Sulzer Annual Results Presentation 2012

Sulzer Annual Results 2012
Annual Results Presentation 2012
Strong double-digit growth in orders and record high sales

February 15, 2013
THE SAFE HARBOR STATEMENT UNDER THE US PRIVATE SECURITIES LITIGATION REFORM ACT 1995
This presentation may contain forward-looking statements, including but not limited to, projections of financial developments, market activities or future performance of products and solutions, containing risks and uncertainties. These forward-looking statements are subject to change based on known or unknown risks and various other factors, which could cause the actual results or performance to differ materially from the statements made herein.
Sulzer Annual Results 2012 | slide 2
Page 1
Agenda
Business Performance Update on Strategic Priorities
Financial Results
Outlook and Conclusion
Highlights 2012
Strong double-digit growth in order intake and sales Stable profitability and substantial increase of cash flow Further strengthening of global production and service network Strategic priorities defined Solid balance sheet remained Increased dividend proposed Outlook 2013: moderate growth of orders and sales; profitability to improve slightly
Solid performance and well positioned for the future

Page 2
Key figures
in millions of CHF
2012 4 023.4 1 829.2 4 021.6 540.9 13.5% 409.5 10.2% 15.5% 307.1 9.03 347.9 95.9 17 936
2011 3 566.1 1 864.0 3 577.9 482.8 13.5% 364.1 10.2% 18.8% 279.8 8.25 82.4 336.8 17 002
% +12.8% 1.9% +12.4% +12.0%
%
adj.1
Order intake Order backlog (Dec 31) Sales EBITDA ROSDA (EBITDA in % of sales) EBIT ROS (EBIT/sales) ROCE (EBIT/capital employed) Net income attr. to shareholders EPS (in CHF) Free cash flow Net liquidity (Dec 31) Employees (Dec 31)
+3.9%
+4.1%
Growth supported by acquisition and organic growth
+12.5%
Solid financials in a challenging environment
+9.8% +9.5% +5.5%
Strongly improved cash flow; net debt position reduced
1) Adjusted for currency effects as well as acquisitions and divestitures Note: Newly acquired Cardo Flow Solutions (herein after called wastewater pump business) consolidated as of August 1, 2011
Top-line development
Order intake
(in millions of CHF)
Sales
4 023 3 566
4 022 3 578
+13% nominal (+4% adj.1)
Book-to-bill: 1.0 Order backlog: CHF 1 829 million
+12% nominal (+4% adj.1)
2011
2012
2011
2012
Strong double-digit growth; sales at record level

1) Adjusted for currency effects as well as acquisitions and divestitures
Page 3
Bottom-line development
Operating income (EBIT)
Net income attributable to Sulzers shareholders

410 364
307
+13% nominal
280
+10% nominal
2011
2012
2011
2012
10.2%
ROS
10.2%
8.25
EPS in CHF
9.03
Stable double-digit profitability; net income further increased

Guidance check 2012

Guidance: Achievements: +13% nominal Check: Achieved
Orders
High singledigit growth
Sales
High singledigit growth
+12% nominal
Achieved
ROS
To remain double-digit
10.2%
Achieved
2012 results: delivered as promised

Page 4
Acquisitions
Various acquisitions at various magnitudes in all four divisions in the last years Latest additions were at the end of 2012/beginning of 2013:
Assets of the carbon business of Thermoset Inc. to complement Sulzer Metcos high performance carbon-friction product line for the automotive business Krger, a transaction to complement Sulzer Chemtechs product range in the dispenser business (Mixpac Systems) 2009
TowerTech Freeze Tech Khni Select Transmission, Borg Warner assets SAB Preu
2008
Capime
2010
Sulzer India (taken private) Dentaco Dowding & Mills DLC from Bekaert
2011
Black Magic Crew (BMC) Engenharia Cardo Flow Solutions
2012
Hidrotecar CGT Cold Gas Technology Thermoset
2013
Krger A/S
Monitoring the markets for further targeted acquisitions
Smaller bolt-on acquisitions in 2012

Note: Dowding & Mills (Sulzer Turbo Services) and Cardo Flow Solutions (Sulzer Pumps) were of significant size; remaining acquisition of small- to midsized character
Footprint changes in 2012

New production facility Pump production facility in Kunshan, China opened to serve the local water markets
New service locations added Brazil, Colombia, Russia, Singapore, South Korea, and Sweden
New pump production facility in Kunshan, China
Other changes Move of global headquarters of Sulzer Chemtechs MTT1 business to Singapore Additions from newly acquired companies
Adding new service centers to increase customer proximity
Decisions driven by market demand and strategic considerations

1) Mass Transfer Technology
Page 5
Footprint
170 production and service sites serving the world
Global headquarters, Switzerland
Major production and service facilities

(not exhaustive, for illustration purpose only)
Truly global with a focus on market and customer needs

Geographical breakdown share of sales

39% of sales in emerging markets
North America: 25% Europe: 37%
Asia, Australia: 23% Middle East: 4% Africa: 3%
Central and South America: 8%
Balanced presence and strong positions in emerging markets

Page 6
Market developments 2012 vs. 2011 from a Sulzer viewpoint

Oil and Gas Power Water
Growth on high level
Moderate growth on low level
Growth
Transportation
General industry
Moderate growth on high level
Flat Mixed picture

Note: Arrows indicative and for illustration purpose only
Markets share in sales

Oil and Gas 40%
(39%)
Power
15%
(18%)
Water
12%
(8%)
Upstream, pipelines, downstream
Conventional, renewable
Production and transport, wastewater
Transportation
9%
(10%)
General industry
24%
(25%)
Sales share 2012 (2011)

Automotive, aviation, rail, shipping Pulp and paper, mining, dental, other
Page 7
Sulzer Pumps
Market leader in pump technology and solutions

Main markets Oil and gas (upstream, midstream and downstream) Water (production and transport, wastewater) Power generation Main products Engineered pumps Configured pumps Associated services
Sulzer Pumps Key figures

Sales +20%
Strong increase
ROS 9.1% | 9.6%4

Stable
ROCE 13.1%
Value creating
in millions of CHF Order intake Order backlog (Dec 31) Sales EBITDA2 ROSDA (EBITDA in % of sales) EBIT3 ROS (EBIT in % of sales) ROCE (EBIT in % of capital employed) Employees (Dec 31)
2012 2 094.3 1 309.1 2 097.5 245.9 11.7% 191.2 9.1% | 9.6%4 13.1% 8 573
2011 1 705.6 1 343.5 1 747.8 210.2 12.0% 168.2 9.6% 20.5% 8 211
% +22.8% 2.6% +20.0% +17.0% +13.7%
% adj.1 +7.1% +5.9%
+4.4%
1) adjusted for currency effects as well as acquisitions and divestitures 2) including non-recurring costs of CHF 7 million (2011: CHF 30 million) for acquisition of wastewater pump business 3) including non-recurring costs of CHF 7 million (2011: CHF 30 million) and amortization charges for intangibles of CHF 22 million (2011: CHF 9 million) for acquired wastewater business 4) excluding 0.5-percentage-point higher corporate fees charged to divisions in 2012 compared with 2011 achievements
Page 8
Sulzer Pumps Breakdown by market and geography

Sales by market segment
15% 10% 15% 16% 15%
Sales by geography
7% 20% 34%
23%
5%
25% 23% 17%
11% 23%
Europe North America Central and South America Middle East Asia, Australia Africa
Sales and ROS development (in millions of CHF)

50% 46% 45%
1817 12.8% 1857 1748 1576 12.0% 11.0% Sales ROS in % 2098
2010
2011
2012
General industry Water Power Oil and gas

9.6%1
9.6% 9.1%
1) Excluding 0.5-percentage-point higher corporate fees charged to divisions Remark: acquired wastewater pump business consolidated since August 2011 (mainly serving water market)
2008
2009
2010
2011
2012
Sulzer Pumps Highlights 2012 and outlook 2013

Strategic priorities and highlights 2012:
Technology leadership
New high efficiency products launched Subsea products launched; long-term exclusive collaboration agreement with FMC Technologies signed Service network and offering expanded Additional production plant in Kunshan, China Inclusion of high-tech coatings from Sulzer Metco
Outstanding services Continuous operational improvements Collaborative advantage
Outlook 2013: Moderate growth in order intake and an increase in sales expected. Profitability forecast to increase slightly.
Page 9
Sulzer Metco
Market leader in surface solutions

Main markets Transportation (Automotive, Aviation) Power General industry Main products Coating materials (thermal spray) Coating systems (thermal spray) Coating services
Sulzer Metco Key financials

Sales +3%
Growth on high base
ROS 10.0% | 10.5%2

Stable
ROCE 17.1%
Clearly value creating
in millions of CHF Order intake Order backlog (Dec 31) Sales EBITDA ROSDA (EBITDA in % of sales) EBIT ROS (EBIT in % of sales) ROCE (EBIT in % of capital employed) Employees (Dec 31)
2012 689.5 76.5 690.3 91.7 13.3% 68.7 17.1% 2 399
2011 673.6 77.4 667.3 91.9 13.8% 68.7 18.2% 2 259
% +2.4% 1.2% +3.4% 0.2%
% adj.1 +1.2% +2.3%
10.0%| 10.5%2 10.3% +6.2%
1) Adjusted for currency effects as well as acquisitions and divestitures 2) Excluding 0.5-percentage-point higher corporate fees charged to divisions in 2012 compared with 2011 achievements
Page 10
Sulzer Metco Breakdown by market and geography

Sales by market segment Sales by geography
21%
36% 36% 37%
1% 2% 52% 24%
Europe North America Central and South America Middle East Asia, Australia
52%
51%
50%

744 Sales 624 ROS in % 667 690
10% 2010
2%
11% 2011
2%
11% 2%
9.4%
556 10.3% 9.2%
10.5%1
10.0%
2012
General industry Transportation 2 Power Oil and gas

2008
1) Excluding 0.5-percentage-point higher corporate fees charged to divisions
2)
3.7%
2009
2010
2011
2012
Automotive 22%; Aviation 28%
Sulzer Metco Highlights 2012 and outlook 2013

Acquisition of carbon friction materials business

Strengthened coating service business with shop-in-shop center in China Further progress with LEAN Joined the CCAM1 Joint development of solutions together with Sulzer Chemtech
Outlook 2013: Moderate growth in order intake and sales expected. Profitability forecast to increase slightly.
1) Commonwealth Center of Advanced Manufacturing, Virginia, USA
Page 11
Sulzer Chemtech
Market leader for separation, mixing and service solutions

Main markets Oil and gas (mainly downstream) General industry Main products Separation solutions Separation tower services Two component mixing and dispensing systems
Sulzer Chemtech Key financials

Sales +9%
Increased
ROS 9.8% | 10.3%2

Stable
ROCE 16.3%
Clearly value creating
in millions of CHF (as reported) Order intake Order backlog (Dec 31) Sales EBITDA ROSDA (EBITDA in % of sales) EBIT ROS (EBIT in % of sales) ROCE (EBIT in % of capital employed) Employees (Dec 31)
2012 705.1 293.6 724.6 105.5 14.6% 70.7 9.8%| 10.3%2 16.3% 4 086
2011 701.7 310.7 667.0 97.8 14.7% 63.1 9.5% 15.3% 3 634
% +0.5% 5.5% +8.6% +7.9% +12.0%
% adj.1 4.1% +4.0%
+12.4%
Page 12
Sulzer Chemtech Breakdown by market and geography

Sales by market segment Sales by geography Europe North America Central and South America Middle East Asia, Australia Africa
33% 3%
28% 3%
27% 3%
37%
32%
3%
5%
23%
64%
69%
70%

823 Sales 17.0% 632 575 ROS in % 667 725
2010
2011
2012
10.2% 8.6% 9.5%
10.3%1
9.8%
General Industry Transportation Oil and Gas
2008
2)
2009
2010
2011
2012
Automotive: two-component dispensing
Sulzer Chemtech Highlights 2012 and outlook 2013

Start up of biopolymer pilot plant

Process technology test center put into operation Expansion of service offering of static equipment Expansion of capacity and capabilities in Asia, Australia Joint service project in HPI plant with Sulzer Pumps
Outlook 2013: High single-digit growth in order intake and sales expected. Profitability forecast to reach a double-digit level.
Page 13
Sulzer Turbo Services
Leading independent service provider for rotating equipment

Main markets Oil and gas Power General industry Main services for Industrial gas and steam turbines Turbo compressors Generators and motors
Sulzer Turbo Services Key financials

Sales +5%
Increase
ROS 10.8% | 11.3%2

Stable
ROCE 14.8%
Value creating
in millions of CHF (as reported) Order intake Order backlog (Dec 31) Sales EBITDA ROSDA (EBITDA in % of sales) EBIT ROS (EBIT in % of sales) ROCE (EBIT in % of capital employed) Employees (Dec 31)
2012 535.2 151.6 510.5 71.6 14.0% 54.9 14.8% 2 703
2011 477.6 130.1 488.0 69.2 14.2% 53.2 14.9% 2 654
% +12.1% +16.5% +4.6% +3.5% +3.2%
% adj.1 +8.4% +0.8%
10.8%| 11.3%2 10.9% +1.8%
Page 14
Sulzer Turbo Services Breakdown by market and geography

Sales by market segment Sales by geography
16% 4% 38% 43% 43% 7% 36%
Europe North America Central and South America Middle East Asia, Australia
37% 35% 35%
32%

Sales ROS in % 399 314 488 511
27%
22%
25%
2010
2011
2012
9.7%
291 11.3% 10.5% 10.9%
11.3%1
10.8%
General industry Power Oil and gas
2008
2009
2010
2011
2012
Sulzer Turbo Services Highlights 2012 and outlook 2013

New tools for turbine inspection implemented Capabilities and resources added for LTSA1 strategy deployment Service offerings in new markets launched Further steps toward LEAN Closer collaboration with the Sulzer divisions
Outlook 2013: Moderate growth in order intake and an increase in sales expected. Profitability forecast to increase slightly.
1) Long-term service agreements (large and long-term relationship)
Page 15
Agenda
Financial Results
Vision and values

Vision: Our customers recognize us for our leading technology and services, delivering innovative and sustainable solutions. Values:
We exceed the expectations of our customers with innovative and competitive solutions.
We perform on the basis of structured work processes and LEAN principles.
We are committed to high standards and show respect for people.
Customer and people oriented, making sure that we act excellently

Page 16
Strategic priorities
Outstanding services Continuous operational improvements Collaborative advantage Customer orientation Profitable growth
Midterm targets 2015
Oriented toward our customers with a focus on value creation and profitable growth
Strategic priorities
Achievements 2012
New innovative solutions launched Technology leadership Technology portfolio expanded Start up of biopolymer pilot plant Share of sales in services 41% Outstanding services Expansion of service network Service offerings for new markets Safety KPIs further improved On-time delivery improved by 14% through LEAN initiatives Cross-divisional projects launched Collaborative advantage Continued partnerships with universities and technical institutes
Actions 2013
Continued investments in R&D Further expansion of technology portfolio Further strengthening of service network Expanding service offering for the power industry Improvement programs for safe behavior and Safety KPIs Leverage on-time delivery potential Increasing focus on company-wide cooperation Seizing additional opportunities for shared services
Continuous operational improvements
First achievements and further actions

Page 17
Agenda
Financial Results
Financial highlights 2012

Double-digit growth of order intake and sales

Supported by acquisition and organic growth Record level of sales
Strong financial performance

Return on sales in double-digits Increased net income Strong cash flow
Healthy financing and balance sheet

New credit line established Capital structure solid Increased dividend proposed
Strong financial performance and high cash flow

Page 18
Order intake by division

millions of CHF
2012 4 024.1 2 094.3 689.5 705.1 535.2 0.7 4 023.4
2011 3 558.5 1 705.6 673.6 701.7 477.6 7.6 3 566.1
+13.1% +22.8% +2.4% +0.5% +12.1% +12.8%
adj.1 +4.0% +7.1% +1.2% 4.1% +8.4% +3.9%
Divisions Sulzer Pumps Sulzer Metco Sulzer Chemtech Sulzer Turbo Services Other Total
A strong year with more than CHF 4 billion of order intake

1) adjusted for currency translation effects as well as acquisitions and divestitures Sulzer Annual Results 2012 | slide 37
Order intake by region

millions of CHF Europe North America Central and South America Middle East Asia, Australia Africa Total 2012 1 487.4 1 091.5 296.7 156.7 839.6 151.5 4 023.4 2011
4% 21% 4% 7% 27%
1 301.9 +14.2% 891.1 +22.5% 334.3 11.2% 139.5 +12.3% 786.1 +6.8%
37%
113.2 +33.8% 3 566.1 +12.8%
Strong growth in North America and Europe Europe driven by high demand in Russia and supported by acquisition effect Central and South America declined, mainly due to lower activity in Brazil Asia, Australia continued to grow on a high level
Page 19
Sales by division
millions of CHF
2012 4 022.9 2 097.5 690.3 724.6 510.5 1.3 4 021.6 1 632.2 40.6%
2011 3 570.1 1 747.7 667.3 667.0 488.0 7.8 3 577.9 1 457.9 40.7%
% +12.7% +20.0% +3.4% +8.6% +4.6% +12.4% +12.0%
adj.1 +4.2% +5.9% +2.3% +4.0% +0.8% +4.1%
Divisions Sulzer Pumps Sulzer Metco Sulzer Chemtech Sulzer Turbo Services Other Total Total sales from services in % of total sales
Record level of sales, supported by all four divisions

1) adjusted for currency translation effects as well as acquisitions and divestitures Sulzer Annual Results 2012 | slide 39
Sales by region
millions of CHF Europe North America Central and South America Middle East Asia, Australia Africa Total 2012 1 483.3 1 015.9 306.5 157.9 915.3 142.7 4 021.6 2011
4% 23% 36%
1 268.0 +17.0% 837.1 +21.4%
4%
330.4 148.6 835.7 158.1
7.2% +6.3% +9.5% 9.7%
8% 25%
3 577.9 +12.4%
Strong growth in North America and Europe Europe driven by high demand in Russia and supported by acquisition effect Central and South America declined, mainly due to lower activity in Brazil Share of sales in emerging and developing markets: 39% (2011: 41%)
Page 20
Backlog bridge
Order backlog breakdown
3703 247 73 -3722
Share by division: Sulzer Pumps Sulzer Metco Sulzer Chemtech Sulzer Turbo Services
72% 4% 16% 8%
-232 1864
-68
-36
1829
Backlog Dec 31, 2011
New orders organic
Order related acquisition effects
FX effects on orders
Sales organic
Sales related acquisition effects
FX effects on sales
FX effect on Backlog Dec 31, 2012 opening/ending balance
Order backlog remained at a high level as of December 31, 2012 Currency translation vs. prior year was positive Acquisition effects: wastewater pump acquisition as well as some smaller acquisitions
Gross margin
Influence factors
To the positive: Operating leverage Operational excellence
Stable gross margin despite changes in business mix

Note: No material impact from raw material price changes
+
Page 21
Gross margin 2011: 30.6%
To the negative:
Gross margin 2012: 31.0%
Changed business mix Some lower-margin long lead time orders
Operating income (EBIT)

Operating income (EBIT) millions of CHF Total Divisions Sulzer Pumps Sulzer Metco Sulzer Chemtech Sulzer Turbo Services Others Total Sulzer 2012 385.5 191.2 68.7 70.7 54.9 24.0 409.5 2011 353.2 % +9.1% Return on sales in % (EBIT/sales) 2012 9.6% 9.1% 10.0% 9.8% 10.8%
20121 10.1% 9.6%
2011 9.9% 9.6%
168.2 +13.7% 68.7
10.5% 10.3% 10.3%
63.1 +12.0% 53.2 10.9 +3.2%
9.5%
11.3% 10.9%
10.2%
364.1 +12.5%
10.2% 10.2%
Strong increase of operating income; stable ROS

1) Excluding 0.5 percentage points higher corporate fees charged to divisions; no impact on Total Sulzer
EBIT bridge
Operating income (EBIT) bridge 2011 to 2012
36 -18
Real estate gains from block sale booked in 2011
410
364
23
Acquisition-related non- recurring effects (integration, transaction, step-up)
5
FX had no material impact on ROS due to natural hedge
ROS: 10.2%
ROS: 10.2%
EBIT 2011 as stated
Real estate gains
Non-recurring effects from Cardo acquisition
FX translation Underlying EBIT 2012 as effect change in EBIT stated
Good underlying increase excluding non-recurring items

Page 22
From operating income to net income

millions of CHF Operating income (EBIT) Net interest income Other financial income Income before income tax expenses (EBT) Income tax expenses Net income Attributable to shareholders of Sulzer Ltd. Attributable to non-controlling interests Earnings per share basic (EPS) in CHF 2012 409.5 17.6 22.3 414.2 102.2 312.0 307.1 4.9 9.03 2011 364.1 6.1 11.4 369.4 89.4 280.0 279.8 0.2 8.25 % +12.5% +95.6% +12.1% 14.3% +11.4% +9.8% +9.5%
Higher interest expenses due to CHF denominated bond and lower interest income Other financial income included gain on sale of third-party shares Effective income tax rate at 24.7% (2011: 24.2%) at a relatively low level, influenced positively by various non recurring items
Free cash flow (FCF)

Free cash flow1 development over multiple years
529
363
348
150 82 2008 2009 2010 2011 Proceeds from sale of real estate included in FCF in millions of CHF: 22 144 5 2012
Focus on cash showed first results; strongly improved FCF

1) Cash flow from operating activities less capital expenditure and sale of PP&E/intangibles Sulzer Annual Results 2012 | slide 46
Page 23
Cash for Growth project1 update

Year 2011: Strong increase of net working capital (NWC)
Strong focus on volume growth after downturn year 2009 Post 2009, NWC increased over proportionally compared with volume growth Negative implications on cash flow Cash for Growth project phase I initiated
Year 2012: First improvements of cash flow

First positive implications from phase I of project became visible
Year 2013 ff.: Sustainable reduction of NWC

Launch of Cash for Growth phase II with the ambition of building a more cash-conscious culture
Strong improvement of operating cash flow based mainly on Goal: further reduction of NWC in % of sales better cash collection
improved payment terms
Focus on processes:

Lower inventories Better timing of purchases
We aim for a sustainable improvement of net working capital

1) Cash for Growth: Sulzers internal initiative to reduce net working capital on a sustainable basis. Sulzer Annual Results 2012 | slide 47
Cash flow statement (condensed)

millions of CHF Cash flow from operating activities Capital expenditure Sales of PP&E and intangible assets Free cash flow Acquisitions and divestitures Purchase/sale of financial assets/marketable securities CF from operating and investing activities Dividend Changes in borrowings Treasury stock/changes in non-controlling interests Exchange gains/losses on cash and cash equivalents Net change in cash and cash equivalents 2012 472.8 128.2 3.3 347.9 37.5 33.4 343.8 102.2 157.0 7.7 7.6 84.7 2011 188.6 113.2 6.9 82.3 815.4 4.1 729.0 102.0 619.7 18.5 15.7 245.5 % 13.3% 52.2% 0.2% 51.6%
Improvements driven by operating cash flow

Page 24
Cash and debt overview

Net liquidity
800 600 400 306 200 0 -96 -200 -400 -600 -800 2008 2009 2010
Cash and marketable securities Debt Net liquidity
(millions of CHF)
767 671 489
681 553 431 513
Strong cash generation and further reduction of net debt position to CHF 96 million Successful refinancing of a new CHF 500 million five-year credit facility Debt position mainly refers to CHF 500 million CHF-denominated bond
-609 -768 2011 2012
-97 -182
-128 -337
Net debt position further reduced

Balance sheet
Balance sheet (millions of CHF)
5000
Equity Equity in % of total assets Liabilities Gearing in % (debt/equity)
60%
Ratios: Equity ratio at 50% Gearing at 27% Capital allocation: Business needs Dividends Acquisitions
4500 4000 3500 3000 2500 2000 1500 1000 500 0 2008 2009 2010 2011 2012 0% 20% 30% 50%
40%
10%
Solid capital structure to support growth ambitions

Page 25
Dividend
Dividend over multiple years
(in CHF)
3.20 3.00 2.80 2.80 3.00
Payout:
29%
35%
34%
36%
35%
2008
2009
2010
2011
2012
Increase of dividend to CHF 3.20

Note: Proposal by Board of Directors to Annual General Meeting 2013 of Sulzer Ltd. which will take place on March 27, 2013 Sulzer Annual Results 2012 | slide 51
Agenda
Financial Results
Page 26
Assessment of key markets for 2013

Sales share 2012 Market conditions 2012 Growth at high levels Moderate growth at low levels Assessment for 20131 Further growth for parts of the market Forecast to continue at similar levels Further growth expected Forecast to continue at similar levels
Oil and gas
~40%
Power
~15%
Water
~12%
Growth, supported by acquisition Moderate growth at high levels
Transportation
~9%
1) published on February 15, 2013; Based on present knowledge and excluding major changes in the general economic conditions Sulzer Annual Results 2012 | slide 53
Financial midrange targets by the year 2015

Midrange targets 2012-2015 Sulzer Turbo Services FY 2012 Target corridor by 2015
Sulzer Pumps Target corridor by 2015
Sulzer Metco Target corridor by 2015
Sulzer Chemtech Target corridor by 2015
Total Divisions Target corridor by 2015
FY 2012
FY 2012
FY 2012
FY 2012
Sales growth1
+5.9%
6-8%
+2.3%
5-7%
+4.0%
6-8%
+0.8%
5-7%
+4.2%
6-8%
EBIT margin (ROS)2 Return on capital (ROCE)2
9.5%
11-13%
10.0%
11-13%
9.8%
12-14%
10.8%
12-14%
9.8%
11-13%
13.6%
>20%
17.1%
>20%
16.3%
>20%
14.8%
>18%
14.7%
>20%
Issued: February 2012

1) Targets 2015: compound annual growth rate in %; base year 2011; organic; portfolio as of December 31, 2011; constant FX 2) Basis: EBIT before major non-recurring items (major restructuring, M&A related expenses such as step ups, integration, transaction costs etc.); from 2012 including 0.5% higher corporate charges to divisions compared with 2011; Capital Employed including Goodwill and other intangible assets.
Page 27
Corporate Governance Board of Directors Annual General Meeting of Shareholders (March 27, 2013)
Not to stand for re-election as chairman and member of the board:
Jrgen Dormann
Proposed for election to the board and designated to be elected as chairman:

Manfred Wennemer
Born 1947, German origin Broad international experience in major industrial companies on operational leadership level and as chairman of advisory boards.
Following internal age limitation rules. For a one-year term of office.
Proposed for re-election for a one-year term of office:

Thomas Glanzmann Vladimir V. Kuznetsov Jill Lee Marco Musetti Luciano Respini Klaus Sturany
Board member since April 2012 elected until 2013
Board member Board member since December 2007 since April 2011 elected until 2013 elected until 2013
Board member since August 2009 elected until 2013
Summary and conclusion

Significant growth of orders and sales Solid financial performance in a still challenging environment 2012 achievements Strong cash flow improvement Global manufacturing and service footprint further strengthened Strong balance sheet maintained; increased dividend proposed Clear vision and strong values Vision and strategic priorities Strategic priorities launched with a focus on value creation and profitable growth
2013: moderate growth of orders and sales; profitability to improve slightly Outlook Midterm targets 2015: confirmed The Sulzer team is committed to deliver as promised
Sulzer has all the ingredients for sustainable future success

Page 28
Q&A
Thank you for your attention. Visit us online: www.sulzer.com
Investor contact, event dates and stock information

Investor Relations: Philippe Dewitz Phone +41 52 262 20 22 Fax +41 52 262 00 25 investor.relations@sulzer.com www.sulzer.com/Investor-Relations Company address: Sulzer Ltd Zrcherstrasse 14 8401 Winterthur, Switzerland
Key reporting dates and events in 2013: February 15, 2013 Full Year Results 2012 publication (Analyst conference 4p.m. CET at SIX, Zurich, Switzerland) March 27, 2013 Annual General Meeting 2013, Winterthur, Switzerland April 16, 2013 Order intake release first quarter 2013 (media release) July 23, 2013 Midyear Results publication (six months 2013) (Conference call/webcast) October 17, 2013 Order intake release first nine months 2013 (media release) November 8, 2013 Capital Market Day 2013 Sulzer Ltd is listed on SIX Swiss Exchange: Identifier SIX (security number) ISIN Ticker Symbol Bloomberg Reuters Number 3838891 CH 003 838891 1 SUN SUN VX SUN.S Number of shares issued: 34 262 370 Largest shareholders (>3%): Renova Group 31.2% Blackrock 3.0%
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Sulzer Annual Results Presentation 2012

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Sulzer Annual Results 2012

Annual Results Presentation 2012

Strong double-digit growth in orders and record high sales

Sulzer Annual Results 2012 | slide 2

Sulzer Annual Results 2012

Outlook and Conclusion

Sulzer Annual Results 2012 | slide 3

Solid performance and well positioned for the future

Sulzer Annual Results 2012

% +12.8% 1.9% +12.4% +12.0%

Growth supported by acquisition and organic growth

Solid financials in a challenging environment

+9.8% +9.5% +5.5%

Strongly improved cash flow; net debt position reduced

Sulzer Annual Results 2012 | slide 5

+13% nominal (+4% adj.1)

Book-to-bill: 1.0 Order backlog: CHF 1 829 million

+12% nominal (+4% adj.1)

Strong double-digit growth; sales at record level

Sulzer Annual Results 2012

Net income attributable to Sulzers shareholders

Stable double-digit profitability; net income further increased

Guidance check 2012

High singledigit growth

High singledigit growth

2012 results: delivered as promised

Sulzer Annual Results 2012

Monitoring the markets for further targeted acquisitions

Smaller bolt-on acquisitions in 2012

Footprint changes in 2012

Decisions driven by market demand and strategic considerations

Sulzer Annual Results 2012

Global headquarters, Switzerland

Major production and service facilities

Truly global with a focus on market and customer needs

Geographical breakdown share of sales

Asia, Australia: 23% Middle East: 4% Africa: 3%

Central and South America: 8%

Balanced presence and strong positions in emerging markets

Sulzer Annual Results 2012

Market developments 2012 vs. 2011 from a Sulzer viewpoint

Growth on high level

Moderate growth on low level

Moderate growth on high level

Flat Mixed picture

Markets share in sales

Upstream, pipelines, downstream

Production and transport, wastewater

Sales share 2012 (2011)

Sulzer Annual Results 2012 | slide 14

Sulzer Annual Results 2012

Market leader in pump technology and solutions

Sulzer Pumps Key figures

ROS 9.1% | 9.6%4

% +22.8% 2.6% +20.0% +17.0% +13.7%

% adj.1 +7.1% +5.9%

Sulzer Annual Results 2012

Sulzer Pumps Breakdown by market and geography

Sales and ROS development (in millions of CHF)

General industry Water Power Oil and gas

Sulzer Annual Results 2012 | slide 17

Sulzer Pumps Highlights 2012 and outlook 2013

Outstanding services Continuous operational improvements Collaborative advantage