customer, Petrobras and Technip. And the innovation is that you can separate, on the seabed, the oil coming out of the well and the CO2, the gas in general, which is about 50% of what is coming out. This technology of the separation comes from our customer, Petrobras. What comes from Sulzer is this very advanced, very demanding pump technology to take the gas, mainly CO2, and put it back down into the well.

You see the magnitude of these pumps. On the right -- left-hand side, you see a man standing there. So it is a huge pump. Now, this is not just an excitement of our engineering-oriented company, Sulzer, about the great project. If this works and the 3 pumps are now going to be deployed on the sea base, this is changing subsea drilling, making it more economical and making it also more environmentally-friendly because the CO2 is never coming up to -- on the platform again where, often, a lot of it did get lost. This is what Sulzer can do and is still doing and is opening the road to a new generation of subsea pumps.

On the other hand, on the other side of the spectrum, the new Sulzer with our new technologies that are struggling a little bit right now, but the need for overcoming plastic waste is unchanged. And Sulzer is working in customer trials -- I'm not speaking about early-stage results -- on a PET replacing technology that is known. But key thing in this PET replacing technology is that the qualities of the polymer that we call PEF is really drop in -- or better than PET, including the optical qualities. So we are in customer testing with this new technology, which we are very proud of.

Speaking a short moment about Sulzer Excellence. Sulzer Excellence is sometimes very down to earth. And I give you an example here in a very, very short film. We are speaking here about replacing a large hall that we have in Houston, where we store our customers' rotors. And we need that space so we can respond to the ever-increasing demand of gas turbine services. Have a look.

[Presentation]

These are our customers' rotors, and they are there. So the moment their running equipment needs service, they have as slow -- as short off-time than possible. Now, what's the excellence behind it? Rather than building a new building for our capacity expansion, we take the existing building, and we put these rotors in another building, which is less expensive outside of Houston, and we can do this very quickly so that we can respond to our customers' needs faster. Very practical, down-to-earth operational, or if you want, investment excellence.

So I'm coming to the end of my part of the presentation, the key takeaways. Division Flow and Services are growing, and they are growing in a challenging environment and with improved profitability. Chemtech's core business, the separation and purification technology that you can apply across many industries, is stabilizing; at a low level, no doubt, but stabilizing. The division is nevertheless impacted by delayed projects, as we have now mentioned several times, for different reasons, but certainly linked to the geopolitical situation. We are now strengthening Chemtech, focusing on the essential part of it, essential, which is necessary to grow, to be cost competitive and to do innovation that is relevant for our customers. We want Chemtech to return to growth as fast as possible.

Our company's sales and profitability are on track. And we expect, as we have already said in February, a stronger back-loaded H2 order intake. Sulzer Excellence, the machine is clearly delivering results and will continue to do so.

Taking a step back from the immediate daily things that are happening, we do see, around the globe, an ever-increasing importance of securing resilient and strong infrastructure for the supply of energy, water and chemicals. And this is why we are speaking of structurally growing markets, and we wouldn't be surprised if exactly these markets would grow even faster in the aftermath of the geopolitical situations that we have because the necessity to have your own infrastructure for energy, for water and for chemicals is becoming very clear in many world regions.

So Sulzer's growth potential going forward is fully intact. We are pushing sales. We are doing everything we can to increase order intake. And in the meantime, we are also doing our homework with Sulzer Excellence.

We are confirming the guidance that we presented to you in February with an order intake increase from 1% to 5%, sales up 2% to 5% and an EBITDA margin for the full year 2026 of around 16.5%.

Ladies and gentlemen, thank you very much for your attention. And now, we are opening for Q&A session.

Thank you. I will start with the first question of Alessandro Foletti from Octavian. In Service, can you quantify the impact of customer delaying orders because they run the equipment longer?

Let me answer the question like this. We have -- approximately 20% of Services is repair business. And in repair business, I would say, around about 20% to 30%, they are currently delaying their normal service cycles, partly by a couple of weeks, partly by a couple of months. But more precisely, I cannot answer the question.

There's a follow-up question from Mr. Foletti. In the Middle East, there are or were projects for several pipelines in Saudi Arabia, Oman, Iran. Can you give an update here?

I can give an update. These projects are in the planning phase, and we are participating in them. It doesn't mean we have the business, but we are very close to the customers preparing the final offer.

Next question is from Fabian Piasta from Jefferies. Can you please give further granularity on energy, infrastructure, water and industrial in Flow? It looks like some strengths offsetting other weaknesses.

Granularity. We have -- basically, in energy and in infrastructure, we have a very good base business in H1. And this is -- as I said in my presentation, this is compensating partly, but only partly, the missing larger orders. And you see that Energy and Infrastructure grew in H1 by 9.8%. So this is really a very good performance. On the other hand side, we have the water business, around about around 0, and slight growth. And we have the industry business, which is in the single-digit minus because we are not publishing normally the more granular information about industry and water. But industry is really majorly hit by the supply chain disruptions, which we have in the Strait of Hormuz and especially on the fertilizer side.

Again, a follow-up from Fabian Piasta. Turbo Services' plus 2% sales looks soft. Can you explain?

Yes, we are starting from a high base. And also, on the Turbo Services side, we have the delays in the repair business because we are talking about higher oil and gas prices, and the higher oil and gas prices, they are driving the delays of the services. They don't want to stop their machine running. And this is why I think, based on this extraordinary high base, which we have on the gas turbine service, it's a good performance when you look back for the last 3 years where we have grown, in this section, double digit.

Then, another follow-up question from Mr. Piasta. MTCS sales are down minus 18%. Is this the bottom when you refer to stabilizing?

Okay. Well, with the order intake stabilizing and still backlog that is there, we would say, with MTCS, so the core business, that should be, according to everything that we know, the bottom. Of course, this is barring any unforeseen events. Would you like to add something?

No. This is -- Suzanne, absolutely, I agree in the sense that we have seen, in MTCS also in H1, a very -- sorry, in Q1, a very weak Q1, and this also impacted the sales. Therefore, we have lower sales on H1 basis. On the other hand side, we have seen that this is all turning around a bit, the movement. We have a stable movement in MTCS when we talk about order intake in H1. So this should -- and I say, really like in -- not knowing this exactly what will happen in the future, this should then now indicate somehow the bottoming of the MTCS business when it comes to sales and also order intake.

It is not only a question of the market. It is also a question of how we are selling, our approach to selling, and how we are carrying across the value that we create with these technologies to our customers. Sales excellence is just as part -- just as much a part of our Sulzer Excellence than all the other elements, and we do see some results also there. For example, how our salespeople around the globe are using their time? Do they do it when speaking -- by speaking to the customer and finding out their needs? Or are they using it partly for administrative stuff on their desks? Just very basic example.

Then, a question from Arben Hasanaj from Vontobel on the outlook. Do you have indications that larger projects will return in H2? Or why are you confident in the 2026 order guidance?

Yes, we have indications. indications is the right word. Why do we have them? Because we are working with our customers on large projects, preparing tenders, for example. So preparing tenders is not the same as receiving an order, of course, but we see an increasing activity. However, I would like to also mention that it is rather likely that these orders will come in Q4, given where they are now in the decision-making cycle.

Next question from Raphael Lucet from Moneta Asset Management. With the large increase in refining margin disruption and Russia, do you expect a potential pickup in this activity?

Can you repeat the question?

With the large increase in refining margin disruption and Russia, do you expect a potential pickup in this activity?

So we have -- let's start with the easy question. We have -- part of the question. We have no business in Russia. We are also not speaking about refining margin per se. We are speaking about the margin in Flow, and therefore, Energy and Infrastructure. And in general, we are expecting a pickup of demand.

The refining activity, now he defined it. Next question from Louis Billon from Baader Europe. My question is about your capacity expansion in Texas. Could you provide more details on your current capacity? What will the capacity look like after the investment? Is it fair to assume that your annual sales for gas turbine services in the U.S. are around CHF 100 million to CHF 150 million? What kind of growth do you expect in this business? And could order intake or sales exceed the mid-single-digit-hundreds of millions by 2028?

What a difficult question.

What a difficult question, and many questions in one question. So we are increasing capacity for gas turbine repair with this investment by about 20%. We are -- we have a business for gas turbine service in the United States of around CHF 150 million. The biggest capacity inhibitor, so to speak, is skilled labor because this is still a lot of manual work, and we need to attract the right people and also be an attractive employer to them. Now, this has been the case also in the last years. We are pushing that increasingly.

Why more gas turbine service business? Because there are more gas turbines out in the world and particularly in the United States. Now, given the supply delays from the gas turbine providers, this is not a step change. It is a positive for us, positive development over the years. It also means that older gas turbines are being run longer. That means they need more repair and are not taken out of service. Sometimes, they have been taken out of service and they are going back in.

Another question from Louis Billon. How confident are you that the delayed customer projects will ultimately convert into sales rather than be canceled? Do your contracts include cancellation clauses or termination fees? What protections do you have in place? And where are these customers based?

So the protection that we have in place is such that our -- of course, we have cancellation fees and so on, what cancellation -- in the contract, we have methods to work with the cancellations, so to speak. Most importantly for us is that these large projects are always cash-positive for Sulzer. So if something stops, then the money is in Sulzer and not somewhere else, which strengthens our position there. Cancellation of strong -- of large projects, yes, this is not excluded. In our assessment, however, this would only be the case if the situation in the world and particularly in the Middle East would further escalate. In our prediction or our guidance, we have not taken into account a major escalation of the situation in the Middle East. You want to add something?

Yes. And looking back, whatever, a couple of decades, we haven't seen really project cancellations on a high magnitude ever. Yes, we have, from time to time, a project cancellation. But the history has shown to us that normally, in the area in which we work in, that we don't have project cancellations per se.

A question from Christian Arnold from ODDO. What is the gross margin of the FRC business being reclassified from Chemtech to Flow? And are there further businesses being potentially reclassified?

The gross margin, I don't have in mind, to be honest. I know that the FRC business is around about CHF 40 million on sales. I think we have something around CHF 3 million, CHF 4 million on EBITDA for this business in the end. But the gross margin, I cannot tell you.

I have another detailed question from Alessandro Foletti. Can you please give an update on the electromechanical side of service and OEM pump service? We speak a lot about turbines but not much about the other 2 segments. Can you quantify growth here?

Yes, very good question. I would like to start with the electromechanical part. Let's make a long story short, every turbine needs a motor. And we see this business area growing strongly. We have not yet included it in our figures. We are going to most likely invest in the electromechanical business, and we are working on also having very good margins in this area. So yes, this is developing very well. It was a side arm of the Services strategy a few years ago. And now, it has become an important part of the growth story of Services.

Pump services, on the other hand, is developing nicely. Of course, there, you have also the situation that if whole projects are being delayed, it can also impact pump services.

Another one from Alessandro Foletti. Yes. And on Chemtech, are there any restructuring costs we should think of? And is the margin in H2 suffering because of that? Or will you be able to absorb any one-off costs?

It's a very general question, but let me answer this like this. Yes, we will have, in H2, no major impacts from restructuring. We are planning restructuring costs for Chemtech in the low-single-digit area. But we also -- as you can see in the financial reporting, we have, on the subsequent events, already announced that we foresee an impairment in the Chemtech division of around about CHF 8 million, and this impairment is for our R&D center in Singapore. So all in all, on the visibility which we have right now, we do not see that our profitability is impacted for Chemtech in H2. We think we can even slightly grow. Why? Because we have already taken action by end of H2, and all these measures -- cost measures which we have taken by end of H2, they are coming to a full run rate in the second half of this year. And additionally, we will have some impacts of this additional cost-cutting program, which was addressed by Suzanne. So all in all, I don't think that we have an impact on the margin.

I think the last question is from Adrian Knoblauch from [indiscernible] regarding the outstanding dividend payment to Tiwel. Regarding the notes on the full year report regarding the CHF 170 million loan, if we can elaborate on this arrangement, and if there are further such reductions to expect in the future?

This we published in our annual report in February. This, in my eyes, was a onetime exercise because as we already announced, our holding company, basically Tiwel, who holds the shares of Sulzer, they have negotiated and achieved from all authorities, OFAC, Brussels and also Switzerland, all approvals to make it possible to pay out this part of our dividend. And this money flow was not leaving Switzerland, and this was used -- very important, and this was used to pay back debt because otherwise, parts of our shares would have fallen into the hands of a Russian bank. So I think this was, all in all, an extraordinary situation, which we have taken action on to secure the future for Sulzer.

Sorry, there is again a question. So lots of interest today. [ Miro Zusak ] is asking, you mentioned that you expect the large orders just in Q4 rather than Q3. Given the large improvement needed to meet your guidance, would a weak Q3 mean that you adjust your guidance from today's perspective?

No. From today's perspective, we would not adjust our guidance because of a weak order intake situation in Q3, everything else being the same, of course.

From Alessandro Foletti, can you say something on net working capital in H2?

I hope that this will improve, but being serious on this, when we see the larger orders coming in. And yes, most of them -- and I also want to pre-inform and prewarn you, yes, we are not seeing these larger orders really coming in, in Q3. The larger orders are currently planned for Q4. And when these larger orders come in for Q4, we also will receive, in Q4, a couple of larger down payments for these orders. And alone by this fact, our net working capital will improve, and also our free cash flow. So I'm foreseeing that our net working capital is decreasing to the year-end. But I cannot tell you right now about the magnitude because this is strongly dependent on the larger orders, which we will get by H2.

This was the last question in the Q&A section. Thank you very much.

Thank you.

Thank you very much.

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 that -- not audiences, but the people who are joining us from remote. Thank you for your interest in our company.

And 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 are, 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.

And with industries like energy, the chemical industry, and definitely, natural resources, which in the case of Sulzer is mostly linked to water, we have an 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.

But at the same time, these industries have a heavy ecological footprint. So 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 pollution while keeping everything affordable. And that is what Sulzer is doing for our customers in our industries. This is why although 2025 was, let's call it an interesting year, we had 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 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. But if I look at the figures, it's about 80% of the projects that were supposed to happen in 2025, and I'm speaking about the large-scale projects, have moved into 2026. So 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.

So let's look at 2025, a little bit more concretely on what we did. Well, we accelerated our strategy implementation. And our strategy is a rather down to earth, not so complicated strategy. It doesn't mean it is easy to implement it because it's thousands, many thousand different steps that we are taking. We concentrated on our markets and on our customers. And this means, for example, that we invested in our sales force. So 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. And you see it a little bit in our margin development. We learned to find a price point better than in the past, and we are on a journey to improving that.

We have made important steps, but 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 culture change in Sulzer because we come from a history, a successful history that prides itself almost only on innovation and engineering excellence. Now this is still important for our company, no doubt, 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 interesting 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. But at the same time, of course, we cut costs wherever they did not contribute to value creation or not enough.

And what we also did, and that was very important for Chemtech, we streamlined innovation. What do I mean with 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 mid-term 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.

Also, this is a journey, but we made nice progress in it, and we did report a good contribution to our profitability. And 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 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. And all of this leads that we can report highest reported sales, order intake, and profit.

Now our CFO, Thomas Zickler said, and you have to say, Suzanne, currency adjusted and also, sorry, in constant currency and also adjusted for acquisition and divestment. And yes, he's, of course, right, like mostly, but it is also almost -- we could almost say nominally. But we are correct, right? Yes, of course. So I will go quicker through these figures because Thomas will go a bit deeper on that.

We had an order intake of 2.1%. We had strong growth in aftermarket and in what we call noncyclical or water, which is more than 60% of our turnover. Our business of smaller projects, short-cycle projects grew nicely in all 3 divisions because this is the type of decisions that our customers like to do also in those volatile environments that we are acting. And we did have some large projects, customer projects 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%. So the company is still definitely growing. And 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. Now an order in the pipeline is -- 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. So it's like an early sign. We are happy to say that we grew our sales, and we did grow them with commercial discipline. We increased our margin. We were not buying sales and we're not buying order intake. And so we increased our profitability figures significantly. As you see it here, Thomas will speak about them more.

These are our figures at the glance. I would just like to highlight earnings per share going up very nicely and also our EBITDA, which is a record EBITDA. We're a 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, yes, 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 earnings per share went up 19%.

If you look at this slide, we look back a little bit for the last 3 years. And 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 -- it goes 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. So we increased our dividend again by CHF 0.50 if it is approved by the general assembly to CHF 4.75 per share.

So ladies and gentlemen, now let's look a little bit deeper into our figures with our CFO, Thomas Zickler.

Thank you very much, Suzanne. So 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. So when you look at our order intake and our sales, on both KPIs, we have around about CHF 190 million negative FX impact. So in other or in easy words, our order intake and our sales would have been around 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 3 consecutive years, Services has grown double digit. So 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 1 or 2 sentences, it's that overall, I will say, smaller and non-cycle business is running very well. However, 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 was 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%. So you see that towards the end of the year 2025, we really picked up in our business development. Also, when you look at our order intake margin, we haven't really bought any orders in just to get order intake. And this is very important. I'm saying this for now 4 years in a row. We are getting our order intake with a still increasing order intake margin. And you see this compared to last year, still 70 basis points higher order intake margin.

And as said by Suzanne, we have overall talking about the whole Sulzer Group, still positive book-to-bill ratio of 1.06. So talking about our EBITDA profitability. It is indeed a record profitability over the last at least 20 years. And when you look at our profitability at the EBITDA, you see it's CHF 556 million. And what you have to know, and 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 around about CHF 40 million. So to say it in other words, our EBITDA without this negative FX impact would have been close to CHF 600 million or somehow around CHF 600 million. When we talk about the success, why is our EBIT and EBITDA increasing so much? And 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 in the details later on. But 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, say, efficient use of our capital. And this means higher EBIT, stable capital, that the return on capital is growing up by 140 basis points.

So 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%. So we really have outperformed the market. Also 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.

And market capitalization, I checked just 5 minutes ago, our share price, we are more or less flattish compared to yesterday. So 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. So I calculated we are currently at CHF 177 million. If we would have been at CHF 178 million, we would be at exactly 6.0 market capitalization.

So 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. And as I said, in Flow, we have also seen a lot of operational excellence measures really realizing in 2025, helping to optimize the cost setup, helping also to improve the profitability by also, in parallel, increasing the sales.

And when I talk about the sales, you see that sales in Flow increased double digit by 12.3%. And 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. But we also have had a very good sales development in the water and in the industry area. So 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? Because let me start with Energy. In Energy, we had in H1 2024, one large big order -- elephant order from the Middle East with USD 100 million. And these large orders, they haven't come in, in 2025. This is the overall storyline for 2025. So when you look where Energy landed by end of the year 2025, Energy landed with around about minus 3%. So minus 3% without having the USD 100 million large order means if you would have taken out this one order, energy would have been at least plus 5% and more. So 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. So let me leave it here with the statement, Water grew double digit in 2025. And annoying 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 even 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. And 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 around about 18%. So you saw also in Flow an uptick when it comes to the business performance in 2025.

Then let me go to Services. Services is also really -- 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. So there's an internal competition, 10 basis points lower than Flow, but they grew with 150 basis points on the profitability. And what is the reason for this? Yes, also operational excellence. But as I have mentioned on the first slide, services is growing for the third consecutive year in order intake and also in sales. And 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.

So 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 Davies and 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.

And last but not least, we have invested in the U.S. in our, and I wrote it down, in our largest turbomachinery center in North America. And 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. And here, services is on its way with upgrades, modernization, repairs, retrofits to really ensure that all the customers have a reliable energy, yes, equipment available.

That's from my side. I forgot one point, also 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 -- 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. And 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. But believe me, still Americas, and you saw it also in the e-mail, which we shared this morning with most of you and in the press release that Americas is still growing almost by 10% and also EMEA by more than 25%.

Then more challenging environment, Chemtech. Chemtech, what is here the headline is really the overcapacity, especially the refining overcapacity on -- sorry, it's not working. Okay. Chemtech, we have the overcapacity, especially in the refining area for the refineries in China. But we have also the overall, yes, 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. So we have basically in this smaller projects, short-cycle base 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 tower field services, turnaround services, and so on. So 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 around about 50% to 37%. So this is a reduction by 12% of the Asian share. And on the other hand side, we have increased the share in EMEA by around about 11%.

And some of you remember, we are going to open a service shop in Saudi Arabia for Chemtech this year, by mid of this year. So 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 2 percentage points. But here, and Suzanne already addressed it, I really want to explain to you, this is a very value-accretive margin. And why I'm saying this? Because, yes, the profitability went down because Chemtech lost 13.6% of their sales. But 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 2 BUs within the Chemtech organization. And 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. So 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.

And on the other hand side, this means when we achieved 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. Also 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 '24 to quarter Q4 '25, an increase of more than 13%, which indicates that we most probably have seen the end -- the light at the end of the tunnel.

Then 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, 2 reasons for this. We have because of the lower interest rates globally, lower interest income for Sulzer. And 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.

Then 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 million? 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.

Okay. Well, thank you. Yes. And with this, we would have been close to CHF 300 million 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 lower interest income, and just to drop the numbers, tax payments are around about CHF 10 million higher and lower interest income is around about CHF 7 million. So alone, when you add these 2 ones, you see that we can explain the lower cash flow.

Now it's working.

So balance sheet and net debt-to-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 always addressing, Thomas, why do you show not just the net liquidity of Sulzer, and 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. But this is only the cash which you see for 2025 with CHF 640 million. It's only our own Sulzer cash.

And 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 2 new bonds in the total amount of CHF 330 million, and this is why we have CHF 30 million more debt. And then when you do the calculation, net debt divided by EBITDA, we have then a net debt in 2025 of CHF 555 million and an EBITDA of CHF 556 million. So you see it's 1.0x. And when you compare this with last year, it's basically a no change. It's a stable 1.0x on the net debt side.

Okay. So 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 CHF 4.75 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 CHF 3.50 and you see then a lot of dots. And then until 2021, you have here still CHF 3.50. And you see in the last years that we steadily increased the dividend because we are, as you know, on our Strategy 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 stays between 40% and 70% of our core net income is in our dividend policy, what we can pay as dividend. And 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%. So 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 onetime by higher amounts.

With this, I would like to hand back to Suzanne and then ask -- should we do the question? No?

No. I still have a few things to. But as a matter of fact, we have already 45 minutes, so 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, yes, interesting, I hope.

So 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 the way we are handling business demands from one customer to several divisions. There we are sometimes a bit our own enemy.

Yes. So let's look at energy, our #1 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 service division. The chemical industry, new capacity is indeed subdued, except for some specialty segments, purification and separation, very, 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. So 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, and we need more. And so 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. And 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. But 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, but 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.

So 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. And there, we are also suffering from the comparison base. If you look at our Q1 order intake, the base is around about CHF 1 million -- CHF 1 billion. So if you have a CHF 50 million order in March or you have it in April, makes a difference of 5 percentage points. This is why we really don't think that the Q1 order intake has too much of an information value. So we see not so much momentum in 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 2026, continued growth in aftermarket in small-scale project and in the water. And we do see an upwards trajectory 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 maybe 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 and the challenges that our customers have in order to have safe, clean, less emission, and so on is also driving our markets. So we believe that Sulzer is clearly on an upward trajectory, potentially not every quarter.

So 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. And 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. And we are moving towards integrated customer solutions, solutions for specific industry centers like water, where all of our 3 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 -- what I want to say is 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. So we are guiding an order intake of 1% to 5%. We are guiding sales for 2% to 5%. And we do see an EBITDA margin that is further improving to about 16.5%. Very short. I have been told you like these examples. So I will do it, but I'll be 3 in 5 minutes, I promise.

So we are still making traditional energy cleaner and less expensive and readily available. And that will continue this business for a very long time because the world needs more energy. And you see an example here where a customer of our thought they had to replace 2 full compressors, which would have shut down their offshore operations for apparently several years. But we came in with our retrofit solutions from the Services division and could upgrade the compressors. We contributed to less -- to a smaller environmental footprint because the energy consumption of the operations is now down 14%. And for the customer, most importantly, we could -- 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 and Sulzer is very good at that. Now we still speak about keeping the energy transition moving because it is still moving almost worldwide, and this is a nice example for a bioethanol plant in Brazil, where we were the main supplier and 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 2 months ago. This is following the strategy of having industry-specific offers from a One Sulzer perspective. And here, very specifically, we have around the globe quite some very, very good, but smaller companies active in water treatment, who are regionally well established, and 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 shared business 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, but 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. But 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. So our strategy is working, and we push on with this strategy by 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. Patrick Rafaisz from UBS. Is it -- how many questions? Can I go with 3 to start?

It depends how complicated they are.

Okay. Let's start with 2 first. One is on the order intake margin. And Thomas, you mentioned the 70 bps improvement. But if I look at H1, H2, H2 was actually down, on my calculations. Can you elaborate on that? Is that mostly mix? And how should we think about the order intake margin in '26?

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 we had the difficulties with our order intake to really come to the guidance to the end of the year. So 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 may be brought forward some orders?

No, it did. 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. And then a question on the margin expansion. It's very impressive, adding another almost percentage point or thereabouts in '26. If you allocate that to the 3 divisions, I mean, Chemtech you already mentioned will definitely improve. But how do you think about services and Flow versus '25, right?

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. But we are not buying sales that is very -- and not 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. Okay.

It's a short one like that. I just -- 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?

We are business people, not analysts. So we don't do quite such calculations. That was meant in a referent way. Just really also like Thomas answering how this really are. I can just -- I know you want the figure for your thing. What's now?

Maybe I take over.

Yes.

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, and 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.

Christian Arnold from ODDO BHF. On the margin, EBITDA margin, I mean, you achieved the record high EBITDA margin, 15.6%. Now you are guiding for quite a step actually in '26, 16.5%, which is impressive. Thinking about your order intake margin increase of 70 basis points, sales growth of 2% to 5%, which probably leads to some operating leverage. And then 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. So what could go against you? Are these higher personnel costs? Are these product mix effects, which we have to think about? Yes.

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 -- we 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 have 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. And also, we want to be in line and sustainable with the last 4 years, where we have almost every year guided with 1 percentage point growth. And we think, as Suzanne explained, we think also for 2026, we can do it. However, and 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. And maybe just a small question on CapEx. What do you think what will you spend in '26 and '27?

I have to say...

Yes. Sorry, same levels. Thank you very much.

Alessandro Foletti of Octavian. Can I ask you also 2, 3 questions, please. Maybe first on the H1, H2 split. I think you guided in the press release that H1 will be lower than H2. But the backlog entering the full year is quite high, like basically like last year. Why still this H1 weakness somehow?

Our guidance was related to order intake, not sales.

Okay. So that means on sales that we should not expect this huge H1, H2.

Yes. Alessandro, sales is always much more stable coming from the order backlog than order intake. But 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 6 months of this year.

Okay. Thanks. On the profitability again, in Flow, particularly, I think Ms. Thoma, you mentioned that you did have some help from the market to increase the profitability there. Can you dissect how much of this improvement is 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 2 years ago, for sure. And then this combined with our, say, cost measures, this enables us to get the profitability up. But on the pricing side, I think we are very disciplined. We have new pricing tools. We are using here a bit more sophisticated tools. But overall, yes, the markets, they are supporting this development, but I cannot really give you whatever XYZ percent.

All right. Maybe last one on the large orders again. There were some discussion with you during the year, last year about carbon capture. Now you mentioned it, but I'm not sure that there's still the levels. Are they still around these projects? Are they not around, where?

So we have a large project in 2025, the Teesside project in the U.K. And 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. And there is not only -- 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.

And 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, but we do see momentum in carbon capture. Also in the Middle East, we do not -- we see discussion in China, but that will come much later. We do not see it in India.

Right. But 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. But they also -- they already do have some push for that.

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 your assessment of the competitive landscape for those projects?

We are definitely the market leader when it comes to large-scale carbon capture projects.

If I remember correctly, you mentioned of the 9-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 and the projects you see now, the bigger projects coming rather in the second half of these new projects? Or are they still the same and 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 project volume. We wouldn't have gotten all the projects, but in the order of CHF 300 million, of which we maybe would have gotten half or 40%. And of those, CHF 220 million have moved into 2026 and CHF 80 million were lost, but there are some new that have become more concrete so that they -- they weren't that concrete in September, so, I didn't speak about them.

So all in all, that's what I was trying to say with my underlying momentum. There is a strong underlying momentum when it comes to energy generation worldwide, not only in power, also in oil and gas. We will -- would be very amazed if we wouldn't have any orders in the next 12 to 16 months that are really major, most likely in -- very likely in the H2.

Arben Hasanaj from Vontobel. My question would be around the outlook for the service business for this year and also next 2, 3 years. I mean, if you look at the CapEx budgets also in the area of data centers, they have become even more bullish. So I was wondering how confident are you that this kind of momentum continues and maybe even still double-digit momentum. Yes, I was wondering, how do you see the market this year and next 2, 3 years? How long can this super cycle last in your view?

We are very positive over the next 2, 3, 4 years because of some underlying drivers.

Yes. 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 overachieve, then vice versa. So 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 year.

No, that was not -- that was an ambition and expectation. It was not an additional guidance. Thank you for raising that.

Any other questions? Well, then we come -- no, then we come to the -- yes, exactly Marlene coming in with maybe questions from.

Yes. I have 2 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 improvement?

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. Now operational excellence is also many, many, many small steps. So it does take energy and it does take time, and it is a continuous improvement that we will have and not a step change. But 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. So 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. But 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 basis also Q4 in every year. So -- right? But I would also not take it as a -- not yet take it as a fundamental trend change, too early.

Fabian Piasta says, great. Thanks. And this has been -- no, wait a second. Sorry. I have another question from [ Loui Bion ].

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?

Okay. Our business is not linked to the new turbines directly. As you know, the new turbines, they now have delivery times of 4, 5, and 6 years. Now that does still impact our business positively because in many cases, let me say, it a bit old turbines are being dug out or, let's say, reinstate with reengineering and put into operations again because that goes much faster. So 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.

So indirectly, we will profit from that. Definitely, we see it today. And yes, we have invested in our operations in the United States, also capital investments, which our American colleagues were very happy about because they haven't gotten that much over the years. And also, we have improved our operational excellence, which also means that you can do the more things, more volume with plus/minus the same operations. So 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. So again, thank you very much for attending online, and thank you very much for taking the time and the effort to come here, is 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.