The evolutions in the energy industry since the beginning of 2000 as well as potential changes in the political environment on subsidies have altered the risk profile of future investments for fuel cell ventures considerably. With the strong performance and commitment of the team, Sulzer Hexis has-with its product Galileo-reached an advanced level, both in terms of performance and cost. Despite this achievement, Sulzer has concluded that carrying the risk of further significant investments solely is beyond its scope and focus.

Therefore, Sulzer intends to start winding down the operations of Sulzer Hexis in a controlled manner, if no buyer can be found shortly. During the next weeks discussions with employee representatives will be held and appropriate solutions will be developed. The total cost of closing would impact the operating income of the second half of 2005 by approximately CHF 20 million, of which around CHF 6 million is the cash effect.