Sulzer Order Intake Confirms Upward Trend

The third quarter significantly improved on that of prior year, with a 13% nominal rise in order intake. Further stabilization of the market situation increasingly indicates an economy upswing – even if only modest. For 2003 as a whole, Sulzer expects a higher order intake than in 2002.

Sulzer’s markets are recovering, however at different rates according to region and sector. The general situation has not changed much in the last few months: Asian markets are developing very positively, while the North American market is still very slow.

Core division business developments were encouraging on the whole:

Sulzer Metco order intake of CHF 309 million still lags nominally 5% behind the prior year period (adjusted: –3%). Although the difficult aviation and power generation markets have stabilized, no clear upward trend is evident as yet. The third quarter brought above-average growth mainly in complete system sales. Sulzer Metco has now passed the lowest ebb, and looks to the remainder of 2003 with reserved optimism.

Sulzer Turbomachinery Services order intake grew by 8% to CHF 153 million (adjusted: 2%). While no improvement is likely by year-end in North American markets, where demand is still unsatisfactory, business in Europe and the Middle East is developing as expected. Forecast for the last quarter 2003 is difficult, since business depends very much on short-term order intake.

Sulzer Pumps, the largest division, continued this year’s upward trend in the third quarter. Order volume of CHF 747 million for the first nine months represents an impressive growth of 12% in local currencies compared with the prior year period, due not least to an excellent third quarter (+24%). Despite negative currency developments, nominal growth was also positive at 3%. The encouraging market situation in Asia is still contrasted by disappointing developments in North America. Sulzer Pumps faces the remainder of 2003 with confidence.

Sulzer Chemtech continued on a steady growth trend with order intake rising to CHF 253 million. This nominal growth of 8% corresponds to an excellent 14% after adjustment (17% in the third quarter alone) and is mainly attributable to strong demand in Asia, as well as in Europe and the Middle East. However, the North American market shows no sign of any recovery as yet. Overall prospects for the remainder of 2003 are good.

Sulzer Hexis will have no significant order intake until the next system generation is launched in 2004/2005, since all the “HXS 1000 Premiere” pre-series units have been sold as planned. With development work on the next system generation proceeding according to schedule, Sulzer Hexis expects to pass some further operational milestones during the next six months.

Order volume attributable to Others (CHF 20 million for the first nine months 2003) is steadily diminishing in relation to overall order intake. This is due to the ongoing reduction of Sulzer International sales offices and companies as planned.

In contrast to Asia, the North American market is still at low ebb and shows no significant sign of an upswing. Sulzer assumes, however, that this unfavorable situation will improve during the next six months, likewise in Europe. There are already signs of recovery in the aviation sector, and – to a lesser extent – in the power generation market. Currency effects on nominal order intake are still very significant, and their overall influence may be either positive or negative, depending on developments.

Order intake by the Sulzer Corporation for 2003 as a whole will be announced on January 16, 2004.

Order intake for the first nine months 2003 (in million CHF)

¹)adjusted for acquisitions, divestitures, and currency effects