Capital Market Day 2015 Rotating Equipment Services Peter Alexander, Division President February 12, 2015 Agenda Rotating Equipment Services Sulzer Full Potential for RES Point of Departure Mission & Strategy Operational Excellence Summary Rotating Equipment Services Capital Market Day 2015 slide 2
The best of two worlds: OEM and independent services Equipment serviced Turbo Turbines and Compressors Pumps OEM and 3rd party Electrical Generators and Motors BU AME US, Canada Mexico Brazil, Argentina Colombia, Venezuela BU EMEA UK, Germany Netherlands, Norway France, Spain Middle East, Russia We are well positioned to become the worldwide preferred and integrated rotating equipment service provider with the best and broadest technical capabilities available BU APAC Australia Indonesia, India China, Singapore Rotating Equipment Services Capital Market Day 2015 slide 3.with a unique service proposition for our customers Single point of service reduces customer costs and complexity Solving our customers problems True service mindset Best quality and technology OEM and non-oem expertise 100 locations in 25 countries Global reach and local presence Broadest range of capabilities Gas and steam turbines, centrifugal compressors, pumps, motors, generators Rotating Equipment Services Capital Market Day 2015 slide 4
Rotating Equipment Services Division Snapshot Sales by geography (2014) Sales by market segment 1) APAC 12% 35% 1% 32% 25% 2% 28% AME 49% EMEA 39% 32% 45% Sales and profitability development 706 725 10.1% 10.0% 2013 2014 9.3% 8.9% Oil and gas Water Power General industry 2013 2014 Sales (CHFm) ROSR oprosa 1) 2014: Rotating Equipment Services; 2013: Turbo Services Rotating Equipment Services Capital Market Day 2015 slide 5 Market outlook generally positive despite unclear development in the oil and gas market Oil and Gas Power General Industry AME EMEA APAC Low oil price might extend usage cycle of equipment EU capacity reduction Developing market New investments driven by low gas prices Scale back of conventional in Europe; Opportunities in MEA Continuous growth of ISP opportunities Mining in Latin America with improvement potential Industrial base (especially UK) declining in Europe Stability in Australia, opportunities in China Our short-term market outlook Source: Market reports; Management opinion Rotating Equipment Services Capital Market Day 2015 slide 6
Leading position in growing and sustainable markets Our market position Gas Turbines Steam Turbines Compressors #2 service provider in OEM share ~70% #2 service provider in OEM share ~65% #3 service provider in OEM share ~55% Large installed base Future-proof machines Headroom for growth in the markets Ready for new technologies Pumps Electrical #2 service provider in OEM share ~55% #1 service provider in OEM share ~30% Large installed base and growth opportunity Rotating Equipment Services Capital Market Day 2015 Slide 7 Agenda Rotating Equipment Services Sulzer Full Potential for RES Point of Departure Mission & Strategy Operational Excellence Summary Rotating Equipment Services Capital Market Day 2015 slide 8
Mission and growth drivers for Rotating Equipment Services RES Mission The worldwide preferred and integrated rotating equipment service provider with the best and broadest technical capabilities available Operational Excellence Combine offer, optimize sites Close white spots Partnerships and joint ventures Access new segments and services Provide more services to more customers Rotating Equipment Services Capital Market Day 2015 Slide 9 Our global footprint of over 100 service locations enables us to offer more services to more customers UK: 24 SCs Capability of Service Center Turbomachinery Pumps Electromechanical Type of location Service center Planned service center RES HQ Rotating Equipment Services Capital Market Day 2015 slide 10
Success stories: Leveraging RES structure in all regions Americas Tallgrass Pony Express Pipeline project Installation and commissioning of 15 pump / motor skids Insourcing of the installation service EMEA PCK Refinery overhaul project Compressor repair and retrofit in NL, DE, and CH Leverage existing relationship Asia-Pacific Singapore and Indonesia full scope Simplified service selection for a customer Offering the full service portfolio out of one shop Rotating Equipment Services Capital Market Day 2015 slide 11 Agenda Rotating Equipment Services Sulzer Full Potential for RES Point of Departure Mission & Strategy Operational Excellence Summary Rotating Equipment Services Capital Market Day 2015 slide 12
Sulzer Full Potential: Spare parts growth and optimization of service branch network Spare Parts Full Potential Optimization Service Branch Network Optimization across entire spare parts value chain Improved manufacturing and sourcing Pricing optimization and sales improvement Streamlining of organization and processes Individual branch action plans per branch for all product types Co-location, right sizing and operational improvements of service branches for substantial cost improvements Capability transfer for offering extensions of branches across products Service full potential Rotating Equipment Services Capital Market Day 2015 Slide 13 Agenda Rotating Equipment Services Sulzer Full Potential for RES Point of Departure Vision & Strategy Operational Excellence Summary Rotating Equipment Services Capital Market Day 2015 slide 14
RES delivery in line with Sulzer vision One Focused Market-oriented Significant cost savings potential from functional integration Single contact point for customers to Sulzer services Reduced organization complexity We are working together for the benefit of Sulzer Performance-critical equipment and service solutions Technology and market leadership Shared KPI s with PE Sharing of common market information between divisions Harmonized frontend, leveraged relationships Know how and expertise leveraging globally Combined market and regional approach Rotating Equipment Services Capital Market Day 2015 Slide 15 Rotating Equipment Services: Generating value by providing more services to more customers Great market proposition with our combined offering Be the worldwide preferred and integrated rotating equipment service provider with the best and broadest technical capabilities available Focusing on operational excellence Opportunities to grow geographically and through acquisitions Rotating Equipment Services Capital Market Day 2015 slide 16
This document may contain forward-looking statements, including, but not limited to, projections of financial developments and future performance of materials and products, containing risks and uncertainties. These statements are subject to change based on known and unknown risks and various other factors that could cause the actual results or performance to differ materially from the statements made herein. Furthermore, the information shown herein has been compiled to the best knowledge of the authors. However, Sulzer Ltd. and its affiliated companies, including all directors, officers and employees cannot assume any responsibility for the quality of the information, and therefore any representations or warranties (expressed or implied) as to the accuracy or completeness of the information is excluded. Rotating Equipment Services Capital Market Day 2015 slide 17