Sulzer order volume sustained for 2002
In a difficult economic environment, the Sulzer Corporation upheld the level of order intake during 2002. While order volume declined nominally by 6 percent to CHF 1917 million, there is an increase of 2 percent in order intake after consideration of adjustments for acquisitions, divestitures, and currency effects.
The nominal decline of 3 percent in core division order intake to CHF 1864 million likewise represents a 2-percent increase over prior year after adjustments. Apart from the challenging market conditions, currency effects had a negative effect on order intake figures. Prospects for the current year are very difficult to assess in view of the tense political situation worldwide and uncertain economic developments.
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 (process components and services), and the venture division Sulzer Hexis (fuel cell systems). Sales by the core divisions in 2001 totaled CHF 1875 million.
Order intake by Sulzer Pumps decreased slightly to CHF 942 million, 4 percent lower than in the prior year. This is exclusively attributable however to the significant devaluation of all relevant currencies against the Swiss franc; the net change in local currencies is an increase of 6 percent. Order volume for the fourth quarter was slightly higher than in the comparably difficult third quarter. The most positive developments are still in the oil and gas markets, with no sign yet of any sustainable recovery in other segments. In contrast to the respectable growth of order volume despite difficult conditions, gross margins realized from order backlog of early 2002 were disappointing. Operating income will not match the prior-year value. Sulzer Pumps expects a continuation of the current restraint of customers to invest, and will focus intensively on internal improvements.
As previously announced, the Sulzer Corporation expects a clearly positive operating income from the four core divisions, but lower overall than in prior year. While Sulzer Metco, Sulzer Turbomachinery Services, and Sulzer Pumps will not match the 2001 level, Sulzer Chemtech operating income will show a significant improvement. Due to the various divestitures during 2002 (Sulzer Burckhardt; real-estate properties), corporate net income for 2002 will reach a respectable level.
Sulzer still expects a slow development of order volume over the next few months. In view of the uncertain economic prospects and tense geopolitical situation, a cautious approach is advisable. Flexibility and rapid adaptation to ongoing events remain indispensable. In all divisions, Sulzer will focus above all on enhancing profitability.
The Sulzer financial results for 2002 will be presented at the annual media conference on Wednesday, March 5, 2003.
For more detailed information on 2002 results of Sulzer's other devisions, have a look at www.sulzer.com.