Strong Growth During the First Half of 2006

19.07.2006

During the first half of 2006, Sulzer enjoyed continued growth. The order intake increased substantially by CHF 350.1 million to CHF 1,654.8 million as compared to CHF 1,304.7 million a year ago. Sulzer anticipates the good order situation to continue during the second half of the year.

Demand for Sulzer’s products and services grew considerably during the second quarter, although at somewhat lower growth rates than in the exceptional first quarter. Nominal growth for the first six months was 26.8%. Currency influences remained positive; impact from acquisitions/divesti¬tures was small. When adjusted for these effects, an excellent organic growth rate of 23.4% was achieved. The most significant growth was realized at the Sulzer Pumps and Sulzer Chemtech divisions.

Order Intake by Division

Sulzer Pumps increased its order intake to CHF 877.0 million, recording a significant 28.9% growth (adjusted1 27.1%). Markets in Asia, the Americas and the Middle East performed at particularly high levels. All industry segments were strong, above all hydrocarbon processing. Sulzer Pumps expects further growth during the coming months.

Order intake at Sulzer Metco was CHF 332.6 million. The increase of 14.7% (adjusted1 12, 2%) year-on-year was due to strong performance in all regions, especially Asia. The aerospace segment, which booked a number of systems orders, contributed substantially to the increase while the automotive segment business remained at the previous year’s level. The division anticipates continued good order intake during the second half of the year.

Sulzer Chemtech significantly increased its order intake as compared to the previous year. At CHF 322.1 million, it was 60.9% (adjusted1 48.7%) higher than during the same period in 2005. Some large orders contributed to this very high order level. All regions performed well, especially the Americas and Asia. Sulzer Chemtech expects continued growth for the second half of the year.

Sulzer Turbo Services reported a slight decline in order intake over the same period last year to CHF 118.6 million (–4,0%, adjusted1 –7.4%). Business in North America was better than in Europe and the Middle East where cautious ordering and strong competition prevailed. This situation is not likely to change in the near future.

The order intake of Other was CHF 4.5 million. Sulzer Innotec’s orders were at a good level. Increased intra-divisional activity resulted in a higher elimination factor.

Outlook for the Second Half of 2006

The main markets served by Sulzer, primarily oil and gas, power generation, and aerospace, are forecasted to remain very active with high levels of capital spending. The automotive sector is also expected to develop well, whereas the pulp and paper business will remain stable. The company remains confident that it will benefit from these trends and will realize a high level of order intake during the second half of the year albeit with lower growth rates.

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