Ladies and gentlemen, welcome to the Sulzer Full Year Results 2020 Conference Call and live webcast. I am Moira, the conference call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Christoph Ladner, Head of Investor Relations. Please go ahead, sir. Thank you, Moira. Good morning, and welcome to Sulzer's Full Year 2020 Results Conference Call. Today with me is our CEO, Greg Poux-Guillaume, and our CFO, Jill Lee. For this call, we have prepared a presentation, which you can find on our homepage. Please note that if you want to ask questions during Q&A after the presentation, you have to dial in via the phone number that was sent to you when you registered. As always, I want to draw your attention on the safe harbor statement on slide number two. The call may contain forward-looking statements containing risks and uncertainties. These statements are subject to change based on known or unknown risks and various other factors. Thank you, Christoph. Hello, everybody. Let me start with our 2020 highlights on page four. With the outbreak of COVID-19 in China, then worldwide, we had to adapt on the fly. We hit the brakes on our operating expenses, concurrently launched a resizing plan for our energy-related businesses, we did this a few months ahead of the market slump, which allowed us to remain selective and focused on margins when taking orders. We did our rebound in Q4, which was up sequentially versus Q3, contrary to our usual seasonality. Our sales were a little bit more impacted, down around 5% on the expected customer site access restrictions, the supply chain delays, and customer-driven slowdown of certain projects. Note that for both orders and sales, we had a currency translation impact of around CHF 250 million. Negligible impact on margin, as we are naturally hedged, but that's the downside of reporting in Swiss francs. Operational profitability was down 100 basis points to 9% with the drop driven solely by our Applicator Systems division. The other three divisions together were up 10 basis points despite lower sales. Pricing was stable, execution was solid, and we took significant cost out. We squeezed our operating expenses by about CHF 60 million, and we had the first CHF 12 million savings from our targeted CHF 70 million energy resizing plan. Our Applicator Systems division is pretty much recession-proof, but this wasn't a recession per se. When dentists were forced to close, you don't sell dental products. We lost most of Q2 in APS. Really a full quarter was pretty much gone. Since the summer, Applicator Systems has rebounded strongly, and Q4 was actually higher than Q4 2019. When I look at our order intake in January in Applicator Systems, January was actually our highest month in order intake ever in Applicator Systems. Our strong focus on cash resulted in yet another record free cash flow of CHF 272 million, 28% up versus the CHF 213 million of 2019, which was already a high number. This high number, this CHF 272 million, and our strong balance sheet allow our board of directors to propose an unchanged dividend of CHF 4 per share to the AGM. Despite the pandemic, we've continued to strengthen Sulzer with acquisitions in the area of healthcare, and medical in Applicator Systems, and in water in our Pumps Equipment business. I will show you on later slides why these acquisitions are of strategic importance. Looking at the split of our orders from different angles on page five, you see that our Service division has gained against the other divisions. This is because Service has grown orders in 2020 by 1% organically, while the other divisions saw decline. There is also service revenue in Pumps Equipment, in PE, and in Chemtech. Aftermarket activities overall, if I sum everything up in 2020, were 44% of Sulzer. If I exclude Applicator Systems, where the notion of aftermarket really doesn't make any sense because these are mostly consumable devices. If I exclude Applicator Systems, aftermarket was actually 50% of Sulzer. Operational profit saw a temporary decline in the Applicator Systems portion. The market freeze that hit Applicator Systems in Q2 is responsible for that. Since then, the division recovered strongly, as I explained. The share of APS will be back up this year. Regionally, Asia gained, mainly driven by China. No surprises there. All right. Let's move on to page six. Going into our divisions and starting with Pumps Equipment, or PE as we call it for short. Orders were down about 3% organically in 2020. Water was up 2% if we adjust the 2019 base for the two large orders we had in water transport and desalination in Saudi Arabia. These were water infrastructure projects, as you know, and water infrastructure is always lumpy. As we often explain, the real indication of the health of the water market is the performance of our core municipal water segment, which is the lion's share of our water business. Industry was flat, as a decline in pulp and paper was offset by increases in other process industries such as metal and mining. Energy saw two completely different half years. H1 was strong, and particularly Q2, when we defied gravity by growing while the market was shrinking, all the while taking out capacity in anticipation of the coming trough. H2 was weaker, as anticipated, as the market found its trough and we continued to be selective. Overall for the year, energy was only down 2%, and this means that we have high comps for H1 2021. We saw a similar picture for sales. The decline was mainly driven by energy, whereas water was up and industry was stable. Despite lower sales volumes, good execution and swiftly implemented cost measures pushed operational profitability 30 basis points higher to 4.3%. We closed the acquisition of Nordic Water on February 1st. This is on page seven. In water, Sulzer historically supplies pumps, mixers, compressors, and aeration systems, mainly for the wastewater markets, wastewater treatment plants. We acquired JWC in January 2018, enlarging our product portfolio with grinders and screens that shred and filter large solid parts at the beginning of the process to protect the other equipment downstream. With Nordic Water, we strengthen our screens offering and add processes and equipment, sorry, for sedimentation and filtration. This makes Sulzer one of the very few companies that can offer equipment for all major steps in municipal and industrial wastewater treatment. Nordic Water also offers access to the freshwater treatment market, which is using the same filtration technology. The water treatment market is expected to grow somewhere between 4% and 6% a year. We see significant sales and aftermarket synergies as the product overlap is limited between Nordic Water and the rest of our water business. Nordic Water complements us well geographically. For 2021, we expect Nordic Water to generate sales of CHF 80 million and an EBITDA of CHF 13. Moving on to page eight. We give you some insights into Pumps Equipment's energy business. While you see on the chart that orders suffered in Q3 and Q4, margins on orders were still up compared to the previous year due to our continued selectivity. You can also see that at division level with order intake gross margin up 100 basis points for the year, we actually did well. Energy takes about nine to 12 months from orders to sales. We started to ramp down our capacities and adapt our cost structure early when orders were still growing, but in line with our expected view of the market. Well, we think that we've seen the market trough in the second half of 2020, and we expect a gradual sequential improvement in the first half of 2021. We announced in April last year that we would reduce our energy capacities by about a third. We announced the closure of a factory in Belgium that we expect to complete in 2021. In addition, we significantly downsized our engineered pump factories in Portland in the U.S. and in Brazil. When the market does recover, and I believe that banks like JP Morgan and Goldman Sachs see Brent at $100 in the not too distant future, so there are voices out there that think that the market will recover in the foreseeable future. We can ramp up as needed as we debottleneck our remaining factories in parallel. This ramp up is not what's in our working scenario for 2021. Now let's move to our Rotating Equipment Services division. It was boringly flat, but boring during a pandemic is actually pretty great, I think. Orders were up in service organically close to 1%, despite customer site access restrictions and a general belt-tightening in the markets that we serve. We saw positive developments in Asia-Pacific and in the Americas, and we were stable in Europe, Middle East, and Africa. Our sales in RES were slightly down as our customers asked for delays and pushed out some maintenance work. Profitability remained stable, showing the resilience of our business model. RES is a division that generates 14%, one four, operational profit year in and year out. From a volume perspective, a bad year is a flat year, and a good year shows about 5% growth. It's the bedrock of what we do. The first half of 2021 will continue to be slow as lockdowns are still in effect. We expect some pent-up demand to be released once lockdowns are lifted. On slide 10, we show you an example of why RES is resilient and why its offering is broader than you may think. I mean, who generates exceptional cruise ship orders during a pandemic that is idling the majority of ships? Well, RES did. Cruise ships, while they remain idle, some operators, pre-COVID-19, brought forward maintenance work, only for complex essential stuff. Modern cruise ships are powered by electric propulsion systems. If one of a pair of motors develops a serious fault, the vessel must remain docked until repairs are completed. In this particular case, the OEM, the original manufacturer of the motors, proposed to replace the complete stator, which would have implied cutting out the hull in a large dry dock. That's convenient for the OEM, but it's not really convenient for the cruise ship operator, as you may imagine. At the end of the day, it's all about the customer. Sulzer offered a solution to repair the motors on-site, turnkey. The work was performed on all four motors from two sister ships inside the ship by a Sulzer team composed of engineers and technicians from Australia and the U.K. with high voltage coils that came from one of our sites in the U.K. We kept our people in their own bubble while in the vessels because there were other teams doing maintenance at the same time. Kept everybody safe, developed the project on time, on budget, with Sulzer quality to the full satisfaction of the customer. This was a significant order. We're talking mid-single digit million CHF, just so you get a little bit of perspective as to how valuable these orders are. Let's move on to slide 11, Chemtech. Chemtech orders declined by about 7% organically and by 1% adjusted for Forex. While China was very strong, up almost 30% for the year, three, zero 30%. Large chemical projects in other parts of the world were postponed. Site access restrictions also had a negative impact. Sales were down due to the impact of lockdowns, particularly in our factory in India, which remained either closed or understaffed for many weeks because of local restrictions. Despite lower sales, operational profitability was stable at 9.6% on strict cost discipline. You may notice that we changed the way we present the order split. Chemtech develops chemical processing and separation technologies that enable our customers to operate world-class plants in evolving market segments. Part of this evolution is leading us to present the business differently. Chemical applications are almost 55% of what we do. Service is about 15%, and gas and refining is about 20%. The remaining 10% is the fastest-growing and most promising segment. We call it our renewable segment, and it encompasses sustainable applications like biopolymers, recycling processes for plastic or fibers, and things like biofuels or carbon capture or low carbon applications. The segment was close to CHF 50 million in 2020 and will grow significantly in the next couple of years. An example of that can be found on page 12. Chemtech supported the development of China's first fully integrated sugar to polylactic acid plant located in Bengbu, in China's Anhui province. The facility utilizes Sulzer's distillation, crystallization, and polymerization technologies to produce 30,000 tons a year of polylactic acid. Polylactic acid is the most promising form of biopolymers, and most PLA plants worldwide use Sulzer technology. The new facility uses locally sourced glucose to produce polylactic acid. Sulzer played a crucial role in the construction of the plant. We designed, we engineered, and we supplied customized mass transfer equipment for the purification of lactide and the polymerization processes. Moving on to Applicator Systems on page 13. APS, Applicator Systems, started off the year strongly, but our markets collapsed in Q2 as dentists and retailers were forced to close. We then saw a strong recovery in Q3 that has continued in Q4 and carried into January of this year. Q4, as I told you, was 5% higher than the same quarter in 2019, and the rebound was across all segments. While pricing remained stable, the drop in volumes had a negative impact on profitability of Applicator Systems. We lost most of the second quarter and ended up at 13% operational profitability, down from our usual 21%. We expect Applicator Systems to go back to the high teens in 2021 as markets get back to cruising altitude around the mid-year and to be back in the 20% in 2022. The business is doing great. People still have teeth and eyes. They still buy iPhones. We were simply hit by essentially the 100-year wave for that business. We used 2020 to complete our beauty transformation by closing the factory in Bernburg and expanding and retooling Bechhofen. We're now back in fighting shape in beauty, and this is behind us, which is great. Finally, the acquisition of Haselmeier. Through that, we're building our fourth leg in Applicator Systems in medical. I'll give you some more insights on the next slide. Haselmeier designs and produces drug delivery devices such as injection pens for subcutaneous applications like fertility treatment, growth hormones, diabetes, and increasingly rare diseases. With the addition of Haselmeier, the medical segment of Applicator Systems now includes medical applicators for bone and tissue repair and drug delivery devices. Haselmeier's products are based on its own IP, intellectual property, with some 200 patents. Haselmeier, therefore, is not a contract manufacturer. The latest D-Flex platform is highly flexible and allows for faster customization and certification of new drugs. We have ambitious targets for that business. We believe that we can more than double sales. I'll give you numbers in euros, from the EUR 35 million that the business delivered when we acquired it to EUR 90 million by 2025. We also believe that we'll increase EBITDA margin in the same period from 15% to 30%. On slide 15, you see the recovery of APS in a graphical form. In Q2, you can see that the markets that we serve in APS collapsed because once again, dentists were closed and retailers were closed. These were forced closures. It had nothing to do with demand. It had everything to do with the pandemic. As you can see on the chart, we start to recover in the summer. That has continued in Q4 and carried into this year. As I said, January is our highest month ever in order intake in APS. This doesn't mean that volume fluctuations are totally behind us. There's currently an element of restocking, and lockdowns, while milder, are not over. The rebound is clear, and our customers are looking past the pandemic at this point. We see volumes recovering fully by the summer, with some markets faster than others. In dental, for example, the U.S. market will be slower to recover, mostly for health insurance reasons linked to people losing their jobs. As you know, it sometimes works that way in the U.S. Let me talk now about our recurring cost savings that I mentioned earlier. Slide 16 gives you more details on our ambitious plan. We're downsizing our footprint in energy, as I explained. We said last year that we would reduce our capacities by about a third, and all the measures are either completed or well underway. We are fully on track to deliver the CHF 70 million of recurring savings that we are targeting. We're in the process of closing a pump factory in Belgium. We expect the closure to be completed by the end of the year. As I said, we significantly downsized pump factories in Portland and in Brazil, and we also closed the Chemtech factory in the U.S. We closed a large turbo service facility in Europe, and we resized corporate and division overheads. We really tackled everything, mostly energy, but also some of the overheads. We already had savings of CHF 12 million hit the bottom line in 2020. We expect an additional CHF 40 million, four, zero, in 2021, and the final CHF 20 million in 2022. All of that is recurring. The CHF 70 million is recurring. As I said, these savings are structural, the CHF 70 million, and it will be sticky. Moving on to the next page 17, I alluded to a massive Forex translation effect. Sulzer is a fully global company which does business in a multitude of different currencies, only a small fraction of which being Swiss francs. Swiss francs is our reporting currency, and the franc is strong, to say the least. This leads to a significant translation effect that we show you on slide 17. Here you see how our orders have been impacted over the last 10 years. For sales, it's pretty much the same thing. We lost a bit more than CHF 1 billion of orders over that period, solely due to Forex exchange movements. Even if you leave the first bar in 2011 aside, the negative impact is still about CHF 600 million. It was -6.6% last year alone in 2020, and it looks like the trend will continue, as Forex rates currently suggest that the impact in 2021 will again be negative by about 2%. Keep in mind that when you look at Sulzer's growth, the reported number is distorted negatively by Forex. We may, at some point, decide to change our reporting currency, as it no longer reflects the substance of our operations and makes our non-adjusted numbers hard to read. Now over to Jill for a more in-depth analysis of our financial figures. Thank you, Greg, and good morning, everyone. Let me highlight the most important numbers on slide 19. As Greg just mentioned, we had a significant translation impact on orders and sales. On an FX-adjusted basis, orders were down 2.2% to CHF 3.414 billion and down 3.8% organically. The order intake growth margin has increased by 40 basis points due to order selectivity and pricing discipline. Despite a lower contribution from our Applicator Systems division. Our order backlog continued to increase. You see a lower number of CHF 1.759 billion, but actually adjusted for the FX, the number went up by 5.4% versus 2019. Sales were down 4.6% FX adjusted and 5.6% organically as we suffered limited access to customer sites and some markets were temporarily closed. Operational profitability was down by 100 basis points to 9% due to negative mix effect from lower sales in APS. The other three divisions together, on the other hand, increased their profitability by 10 basis points despite the lower sales. EBIT decreased mainly due to higher restructuring expenses that we incurred on our measures to resize the energy business. The reported return on sales dropped from 6.5% to 4.5%. On free cash flow, we hit a new record high of CHF 272 million, up 27.5% versus the previous year. Now let me go into more details in the subsequent slides. Slide 20. Our operational profit was significantly impacted by the drop in volumes and also the negative mix effect from lower APS. The other cost that you see on the chart was mainly under absorption, about half of the CHF 24 million you see on the chart. The rest relates to pension valuation impact from lower discount rates as well as COVID-19 related increase in allowances for bad debts, each around CHF 5 million. We took swift actions to squeeze our OpEx by CHF 60 million, had the first CHF 12 million from our energy resizing due to our swift actions, had higher costs from announced wage increment, which we did not withdraw. Therefore, achieved a net savings impact of CHF 59 million. FX had a translation impact on the absolute operational profit, not on the margin. Due to the mentioned effects, our operational profitability went from 10% in 2019 to 9% in 2020. The next slide, where I show you now from the operational profit or opEBITA, as we used to call it, to EBIT. Amortizations were almost unchanged from last year. Restructuring expenses increased by CHF 32 million to CHF 56 million due to the resizing of our energy business. Most of the restructuring expenses were booked, therefore, in Pumps Equipment. We impaired assets by CHF 10 million in relation to the footprint adjustments on facilities in the U.S. and Europe, as mentioned by Greg. In addition, we had CHF 15 million of other non-operational items, mostly attributable to this mentioned resizing measures and a bit of M&A-related costs. Still, compared to 2019, this is CHF 23 million lower. Next slide 22. If you go further down the P&L, you see that our financial result is unchanged versus the prior year. Taxes were lower in 2020 in absolute, but the effective tax rate was higher than our normalized tax rate of around 24%, as some of the restructuring costs are not tax-deductible. Our reported net income was therefore CHF 87 million in 2020 versus the CHF 158 million in 2019. When you correct for tax-adjusted one-offs, core net income stood at CHF 200 million in 2020 versus CHF 258 million in 2019, which is a drop of 22%. Moving to the next slide 23, on free cash flow. While net profit was down, free cash flow reached a new record high, as you can see on the slide. We continue on our discipline management of net working capital and generated CHF 41 million cash flow from lower accounts receivables and inventories, despite a reduced level of accounts payables. This was, however, largely offset by an increase in work in progress that could not be delivered due to the project timing, driven by COVID factors. We have also a positive impact from provisions made, but which will be paid in 2021, mainly restructuring related. About two-thirds of our restructuring-related cost of CHF 71 million will be paid in 2021. On the CapEx side, we stayed focused in 2020. We added CHF 72 million of new plant and equipment to our balance sheet on top of the Bechhofen expansion that was decided in the previous year. Overall, we spent some CHF 89 million in property, plant, and equipment CapEx and added another CHF 7 million on intangible assets. These are the main components to our free cash flow of CHF 272 million. Now on slide 24, let me also share with you the situation on our balance sheet. Our balance sheet remains solid. At the end of 2020, our net debt stood at CHF 415 million, an increase of CHF 68 million versus the prior year end. The net debt to EBITDA ratio came to 1.3x at the end of 2020, higher than the 0.8x a year earlier, mainly attributed to the temporarily lowered EBITDA that was down on COVID-induced lower volumes and restructuring. Obviously, the EBITDA will rebound in 2021, therefore, improving once again our ratio of net debt to EBITDA. Next slide, 25. On the back of that solid balance sheet and the healthy free cash flow, we are proposing an unchanged dividend of CHF four for 2020 to the AGM. This reflects really the solidity of our balance sheet and our confidence in Sulzer's future performance. As a reminder, we increased the dividend from CHF 3.50 to CHF 4 last year and stuck to our guns despite the pandemic. Our cash flow generation in 2020 and the rebound of our share price close to pre-pandemic levels validates this approach. With that, let me hand back to Greg for the outlook. Thank you, Jill. For 2021, this is on page 27. For 2021, we expect a progressive return to pre-pandemic levels. The first half of 2021, at the very least, will continue to be impacted by the pandemic, with regional lockdowns hampering business interactions, and H1 will be compared to a high 2020 baseline. Our business most impacted by lockdowns in 2020, Applicator Systems, should build on its strong H2 2020 rebound to return to pre-pandemic volumes by the middle of 2021. Progress with vaccination and ensuing economic boosts should bring an acceleration to all Sulzer businesses in the second half of the year. Sulzer order intake in 2020 was only down 2% for the year on the back of a strong first half. Against this robust baseline, we expect orders to be up 3%-6% in 2021 on a currency-adjusted basis. There's still some uncertainty on the speed of the rebound at this point. You see that energy, which had a massive H1 2020, will be a 2.5 percentage point drag. With acquisitions, a symmetrical 2.5 percentage point boost. We expect sales to grow by 5%-7% in 2021 on a currency adjusted basis. Operational profitability will benefit from the rebound in Applicator Systems to a profitability in the high teens, while we will get an additional CHF 40 million uplift from structural savings, but a release of some of the CHF 60 million OpEx squeeze to feed the growth. Overall, we expect operational profitability to return to pre-pandemic levels close to 10%. Moving on to page 28, our final slide before questions and answers. Takeaways. What would we like you to take away from Sulzer in 2020? Well, we believe that we demonstrate the resilience of our business model. The APS impact was temporary and quite unique in history. Really a 100-year wave hitting a very low cyclicality business that will soon be an unpleasant memory. Everything else actually increased in profitability in 2020. Although there's still a real factor of uncertainty caused by the pandemic, we will resume growing in 2021. This growth is increasingly driven by water and pumps, healthcare and applicators, and our renewable segment in Chemtech. To paraphrase somebody else's slogan, not your father's Sulzer. We were very quick to adjust our cost base and the structural savings of CHF 70 million, together with higher volumes, will lead to a profitability of close to 10% in 2021, and above that in 2022. Finally, our strong cash generation and solid balance sheet allow for an attractive dividend yield and continued bolt-on acquisitions. On those words, I hand over to the operator for the Q&A session. The first question is from Aurelio Calderon from Morgan Stanley. Please go ahead. Hi. Good morning, Greg, Jill. Thanks very much for taking my questions. I guess the first question I had was around your OpEx squeeze of CHF 60 million in 2020. How much of that do you think would basically unwind in 2021, and how much are you aiming to retain as permanent cost savings? I appreciate you also have the CHF 40 million of the permanent cost savings program on top of that, but just would be curious for my broker modeling to know how much of that you think can stick. I'll take the second one after that, please. Yep. Okay. Oh, Jill, you want to take that one? It's okay. Yeah. Okay. Let me answer. I think overall on the OpEx squeeze, we talk about CHF 60 million of OpEx squeeze this year. We expect at least one third of this to be still sticky in 2021. If you consider the additional CHF 40 million of structural savings that will come in this year, essentially what we are saying is a wash versus the last year. Last year, we talked about CHF 60 million of OpEx squeeze. The normalization will not be fully in this year. We'll continue to take some of the savings, and therefore in total, we expect, together with the structural savings, to be able to mitigate fully whatever we had saved in 2020. If I can add to what Jill said. The OpEx squeeze is really composed of three things. It's composed of a compensation squeeze, it's composed of a travel squeeze, and it's composed of an SG&A squeeze. We believe that compensation will come back because as the market picks up and people hit their numbers, bonuses will be paid and therefore compensation will come back. We believe that travel is not going to come back fully. We think that something like a third of business travel is going to go away because we will not travel for internal meetings. We'll travel to see customers, but not for internal meetings. We've got the SG&A squeeze, and some of that will stick, some of that will be released so that we can feed the growth. I think Jill is right, that over time, we'll keep maybe CHF 20 million out of the CHF 60 million OpEx squeeze. Really the debate is going to be how fast the market recovers in 2021. If the market recovers really fast, we'll release the OpEx squeeze really fast. If the market recovers slower, we'll just release the OpEx squeeze slower. It's essentially a toggle that allows us to adapt to whatever market conditions we see. Does that answer your question, Aurelio? Yes, thanks very much. If I may take another one, please. It's mainly on the performance of your Rotating Equipment Services through the year and maybe more through the second half. I would be curious to know the different dynamics you saw in the pumps business and the turbo services business and the electromechanical services business, and especially if you could comment something on pricing pressures, because we've been hearing from other players in the industry that there have been some pockets of, let's say, pricing pressure. I see that your margins were quite resilient, so would be curious to know what the balance there for you. Okay, Aurelio. Well, I think that some people over-intellectualize our RES division, our services business. We can break it down in the various sub-businesses, but really the way you should think about it is this is a multi-product service business that uses the same workshops to service our pumps, other people's pumps, other people's turbines, other people's compressors, other people's motors. It's a combination of various products and various geographies. Because it's quite a diversified set of end markets and a set of customers and a set of products, it allows us to be very resilient year in and year out. If you take the last five years, my tenure's been five years, so I know those numbers at least, and you can see that our margin every year is around 14%. I think the lowest it's been is probably 13.6% or 13.7%, and it's gone up to 14.1%, but it's really within a narrow band. When the market is really bad, during the oil downturn, the last two oil downturns, we were essentially flat to slightly up. When the market's good, we're + 5%, + 6%. There's a bunch of different dynamics. You'll have different markets, moving up, moving down. At the end of the day, our diversification and the fact that we're mutualizing the rooftops is what allows that business to be actually quite easy to forecast and quite predictable. Does that answer your question, Aurelio? Yes. That's great. Thanks very much. I'll go back to queue. Thank you. The next question is from Charlie Fehrenbach from AWP. Please go ahead. Yeah. Good morning again. I'm not sure if I got this correctly. For the targets of order intake growth and sales growth 2021, is half of it coming from the acquisitions you've done and half of it would be organically? Thank you. Hi again, Charlie. What we said for the order intake is that we said we grow 3% to 6%. What we said is that we have an effect, which is we bought two businesses last year, Nordic Water and Haselmeier. These businesses together will contribute about 2.5% of the 3%-6%. We also have a high baseline in energy because in the first half of last year, we had a really high order intake in energy. As the market stabilizes on the levels that we saw the second half of the year, a little bit higher, that will have a negative impact of about 2.5%. Essentially, energy as a negative and acquisitions as a positive essentially neutralize themselves. Everything else will contribute somewhere between 3% and 6% of growth. Does that clarify things? Okay, yeah. Thank you then. Thanks, Charlie. The next question is from Patrick Rafaisz from UBS. Please go ahead. Yes. Thank you, and hi, everyone. Three questions, please. I'll start with the first. You were talking about the order intake gross margin that improved 40 basis points in 2020. With the order growth you're projecting, what kind of margin mix assumption are you making here? Would you anticipate a further improvement in the order intake mix? Oh, you want to ask all three questions or you want me to take them one by one? I can ask the other two as well. The second one would be on free cash flow. Obviously very strong for 2020, and you talked about the bridge here. What are you anticipating for 2021, right? There will be some cash outs from the cost takeout program, CapEx potentially picking up a bit. Do you think there's a chance you can defend free cash flow at the record level of 2020, or should we conservatively assume a bit of a lower number here? The third question would be around the growth prospects you talked about in Chemtech for renewables. You said significant. Any chance you could add a bit more color on that or potentially even quantify? Thanks. Okay, Patrick. Jill, I think we'll take the first two questions and I'll take the third. On the growth margin, we have the 40 basis point. What can you anticipate? From a mix perspective, you would expect that the mix will help us. I think pricing is going to be pretty much the same. We will practice our continued discipline management on pricing. It's not going to be one that you'll see a market being supportive in terms of pricing. Mix is definitely in our favor because as APS rebound, and we have seen that already in Q4 continuing in January, this should help us in the overall gross margin for your modeling. You can do that. We also expect with the acquisition of Nordic Water, depending on how the pandemic pans out. Clearly in terms of the service and water part, we expect resilience and coming back to growth. It's only the energy part that would be lower. All in all, the mix is going to be favorable, so you can model with a higher mix. We talk about the 2.5 basis point drop in energy. So as you know, energy is the lower margin part of it, and everything else you can plan with the balance of the 3%-6% order intake growth. I hope that helps you in terms of your modeling. Yeah, thank you. Actually, the lower contribution from energy should also prove positive for the mix. Exactly. From a mix perspective. Yes, correct. As we grow more of the others, it would help on our gross margin. On free cash flow. Yes, on free cash flow. We have a record high free cash flow in 2020. I think the likelihood of us having the same record high in 2021 would be fairly low, given the fact that we have restructuring expenses that we have provided but will be paid in 2021. I mentioned that we know about two-thirds of our CHF 71 million will be paid rather in 2021. You can model around close to CHF 50 million to be paid on that front. Our CapEx, we have squeezed our CapEx in 2020. We expect our CapEx to go back a little bit up, and of course, we will continue to be prudent on that. We will release that when we see the market actually coming back. You can plan around CHF 20 million on the CapEx part up, higher CapEx compared to 2020 of around CHF 20 million. I think we will drive our net working capital, but typically you can also anticipate that with volume up. I think to continue to squeeze our net working capital down, that would be difficult to do. In percentage-wise, our net working capital is around 20%. We plan to keep around that level. All in all, that should bring us to a free cash flow that is more on our normalized curve of around 5%. Typically, we say in the past, our cash flow is around 4%-5%. I think with that modeling, you'll see us coming back more to the normalized curve. 4%-5% of sales is what Jill said. Yes. Thanks for that. 4%-5% of sales. Yes. Okay. I'll take the growth question, Patrick. Chemtech has this exciting segment that we call renewable applications. In there you've got the biopolymers, you've got the bioplastics, different technologies that we have for that, whether it's PLA or PEF. We've got technologies that are commercial. We've got technologies in the final stages of development. We've got recycling process applications like what we're developing with H&M for textiles, or what we are building for ArcelorMittal for carbon monoxide to turn into biofuels, or what we're doing for the Quantafuel people in Northern Europe for transforming plastics into biofuels. There's a lot of different applications in there. The overall size of that segment in 2020 was about CHF 50 million, and this is something that should grow significantly in the next few years. When I look at the pipeline that we've got for 2021, this is something that could be 50% up, even 100% up in 2021. I probably shouldn't be guiding on this, but I expect that segment to be somewhere between, I don't know, CHF 70 million and CHF 90 million or CHF 100 million in 2021. It's hard to predict in some ways because these are novel technologies and because these are customers that are being pioneers in terms of implementing things. Sometimes it takes a bit longer for them to analyze and to decide before they actually write the check. The pipeline of discussions that we have supports these types of numbers. Did I answer your question, Patrick? Absolutely. Very helpful. Thank you both for this. Thank you. Thank you, Patrick. The next question is from Armin Rechberger from Zürcher Kantonalbank. Please go ahead. Yes. Good morning, gentlemen. Well, just an additional question to your Chemtech answer now. You said you see the renewable part maybe going up from CHF 70 million to CHF 90 million in 2021, from close to CHF 50 million it was in 2020, when I'm right. Really astonishing growth you see there. Is that correct? Yeah, it's correct. This is growth on, if we're honest about it's growth on still reasonably low levels because you're only talking about a CHF 50 million segment at this point. These are technologies that are very much at the heart of what the world needs today. If I look at our commercial activity in terms of how our tendering resources are spent, they're increasingly being consumed by these discussions because we have a lot of customers that want to do novel things and want to potentially increase their sustainability profile. A few projects can make those numbers grow by 50%. I wouldn't. Clearly, no business will grow 50% year-on-year in the long term. As you are in the lowest part of the curve, I believe this is, if not exponential, at least this is going to be a significant driver of our Chemtech business in the future. Okay, additional question regarding growth. On local currency terms, you mentioned till now, -2% because of the strong Swiss franc, Forex influence. Your growth expectations on local currency and organic terms, if I count correct or calculate correct, it's for order intake 0.5%-3.5% only. Even though with this expectation for the renewables part in Chemtech and APS, you expect growth. It sounds to me astonishingly low, only 0.5%-3.5%. Armin, our guidance is on a Forex-adjusted basis. Mm-hmm. Yeah, that means on local currencies. No, our guidance is Forex-adjusted. You don't have to adjust for guidance for Forex. Forex will be whatever it is. Yeah. The guidance reflects more or less the movement on the local level, because that is Forex-adjusted. You're essentially adjusting twice because we're guiding I can't predict the Swiss franc versus other baskets of currency. All I can do is, at a constant exchange rate, I can tell you where we think the business is going to go. The 3%-6% is a real growth number. If we have 2% uplift on top of that from currency, then the 3%-6% becomes 5%-8%. If we got 2% negative because the Swiss franc goes up again, then the reported number, instead of being 3%-6%, is going to be 1%-4%. Yeah. We gave you an indication of 2.2% for the year Forex, but that 2.2% is reflected in our guidance is on a Forex-adjusted basis. You shouldn't adjust our guidance. Yeah. You shouldn't reduce it by the Forex. Yeah. Clear. Let me put it that way. For order intake, you guide for 3%-6%. Right. I have to deduct 2.5% because of your acquisitions. I end up with 0.5%-3.5% for order intake on organic and local currency basis only. Armin, you got the 3%-6%, and you should deduct 2.5% for acquisitions. You should increase by 2.5% for energy, because as you know, we've got this high baseline in the first half of the year. Our energy order intake was only down 2% for 2020. It was only down 2% because we were up, I think, 10% in the first half of the year. 2021 is going to look more like the second half of the year in energy than the first half of the year. This is why we gave you the split of saying there's a 2.5% uplift from acquisition, and there's a 2.5% reduction percentage point from energy. You have an uplift at APS, you have an uplift at renewables. Yeah. Just on your organic is organic. Don't tell me about 2.5 minus in energy markets. You have also uptake. I'm just telling you that the effect of energy is going to be negative for 2021. That's all I'm telling you. At the end of the day, Armin, we're in the beginning of a year, which is still impacted by the pandemic, with not too many people being able to forecast when the world's going to go back to normal. Could we go with higher numbers if everything goes right and we end up with a blue sky scenario? Probably. Do I feel like I'd be very credible if I went with a blue sky scenario today? Probably not. I get your point. Your point is, well, if there's only energy that's down and everything else is up, why can't you have higher numbers? I think the answer is, it will really depend how the year unfolds. If you look at Sulzer's track record historically, we've quite often adjusted our guidance at the half year. I understand. Yes. Okay. maybe Yeah. Hopefully, you guys won't accuse us of overselling, but I understand your point. I understand your point. Okay. Oil price. I don't want to put you in the corner of an oil-related company, but still above $60, then we have this situation with shale oil in the United States. They were not able to produce. What do you see, what trends in this business, upstream, downstream? What could trigger some business, what not, and so on? I can answer your question in different ways. The first way I can answer the question is to tell you what we have in our guidance. As I explained, in our guidance, we are not assuming that the oil market is going to pick up significantly in 2021. Despite the fact that the oil prices are up, despite the fact that some people are talking about $100 per barrel, despite the fact that there's been underinvestments. I think it's too early for us to forecast that there's going to be any type of rebound in oil in 2021. We've got pretty cautious assumptions, hence the minus two and a half percentage points on the overall Sulzer level coming from energy in 2021. Now, if I look at how the market is developing, I think the oil transport market is going to be depressed for the foreseeable future. That's like pipeline pumps that we build in our factory in Portland, in the U.S., for example. This is why we restructured that factory in Portland. If I look at what's happening currently, we're seeing a pickup in exploration, and we're seeing that refining continues to be tough and continues to be cost-conscious. Those are the trends that we see today. I followed, pretty much like you, I'm sure, I followed what people like Halliburton and Schlumberger have seen, and there is some cause for optimism in the market, but that is not reflected in Sulzer's numbers at this time. Okay. Your restructuring costs were CHF 56 million in 2020. I had a higher figure you guided for, in mind, I mean, what do you expect for 2021? Any more restructuring costs you are going to book, or it's over now really? Shall I take that? Yeah. On the restructuring, we guided the market to expect around CHF 80 million related to our energy resizing activities. So far in 2020, we spent CHF 71 million, and that's actually both restructuring as well as the non-op part. Therefore, as a result, we are expecting around CHF 9 million-CHF 10 million in 2021. Of course, depending on the market, we continue to look to see if there's a need for additional measures. When that comes, we will guide accordingly, and that would then be an addition to the CHF 70 million savings that we have communicated. On the CHF 80 million that we have communicated, it's CHF 71 in 2020 and the balance in 2021. Okay. That's clear now. Belgium, I had the impression that the restructuring there is already finished. Everything is on the way now. It's closed now, I mean. That doesn't seem the case. Still work to do there. Yeah. I think you might have mixed it up with our German plant in Bamberg, where we announced the restructuring. God, when did we announce it? I think it was late 2019 probably. That one is done, and the factory, the last people have left, and the factory is closed. Belgium is a pump factory. We announced our plan to close in probably, I'm trying to recall when it was exactly. It was like May or June. In Belgium, the social process is much longer than what you seem to have in mind. If we manage to have the plant closed within 18 months of announcing, that's really, really fast for Belgium. What we've done is we've started the consultation process. We signed, at this point, an agreement with the employees that allows us to start shifting the load to other factories. 2021 is going to be a wind-down year. Belgium, the social consultation just takes a long time by law. You can't do it any other way. Okay. I refer to page 15 about APS, the volumes you show for January. When did Haselmeier kick in there? On which month? We closed Haselmeier on the first of October, off the top of my head. Right. Therefore, you had Haselmeier in Q4, in the January numbers of APS, you've got something like CHF 2.2 million for Haselmeier, I think. Okay. If you're trying to say I'm cheating because I'm including Haselmeier. Even if you exclude Haselmeier, it's still okay. My point is still valid. Oh, yeah, I see. Correct. Okay. Thank you. All right. Thanks. The next question is from Giuseppe Andrea Frey from Credit Suisse. Please go ahead. Hi, everybody. A quick question on my end to the balance sheet. Do you have a target ratio or an upper level on net debt EBITDA where we say it's an absolute limit, or you feel comfortable with going forward in maybe medium-term or so? Well, I think we don't go with a hard ratio, but clearly we want to stay investment grade. Okay. That's basically your target, to keep to an investment grade. Yeah. Great. Okay. Great. Okay. We want to be always in a position that we are able to support. You have seen in the past to support the attractive meaningful bolt-on acquisitions. That's how we drive our balance sheet, yeah. Okay, perfect. Thank you. As a reminder, for further questions, please press star and one. The next question is from Alessandro Foletti from Octavian AG. Please go ahead. Yes. Good morning, everybody. Thank you for taking my questions. I have a couple, if I may, maybe two on, sort of, let's say, bird's-eye view and then a detailed one. On Chemtech, I remember last year you mentioned that there had been delays in services, but your clients were booking already the slots for September. That was due to the travel restriction on COVID. What is going on now? You have mentioned earlier, I think, pent-up demand in rotating equipment. I wonder if there's something like that also in Chemtech, that at some point you will have an avalanche of orders coming down to you. That would be my first question. I take them one at a time, of course. Alessandro, I'll take that one. You're correct. We had delays on the service side because customers were rescheduling outages. These big plants, they have outages where you do maintenance at set periods, and the outages have to be as short as possible because, when the plant is down, it's costing money to the customer, which means that they compress the outage, and there's a lot of people on site at the same time, which is not great during a pandemic. Outages in the summer were shifted to September, October, and then when we got to September, October, a lot of things were shifted again to 2021. Yeah, there is an element of pent-up demand in terms of outages. What we're seeing in the There's a little bit of noise in the background. Somebody's on. What we're seeing in the background is that we're seeing activity pick up in the U.S. in terms of outages being scheduled now for the first half of the year. We're not seeing that in the rest of the world yet. Yeah, there is an element of pent-up demand. There will be an uplift in the U.S. in the first half of the year, and I think for the rest of the world, it'll have to wait till later. These are all things. It goes back to Armin's question earlier. If for whatever reason, the pandemic is behind us tomorrow, there'll be a lot of things picking up steam and a lot of business coming our way. Right now, our working assumption is that different geographies will emerge at different speeds, and therefore, we still have quite a cautious view of when sites will be accessible, and therefore, we're not forecasting for an avalanche, as you put it. We're forecasting for a gradual pickup, which will be staggered geographically. Does that answer your first question, Alessandro? Thank you. Maybe if I can continue on the energy again. Sorry for that. You mentioned, I think twice in your presentation that you see the trough in that segment in H2. You seem to be still very cautious. I understand you had a high base last year. I wonder maybe more on the market, is this really only, so to speak, oil and gas-related, the trough, or also on the power side, on the generation? Are there new turbines coming up at some point that then you will end up servicing, et cetera? Is that segment still sort of in a slowdown mode? Well, no, the trough is not really power-related. As you may recall from our discussions in the last few years, we have a tendency to be very selective in power. We have a significant aftermarket business in power, and that is pretty resilient and recurring. We have a new equipment business in power, which we've really sized at around CHF 80 million to CHF 100 million. The margins on the equipment are usually not great, so we have a tendency to be cautious about the volume that we take on. It's not so much the impact of power, it's really a discussion on oil and gas. If you go to page eight of the presentation, you see what I mean in terms of the order intake, how Q3 and Q4 were significantly lower than the trend we were on before that. We do see that there will be a gradual rebound in 2021 in energy. Because our first half of the year in 2020 was so high, that gradual rebound will still lead to a negative growth for the year in 2021 linked to energy. Okay. Thank you very much. That's clear. If I can ask you, sneak in another one. You mentioned on your margin guidance that you want to be back on pre-COVID-19 level in 2021. This statement, if I remember properly, you made it already last year at the time of H1 results, if I'm not mistaken. As you mentioned already, the pandemic has been lasting always longer and longer and longer, and now I wonder if for you to reach that statement, there is more and more hope into H2 2021, and if there is a moment where maybe that hope is just not reachable anymore, or if no, you are really easy on that one at the end of the day because you know the cost situation you have. Yeah, I think it's a combination of both, Alessandro. We believe 2021 is going to be back-loaded as a year. We think the first half of the year is going to be softer because it'll be on the continuation of the second half of 2020, and we believe there'll be a pickup around the summer or after the summer. There's an element of that. There's an element of cost structure, where we're going to have another CHF 40 million of savings hitting the P&L this year, structural savings. How fast we release the OpEx squeeze is really just a factor of what we see in the market and where the opportunities are. We have a little bit of a toggle where we can move things a little bit to the left or to the right. I think the final point is, we gave you visibility very early. We started saying that we'd be back towards pre-pandemic profitability. We said that over the summer of 2020. We're repeating it now, but we're saying close to 10%. Close to 10% gives us a little bit of wiggle room somewhere in that, whatever, 9.5%-10% range. The better the market, the closer we'll get to 10%. We believe that we've got sufficient visibility on the combination of tendering volumes and our cost structure to be in that ballpark. We'll probably fine-tune that number at the half year. All right. Great. Can I ask you one last one? Yeah. Did I understand correctly that you mentioned the Nordic Water acquisition to be favorable for your product mix? Yep. Right. I don't want to pin you down too much on this one, but I read the sustainability report that Nordic Water published one or two years ago, where there were some figures related to 2018 and 2019. Not going into the details of those numbers, I'm sure you know them. Yeah. 2020, I cannot imagine it was a better year than 2019. Funnily enough, Alessandro, you're asking a really good question. We should really, if we could afford you, we'd hire you to do due diligence on these businesses that we buy. You're exactly right. Nordic Water had a pretty disappointing. Well, disappointing is not the right term. It had pretty low 2018 and 2019. 2020 was actually a much better year. Strangely enough, Nordic Water was better in 2020. I think it has to do with a number of things. It has to do with the fact that it serves the water market, the clean water, the municipal water markets. It's very exposed to Europe, not very exposed to the U.S. In the U.S., the municipal water market slowed down in 2020. It didn't slow down in Europe because it's mostly government-driven, sometimes regulated. Their market was actually good in 2020. Also, Nordic Water brought in a new management team, I think, around 2018, 2019. The actions of that management team started paying off in 2020. They had a better year in 2020 than 2019, and 2021 is going to be better than 2020. All right. They managed as well to reduce the cost structure and to maintain those costs? Yeah, they managed to increase their margins, actually. It's more than just cost management. They actually managed to drive into segments of the market where they got good margins on their order intake, and it paid off. You're totally correct, 2020 was a better year than 2019 and 2018 for Nordic Water. All right. Thank you. That's great. Thank you. Thanks. There are no more questions at this time. Christoph, does that mean we should wrap up? Exactly. There are no more questions, quick summary. Okay. Well, first of all, thank you very much for spending time with us today. 2020 has been a difficult year, I think, for everybody. All of us individually and companies and Sulzer didn't escape from the impact of the pandemic. I think what we're happy with is that we managed to keep all our people safe, and also we managed to keep our business running in a way that allowed us to really mitigate the impact of the pandemic and to hopefully demonstrate once and for all that our model is a lot more resilient than most investors still give us credit for. What's exciting about Sulzer is that our growth is being driven going forward by our water business in pumps, by our service business, which has a really strong install base and is innovating in its service offering all the time. By our renewable business in Chemtech, which has these technologies of today and tomorrow. If you look at Applicator Systems, in Applicators, about 50% of the profit in Applicators is pro forma is now being driven by healthcare applications. That tells you what's going to drive Sulzer going forward. We expect good things in 2021. I had a question during this call about whether we were being too cautious on the order guidance, and then I had a question as to whether we were being too aggressive on the profitability guidance. At the end of the day, we try to balance the pluses and the minuses and to give you something which we feel that we can deliver. We've got a decent track record in terms of delivering on guidance. We'll update you guys as the year progresses. I would only say that the year in January and February is starting in line with our assumptions. On those words, I thank you again for your time, and I hope we'll talk soon. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.