14.10.2011 Sulzer Press center
In the first nine months of 2011, Sulzer received orders of CHF 2 647.1 million. This was an adjusted1 increase of 16.5% (nominal increase of 8.2%) compared with the same period of the previous year. Order intake increased due to growth in early-cycle markets and larger orders in the oil and gas market in the first half of the year. Uncertainties in the financial markets have started to influence customer ordering behavior recently. The strong Swiss franc had a significant negative translation effect on absolute figures, but the company’s global presence is a natural hedge against material impacts on profitability. The acquisition of Cardo Flow Solutions was closed at the end of July and added to the order intake in the remaining two months of the reporting period. Through this acquisition, Sulzer is now a leading provider of pumps in the water and wastewater industry. For the full year, Sulzer expects double-digit growth rates for the order intake on an adjusted1 basis, albeit at a lower rate than in the first nine months of the year.
Order intake for the first nine months of 2011 (January – September)
| (millions of CHF) | Jan.–Sep. 2011 | Jan.–Sep. 2010 | Δ | Δ adjusted1 |
| Divisions | 2 640.7 | 2 439.9 | 8.2% | 16.7% |
| Sulzer Pumps | 1 233.7 | 1 225.5 | 0.7% | 11.0% |
| Sulzer Metco | 501.2 | 473.1 | 5.9% | 17.8% |
| Sulzer Chemtech | 539.3 | 455.2 | 18.5% | 29.1% |
| Sulzer Turbo Services | 366.5 | 286.1 | 28.1% | 19.1% |
| Others2 | 6.4 | 7.7 | – | – |
| Total | 2 647.1 | 2 447.6 | 8.2% | 16.5% |
On an adjusted1 basis, Sulzer achieved a significant increase in order intake, experiencing a 16.5% rise compared with the first nine months of 2010 (8.2% nominally). The strong Swiss franc had a significant negative translation effect on absolute figures, but the company’s global presence is a natural hedge against material impacts on profitability. The emerging markets contributed to the growth. North America developed positively, while order intake in Europe remained stable. Growth was driven by early-cycle markets and by larger orders in the oil and gas market in the first half of the year. Uncertainties in the financial markets have started to influence customer ordering behavior recently. The automotive, aviation, and other industrial markets remained strong. The hydrocarbon processing industry remained at a low level with some large project orders booked in the first half of the year. The power generation market stabilized, although nuclear projects suffered delays due to the incident in Japan.
The acquisition of Cardo Flow Solutions3 was closed at the end of July and added CHF 67 million to the order intake in the remaining two months of the reporting period. Through this acquisition, Sulzer has become a leading provider of pumps in the water and wastewater industry.
Outlook for 2011
The impact of the negative development in the financial markets cannot currently be fully assessed. If the uncertainties in the financial markets persist, this may impact customer ordering behavior further. The automotive industry is likely to remain at its current high level. For the aviation and other general industries, we anticipate further growth. Activity in the oil and gas industry is expected to continue at similar levels, while the hydrocarbon processing industry is likely to remain flat. The power generation market is forecast to remain at a low level. As a consequence of the nuclear incident in Japan, increased future activity is predicted for combined-cycle and conventional fossil plants. Geographically, the emerging markets are expected to remain growth drivers for the company. The significant negative translation effect of the strong Swiss franc is likely to persist and will continue to impact absolute figures and nominal growth rates. However, with its global network, the company is naturally hedged against material currency impacts on profitability.
For the full year, Sulzer expects double-digit growth rates for the order intake on an adjusted1 basis, albeit at a lower rate than in the first nine months of the year.
Order intake by division
On an adjusted1 basis, Sulzer Pumps increased its order intake by 11.0% compared with the same period of the previous year. On a nominal basis—including Cardo Flow Solutions—orders increased by 0.7%. Investment activities in the oil and gas industry were on a high level in the first half of the year. Influenced by the insecurities in the financial markets, the third quarter was characterized by a lack of large projects. In the hydrocarbon processing industry, project activity remained at a low level in general, with some ongoing activity in emerging markets. In the power generation industry, strong activity was seen in India and China, whereas in established economies the market remained flat. Nuclear projects suffered delays as a consequence of the nuclear incident in Japan. The acquisition of Cardo Flow Solutions was closed at the end of July and added CHF 67 million to the order intake in the remaining two months of the reporting period. With this acquisition, the division has become a leading provider of pumps in the water and wastewater industry. The global service network was further strengthened with a service center in Russia.
Activity in the oil and gas industry is expected to continue at similar levels, while the hydrocarbon processing industry is likely to remain flat throughout 2011. The power generation market is expected to remain at a low level. On an adjusted1 basis, the division anticipates a growth of around 10% in order intake for the full year.
Sulzer Metco further increased its order intake, driven by growth in most of its end markets. Higher raw material prices added somewhat to the higher volumes. Demand for the division’s innovative coating solutions was particularly strong in the automotive industry. The aviation industry also developed positively, and strong growth was recorded in the general industry segment. Geographically, demand was particularly pronounced in Asia-Pacific and in Europe.
The automotive industry is likely to remain at its current high level. Continued strength is anticipated in the aviation industry and other general industries. For the full year, the division expects double-digit growth for order intake on an adjusted1 basis, albeit at a lower rate than in the first nine months.
Sulzer Chemtech significantly increased its order intake compared with the first nine months of the previous year. Demand in the hydrocarbon processing industry stabilized, and some large projects contributed positively to the order intake. The Process Technology unit recorded a substantial increase in orders, and activity levels for Tower Field Service and Sulzer Mixpac Systems remainedstrong. Geographically, demand was particularly high in the Middle East and in China.
For Sulzer Chemtech applications, the hydrocarbon processing industry is projected to recover further, although at a slow pace. For the full year, the division expects a clear double-digit growth in order intake on an adjusted1 basis.
Sulzer Turbo Services strongly increased its order intake compared with the first nine months of the previous year, driven bothby significant organic growth and by strong contributions from Sulzer Dowding & Mills, acquired in June 2010. In addition, larger orders were recorded in the first half of the year. The demand for the division’s service offering in the oil and gas and the power generation industries was healthy. The hydrocarbon processing industry showed signs of improvement and other industrial markets continued to grow. Through the acquisition, Sulzer Turbo Services has been able to diversify its product and service portfolio into new markets and has achieved significant sales synergies.
Demand for the division’s services in the oil and gas, power generation, and other industrial markets is predicted to remain at current high levels. The hydrocarbon processing industry is forecast to continue with low growth. For the full year, Sulzer Turbo Services expects double-digit growth in order intake on an adjusted1 basis.
1 Adjusted for currency effects as well as acquisitions and divestitures
2 Others consists of: Corporate Center, Sulzer Real Estate, Sulzer Innotec, and consolidation adjustments
3 Headquartered in Sweden, sales of CHF 463 million in 2010, approx. 1 900 employees
Time Schedule for 2012:
- Order Intake Full Year 2011 January 12, 2012
- Publication of Full Year Results 2011 February 23, 2012
- Annual Media Conference February 23, 2012 (9.30 a.m. CET)
- Presentation Annual Results to Analysts February 23, 2012 (4.00 p.m. CET)
- Annual General Meeting 2012 April 5, 2012
- Order Intake Release First Quarter 2012 April 17, 2012
- Publication of Midyear Results 2012 July 20, 2012
- Order Intake Release First Nine Months 2012 October 12, 2012