Quick Facts
- 190 years of Swiss engineering: Founded in Winterthur in 1834, Sulzer has been making the industrial equipment the world runs on for longer than most countries have had electricity.
- Record margins in 2025: EBITDA reached CHF 556 million at a 15.6% margin, the highest in at least 20 years, and the third consecutive year of significant expansion.
- More than pumps: Sulzer's three divisions serve water treatment, energy infrastructure, and chemical processing across 160 manufacturing and service sites globally.
- Back in the OMSP1: Sulzer returns to the index this month after being removed in September 2025, with an Obermatt 360° View of 88.
Pros
- Structural demand tailwinds. Water infrastructure, energy transition, and carbon capture are long-term growth markets. Sulzer is well positioned in all three.
- Margins compounding upward. Three years of consistent expansion, with 2026 guidance pointing to a 16.5% EBITDA margin, another step up.
- Aftermarket business is the backbone. At 62% of revenue, the services side is recurring, resilient, and growing. It stabilises the business when large project orders are delayed.
- Dividend rising. CHF 4.75 per share proposed for 2025, up from CHF 4.25. Management keeps raising it as earnings improve.
Cons
- Safety rank is the weak spot. With a leverage rank of 19, Sulzer carries more debt than most comparable companies. Not alarming, but worth monitoring.
- Large project timing is lumpy. Several big oil, gas, and chemical orders were delayed into 2026. Order intake growth in early 2026 will be muted as a result.
- Strong Swiss franc is a persistent headwind. Currency effects knocked roughly CHF 190 million off reported order intake and sales in 2025. The organic story is strong; the reported numbers always look a bit softer.
- Chemtech restructuring still underway. The division underperformed in 2025. Management reorganised it and cut costs, but the recovery will take time.
This month, Sulzer joins the Obermatt Swiss Pearls Index (OMSP1) as Lindt & Sprüngli exits. Lindt is a fine company with one of the most recognisable brands in the world, but with an Obermatt 360° View of just 17, it no longer meets the index’s criteria across the board. Sulzer’s return is a different kind of story. When the index was reviewed last September, Sulzer’s ranking had slipped just below the threshold, a close call in a competitive field of 36. Since then, the full picture has come into focus, and it is a strong one.
Outside Switzerland, most people have never heard of Sulzer. That is not unusual. The companies that keep the world running tend to stay out of the headlines. Founded in Winterthur in 1834, Sulzer started as an iron foundry making cast iron, firefighting pumps, and textile machinery. By the end of the 19th century, a collaboration with Rudolf Diesel himself had produced the first Sulzer diesel engine. For much of the 20th century, the company was one of Switzerland’s largest industrial employers. Today, Sulzer is a global leader in fluid engineering: if something needs to be pumped, mixed, separated, or purified at industrial scale, there is a good chance Sulzer equipment is involved somewhere along the way.
The business has three divisions. Flow makes pumps, agitators, and compressors for water, energy, oil and gas, and food industries. Services maintains and upgrades rotating equipment, turbines, motors, and compressors, for Sulzer’s own installed base and for third-party customers. Chemtech provides separation and mixing technology for chemicals, petrochemicals, and increasingly for carbon capture and recycling. One of those markets deserves particular attention. Global water demand is projected to grow by 55% by 2050, while availability is expected to fall by 40% over the same period. Sulzer already supports the purification of more than 66 million cubic metres of water daily, has invested over CHF 10 million in US manufacturing capacity to serve the country’s accelerating water infrastructure cycle, and in September 2025 acquired Probig GmbH, a German specialist in water and wastewater treatment.
What makes the business resilient in the meantime is that aftermarket services now account for 62% of revenue. When customers delay large capital projects, they still need their existing equipment maintained and kept running. That recurring base provides a kind of stability that purely project-driven industrials rarely have. It also tends to attract long-duration contracts with large, creditworthy customers. In the first half of 2025 alone, Sulzer secured three separate five-year service agreements with QatarEnergy covering rotating equipment across its Mesaieed, Dukhan, and offshore operations, and a five-year contract with South Africa’s Eskom to overhaul five open-cycle gas turbines. This month, the company announced a five-year corporate procurement agreement with Aramco for centrifugal pumps, spare parts, and aftermarket services across Aramco’s global operations, with an option to extend for a further three years. These are not small wins.
Sulzer’s global reach is reflected in how the business is structured geographically. Europe, the Middle East and Africa account for 42% of order intake, the Americas for 38%, and Asia-Pacific for 20%. It is a genuinely balanced footprint, which matters when individual regions slow down or face political uncertainty. It also means that the Swiss franc headwind, while real, hits reported figures rather than the underlying business: in 2025, currency effects reduced reported order intake and sales by around CHF 190 million, but organic growth remained solid throughout.
The operational improvement of the last three years has been real and consistent. In 2022, Sulzer’s EBITDA margin stood at 8.5%. When the company left the index last September, the direction was already clear, but the picture was not yet complete. The H1 2025 results showed solid sales growth and a rising margin, but order intake was soft: large projects in oil, gas, and Chemtech had been pushed back by customers navigating a cautious investment climate. The Q3 update in October, released just weeks after the stock swap, told a more encouraging story. Order intake was recovering, the Services division was growing at over 13%, guidance was confirmed, and both Stifel Nicolaus and Kepler Capital reiterated their Buy ratings on the back of the results. By the time the full-year numbers came in February 2026, the picture was complete. The EBITDA margin had reached 15.6%, a gain of more than 700 basis points since 2022, operating profit rose 18%, and earnings per share grew 19%. The stock jumped more than 7% on results day. Today, analyst consensus sits at Buy, with an average 12-month price target of CHF 187. Management is guiding for 16.5% in 2026, with a book-to-bill ratio of 1.06 confirming that new orders are coming in faster than they are being shipped out. That is the full story behind a Sentiment Rank of 93.
For the OMSP1, Sulzer brings something the index currently has limited exposure to: a broad-based Swiss industrial with real exposure to the energy transition and water infrastructure, a clear track record of margin improvement, and a management team that has demonstrated over three years that the strategy works. The Obermatt 360° View of 88 reflects all of that, with a Sentiment Rank of 93, a Growth Rank of 78, and a Value Rank of 71 suggesting the stock is not yet priced to perfection.
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