Sulzer: Order Intake Increased to CHF 2.3 Billion
Sulzer is reporting a high order intake of CHF 2 265.9 million for the first six months of 2008. This represents an adjusted1 increase of 14.9% and a nominal growth of 6.2% compared with the first half of the previous year.
The order intake increase was driven by Sulzer Pumps, which achieved very strong growth in the first six months of 2008. For the coming months, Sulzer expects continued strong demand in most of its main markets, while the currency translation impact will remain significant.
In the first half of 2008, the development in most of Sulzer’s markets remained good. The oil and gas (upstream) as well as power generation markets continued to grow, while the hydrocarbon processing industry (oil and gas, downstream) and the aviation segment remained stable at high levels. The pulp and paper segment softened, while the automotive market still depicted high demand for Sulzer applications.
Geographically, there was significant growth in the emerging regions, in particular Asia, the Middle East, Africa, and South America. Europe and North America remained stable.
All major currencies have weakened against the Swiss franc resulting in a negative translation effect on the nominal growth rates. The adjusted1 figures mainly represent the growth in local currencies, while acquisitions had only a negligible impact.
Order intake by division
Compared with the first half of the previous year, Sulzer Pumps increased its order intake substantially to CHF 1252.2 million. This represents an increase of 30.8% on an adjusted1 basis, and 19.5% on a nominal basis. The growth was driven by large projects with long lead times, such as the orders for power plants in South Africa and China. The market activities remained good: The power generation and the oil and gas segments were strong growth drivers, while the hydrocarbon processing industry also showed robust developments. Demand was encouraging in all regions, particularly in emerging regions. As in recent years, the new equipment orders outgrew the service business. For the coming months, markets for Sulzer Pumps are expected to remain robust.
Orders received by Sulzer Metco amounted to CHF 383.7 million, equivalent to an adjusted1 growth of 1.6% and a nominal decrease of 2.9%, mainly due to currency effects. Demand remained high in Sulzer Metco’s relevant markets in the first six months of 2008. Compared with the same period of the prior year, activity in consumables and the service businesses were higher, while orders for the equipment business were lower. Asia and Europe were the strongest regions. The outlook for the coming months remains intact, with moderate growth expected for the power generation and automotive segments.
Compared with the first half of the previous year, Sulzer Chemtech posted an adjusted1 decrease in order intake of 2.7% (nominal –9.0%) to CHF 466.1 million. The hydrocarbon processing industry stabilized at a high level. Last year’s figure included a large order for the Pearl gas-to-liquid (GTL) plant project in Qatar. Excluding this large project, the division has grown compared with the prior year. Strong activity was recorded in China, India, and the Middle East. For the remainder of the year, markets for Sulzer Chemtech are expected to remain stable.
Sulzer Turbo Services reported an order intake of CHF 154.4 million, a flat development of –0.3% on an adjusted1 basis (nominal –10.4%) compared with the high base set in the same period of the previous year. The market environment remained healthy in all market segments and regions. For the next few months, the division forecasts stable markets with continued positive signs, especially in the power generation segment.
Outlook
Despite increasing uncertainties in the general economic environment, Sulzer has developed in a robust manner in the first half year of 2008. The company also expects continued strong demand for the coming months. Most of Sulzer’s markets are predicted to grow further or to stabilize at high levels. In the oil and gas market, growth is supported by the high oil price. The power generation market will also continue to see high project activity, driven by numerous projects planned in the USA, Europe, and China. Activity in the hydrocarbon processing industry and the aviation market are projected to stabilize at high levels. The pulp and paper market will probably remain soft, while in the automotive market, demand is expected to stay high for Sulzer applications. The currency translation impact will remain significant. Due to the long lead times of many large projects, Sulzer expects that sales will continue to trail order intake.
