Order Intake for the First Nine Months of CHF 2.3 Billion
Sulzer reports an order intake of CHF 2 278.7 million for the first nine months of 2009. This represents an adjusted1 decrease of 29.1% and a nominal decrease of 31.6% compared with the same period in the previous year. The activity levels in most of Sulzer’s key markets were clearly below the level of the previous year’s period.
In recent months the order intake level showed some stabilization. For the full year, Sulzer expects a substantially lower order intake compared to the high level of 2008.
In the context of the global economic downturn, virtually all of Sulzer’s key markets declined in the first months of this year. More recently the order intake level showed some stabilization. The oil and gas (upstream) as well as the hydrocarbon processing industries (oil and gas downstream) were particularly affected by the decline. The power generation industry remained relatively robust, but started to soften as expected. Demand in the automotive market was low and the aviation industry also started to show some weakness. The pulp and paper market remained weak. Negative currency effects continued, while acquisitions had a small positive effect. Geographically, all regions were affected by the deteriorated economic situation, although some emerging markets remained comparatively stronger. Sulzer does not expect a quick recovery in its key markets and is on track in adapting its cost structure and capacities to the clearly lower market demand. While re-aligning to the new market realities, Sulzer remains focused on sustainable long-term value creation with innovative, customer-oriented solutions for performance-critical applications.
Order intake by division
Orders received by Sulzer Pumps totaled CHF 1 284.0 million. This was an adjusted1 decrease of 26.5% (nominally –31.6%). The oil and gas segment has shown clearly reduced activity primarily because customers are postponing projects. The hydrocarbon processing industry remained weak. Power generation continued with comparatively good activity levels, but the near future shows fewer large projects. The activities in the pulp and paper segment remained weak. Despite the challenging market conditions, the division defended its strong market position. Order intake for the full year is projected to be notably below the exceptionally high prior year.
Compared with the first nine months of the previous year, Sulzer Metco posted an adjusted1 decrease in order intake of 26.0%
(nominal –28.1%) to CHF 403.1 million. Demand was low particularly in the automotive and other industrial markets. Despite the weak market environment the business with highly innovative replacement technologies continued to grow. As a result of the decreasing passenger and cargo miles flown, activities in the aviation industry started to show some slowdown. Geographically, orders in all regions were affected, particularly in Europe. For the full year, order intake is projected to be clearly below 2008.
Sulzer Chemtech reported an order intake of CHF 373.8 million, which represented a decrease of 44.2% (adjusted1) respectively 41.8% (nominal) compared to the strong first nine months of 2008. The market activities remained low in all regions. The hydrocarbon processing industry (HPI) was weak due to the low consumption of oil, chemicals and plastics. As customers were cautious with capital investments, demand for new HPI equipment continued to be low, particularly in Europe and Asia. The service business was comparatively strong, also supported by the newly acquired companies in Asia. The Mixpac Systems business was less affected by the downturn, supported especially by the dental market. A substantially lower order intake is expected for the full year compared to the high level of 2008.
Orders received by Sulzer Turbo Services totaled CHF 209.9 million, representing an adjusted1 decrease of 15.2% and a nominal decrease of 11.6%. Activities in the USA continued to be strong, while they were on a comparatively low level in all other regions. Order intake in the region Asia-Pacific was weak, but market expectations remain positive going forward.The strategy of pursuing long term service agreements is successful with several new contracts. For the full year, the division expects order intake below the level of the previous year.
Outlook
While the long-term prospects for Sulzer’s performance-critical solutions remain positive, the company does not expect a quick recovery in its key markets. Geographically, all regions will continue to be affected by the economic downturn; however, activities in some emerging markets are likely to remain comparatively stronger. For the full year, Sulzer expects a substantially lower order intake compared to the high level of 2008. The announced cost reduction and capacity adjustment program will strengthen Sulzer’s ability to manage the challenges in the difficult economic environment. With its continuous focus on innovation leading to adapted and new products, services and solutions, Sulzer is well positioned for sustained success.
1 Adjusted for currency effects as well as acquisitions
