Order Intake After Nine Months Up 24%
Sulzer increased its order intake for the first nine months of 2006 by nearly a quarter to CHF 2 491.1 million, up CHF 483.3 million compared with the same period for the previous year. Over the coming months, Sulzer expects the positive order situation to continue.
For the months July to September, the Sulzer Corporation posted a substantial order intake of CHF 836.3 million, almost in line with the record first quarter of 2006. A contributing factor was the receipt of a number of large orders. For the first nine months, growth in order intake amounted to a nominal 24.1%. While currency translation effects had a marginally positive influence, the impact from acquisitions and divestitures was slightly negative. After adjusting for these factors, order intake grew organically by 23.0%.
Order intake by division
Sulzer Pumps posted new orders amounting to CHF 1339.3 million, representing a significant increase of 29.1% (adjusted1 30.0%). Order intake was excellent in all regions. In the year to date, high demand in the oil and gas segment persisted, but also business with the paper and power generation industries showed good performances. Sulzer Pumps expects further volume growth for the fourth quarter.
Compared with the same period last year, Sulzer Metco reported a 15.2% increase in order intake to CHF 496.4 million (13.5% after currency adjustments). Growth rates at the end of September were thus slightly higher than the mid-year rates (14.7% and adjusted1 12.2%). Business in the aerospace and power generation sectors as well as in general industries was particularly active. Demand in the automotive sector remained stable. The division expects the positive trend in order intake to continue. It is likely that compared with the strong fourth quarter 2005 fewer orders for complete systems will be received.
Sulzer Chemtech maintained the excellent performance trend of the first six months, exceeding the prior-year figure by 40.7% reach to CHF 461.7 million. Acquisitions and currency effects had a favorable impact on nominal growth. After adjustment for these effects, organic growth amounted to 33.9%. A number of major orders also contributed to the sustained robust performance in the third quarter. Business development was sound in all regions. The review by the antitrust authorities of the purchase of Mixpac, Werfo and Mold (media release from August 22, 2006) is pending. It is not anticipated that this acquisition will have an impact on the 2006 results. Sulzer Chemtech expects the brisk order intake to continue over the coming months.
Compared with the previous year, Sulzer Turbo Services posted a decline in order intake to CHF 185.6 million (–5.6%, adjusted for currency effects –7.4%). Markets in the Middle and Far East remained weak, while in North America order intake was very good. Although a slight rebound is visible, the division does not anticipate to fully reach the order level of the prior year.
Order intake for Other amounted to CHF 8.1 million. As a result of the favorable industrial climate in Switzerland, the offerings of Sulzer Innotec for contract research and technical services met high demand.
Outlook for the full year 2006
In light of the lively tendering activity, Sulzer can expect a good order intake also for the last quarter of 2006. This is not only due to the combination of continuing high level of capital expenditures in the oil and gas sector but also to the accelerating capacity expansions by power utilities and other industries. The procurement situation for certain raw materials and components as well as the engineering capacities remain tight. These are special challenges for the divisions in working off the high order backlog. While growth in sales is expected to be significant for 2006, it will not keep pace with the growth in new orders. Carried by the increase in volumes and internal measures, Sulzer expects substantial earning improvements for 2006 compared with the previous year.