Ladies and gentlemen, welcome to the Sulzer Full Year Results 2021 conference call and live webcast. I'm Sasha, the Chorus 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. Thank you, Sasha, and good morning, everyone, and welcome to Sulzer's Full Year 2021 Results conference call. Today with me is our CEO, Greg Poux-Guillaume, our CEO-designate, Frédéric Lalanne, 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 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, contain risks and uncertainties. These 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 in the call. Having said that, it's now my pleasure to hand over to Greg for the presentation. Thanks, Christoph. Good morning, everyone. 2021 was a successful and eventful year for Sulzer. We beat our financial targets, excluding applicator systems which we spun off. Orders were up 3.6%, sales were up 6%, and our operational profitability or operational EBIT margin increased to 9.3%. In addition, our free cash flow was strong again at CHF 211 million or 6.7% of sales. We refocused the company on flow control by spinning off the applicator systems division as a separately traded company named medmix. With the renewed focus and the changed scope, we also renamed our divisions. Pumps Equipment became Flow Equipment. Rotating equipment services became just Services. I'll give you more details in the next slide. We acquired Nordic Water at the beginning of the year, increasing our exposure to water treatment, be it waste or clean water. With this acquisition, water becomes the largest unit in our Flow Equipment division. We renewed the team. This is my last day as CEO of Sulzer after a fascinating and enjoyable six years. My successor, Frédéric Lalanne, is sitting next to me, and he will cover anything forward-looking in this presentation and will also take your questions, as will I and Jill. Frédéric, as you know, ran the Flow Equipment division for the last three years, and he knows the business inside and out. We worked together for over a dozen years in three different companies. He's a strong leader, and I have complete confidence in him. Today, we also announce that Jill Lee, our CFO, has started the clock on her retirement later in 2022. Jill has been our CFO for the last four years and a board member for six years before that. She was the Chair of the Audit Committee, so she has a long and distinguished service at Sulzer. She's been instrumental in everything we have done, and we, Jill and I are not only business partners, we're also great friends. Sulzer and I have been lucky to have her, and we're only giving her back to Singapore, where she plans to move back very reluctantly. Jill will also be succeeded by an internal candidate, Thomas Zickler, currently our Head of Group Treasury. This will happen later this year after a seamless handover, so you'll still get to see Jill at the H1 results presentation. Finally, the board proposes a dividend of CHF 3.50 a share. This compares to CHF 4 last year, but on a smaller scope. As you know, we spun off applicator systems, which is now called medmix, and medmix stated in its prospectus that it will pay a dividend of no less than CHF 0.50. I know the chairman quite well, and he can confirm that. Therefore, for people that are still shareholders on both sides, it's the same as last year, CHF 4, but CHF 3.50 by Sulzer and no less than CHF 0.50 by medmix. On to the next slide five. As previously explained, we renamed two of the three divisions after the split, not only to reflect the change of scope, but also to show our new ambitions. Pumps Equipment is now Flow Equipment as it offers much more than Pumps. We also sell compressors, grinders, filters, agitators, and digital solutions. In water, for example, we're moving from being a pump supplier to being a solution provider for waste and clean water applications. Rotating equipment services is now Services. Just Services. Here we are a full service provider that uses digital and additive manufacturing to maximize the lifetime of our customers' equipment. We also increasingly service equipment that does not rotate. The name of our third division, Chemtech, remains unchanged, although there's a quick shift towards the renewable businesses, which includes applications for biopolymers, recycling, and carbon capture, and which is already 14% of Chemtech, up from 8% last year. Turning to slide six. Our regional order distribution has not changed significantly with the split. We continue to have a very balanced regional revenue base. Post-split, we continue to be half aftermarket, half new equipment. Splitting the new equipment, you see that sales of new equipment to the water market are now as large as those to oil and gas. If I take oil and gas out of the 12%, 8% is new equipment for Flow Equipment, and 4% is new equipment sold by Chemtech. All other industries, including chemicals or pulp and paper, are in the other segment. Now let's turn to our Flow Equipment division on slide seven. Orders in 2021 increased by 1.8% adjusted for FX and declined by 3.9% organic. While water was up 11% organically and industry was up 7% organically, energy was down by 23% on soft markets and continued selectivity. In Q4, we saw a significant rebound in energy while water and industry continued to grow. This latest development makes us optimistic about 2022. Sales increased by 7% adjusted for FX and 2% organic. Again, water and industry were both up 7% organically and energy was down 5%. Continued challenges in logistics caused delays in projects, mainly on our customer side, and resulted in lower revenue on our side. The higher volumes, as well as strict cost management and the positive impact of our energy resizing, helped drive margins up by 160 basis points to 5.9%, despite increased logistics and raw material costs. On slide eight, you see what I meant when I mentioned becoming a solution provider rather than an equipment supplier. That's an example of where we help the customer, in this case Energie Fabriek West in the Netherlands, to optimize their processes so they can move forward on their path to become energy and carbon neutral by 2030. The project aimed to maximize biogas production from wastewater sludge. Sulzer supplied equipment such as pumps, agitators, turbocompressors and others, and its extensive know-how to that project. Now let's turn to services on slide nine. In 2021, orders and sales both started growing again after a 2020 year where they were both stable. The growth in 2021 was driven by Europe, Middle East and Africa and the Americas, whereas Asia-Pacific was negative due to continued lockdowns in parts of that region. For the year, orders were up 2% and sales up 2.7%. In Q4, orders grew by 13% after growing 10% in Q3, which tells you that momentum is strong. In the last quarter, Asia-Pacific was only slightly negative, with significant uplift to come when pandemic-driven site access restrictions in Asia-Pacific are lifted. Operational profitability increased by 30 basis points to 14.2%. Our local presence limits exposure to logistics bottlenecks. On slide 10, you'll find an example of some of the things that we do in Services besides just servicing our own pumps. This is an example of a refurbishment of a generator. It's a very large generator. It's quite technical. It involves a rewinding. It involves a number of refurbishments and improvements. What's different about Sulzer is that we're capable of doing these complicated jobs on site. I mean, this is a massive piece of equipment that doesn't travel very well. OEMs have a tendency to say, you know, "Let's cut the roof, get a crane and a massive truck." We do these things on site. We get you up, back and running quicker, cheaper and a lot more efficiently, both from a cost perspective, but also from a sustainability perspective. If I move to page 11, Chemtech. The renewables businesses within Chemtech was one of the main drivers of order growth in 2021. The segment, which includes solutions for biopolymers, recycling and carbon capture, almost doubled in 2021 and is now 14% of overall Chemtech orders. Tendering in this business remains very active and our renewables pipeline continues to increase. Also very successful but smaller is Chemtech's water business, which is based on our dissolved air flotation technology. It's used for separation in industrial water applications. Overall, orders in 2021 in Chemtech were up 9% and sales increased by 8%. Q4 was a bit slower due to the high base in the previous year. Despite these challenges, I'm sorry, logistics were and remain a challenge, mostly impacting revenue recognition. Material cost inflation is manageable as it has been in all our businesses. Despite these challenges, Chemtech's operational profitability increased by 40 basis points to 10%. On slide two, we remind you that most of the world's bioplastics polylactic acid plants run on Sulzer technology. Here's one of the latest biopolymer projects that we won. Sulzer will deliver equipment and know-how to NatureWorks' newest biopolymer manufacturing facility in Thailand. The new facility should deliver 75,000 tons of biopolymers annually, and Sulzer will design and supply the lactide purification, the polymerization, and the devolatilization. All of these are critical steps to the PLA process, and Sulzer is by very far the market leader in those. Now over to Jill for the financials. Jill? Well, thank you, Greg. Thank you so much for your kind words. Good morning, everyone, and welcome as well from my side. Let's begin with the overview on slide 14. I'd like to point out that we show here only the continuing business. The APS spin-off was completed on September twentieth, and since then, we report APS as discontinued business in our income statement. While we did not adjust the prior year figures in our balance sheet and cash flow statements, you can see the information relating to the impact from the discontinued business in the notes of our annual report. For the full year 2021, our orders were up 3.6% adjusted for FX and 0.9% organic. In Q4, orders were up 16% FX adjusted and 13% organic, mainly driven by Flow Equipment and Services. Our order backlog has further climbed to CHF 1.724 billion, which will benefit sales going into 2022. Sales were up 6% FX adjusted and 3.5% organic, with all divisions contributing to growth. Although our divisions encountered supply chain and logistic challenges, operational profitability on group level was up 70 basis points, rising to 9.3%. This is a record for the company in its new scope, with all divisions hitting new heights in operational profitability. EBIT was also up significantly as we had less restructuring and other one-off costs compared to the year before. Our EBIT margin therefore increased from 4.5% to 7%. I'm also really pleased to report once again a strong free cash flow of CHF 211 million, which corresponds to 6.7% of sales. Now, you might wonder about the CHF 1.4 billion of net income shown in the annual report. Please don't be confused and focus on the net income from continuing operations. The spin-off of medmix led to a gain on net assets recognized of CHF 1.3 billion, which shows up in our reported net income figure, including discontinued operations. It's presented this way in line with IFRS reporting requirements. Let's move on to the next slide, which shows operational profit bridge. Main positive drivers of margin expansion have been higher volumes and the CHF 40 million of structural savings from the resizing actions that we had taken on our energy business. Margin and mix did not have a significant impact, but it's overall net positive. On the negative side was a partial reversal of the CHF 59 million of OpEx squeeze that we had done in 2020 during the pandemic. OpEx squeeze impacts like vacation leave consumption, travel stops, and delayed replacement hiring are gradually normalized in varying degrees, resulting in a partial reversal impact in this year of CHF 41 million. The CHF 6 million of others include higher costs for supply chain and logistics. Acquisitions contributed a positive CHF 8 million impact and FX added another CHF 3 million. All in all, our operational profitability increased by 70 basis points, reaching a record level of 9.3% for our new business scope. Turning to slide 16, showing the steps from operational profit to EBIT. I think it's pretty straightforward, not too much to comment. Amortization of CHF 50 million were slightly up from the CHF 47 million last year, including now Nordic Water. Restructuring, impairment of assets and other non-operational items are significantly down versus last year, showing the good progress we have made with resizing of our energy-related activities. Moving on to slide 17, the bridge from EBIT to net profit. Net financial income and expense were on same level as last year. The effective tax rate on the continuing business was 28.9%. This included CHF 4.7 million of negative deferred tax impact related to restructuring expenses of closed facilities with no corresponding tax effects. The loss on income from associates mainly relates to investment in Worn Again and in Tamturbo, both of which are involved in developing new sustainable technologies. One in the field of recycling of worn textiles and the other in oil-free compressors. Reported net income from continuing operations nearly doubled to CHF 141 million, compared to CHF 72 million the year before. Discontinued operations contributed a total of CHF 1.281 billion to total reported net income, primarily reflecting the gain on net assets that have been derecognized due to the APS spin-off, as I have mentioned earlier. Now, going to the next slide, on the free cash flow and the bridge from EBITDA. Let me point out that the bridge excludes discontinued operations. Our net working capital has increased only by CHF 13 million despite higher sales as better collections mitigated increase in inventories. CapEx was CHF 64 million, much lower than our pre-pandemic level of CHF 81 million for the same scope in 2019. A change in all other items added CHF 25 million. This is a bunch of different items, but mostly relating to movements in provisions, accruals, and some revaluation impacts. Because of that, the free cash flow, excluding discontinued operations, amounted to CHF 221 million. Again, a solid, free cash flow generation of 6.7% of sales. Turning to our balance sheet on slide 19. Compared to the previous year, our debt has decreased as we have repaid a bond of CHF 210 million during in 2021 and transferred CHF 52 million of lease liabilities to medmix. That's the part that belongs to APS. The intercompany loan provided to medmix prior to spin-off has been fully repaid in Q4, contributing a net cash in of CHF 344 million to Sulzer after deducting cash retained by medmix entities. All in all, our cash and cash equivalents increased to CHF 1.233 billion at the end of the year. As a result, at the end of December, our reported net debt stood at a very healthy level of CHF 67 million or 0.2x EBITDA of our continuing business. If we exclude the cash that we hold on behalf of Tiwel, net debt would be CHF 366 million, again, on a very healthy level of 1x EBITDA of our continuing business. Now on slide 20, you see the history of the dividends that we have paid in the past. Our board proposes to pay a dividend of CHF 3.50 per share. This compares to CHF 4, including APS last year. Assuming medmix pays a dividend not lower than CHF 0.50, and you've heard from someone close to the chairman, the shareholder holding both shares would receive the same dividend as last year. Now, I am pleased to hand over to Frédéric, our CEO-designate for the outlook. Thank you, Jill. Good morning, everyone, and warm welcome to all of you. Let me start with a couple of words about myself. I started at Sulzer six years ago as the Chief Commercial and Marketing Officer and reshaping the commercial functions across all the businesses. Three years ago, I took leadership of the Flow Equipment division and turning it around from a break-even to record profitability in 2021, close to 6%, 5.9% exactly. Prior to Sulzer, I was a senior executive at Alstom and General Electric, and I've lived and worked around the world with a special focus on Indonesia and India during six years. At Sulzer, we do have a lot of promising technologies, and we have strong position that we can build on. Our strategy, which Greg and I defined together as part of the executive team in the last years and that the board fully endorsed, is the following. First of all, growing the water and industry businesses in Flow Equipment, and here we have a unique value proposition and a lot of growth opportunities ahead of us. We will continue to grow the service faster than the market by leveraging our unique digital tools and geographical setup. Finally, we will defend our leadership in Chemtech in both chemical and in the Chinese market, while we continue to boost our biopolymer and recycling activities. On top of that, our strong focus on ESG is key to identifying the markets we play in and will lead to strong and sustainable financial performance for the group. We will publish soon a separate sustainability report, mainly at the end of Q1, but our three pillars are unchanged, as you can see on the slide 23. First, we aim to minimize our carbon footprint and target to reduce our CO2 emissions by 30% until 2030, with the aim to become carbon neutral by 2050, and we are already making excellent progress on this. We also want to enable a low carbon society, and our solutions support a circular economy. We bring an important piece of the sustainability puzzle to our market with proprietary technologies in areas like water treatment, biopolymers, and recycling. Last but not least, we are also engaging our employees and communities. We aim to make life better for those around us by delivering improvements across all key indicators every year. Some of the leading rating agencies have recognized our efforts. MSCI, for example, gave us this year a double A. Our guidance on slide 24. We see all division growing their orders in 2022. In Flow Equipment, we see continued growth in water and industry, and energy is expected to rebound. In Services, growth will be supported by easing site access restrictions, I already explained, and particularly in Asia. In Chemtech, we see further growth in renewables, while China remains robust and other region also expecting to grow. Overall, we do see orders up in the range of 3%-5% in 2022. For sales, we see Flow Equipment to be flat while Services and Chemtech are expected to grow. Sales in Flow Equipment are held back by the slowdown in energy, where in 2021, order intake was down by 23% compared to 2020. The sales were almost CHF 100 million lower in 2022. Growth in energy will resume in 2023 on a rebounding 2022 market and backlog as well. This is a one-off soft landing. We anticipated this in our cost and footprint actions. The decline in energy is and will be compensated by further growth in water and industrial segments. We also expect operating profitability to continue to go up in all three divisions, resulting in an operating margin close to 10% and in line with the guidance we gave at the Capital Markets Day a few months ago. Our midterm target, as Jill explained, remain more than valid. We see Sulzer sales growing midterm by 4%-5% on average, and our operational profitability hitting a corridor of 10%-11%, where the bottom of that range almost reached as early as this year. Let me summarize now on the slide 26. After the split of medmix, we are well positioned as a pure play flow control company, and we will accelerate growth in sustainable application. We have also demonstrated the high resilience of our business model during the pandemic. The fluctuations have been minimal and we beat our guidance in 2021. We expect continued growth in order and sales, as well as faster improvement in our profitability in 2022, as just explained, with significant strides being made towards our midterm targets. Supply chain and logistics challenges will still be present in 2022, but we expect them to hit during the year, especially in H2. Raw material and component inflation have been successfully managed at Sulzer to date, and we do see that continuing. As finally, you will see soon new faces at Sulzer this year with a new generation of leaders taking over from a successful team led by Greg. Tim Schulten, myself, also Thomas Zickler, who will take over from Jill as CFO later this year, are all excited about picking up the mantle and running with it. Sulzer is in a great shape, but we aim to take it higher still. On this word, we will open the call now for questions. Operator, over to you. We now begin the question and answer session. Anyone who wish to ask a question or make a comment may press star and one on their touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Anyone with a question or a comment may press star and one at this time. The first question comes from Walter Bamert from Zürcher Kantonalbank. Please go ahead. Good morning, everybody. This is Walter Bamert from Zürcher Kantonalbank. Would you please share with us your review on three important new equipment and markets? The first is oil field water injection pumps. What is the main driver for the pickup we saw in Q4? And will this be a multi-year driver? The second is pulp and paper. Is this additional capacities or rather technology change? And finally, is the feeder pumps business for coal and nuclear dead, or do you see project activity there? Okay. Thank you, Walter. I think Frédéric and I will take this together. I mean, pulp and paper, the world is moving towards a fiber-based economy. You can see the trend towards replacing some plastics by either bioplastics or by paper-based products, and therefore that creates a lot of tailwind for the pulp and paper industry. We're right in the heart of that. I think in the last presentation, we gave an example of a biorefinery in Finland where we're supplying all the equipment essentially. So that's a good market for us. We have a leadership position and we're excited about it. In terms of the boiler feeder pump business, I mean, there's not a whole lot of places that are building coal plants, and that's become a minor business. I'll hand over to Frédéric, and he can also talk about something which is not hugely significant for us, which is the oil field water injection pumps. Frédéric, you wanna comment? Yeah. On the boiler feed water, it's clear that the long-term opportunity will be in the nuclear area. As you have seen a wave of revival of nuclear application. Here we talk more for the end of the year 2020s. We are preparing ourselves for this wave. To answer your first question on oil field water injection, this is a key activity, and we do see a rebound in our activity at present time for offshore and onshore upstream market led by a wave of FPSOs in Brazil but also in West Africa. With our technology, we are well positioned to catch from this rebound. Yes. An important piece of activity for our factory in U.K. Walter, anything else? Did we answer your question? Perfect. Let's get somebody else the chance to ask questions now. Thanks, Walter. The next question is from Aurelio Calderon from Morgan Stanley. Please go ahead. Hi. Good morning. Thanks for taking my questions. I've got three, if I may, and I'll take them one at a time. The first one is around pricing. I think you've managed to defend pricing quite well. I wonder how much in your embedded 2%-4% sales growth is pricing, how much is volumes? Let me take that one. We managed to defend pricing quite well, but, you know, if you look at Sulzer's mix of businesses, most of our businesses are tender-based businesses, i.e., you supply a quote to a customer as part of a tender process and therefore, you know, pricing can evolve quite naturally every time you submit a bid. There are some exceptions to that. For example, if you take our water business, a lot of it is a price list type of business. If I take the example of water, where we sell through distributors in some countries and a lot of our products are based on price lists, we had two price increases in 2021. We had a third one in January 2022, and there's another one coming a little bit later this year, pretty much in line with what the market is doing in water. If I take the rest of our businesses, as I said, it's not really easy to isolate because at the end of the day, we're just submitting bids. In some cases, we are just benefiting from the cost savings that we've generated, which are quite significant. I would say that the price impact is less than 1%, and this is why we're not breaking it out. Did I answer your question? Yes, it does. does. It's super helpful. I guess linked to that question is around savings. I think you've done quite a good progress there, and I think you mentioned that you wanted to resize the energy business to by one-third. How much is left in the bank? What should we expect in terms of savings for 2022? Are you happy with the size of the energy business right now? Maybe, Greg, let me take the question. I think, you know, all the questions that you've asked is, you know, to cast around how you expect our profitability to be affected by the higher input prices. What I can say is that overall, we do continue to see the CHF 20 million of incremental structural savings in 2022 coming from actions that were taken in the past, the structural actions on the energy related bits. Potentially a little bit more from additional improvement actions that we always continue to take. If you are modeling, you can assume that net-net in the combination of what Greg has said, how we typically price based on the quotations that come to us. Based on order specification as well as costed component purchase price, plus a little bit of the price lags related type of adjustment, and the cost savings, we should come up with a slight net positive in terms of mix and margin in 2022. Jill, CHF 20 million still to come in 2022 from the cost savings. Frédéric, do you wanna add a bit of color in terms of the energy resizing? Is it done or you still have things ongoing? Anything still needed to be announced? No, nothing significant to be announced. Our resizing plan has been completed, in fact this year, successfully with a footprint which is now more aligned with the new market reality. But also, we are also in a position to grasp any rebound in the market if this rebound is coming. Overall, we are now well positioned. The tail end of the savings, CHF 20 million to come in 2022, and we will benefit from operational leverage because although we've compressed our footprint, we're able to scale up volumes on that smaller footprint that we have. Other questions related to that or your next question? No, that's great. Maybe one last question from my side, and that's around services. I think you mentioned that site access has been a challenge, especially in APAC. I wonder how much of an improvement you saw sequentially or was it more or less stable? I'm referring to APAC, which historically- Yes. That seems to be the weakest one. It's really in large part a service challenge because it's a challenge for a services division. We either maintain equipment on site or we need to go to site to pick up the equipment or to analyze the situation. If you can't access sites then, that business is less accessible. The challenges haven't eased in APAC. It's still complicated in a lot of countries. We expect most of that to go away in the course of 2022. We expect a clear rebound in our APAC region in services. That's great. Other questions? Thank you. Thank you very much, Greg, for the recap, and Jill. Pleasure. Next question, please. The next question from Arben Hasanaj from Vontobel. Please go ahead. Yes, hello, everyone. I would have two questions. The first one would be on your order guidance. So I think market expectations were rather on the higher end of that guidance. Can you maybe elaborate a bit, what are the drivers there? Is it that you really expect to remain selective in energy? Yeah, if you could elaborate on that. Maybe you can answer this question, and then I'll have a second one. I'd say the order guidance, and Frédéric will jump in on energy specifically, but the order guidance is, you know, maybe I have a track record or Jill and I have a track record of starting conservatively and raising things halfway through the year. We think that the guidance is a solid one given what we see out there and also given the fact that we don't intend to chase business and energy. The market is rebounding, but we will only go for things that we think we can get good margins from. So that's really our thinking on this. Frédéric, are you gonna be less conservative than I am? Are you finally gonna answer Arben's wishes? No. We gave a corridor of three to five. It is clear that you have seen a fantastic improvement in the water business, organic and inorganic in 2021, and we will capitalize on these very strong points. The need for infrastructure in water is there. We expect good things from the water industry. As explained before by Greg, we are in a leadership position, and we do see some positive development as well in the mining and fertilizer activity. To answer your point on energy with the price of oil close to $100 per barrel and consumption back to pre-pandemic level and significant under CapEx in the last two years, we expect some rebound, but as we said, we will be selective in our approach. Chemtech's doing great and should continue to do great. In our Services business, if the restrictions, site access restrictions lift earlier than we think, then this will be also a tailwind. Frédéric, is it fair to say that the moment I leave at the end of today, you'll be a bit less conservative on guidance than I am, and you think you can do better? The only thing I can say at present time that we expect a very solid quarter one. All right. With the first indication, we have half February. We have good prospects for this quarter. All right. You heard it first from Frédéric. Other questions, Arben? Thank you very much. My second question will be around Chemtech. I saw that the headcount there increased quite a bit, so I was wondering if this has to do with the kind of a ramp-up in renewables or- Yeah. Headcount, Arben, and Chemtech's always really misleading because Uh-huh. We've got a services business in there, you know, tower field services. When we win jobs in tower field services, the management layer of these teams. You know, if you do a tower field services job, sometimes you have to provide hundreds of people on the site because the aim is to go in, open the tower, make the changes, close the tower, and get the plant back and running really quickly. You do that by having a lot of resources, so you can keep that to the minimum amount of time. Now, so that we don't carry these resources full-time, we only employ full-time the management layer and all the field labor are people that we find on the market and we employ on short-term contracts or for the job. Therefore, when we start winning jobs in tower field services, it makes our headcount go up in Chemtech. Maybe what we'll do in the future is Frédéric might consider splitting out the tower field services part of the headcount in Chemtech so that you guys don't fear that we're suddenly massive, adding massive amounts of people. That's just not the case. We're adding people in Chemtech because our renewables business is growing fast, but the main fluctuations are linked to tower field services. And they're variable, they're not fixed. Does that answer your question, Arben? I see very clearly. Thank you. Thank you. The next question is from Dominik Feldges from NZZ. Please go ahead. Yes. Hello, good morning. I have a couple of questions. Logistics-wise, I mean, could you please elaborate a bit on what the challenges there were and how they might still look like in the current year as we speak? Regarding restructuring, could you please elaborate a bit again what exactly you did? I mean, which plants were now maybe closed, how many staff in staff numbers, I mean, how much that impacted the staff number? No discussion was answered. Please a new question to the new CEO and also with a bit of a request, if you could just talk a bit not as fast as before. I mean, there are people maybe in the call which are not all experts, you know, on your business. So it was a bit difficult to follow, I have to admit. But what really needs to be changed at Sulzer, you know, so that Sulzer can be taken to a higher level? And then two last questions. You've not really talked about the geopolitics. I mean, obviously we have a conflict, you know, between Russia and the Ukraine. Yeah, I mean, what's your feeling there? I mean, how might that impact Sulzer, especially your energy business, as we go forward? Very last question regarding the share price, I mean, which has really been flat, I mean, since the spin-off of Medmix. I mean, what do you account for this? Thank you. All right. Thank you, Dominik. We'll take all of your questions one by one, and all three of us will jump in at different times. You know, I'll start with the share price. You know, our job is to run this business to the best of our ability and to invest the shareholders' money wisely. We feel that we're doing that, and we're certainly confident that Frédéric and his team will continue to do that. We've improved our results year-over-year, and we have once again in 2021 a year of record results. That it doesn't translate over the last few months in the share price is, you know, it's regrettable, but there are market events currently. I mean, the markets are quite volatile, and I think everybody is suffering from a share price perspective, you know, as is Sulzer. We expect our efforts to be reflected in the share price when the market stabilize, but we also had a really strong run in 2021. I think, if you include medmix, from 1st January to 31st December, you're talking +50% pretty much. Yeah, we'd like to see our efforts reflected more significantly in the share price since the beginning of the year, but we also understand that the market impacts everybody, and we don't have a timing or a number. I think this is the volatility that we have currently is here to stay for a while, and that ties into the geopolitical question that you asked. I mean, some of the concerns are linked to inflation and interest rates, you know, or is the Fed, the European Bank, are they raising interest rates? They are. What's happening in Ukraine. Clearly, as we're all business leaders at Sulzer, we're also individuals, and we're all concerned about what's happening in Ukraine. If you look at it, though, from a business perspective, our Russia business is a Russia for Russia business. So we have factories and service centers in Russia, and they produce for the Russia market. There's very little in terms of import and export across the Russian border at Sulzer. I don't think this is a conflict that will disrupt our ability to run our operations or will impact our businesses significantly. To your question as to whether a conflict between Russia and Ukraine would help our energy business, I mean, if I'm completely oblivious to everything else, I'd say it probably would because it would generate a need for investments elsewhere and would probably have an upwards effect on oil prices. But I mean, I kind of feel horrible having even a discussion about that. I certainly hope that the conflict between Russia and Ukraine doesn't escalate. That's certainly our wish or desire and everything else would be bad news for the world. The logistics question, the challenge has been not so much on our side. We've managed that quite well. We've been flexible and, you know, for example, we have components and materials that go from China to our factory in Finland. We used to do that by shipping. Now we do that by train. Then the trains got complicated, and we did it by trucks. Now I think we're back to trains. You know, we're quite flexible, and we've managed pretty well the flows. Our issue has been on our customer side, customers. Because when a customer is not ready with a project because they're missing another piece of equipment or they can't get certain things to site, then they have a tendency to slow down everything else. We've also had customers that weren't able to get a truck to our facilities to pick up equipment because of all the constraints on logistics. That's been the story in 2021. It's the story in the beginning of 2022. I know a lot of people have said things will normalize or start to normalize after Chinese New Year. It's a little bit too early to say whether that's happening. Our working assumption is that logistics will continue to be difficult until the summer and will start easing progressively in the second part of the year. That's our working assumption. In terms of restructuring, most of it was in Frédéric's business, but to keep it short and tight, we closed a factory in Belgium, and we closed a factory in the U.S. in Portland. Belgium is pretty much done. We're stopping production, Frédéric, when? In February? We're done. Completely finished. Oh, we've just stopped production. In Portland, when are we stopping production? June. We're stopping production in June, but we've already pretty much completed the downsizing. We're just executing the tail end of the backlog. In general, we don't give headcount numbers associated because it's kind of, you know, it kind of feels like pandering to the markets. You know, we don't like doing restructuring, we don't like laying off people, and we don't like to brag about the number of people that are part of that just to show that we're taking action. What we try to do is to do it in a way that was fair and to our people and gave them opportunities to find other jobs elsewhere. You know, the positive is that in both these markets, the job market has never been as active as it currently is. We feel that our people will land in good positions in other companies when we're not able to provide something else for them in Sulzer. Frédéric, you wanna take the question about what needs to change at Sulzer? How do you get the company to a higher level? Thanks, Greg. My answer to that question is the following. First of all, I've been part of the Executive Committee over the last six years and together with Greg and the Executive Committee, we put in place that strategy. This strategy has been validated for the Board. As I explained before, we will go ahead with our key priorities in the business of infrastructure for water, for underserved application and for sure, for renewables. What needs to change, in fact, it's a continuity here, but a continuity with a new team. As you have heard also, we have a new team in place. What we will make different a little bit is to accelerate the transformation of Chemtech towards new renewable application, recycling and circular economy. I would say we have a clear path for our pumps or flow business and service, but we would like to put the booster a little bit on Chemtech. You have seen that the part of renewables has reached 14% starting from very small percentage few years ago, and we clearly target to be at 20% in the renewable business very soon. Thanks to addition in our portfolio and organic development, our guys here are very well set to grasp this renewable and circular economy. Dominik, did we answer your questions or you wanna ask a follow-up? Yeah, maybe just one more, but I mean, obviously since you're, maybe you can share with us a bit, the view of Mr. Vekselberg about this. I don't know whether that is possible, but I mean, whether you might have talked with him about the conflict recently. Otherwise, I mean, all questions have been answered. Thank you very much. We haven't. I don't have any knowledge of Viktor's view on the geopolitical conflict that we have currently between Russia and Ukraine, so I'm sorry, I can't help you with that. Okay. Thank you. Thanks, Dominik. The next question is from Alessandro Foletti from Octavian. Please go ahead. Yes. Good morning, everybody. Thank you for taking my questions. I also have three or four. Can I take them one by one, if you don't mind? Good. Okay. Thank you. First of all, on the sequential order intake in the three divisions, there were some ups and downs, but you mentioned that in general, your momentum is improving. I see that in Flow Equipment. I'm not sure about Chemtech. Can you maybe give a little bit more indication there? Why do you feel that the momentum is building up and why the slow Chemtech in Q4 is not an issue? Then I have a follow-up on the site restrictions again. Yeah. Frédéric and I will answer it together. I'll answer Chemtech and he'll answer about the momentum and Flow Equipment. Chemtech is really easy. Chemtech market is really active. You know, our growth engines are China and the renewables businesses. Both of them are doing really well. The only thing that makes the sequential orders in Chemtech sometimes a little bit hard to read is that you've got some big projects in there that are lumpy. When they hit, it kind of moves the needle a little bit. For example, I can think of a project in the U.S., which is a $23 million project that we could have booked in Q4, but it slipped by a few days 'cause we were still tidying up a few things on the terms and conditions with the customer, and we'll end up booking it in Q1 instead, you know. I mean, these things, when you have something lumpy like that, $23 million, it kind of moves the needle a little bit. There's really good momentum in Chemtech. There's really nothing to be gleaned from the sequential in Chemtech. The market is active. China's doing well. Renewables pretty much doubled in 2021, and the momentum is good. Frédéric, you wanna talk about the momentum in Flow Equipment? In flow, in fact, what is striking is that we had a Q4 year-on-year, which is +50% in energy, and some people have noted that. It's clear that again, it's a project business. We have received two very large orders for FPSOs during the month of December. Thanks to that, it has created that momentum in Q4. Overall, we are on a stable path of growth for all three segments in flow. If you look at quarterly in 2021, every quarter has shown some steady improvement. We're in steady trends. Services, maybe to wrap up your question, Services will accelerate as Asia kind of fluidifies. That's gonna happen in the course of 2022. I mean, I was gonna say we feel good about 2022. I mean, Frédéric, you feel good about 2022 'cause I'm gonna be a man of leisure. Yeah. You're gonna be running the show and No, I feel good about 2022, and as you have said before, January is great, and we do expect a very solid Q1 in 2022. Alessandro, what's your next question? Yes. Just continuing on this subject, on the site restrictions, maybe more specifically. You mentioned across Asia, but I wonder if you can differentiate between what goes on in China and what goes on in the rest of Asia and- Sure. If there's a difference. We have challenges in Indonesia, for example, where we have a large service center that covers big jobs across the region and some of the movement restrictions that we have in Indonesia are impeding our ability to drive the business as we'd like to. You've probably followed with some of the other companies that you cover, Alessandro, that China is a bit choppy right now because there's still this approach to COVID, which is zero COVID. Whenever there's a few cases that pop up, they lock up parts of cities or entire cities and introduce restrictions. We're running our businesses, our plants, and we're doing that well. I know that this week, for example, in Suzhou, we had some of our people that couldn't come to the factory because they'd locked up part of the city because there'd been, I think, seven COVID cases. Therefore, we had to scramble to, you know, keep with our load plan. These are, you know, examples. I mean, the Suzhou example is not so much a site access, but just a general restriction in China example. It's, you know, it's gonna continue like that for a little bit, but I think we all understand at this point that COVID is in the process of normalizing and that the world is reopening up. That will be tailwind for our Services business in 2022, clearly. Other question, Alessandro. All right. Yeah, thank you very much on this one. Maybe for Jill now, I guess. I have three quick questions on your financials. Number one, on the margin bridge, EBIT margin bridge that is, do you have more OpEx reversal coming up in 2022? On the EBIT bridge, I mean, obviously, there will be some OpEx increase in terms of labor cost. I think you have seen too that with the inflationary part. As said, we also have cost savings coming on board with CHF 20 million. Plus we always continue to, you know, with the increase in volume, we will have operating leverage, and that should all be mitigated and in terms of the inflation impacts. If I can jump in for a second, and Frédéric will may chime in also, Alessandro. I know a lot of companies are commenting on labor inflation and the fact that this is impacting their bottom line. You know, labor inflation at Sulzer and raw material inflation are things that we managed to absorb in 2021 and to mitigate. I mean, Frédéric, I've seen his budget, and I know that he intends to also mitigate that in 2022. Thank you. One other question on the bridge, slide 17, maybe. You have mentioned the CHF 195 core net profit. Can you bridge for me just quickly how you get from the CHF 140 to the CHF 195? Um, core net- You have mentioned on slide 14, you have core net profit from continuing operations of CHF 195, and then in your bridge on slide 17, you have income from continuing operations of CHF 141. There are CHF 44 million. You got income from continuing operations on slide 17, which is CHF 141. That's the net income. The income from continuing. 14. Right. On slide 14, you have core net income of CHF 190- Okay. The core net income is essentially net income adjusted for the one-off, as well as amortization. Right. We took out the net tax impact of that. Therefore, you arrive at the core net income. If you take your net income and you add on the amortization, impairment as well as the restructuring costs and one-offs, less out- Less out. Okay. The corresponding tax impact, you will arrive at the core net income, which is relevant because it's connected to our dividend policy. Alessandro, you know, historically, we have a dividend policy on core net income. We define core net income the way Jill described it. I mean, if you take 2021, there's not a whole lot in terms of restructuring and impairment and one-offs. You're talking really about amortization. Essentially amortization net of tax is the delta. Is that correct? Yes. That's correct. That's the difference between core net income and Just my very last question. Sorry to cut you off. You're good. because I think you wanna go. On free cash flow, can you give an indication of CapEX, what the new level of CapEX and also the new level of leasing payments now that APS is gone? Well, you know, this two years, because of the COVID impact and, you know, our cautiousness in spending, we have a lower CapEx level of around CHF 60 -CHF 65, and I expect in 2022 to go back to our normal of around CHF 80 million. About CHF 65 in 2021 and close to CHF 80 in 2022, as we start growing again and then we get back to a more normalized level. Does that answer your question, Alessandro? Do you have anything else? Yes. The first part is answered. The second part on the leasing payment, am I correct to assume that they will go down from CHF 40 million to, I don't know, CHF 28 or something like that? I'm sorry, we couldn't hear your question because we were speaking at the same time. What's your second- Excuse me. On the leasing payments, am I correct in assuming that they go down from CHF 41 million now to maybe CHF 28-ish or so? Yeah, I think yes, that's right. We have the impact from medmix spin-off, and so the remaining part is around the CHF 25 million-CHF 30 million. Yeah. Yep. Perfect. Thank you very much. Thanks, Alessandro. Next question. We have a follow-up question from Walter Bamert from Zürcher Kantonalbank. Please go ahead. You mentioned that there is pent-up service demand. Can you please help me to better understand the dynamics in the service business, in particular the tower field services in this current market environment? Are companies reluctant to schedule maintenance shutdowns as they are running at full capacity? Well, it's a trade-off though because companies are running at full capacity or fuller capacity, but they also delayed quite a few things during the pandemic because they didn't wanna take the risk to have people on site. You know, in a lot of these chemical facilities or big plants, you have legal requirements just from an insurance perspective to do certain things. That business, net-net, the tower field services business is actually picking up significantly currently. 2021 was a good year for the tower field services business, and we expect that 2022 will also be a good year. Thank you very much. Thank you. Other questions or are we done? There are no more questions at this time. All right. Well, look, we'll wrap up and I'll let Frédéric wrap up in terms of talking about the future. Before we do that, I just wanted to thank you guys. It's been a pleasure for the last six years. I've really enjoyed these interactions and the thoughtful questions and the level of knowledge that you guys all have about the company. I hope we were able to be good partners in terms of answering your questions and giving you visibility and transparency on the business. I'm sure that Frédéric will not only continue that but actually improve it. Frédéric, you wanna say a few final words on 2022 and the way forward? Yeah. Thanks a lot, Greg. As we just said at the beginning and during this call, we had quite a successful and eventful year of 2021. We plan to go ahead with from strength to strength in 2022 and the years to come. We have built a very strong position, and we will capitalize and grow further on this strong foundation that built under the leadership of Greg during this six years. I really want to remind that. Of course, we will update you on the progress during the year. For sure, for the order intake announcements after Q1. With that, we close the call today. Thanks a lot for your interest in our company. For sure, I hope to see you soon on the next call or in the next interaction. Thank you. 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.