Sulzer Metco’s order intake for 2002 nominally matched the prior-year level at CHF 430 million. Excluding the significant influence of the Euroflamm/Metaplas acquisitions per year end 2001, which more than compensated for negative effects of the stronger Swiss franc, the net result is a decline of 8 percent. The seasonal increase of order intake often occurring in December did not take place in 2002, so that last-quarter figures stagnated at the level of the previous quarters. Sulzer Metco’s operating income for 2002 will be significantly lower than in the prior year, restructuring charges amplifying the decline. While Sulzer Metco expects a difficult market for complete systems and materials, as well as in the aviation and energy segments during the current year, the prospects for coating services and component sales remain good. Measures to improve business results for 2003 are currently being implemented accordingly.
Sulzer Turbomachinery Services’ order volume for 2002 was 6 percent below the very good prior-year level at CHF 193 million (adjusted: likewise –6%, with acquisition and currency effects offsetting each other). After a difficult third quarter, order intake increased again in the fourth quarter. Despite a substantial improvement during recent months, operating income will not match the prior-year level. Preventive-maintenance business is still affected by customer restraint, particularly in the USA. The division is expecting a modest market recovery during the next few months.
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.
Sulzer Chemtech’s order volume of CHF 299 million for 2002 reached prior-year level (nominal –1%, adjusted +5%). The normally weaker fourth quarter brought a 5-percent increase in order intake compared with the same prior-year period after adjustment for currency effects. While market conditions in the USA remain unsatisfactory, developments in Asia are very encouraging, with an ongoing increase in investment activity particularly in China. Notable is the good demand for static mixers and crystallization systems. Although prospects are favorable at the present time, any lasting conflict in the Middle East would negatively affect the order intake situation. Thanks to the improvement measures taken, operating income for 2002 will exceed the prior-year level.
By year end 2002, the Sulzer Hexis venture division had delivered about 80 of the 400 “HXS 1000 Premiere” pre-series units sold. Thanks to the valuable experience gained under actual operating conditions, some important measures have already been taken for improving system stability. The technical challenge currently being tackled is to extend the service life of the fuel cell stack – the heart of this energy-generating system. At the same time, findings gained from the ongoing trials in practice are being applied for developing the next fuel cell generation – a near-series product. Together with marketing partners in Germany and Switzerland, co-operation partners in France (cf. media release of January 21, 2003), the Netherlands and Austria, as well as local installation companies, Sulzer Hexis is currently preparing the market for the launch of fuel cell heating units.
The steep percentage decline of order intake under Consolidation, others reflects the realized closures during 2001 and 2002 of Sulzer International sales offices and subsidiaries.
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.
Order intake 2002 (million CHF)
|
|
2002
Jan.–Dec. |
2001
Jan.–Dec. |
? in %
|
? in % adjusted 1) |
|
Sulzer2) |
1917 |
2031 |
–6 |
2 |
|
Core divisions
Sulzer Metco
Sulzer Turbomachinery Services
Sulzer Pumps
Sulzer Chemtech
|
1864
430
193
942
299
2
|
1921
429
206
984
302
8 |
–3
0
–6
–4
–1
– |
2
–8
–6
6
5
–
|
|
Consolidation, others |
51 |
102 |
–50 |
– |
1) Adjusted for acquisitions, divestitures, and currency effects
2) Continuing operations only; Sulzer Burckhardt was deconsolidated per January 1, 2002
The Sulzer Corporation (www.sulzer.com) 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. The Sulzer Corporation currently employs more than 9000 people worldwide. |