This flat nominal development is primarily due to currency effects, in particular due to the weakening of the US dollar. Even though the development of the order intake lost some momentum in the fourth quarter due to fewer large orders and some project postponements, Sulzer expects positive development of the business for 2004 in view of intact market prospects.

Order intake by the Sulzer Corporation for 2003 as a whole was encouraging despite a number of developments that created uncertainty, such as the Iraq conflict, the SARS epidemic, and the generally weak global economy. The year was marked not only by unfavorable market conditions in the USA but also by an upswing in Asian markets, particularly in China.

Development within individual Sulzer core divisions:

Sulzer Metco’s order intake of CHF 423 million in 2003 was nominally 2% less than in the prior year, but matched the 2002 level after adjustment for acquisitions and currency effects. The precarious situation in the aviation and power generation segments affected Sulzer Metco throughout 2003. Business activities improved only toward year-end, indicating stabilization and some degree of recovery in these markets. The materials business developed well in the fourth quarter, while order intake in the turbine components business did not pick up until very late in the year. Due to the resulting delayed revenues from the turbine components business and further restructuring costs, Sulzer Metco will not be able to match the operating income of prior year. Despite insufficient overall performance in 2003, Sulzer Metco is cautiously optimistic about business developments this year.

Sulzer Turbomachinery Services registered a total order volume of CHF 197 million last year, nominally 2% higher than in 2002 (adjusted: –1%). The US market for power plant equipment is still in poor shape but is expected to recover slowly this year. During the final months of 2003, several customer projects were postponed until 2004, thereby affecting order intake for the fourth quarter in particular. Operating income in 2003 for Sulzer Turbomachinery Services is expected to be slightly below the previous year’s level but will maintain an acceptable operating margin. For the current year, this division expects a modest market recovery.

Order intake by Sulzer Pumps, the largest Sulzer division, was slightly above the prior year level at CHF 951 million (+1%). In local currencies this represents an encouraging increase of 7%, despite a weaker fourth quarter when compared with the two very strong previous quarters. While business in the oil and gas segment was particularly positive, the demand in the power segment was rather weak worldwide. Factoring out nonrecurring provisions of CHF 23 million, which have been set aside for operational improvements now being implemented (cf. media release of December 15, 2003), Sulzer Pumps’s return on sales for 2003 will be above 5% and thereby considerably exceed the prior year. For the current year, Sulzer Pumps anticipates relatively stable market conditions.

The order intake for Sulzer Chemtech in 2003 rose by 4% to CHF 312 million, an adjusted increase of as much as 8%. The year was characterized by successful business in the lively Asian markets and several large orders that were booked during the summer months. Positive business developments in the Middle East and eastern Europe also contributed to the high order intake. Operating income for 2003 will considerably exceed that of the prior year. Sulzer Chemtech expects continued strong markets in Asia and a market recovery in the USA.

Following the successful sale of all “HXS 1000 Premiere” preseries fuel cell units, Sulzer Hexis does not anticipate significant order intake until the next-generation system is launched in 2005. Work on the next-generation system is proceeding on schedule, and very promising technical progress has been made. In October 2003, Sulzer Hexis signed a cooperation agreement with the leading Swiss power utility Axpo, who in the same month commissioned a Sulzer Hexis preseries unit.

Order intake for Consolidation, others in 2003 (CHF 25 million) was essentially limited to that of Sulzer Innotec.

As already announced, the Sulzer core divisions will not match their overall results of the previous year due to the restructuring costs incurred by Sulzer Pumps in 2003. Their operating income before exceptional items, however, is expected to exceed that of prior year. Due to these exceptional items, and also due to the comparatively higher real estate revenue and the capital gains from the Sulzer Burckhardt sale during the previous year, corporate net income in 2003 will be markedly lower than in 2002.

Sulzer expects order intake to develop positively during the coming months. Asian markets should remain lively, and there should be a slow market recovery in North America and subsequently in Europe.

The Sulzer financial results for 2003 will be presented at the annual media conference on Wednesday, March 3, 2004.

Order intake 2003 (in millions CHF)

¹⁾ adjusted for acquisitions, divestitures, and currency effects

The Sulzer Corporation is comprised of the four core divisions Sulzer Metco (coating technologies and services), Sulzer Turbomachinery Services, Sulzer Pumps (including services), Sulzer Chemtech (chemical process components and services), and the venture division Sulzer Hexis (fuel cell systems for residential needs). Consolidated sales for 2002 totaled CHF 1946 million. The Sulzer Corporation employs more than 9000 people worldwide.