Slow development of Sulzer order volume
Order intake by the Sulzer Corporation for the first nine months 2002 totalled CHF 1463 million (–6% compared with prior year, +1% adjusted for acquisitions, divestitures and currency effects). Order intake by the core divisions was CHF 1425 million, 3% below prior year level (adjusted: +1%).
The difficult market situation and the negative currency influences led to lower third-quarter results than usual. Despite an acceptable business volume under these circumstances, the operating income of the core divisions will be lower. Sulzer nevertheless expects a respectable net income for the year.
Sulzer Metco order intake rose by 3% to CHF 326 million (–8% adjusted). Demand in the aviation segment lagged significantly behind the prior year level. The market for gas turbines and industrial activities in general remained weak. Due to the ongoing lack of investment incentive, no improvement in Sulzer Metco’s situation is likely during the remaining quarter. Sulzer Metco will clearly not match the previous year-end result, also in view of the restructuring costs incurred.
Order intake by Sulzer Turbomachinery Services totalled CHF 142 million for the first nine months, 12% below the very good prior year level (adjusted: –8%). While market conditions in Europe and Asia continue to develop favorably, various projects in the USA have been postponed or cancelled due to the energy market crisis there. Based on recent developments above all in the USA, Sulzer Turbomachinery Services reckons with a modest improvement during the last quarter of 2002. In spite of rapidly implemented cost reduction measures, a decline is expected in operating income for the year.
Sulzer Pumps order intake declined by 4% to CHF 722 million (adjusted: +6%) compared with prior year level. Order intake was comparatively low in the third quarter, but is expected to recover during the last three months of the year. Developments in the individual segments are unchanged: demand remains at a good level in the oil and gas sector, but is still restrained in the petrochemical and energy markets. Recovery of the paper and pulp industry is not now expected until the second half of 2003. Sulzer Pumps still plans however to match the previous year-end result.
Sulzer Chemtech order intake is slightly below prior year level at CHF 235 million (–2%, adjusted: +4%). Market demand remained at a good level in Asia and Latin America, with moderate demand in Europe, Africa and the Near East, but is still very unsatisfactory in North America. Sulzer Chemtech is now well on the way to a turnaround, and expects a significantly improved operating income for the year.
Sulzer Hexis fuel cell technology is currently in the market trial phase. The sales goal of 400 “HXS 1000 Premiere” pre-series systems was reached in the third quarter, and 58 units have already been delivered. Operating experience with the pre-series systems is continuously incorporated in the ongoing development of a near-series production as of 2004/2005. Sulzer is convinced that Sulzer Hexis has a very strong positioning compared with competitors in this sector.