Slow development of Sulzer order intake
Consolidated order intake by the Sulzer Corporation for the first half of 2002 totalled CHF 1039 million (–3% compared with prior year, +2% adjusted for acquisitions, divestitures and currency effects). Order intake by the core divisions matched the prior mid-year level at CHF 1013 million (adjusted: +3%). This slow development is attributable to the ongoing insecurity in many market areas, a situation which Sulzer does not expect to change significantly before year-end. Order intake for 2002 as a whole is therefore likely to match the prior year level.
All the core divisions still face significant challenges this year, although to varying extents:
Sulzer Metco order intake rose by 5% to CHF 221 million (adjusted: –7%). While the aviation industry market revived slightly, the demand for stationary gas turbines and in industry as a whole has declined steeply. In particular, order intake for complete systems is currently affected by project postponements. Sulzer Metco expects this challenging market situation to continue for the rest of the year.
After a steep decline in the first quarter compared with the excellent prior-year period, Sulzer Turbomachinery Services order intake showed a modest improvement to CHF 101 million (10% below prior-year level, adjusted: –7%). Business in Europe and Asia developed very encouragingly, whereas demand in the USA declined significantly due to the energy market crisis, with much tougher American competition as a result. No significant change is expected in this situation during the second semester 2002.
Order intake by Sulzer Pumps practically matched the prior-year level at CHF 528 million (adjusted: +9%). While business in the oil and gas segment remains at a good level, demand in the petrochemical and power generation markets is passive. Order intake in the paper and pulp industry revived to some extent, although still at low ebb. In view of the ongoing recession in relevant markets, Sulzer Pumps expects a slightly declining demand trend for the second half of this year.
Sulzer Chemtech order intake developed well over the last few months. This has fully compensated for the significant decline in the first quarter 2002 compared with the exceptionally good prior-year period, a situation which also affected Sulzer Turbomachinery Services. Order intake rose slightly to CHF 163 million (+1%, adjusted: +6%), mainly attributable to projects in Asia, Africa and the Middle East. Sulzer Chemtech profits thereby from successful new product launches in recent years, and expects this upward trend to continue during the second semester.
Sulzer Hexis is now in the market test phase with its innovative fuel cell technology. The pre-series sales target of 400 “HXS 1000 Premiere” units has almost been reached, with 371 sold and 26 units already delivered to customers. Current activities are focused on ensuring customer satisfaction with these pre-series units, while at the same time an improved version is being developed for production launch in 2004/2005.
The steep percentage decline in the unit “Others” reflects the closing during 2001 of numerous Sulzer International sales offices and companies worldwide.
Mid-year results of the Sulzer Corporation for 2002 will be announced on August 27.
