Sulzer's Chemtech Restructuring and Resilient Core: H1 2026 Insights
Order intake flat, but profitability climbs as Sulzer accelerates cost cuts and bets on gas turbine services.
SUN.SW · Earnings Call · 2026-07-28
A Half of Contrasts
Sulzer's H1 2026 results present a company bifurcated between a sluggish project business and a resilient aftermarket. Group order intake declined 3.9%, but the company points to a flat result when adjusting for a single large biopolymer order that slipped. EBITDA margin improved 110 basis points to 15.5%, the fourth consecutive year of near-one-point gains. The divergence is most pronounced in Chemtech, where management describes an accelerated transition as it slashes costs and restructures. “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.” — Suzanne Thoma, Executive Chair · 2026-07-28 The division is cutting another 10% of its workforce, following a 10% reduction in the second half of last year, and will incur an impairment of about CHF 8 million for its Singapore R&D center. CFO Thomas Zickler notes the cost measures are designed to make Chemtech fit for the future: “We are planning restructuring costs for Chemtech in the low-single-digit area.” — Thomas Zickler, CFO · 2026-07-28Core Stability and New Growth
Outside Chemtech, Flow and Services are holding up well, with the base business and small project work gaining share. Services sales grew 4.4% against a 14.8% comparison base, while Flow grew 0.5% after a 10.7% prior-year quarter. Management highlights a sequential improvement in order intake from Q1 to Q2 across divisions—a sign of regained momentum. The company is also investing in innovation to capture structural demand. A notable highlight is Sulzer's work on subsea pumps with Petrobras and Technip, and a PET replacing technology that is entering customer trials. Additionally, the gas turbine service business is benefiting from the data center boom, as operators refurbish older turbines while waiting for new deliveries. Suzanne Thoma noted the company is expanding its Texas facility by 20% capacity to meet demand.Financial Strain and Guidance
The biggest drag on cash flow is net working capital, up CHF 117 million year-on-year due to delayed project deliveries. Zickler explained: “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” — Thomas Zickler, CFO · 2026-07-28. This absorbed free cash flow, though management expects improvement when large orders land in Q4. They reaffirmed guidance for order intake growth of 1-5%, sales growth of 2-5%, and an EBITDA margin around 16.5%.Consistency with Prior Messaging
The current narrative echoes previous quarters. In February, Suzanne Thoma told analysts: “H1 is simply that when we look at our pipeline, we believe that the large projects will rather come in H2.” — Suzanne Thoma, CEO · 2026-02-26 Similarly, last July she highlighted resilience in water: “Yes, we see indeed a relative strength in the water business.” — Suzanne Thoma, CEO · 2025-07-24 What's new is the decisiveness in Chemtech and the emphasis on emerging markets like Libya, Iraq, and Egypt.This combination of short-term discipline and long-term optionality is likely to define Sulzer's trajectory. The data centers and energy infrastructure demands provide a tailwind for services, while Chemtech's restructuring positions it for a rebound once the Middle East situation stabilizes.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.