Sulzer Gets Off to a Good Start in 2004

The Sulzer Metco division staged a considerable recovery. Sulzer Pumps also managed to improve substantially on last year's already high volume. Sulzer Chemtech again reached a very satisfactory level of new orders. Despite a continued difficult market situation, Sulzer Turbomachinery Services stabilized business at the prior year level. Sulzer expects order intake to continue developing in a positive manner this year.

Order intake for the first quarter totaled CHF 548 million, which corresponds with a nominal growth of 14%. Adjusted for acquisitions and currency effects, order intake was 9% higher than for the same period in the prior year, with currency effects playing a secondary role. The desired revival in the North American and European markets gained momentum, while orders in the Asian markets continued to be very strong.

Individual results

Sulzer Metco, a provider of surface technology solutions and services, increased its order intake to CHF 132 million (+38%) in the first quarter. The sharp increase was aided by the acquisitions made over the last six months, while currency fluctuations had little impact. After adjustment for acquisitions and currency effects, the order volume rose by a gratifying 13%. In addition to a general increase in demand, business in the aviation segment was more upbeat, while activity in the power generation segment continued to be restrained. The prospects for continued favorable development are intact.

At CHF 50 million (–2%), order intake at Sulzer Turbomachinery Services was almost in line with the prior year level during the first quarter. Adjusted for currency effects, order volume was stable, which—in view of the continued challenging situation in North America and the difficult conditions at the Indonesian facility—may be considered good. Sulzer does not expect the market situation to change greatly over the coming months.

Sulzer Pumps, the largest Sulzer division, increased order intake to CHF 276 million (+15%), thereby achieving its highest order volume since the first quarter of 2002. When adjusted for currencies, this equates to a significant growth of 12%. All Sulzer Pumps segments increased order intake with sustained good markets in Asia and Europe. Both the oil and gas segment and the pulp and paper segment developed remarkably well. The prospects for the next few months are positive.

First quarter order intake for Sulzer Chemtech, a provider of components and services for separation columns and static mixing, practically equaled the very good prior year level. In quarterly comparisons of the last two years, the figure of CHF 85 million marked another very satisfactory achievement. Following a weaker fourth quarter in 2003, business recovered, not least supported by the USA market. Stable development at a high level is expected.

At present, there is no significant order intake for Sulzer Hexis. The focus is on the continued development of the near-series system, which is now successfully undergoing laboratory testing and is progressing as planned. Good results have been obtained in field tests with the installed base of the pre-series HXS 1000 Premiere; customer feedback has also been very positive.

Order intake of CHF 5 million for Others concerns mainly Sulzer Innotec.

Outlook for the second quarter

Following a fairly weak fourth quarter in 2003, Sulzer has experienced a very strong start in 2004. The signs of a noticeable market recovery have increased further. Sulzer expects orders to develop positively over the coming months. Asian markets should remain lively, while the North American and European markets should continue to improve.

The order intake for the second quarter of 2004 will be published on July 15, 2004.