Sulzer: CHF 3 Billion in Order Intake in the First Nine Months of 2013


In the first nine months of 2013, the order intake grew by 1.8% to CHF 3.0 billion. This level was reached despite a slow start to the year in some businesses, in particular, in the water market and in electromechanical services.

For the first nine months, the oil and gas market continued to show growth. The transportation market grew on an already high base. The power industry was stable at a low level, while the water market did not reach the high level of the same period of the previous year. Demand in Asia-Pacific was very strong, while Europe continued to be comparably weak.

Sales showed some growth in recent months. However, lower volumes in the first half-year leading to underutilization of capacities, restructuring charges, and investments in IT infrastructure—which resulted in higher costs—continued to impact the operating income and the profitability.

Further adaptation of production capacities and integration of support functions to leverage synergies

Sulzer continues to implement improvement measures in businesses and regions with continuing weaknesses and to leverage cost synergy potentials.

Because the demand for wastewater pumps in Europe is still weak, tailored measures are being continued to reduce underutilization and to increase the efficiency of the sales and service network. The combination of the wastewater pumps and the process pumps businesses into one business area is progressing well.

In line with its strategic objective to serve its key markets as one focused company, Sulzer also plans to streamline and integrate central support functions at the group and divisional levels. With this change, the company wants to better leverage collaborative advantages and synergies across its businesses in various central group functions such as finance, human resources, and IT infrastructure.

The improvement measures and the integration of central support functions are expected to increase overall restructuring charges in 2013 to at least CHF 25 million. These charges are mainly due to a reduction of personnel in the range of 300 full-time equivalents of which half are already implemented. Annual recurring benefits of around CHF 25 million are expected from 2014 onwards from all measures taken this year.

The integration of central group functions is expected to require a substantial reduction of personnel in the range of 100 full-time equivalents in Winterthur, subject to the consultation process with employee representatives and social partners. Sulzer will carry out the measures as a responsible employer, while ensuring the company’s long-term success in the market.

Outlook for full-year 2013

Based on present knowledge and excluding major changes in the general economic conditions, Sulzer still expects a slight growth in order intake for the full year 2013 compared with the previous year. Sales are forecast to be approximately at the same level as last year and profitability is expected to be around 9 percent of sales before expected restructuring charges and non-recurring costs, and including these over 8 percent of sales.

Growth is expected for parts of the oil and gas market in 2013. Activity in the power, water, transportation, and the general industries is forecast to continue at similar levels. Geographically, Asia-Pacific and North America are likely to remain the growth drivers.

Order intake in detail

Sulzer Pumps

Order intake was higher than in the first nine months of 2012, supported by large orders for pipeline pumps and fire-fighting pumps, but growth slowed down in recent months. Within the oil and gas segment, the upstream business was especially strong with some large orders, while the downstream business lagged behind. The power industry continued its development on a low base, and the water market was lower than the strong previous-year period. Good activity was seen in the general industries. Asia-Pacific was very strong, and North America continued to develop well, while Europe was comparably weak.

For the full year, order intake is still expected at similar levels as in 2012. Profitability is forecast to be lower than in the previous year. This is mainly due to the persisting lower volume and cost absorption in the wastewater business, especially in Europe, and due to lower-than-expected sales for engineered pumps in Europe. Targeted measures to improve the profitability continue.

Sulzer Metco

Order intake increased compared with the first nine months of the previous year, with stronger demand in recent months. The demand was especially high in the automotive industry. After a slow start of the year, there was also increasing demand for coating equipment and services. Order intake growth was driven especially by Europe and the Middle East and by Asia-Pacific.

For the full year, the division still expects moderate growth of order intake and sales. Profitability remains forecast to be slightly lower than in the previous year.

The process for the potential sale of the Sulzer Metco division is progressing well.

Sulzer Chemtech

The order intake increased within the double-digit range. The oil and gas downstream industry continued to develop positively for mass transfer technology and tower field services. The process technology business reported high demand with various large orders, particularly in the second quarter. The order intake for two-component mixing systems was strong, also supported by a small acquisition. Market activity remained at a good level in all geographic regions, especially in Asia-Pacific.

For the full year, the division expects high single-digit growth in order intake and a somewhat lower increase for sales. Based on the strong order growth, profitability remains forecast to reach a double-digit level.

Sulzer Turbo Services

Compared with the record-high first nine months of the previous year, orders decreased in the same period of this year. Activity levels in the oil and gas market were strong, while the power and the general industries were weaker. The demand for electromechanical services remained weak, particularly in the UK and in Australia. Market activity has improved in all regions after a slow start in 2013.

For the full year, Sulzer Turbo Services anticipates a decrease in order intake and sales. Despite the positive effects of the measures taken, profitability is still expected to be at a lower level than in 2012.

More articles on this topic

Manufacturing System of Hydraulic Parts Incorporating TURBOdesign1 with Ebara Corporation

24.09.2020 -

Ebara Corporation are committed to becoming an environmentally aware enterprise and have adopted a corporate philosophy that stresses extensive contribution to society by providing superior technologies and services related to water, air and environment. The Fluid Machinery & Systems Company is the oldest of Ebara’s three business groups and boasts top-level technologies to world-class standards.

Read more

Viscous sugar syrups prove no problem for MasoSine pumps from Watson-Marlow Fluid Technology Group

01.07.2020 -

When it comes to confectionary production, the transfer of highly viscous liquid sugar syrups can be troublesome to many pump types. Able to provide testimony is the Brazil factory of a well-known fruit jelly sweet manufacturer, where production engineers were becoming frustrated with unscheduled maintenance and downtime due to the failure of lobe pumps.

Read more
Directly to the product selection in